51st annual report 2011– · pdf file51st annual report 2011-2012 ... mr. r. sampath...

51stAnnual Report2011–2012

Contents

Notice 5

Directors’Report 7

CorporateGovernanceReport 14

Auditors’Report 22

BalanceSheet 26

ProfitandLossAccount 27

CashFlowStatement 28

NotestoAccounts 29

Ultramarine&PigmentsLtd.51stAnnualReport2011-2012

BoardofDirectorsMr.R.Sampath(Chairman&ManagingDirector)Ms.IndiraSundararajan(WholetimeDirector)Mr.S.SanthanamMr.NimishPatelMr.M.C.ChoksiDr.G.G.NairMs.K.R.JaveriMr.S.Sridhar

CompanySecretaryMr.N.Asokan

BankersBankofIndiaHDFCBankLimitedStateBankofIndia

AuditorsContractor,Nayak&KishnadwalaCharteredAccountants1B,1stFloor,PushpanK.D.Road,VileParleMumbai400056

RegisteredOfficeThirumalaiHouse,RoadNo.29NearSionHillFort,Sion(E),Mumbai400022Tel. : 24017841,7834,7853,7861Fax : 24011699/24014754E-mail : [email protected] : www.ultramarinepigments.net

Registrar&ShareTransferAgentsLinkIntimeIndiaPrivateLimitedC-13,PannlalSilkMillsCompoundL.B.S.Marg,Bhandup(W)Mumbai400078Ph : 02225946970Fax : 02225946969E-mail : rnt@[email protected] : www.linkintime.com

FactoryAmbattur

556,VanagaramRoadAmbattur,Chennai-600053Tel. : 91-44-26821195/1196/1197/1198/1199Fax : 91-44-26821201E-mail : [email protected]

MembersarerequestedtobringtheircopyofAnnualReportwiththemtotheAnnualGeneralMeeting

Ranipet

25-B,SIPCOTIndustrialComplexRanipet-632403,TamilnaduTel. : 04172-244441/244442Fax : 04172-244918E-mail : [email protected]

5


NOTICE

NOTICEisherebygiventhattheFIFTIETHANNUALGENERALMEETINGOFTHEMEMBERSOFULTRAMARINE&PIGMENTSLIMITEDwillbeheldatTHEMYSOREASSOCIATIONAUDITORIUM,MysoreAssociation,393BhaudajiRoad,Matunga-C.Rly.Mumbai400019onMonday,the8thdayofAugust,2011at4.00p.m.totransactthefollowingbusiness:

ORDINARYBUSINESS:

1. To receive, consider and adopt the Directors’ Report and the Audited Profit and Loss Account for the year endedMarch31,2011andtheBalanceSheetasatthatdateandtheAuditors’Reportthereon.

2. Todeclareadividend.

3. To appoint a Director in place of Mr.S.Santhanam who retires by rotation and being eligible, offers himself forre-appointment.

4. To appoint a Director in place of Mr.M.C.Choksi who retires by rotation and, being eligible offers himself forre-appointment.

5. ToappointAuditorsforthecurrentyearandfixtheirremuneration.

BytheOrderoftheBoardofDirectors

N.AsokanCompanySecretary

May26,2011

RegisteredOffice:

ThirumalaiHouse,RoadNo.29,Sion(East)Mumbai400022

NOTES:

a) AMEMBERENTITLEDTOATTENDANDVOTEISENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEINSTEADOFHIMSELFANDTHEPROXYNEEDNOTBEAMEMBER.

b) TheproxyformdulycompletedandsignedshouldbedepositedattheRegisteredOfficeoftheCompanyatleast48hoursbeforethecommencementofthemeeting.

c) TheRegisterofMembersandShareTransferBooksoftheCompanywillremainclosedfromTuesday,July26,2011toMonday,August8,2011(bothdaysinclusive)fordeterminingthenamesofmemberseligiblefordividend,ifapproved.InrespectofsharesheldinElectronicform,thedividendwillbepaidtothoseshareholderswhosenamesappearatthecloseofBusinesshoursonMonday,July25,2011asbeneficialownersasperlistfurnishedbytheDepositoryParticipantsforthepurpose.

d) Membersarerequestedtonotifyimmediatelyanychangeintheiraddressesand/orBankMandatedetailstotheCompany’sRegistrarandShareTransferAgentforsharesheldinphysicalformandtotheirrespectiveDepositoryParticipants(DP)forsharesheldinElectronicform.

e) MembersdesiringanyclarificationonaccountsarerequestedtowritetotheCompanyatanearlydatesoastoenabletheCompanytokeeptheinformationready.

f) PursuanttotheprovisionsofSection205A(5)&205CoftheCompaniesAct,1956,theCompanyhastransferredtheunpaidorunclaimeddividendforthefinancialyear1995-1996to2002-2003totheInvestorEducationandProtectionFund(IEPF)establishedbytheCentralGovernment.

Accordingly,amountshavebeentransferredto the InvestorEducationandProtection fundfromtimeto time.AllpersonsarerequestedtonotethatnoclaimsshalllieagainsttheCompanyorthesaidfundinrespectofanyamountswhichwereunclaimedandunpaidforaperiodof7yearsfromthedatesthattheyfirstbecamedueforpaymentandnopaymentshallbemadeinrespectofanysuchclaims.

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51stAnnualReport2011-2012Ultramarine&PigmentsLtd.

PersonswhohavenotencashedtheirdividendwarrantsarerequestedtoapproachtheCompanyforobtainingtheduplicatewarrantsbeforethebalanceintherespectiveaccountgetstransferredtotheInvestorEducationandProtectionFund.

g) TheEquitysharesoftheCompanyaremandatedfortradinginthecompulsorydematerializedMode.TheISINNo.allottedfortheCompany’ssharesisINE405A01021.

h) Member(s)wantingtonominateapersononwhomtheShareswillvestintheeventofdeathoftheholder(s)arerequestedtousetheprescribedForm-2BandforwardtotheCompany’Registrars.

i) Re-appointmentofretiringDirectors:

Mr.S.SanthanamandMr.M.C.Choksi,DirectorsoftheCompany,retirebyrotationattheensuingAnnualGeneralMeetingandbeingeligibleofferthemselvesforre-appointment.

Mr.S.Santhanam,71years,joinedtheBoardasanAdditionalDirectoroftheCompanyon25thFebruary,1993.Earliertothat,hewasaworkingpartnerofChemdyesTradingCompany.Mr.S.SanthanamwastheVice-ChairmanandManagingDirectoroftheCompanytill31stJuly,2004.DuringhistenureofofficehewaslookingafterSalesandMarketing,CustomerRelationshipManagement,ImportsandExportsliaisingwithgovernmentdepartmentsandmaterialsprocurement,etc.Heenjoysveryhighreputationintheindustry.TheCompanyhasmadesignificantprogressduetotheeffortstakenbyS.Santhanam.Mr.Santhanam’sshareholding(inthesolenameandasfirstnamedshareholderincaseofjointshareholdings)intheCompanycomprise22,91,460equitysharesrepresenting7.85%oftheCompany’spaid-upEquityShareCapital.

Mr.M.C.Choksi,70years,isareputedbusinessmanandhasbeenDirectoroftheCompanyforabout25years.HeisalsotheDirectorinotherPublicCompaniessuchasAsianPaintsLtd.andElfTrading&ChemicalsManufacturingLtd.Mr.Choksi’sexperienceandknowledgeofCorporateissuesandunderstandingofthePaints,PigmentsandResinsIndustryiswidelyacknowledged.Mr.Choksi’sshareholding(inthesolenameandasfirstnamedshareholderincaseofjointshareholdings)intheCompanycomprise3,600equitysharesrepresenting0.01%oftheCompany’spaid-upEquityShareCapital.

TheBoardofDirectorsoftheCompanyrecommendstheirrespectivere-appointments.

j) Membersarerequestedtobringattendance-SlipalongwiththeircopyofAnnualReporttotheMeeting.

k) The Ministry of Corporate Affairs (MCA) vide its circular No. 17/2011 dt.21/04/2011 & Circular No.18/2011 dated29/04/2011 has taken a ‘GoGreen Initiative’ by allowing paperless compliances by Companies through Electronic mode. TheCompanythusproposestosendalldocumentslikeGeneralMeetingNoticesincludingAGMNotice,AuditedFinancialStatements,Directors’Report,Auditors’ReportetchenceforthtotheMembersinelectronicforminlieuofthephysicalform.TosupportthisgreeninitiativeoftheGovernmentinfullmeasure,MembersholdingsharesintheDematMode&thePhysicalMode,andwhohavenotregisteredtheire-mailaddressesarerequestedtoregistertheire-mailIDforthepurposeofservicingdocumentsbytheCompanyinelectronicmodeatouremailidultramarinegogreen@linkintime.co.in

ByOrderoftheBoardofDirectors

N.AsokanCompanySecretary

May26,2011

RegisteredOffice:

ThirumalaiHouse,RoadNo.29,Sion(East)Mumbai400022

7


Directors’Report,ManagementDiscussions&AnalysisTo

TheMembers,

Ultramarine&PigmentsLtd.

Your Directors have pleasure in presenting their FIFTY FIRST ANNUAL REPORT AND AUDITED STATEMENT OFACCOUNTSoftheCompanyfortheyearendedMarch31,2012.

`inLakhs

FinancialResults Yearending

2011-2012

Yearending

2011-2012

GrossProfitBeforeFinanceCosts,Depreciation&Amortisation 2548 2880

Financecosts (171) (41)

ProfitbeforeDepreciation,AmortisationandTax 2376 2839

Depreciation&Amortisation (550) (427)

ProfitbeforeTax 1826 2412

CurrentTaxExpense (371) (771)

ProfitafterCurrentTax 1455 1641

ProvisionforDeferredTax (257) 59

Excessprovisionforearlieryears/MATCredit 171 1

ProfitafterTax 1369 1701

BalanceinProfit&LossAccount 3578 3073

Profitavailableforappropriation 4947 4774

Appropriations:

Dividend (876) (876)

TaxonDividends (142) (145)

GeneralReserve (150) (175)

ClosingBalance 3779 3578

Dividend

YourDirectorshaverecommendedaDividendof`3/-pershareof thenominalvalueof`2/-eachfortheyearendedMarch31,2011 [previousyear`3/-pershareofnominalvalue`2/-pershare including`1 towardsGoldenJubileeYearDividend].Thepaymentofdividendtogetherwiththetaxthereonabsorbedasumof`1022/-Lakhs.TheDividend,ifdeclared,by themembersat the forthcomingAnnualGeneralMeetingwillbepaid toall theeligiblemembersby____th_____2012.

8


Managements’DiscussionsandAnalysisOperationsandFinancialPerformance

Theoperationalperformanceof thecompany forvariousdivisions of the company could be considered as goodkeeping in view of the uncertain economic and businesstrendsprevailingbothindomesticandinternationalfront.

PigmentDivision

PigmentDivision,being thesignificantcontributorof thecompany’srevenuesandprofitability,achievedgrosssalesof`4737lakhswith4230MetricTonsduringthefinancialyearended31-3-2012asagainst`4473 lakhs (4380MT)inthepreviousfinancialyear.TheperformanceisgoodinspiteofeconomicuncertaintiesprevailingintheEuropeanNations. Suitable strategies on the product, place, priceandpromotionalfrontshavebeenmeticulouslyformulatedto cater to the needs of various customer bases andcapturenewmarketsby tapping intonewareas. Inspiteof the continued declining usage of pigments on certainapplications, the division has consolidated its operationson the domestic and global market. Due to continuousR&Deffort,thecompanyhasdeveloped4differentgradehighperformancepigments& thesame iswell receivedbythecustomers.Thecompanyisstrivingtoimprovetheoperationalefficiency.

Ontheexport front, therealizationshowed improvementwhichwasmainlyduetothevolumebasedoffersextendedtothebuyersoncertainpremiumgradeproducts.Inordertohaveawidercoverageandincreasedawarenessofourproducts, the company is participating in internationaltradefairsandexhibitions.

SurfactantsDivision

TheCompanyachievedgrosssales (includesprocessing)of`6941lakhsduringthefinancialyearended31-3-2012asagainst` 5908lakhsinthepreviousfinancialyear.

Thecompanyhasbeenconsistentlyidentifyingnewmarketsandnewcustomerbasestoimprovetheoperationssincethereisvastpotentialremainingtobetapped.Insomeoftheregions,thepresenceofourbrandisshowingmarginalincreasewiththeimplementationofnewmarketingpoliciesand practices. The company has acquired a land duringApril 2011, at Dahej in Gujarat on long term lease fromGujarat Industrial Development Corporation (“GIDC”) forsettingupofaplanttomanufactureSurfactants,PigmentsetctocatertothedemandofWesternandNorthernpartsofIndia.Asperthetermsofthelease,theplanthastobesetupwithinaperiodofthreeyears.

WindMillGeneration

Thepowergeneratedfromwindturbinesisabout̀ 65lakhunitsvaluedat̀ 220lakhs(whichpartiallyadjustedagainstconsumption).Thegenerationofpowerinvariouslocationsvaried marginally due to the difference in technology forgeneratorsandprevalenceofweatherduringwindseasonsindifferentlocations.

ReviewofITDivision

During the year under report, the Division has earnedrevenue of ` 1700 lakhs as against ` 1261 Lakhs to thecorrespondingperiodinthepreviousyearresultinginanincrease of 35%. Due to increased orders and improvedcustomer base, the company will be able to sustain thistrendinthefuture.

Earnings Per Share (EPS) is at ` 4.69 (Previous Year` 5.83)andCashEarningsPerShare(CEPS)is`6.57onthepaidupvalueof` 2/-pershare.

Exports

The exports of the company’s products during the yearamountedto`2568/-Lakhs(PreviousYear`2386Lakhs).

InternalControlSystems

The Company has established and maintained adequateinternal controls over the financial reporting. Internalcontrols have been designed to provide reasonableassurance regarding the reliability of financial reportingandthepreparationoffinancialstatementsinaccordancewith accounting principles generally accepted (GAAP)in India. The Company has an internal control systemcommensuratewiththesizeandnatureofthebusiness.

TheAuditCommitteeoftheCompanyprovidesreassurancetotheBoardontheexistenceofaneffectiveinternalcontrolenvironment.

TheCompany’sinternalcontrolsystemissupportedbylaidoutsystems,self-monitoringmechanisms,andisauditedbyanexternalfirmaspartoftheinternalauditfunction.Appropriateactionsaretakenbymanagementtocorrectdeficienciesastheyareidentified.Weareintheprocessofupgradingitssystemsandprocedurestofurtherenhanceallitsoperatingsystemsandcontrols.

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Personnel

IIndustrial Relations were quite harmonious through-outtheyearunderreview.Thedirectorsearnestlyappreciatethecontributionsandinitiativestakenbytheemployeesatall levels for the company’s improved performance yearafteryear.

OpportunitiesandThreats

Opportunitiesgalorewiththeincreasingproductexposuretonewapplications,territorialexpansionandbuildingupofexcellentmarketingsetup.Customerorientedmarketingistheprimaryobjectiveforgrowthtowardswhichgoalsarebeingrationallysetkeepingpacewiththeprevailingmicroandmacrobusinesstrends.

With the identification and implementation of severalsector-specific growth initiatives, the marketabilityand profitability of products would reach considerableheights. As already stated in the previous years’ reportsthedetergentmarket,beinginthe“FMCG”Segment,thecompanyhasbeenstrivinghardtopenetrateinthepopularsegment. The prospects on the surfactant segment isdependentonthenewproducts.

The upwards revision on the “VAT” rates in the state ofTamilnaduandtheCentralExciseTariffeffectedduringtheyearunderreport,andtheriseininputcostisacauseforconcern.

The world economy has not, so far, recovered from thepersistent global economic depression that hit duringthe year 2008 as evident from the downward trend onthe business prosperity of various sectors of industriesofU.SandotherEuropeannations.Lackofpropercreditcontrol measures, financial discipline, money marketmechanismsandlavishspendingaretherootcausesforthis ever growing economic crisis. The macro-economicuncertaintyinthepastanditscontinuedpresenceinsomeof the industries may seriously affect the future of theeconomyintheabovenationsposingseverethreattotheexport potentials of Indian companies. Global economywould become viable and vibrant unless a fresh set ofglobal financial, economic and monetary reforms areconceptualizedandimplementedintheyearstocome.

RisksandConcerns

1. Thepresenceofsmallplayerssupplyingsub-standardproducts has been causing serious concern forthe company which has also resulted in cut-throatcompetition.

2. Europeon Nations are still reeling under severeeconomicdepressionwhichhasanegativeimpactontheexportprospects.

3. Theprospectsofgrowthof“ITES”areverylowkeepinginviewoftheprevailingeconomictrendsinU.S.Aandotherwesternnations.

4. Thegapbetweenthedemandandsupplyofenergyiswideningasaconsequenceofwhich,theprospectsofbusiness entities and operational efficiency in TamilNaduareseverelyhampered.

Prospects&OutlookThe strategies which have been formulated for thesegments of the company on various fronts would bringinamajorbreakthroughontheprospectsoftheproductsand services in the long run on the domestic market.Similarly, the export will have an appreciable growthon the increasing value of U.S dollars in the short run.The consolidation of market on the basis of competitiveproductedge,willnevertheless,beadefinitiveimpactontheexportprospects.

CautionaryStatement

Thestatementsmadeinthereportdescribesthecompany’sobjectives, projections, estimates, expectations andpredictions which may be “forward looking statements”within themeaningof theapplicablesecurities lawsandregulations.Theannualresultscandiffermateriallyfromthose expressed or implied, depending on the economicconditions, Government Policies and other incidentalfactorsanddevelopments.

Directors

Dr.G.G.NairandShriS.Sridhar,DirectorsoftheCompany,retirebyrotationat theensuingAnnualGeneralMeetingandbeingeligibleofferthemselvesforre-appointment.

Directors’ResponsibilityStatement

Pursuant to the provisions of Sec. 217 (2AA) of theCompaniesAct,1956,theDirectorsconfirmthat.

i] in the preparation of the annual accounts for theyearendedMarch31,2012theapplicableaccountingstandards have been followed along with properexplanationrelatingtomaterialdepartures.

ii] appropriate accounting policies have been selectedand applied and such judgment and estimates havebeen made that are reasonable and prudent so astogivetrueandfairviewofthestateofaffairsofthecompanyasatMarch31,2012andoftheprofitofthecompanyfortheyearendedthatdate.

iii] proper and sufficient care has been taken for themaintenance proper and sufficient care has beentaken for the maintenance of adequate accountingrecordsinaccordancewiththeprovisionsofthisActfor

10


safeguardingtheassetsofthecompanyandforpreventinganddetectingfraudandotherirregularities,and

iv] the annual accounts have been prepared on a “goingconcern“basis.

Finance

All taxes and statutory dues are being paid on time. TheCompanyhasbeenregularinmakingtimelyrepaymentoftheloansandinteresttoBanks.

Thesurplusesinbusinessaredeployedinaprudentmanner,consideringtherisk,rewardandsafety.

StatementPursuanttoListingAgreement.TheCompany’ssharesarelistedwithBombayStockExchangeLtd. Your Company has paid the respective annual listingfeesup-to-dateandtherearenoarrears.

ReportonCorporateGovernance

A report on Corporate Governance is annexed herewith.Auditor’sReportonthesameisalsoannexed.

Auditors

M/s. Contractor, Nayak and Kishnadwala, CharteredAccountants, the Statutory Auditors of the Company holdoffice until the conclusion of the ensuing AGM. The noticeconvening theAGM isself-explanatory.Theyareeligible forreappointment.

CostAudit

PursuanttotherecentorderoftheCentralGovernmentunderSection233B(1)oftheCompaniesAct1956,thecompanyisboundtocarryoutanauditofcostaccountingrecordsrelatingtotheproductsofthecompany.Mr.G.SundaresanhasbeenappointedasCostauditorforthefinancialyear2012-13.

ParticularsOfEmployees

The details of the remuneration of the ManagingDirector/Whole-timeExecutiveDirector is furnished inthecorporategovernancereport.

TherehasbeennoEmployeesdrawingremunerationinexcessofthelimitsprescribedundersection217(2A)oftheCompaniesAct,1956.

Conservationofenergy,technologyabsorption,foreignexchangeearningandoutgo

The particulars required to be included in terms ofsection217(1)(e)oftheCompaniesAct,1956withregardto Conservation of Energy, Technology absorption,Foreign Exchange earnings and outgo are given inAnnexure.

Acknowledgement

The Board acknowledges the support given by theemployeesfortheircollectivecontribution,Bankersandtheshareholdersfortheircontinuedsupport.

ByOrderoftheBoard

forULTRAMARINE&PIGMENTSLTD.

R.SAMPATH

Chairman&ManagingDirector

MUMBAI

Date:May30,2012

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Annexure“I”toDirector’sReportParticularsofEmployeespursuanttoSection217(2A)oftheCompaniesAct,1956readwiththeCompanies(ParticularsofEmployees)Rules1975asamendedbytheCompaniesAmendmentAct,1988andformingpartoftheDirectorsReportfortheyearended31stMarch,2012.

Sr.No.

Nameof

Employee

Age

in

Years

Qualification

andExperience

Designation Remuneration(`)

Dateof

Commence-ment

Last

Employmentheld

1 Mr.R.Sampath 66 B.Sc.B.S.

(Chem.Engg.)

U.S.A.41years

Chairman&

Mg.Director

1,05,49,286 01-03-1970 Engineer,HerculesInc.USA

2 Ms.IndiraSundararajan 64 B.Sc.(Chem)

B.Tech(Pharma)

Whole-timeDirector

1,05,49,286 01-07-2003 ThirumalaiChemicals

Ltd.

NOTES:

1) Remuneration includes Company’s contribution to Provident Fund, Superannuation Fund, Medical Benefits,LeaveTravelAllowanceetc.

2) Natureofemploymentiscontractual.

3) Mr.R.SampathisarelativeofMrs.IndiraSundararajan,Whole-timeExecutiveDirectoroftheCompany.

BytheOrderoftheBoard

ForULTRAMARINE&PIGMENTSLIMITED

R.SAMPATH


MUMBAI

Date:May30,2012

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AnnexureIItoDirector’sReportInformationasperSection217(1)(e)readwiththeCompanies(DisclosuresofparticularsinreportoftheBoardofDirectors)Rules,1988andformingpartoftheDirector’sReport.

I.CONSERVATIONOFENERGY

a) Energysavingsystemsareincorporatedwherevernecessary/Energysavingsareattemptedcontinuously.

b) Existingenergysavingsystemsareproperlyutilisedandfurtherdevicesareaddedwhenevernecessary.

FUELCONSUMPTION(POWER&FUEL)

1.ELECTRICITY UNITS YEARENDING

31.03.2012

YEARENDING

31.03.2011

a)FromEB–TN

PurchasedUnits KW/HR 3448624 3584804

Totalamountpaid ` 19927641 19059247

Rate/Unit ` 5.78 5.32

b)OnGeneration

ThroughDG KW/HR 2213231 1493627

Unit/LitreofDieselOil KW/HR 6.55 4.42

CostPerUnit ` 12.90 13.32

2.COALANDCOKE

Coal&Coke&PetCoke ` 28901898 21355733

Coal&Coke&PetCoke Tons 1998 1395

Rate&Ton ` 14465 15308

3.FURNACEOIL/DIESEL/SKOETC.

FurnaceOil/Diesel/SkoEtc. KL 1606.94 1679.48

TotalAmount ` 60346411 49064964

RateKL ` 37554 29214

4.RESEARCH&DEVELOPMENTEXPENDITUREONR&D

i)Capital ` ---------- -------

ii)Recurring ` 1075645 183022

iii)Total ` 1075645 183022

iv)TotalR&DExpenditureasaPercentageoftotalturnover

0.08% 0.02%

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II. TECHNOLOGYABSORPTION,ADAPTATION,INNOVATION

YourCompanyistakinginitiativesforqualityofallproductsandservicesbyabsorbingnewtechnologiesinproduct/processdevelopmentsthroughmodernizationandbyalsobycost-effectivemethods/processes.

III. FOREIGNEXCHANGEEARNINGS&OUTGO

YourCompanyisconstantlyexploringnewmarketstoenhancetheexportsofitsProductsdespitethestiffcompetitionfaced in the international Market, Vigorous efforts are being made to enhance our revenue from IT-EnabledServices Division. Earnings in Foreign Exchange from Exports and Services are given in Notes forming part ofAccounts.

BytheOrderoftheBoard

ForULTRAMARINE&PIGMENTSLIMITED

R.SAMPATH


MUMBAI

Date:May30,2012

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CorporateGovernanceReport2011-2012(AsrequiredunderClause49oftheListingAgreementwithStockExchanges)

Company’sPhilosophyonCorporateGovernance

The Company believes that the pursuit for good Corporate Governance is an ongoing process which facilitates thecompany to achieve its avowed objectives of transparency, accountability and responsibility in all our dealings withourshareholders,customers,employeesandthecommunityatlarge.Thisobjectiveextendsnotmerelytomeetwithstatutoryrequirementsbutalsotogobeyondthembyputtingintoplaceproceduresandsystemswhichareinaccordancewiththebestpracticesforcorporategovernance.

TheCompanyrecognizesthatstrongCorporateGovernanceisakeydriverofsustainablecorporategrowthandlongtermvaluecreation.

InthisreportthecompanyconfirmsitscompliancewiththecorporategovernancecodeasrequiredbyClause49ofthelistingagreementwiththeStockExchanges.

(a)Composition

1. TheBoardofDirectorsofyourCompanycompriseofanExecutiveChairman&ManagingDirector,aWhole-timeDirectorwithSixNon-ExecutiveDirectors.

2. AllNon-ExecutiveDirectorsexceptMr.S.SridharandMr.S.SanthanamareindependentDirectors.

(b) BoardCommittees

i. AuditcumRemunerationCommittee

Dr.G.G.Nair(Chairman)

Ms.K.R.Javeri(Member)

Mr.S.Sridhar(Member)

Duringtheyear,theCommitteemetfourtimeson26/05/2011,08/08/2011,11/11/2011and14/02/2012.AllthemembersoftheCommitteeaswellastheconcernedpartneroftheStatutoryAuditorremainedpresentatallthemeetings.Theauditedresultsfortheyearended31/03/2012werereviewedbytheCommitteebeforebeingplacedbeforetheBoard.

ThecommitteemembersalsoexaminetheInternalAuditorsReportontheworkingsofdifferentdepartmentsandtheactiontakenonobservations/suggestionsoftheauditors.TheCommitteemembersdoperusethedetailedStatutoryComplianceReportwhichisnormallymadeonaquarterlybasis.

ThecommitteeMembersalsoreviewtheStatementofoutstandingDebts,particularlyoverdue,asalsogroupCompany transactions. Appointment and payment of remuneration to the Directors and key managementpersonnelarealsoreferredto/reviewedbytheCommittee.TheCommitteeMembersalsoactasmembersoftheoftheSelectionCommittee.

ii. ShareTransfer/Investors’GrievanceCommittee

TheShareTransfer/InvestorsGrievanceCommitteeconstitutesofthefollowingmembers:

Dr.G.G.Nair(Chairman)

Ms.K.R.Javeri(Member)

Mr.S.Sridhar(Member)

Mr.N.Asokan,CompanySecretaryistheComplianceOfficer.Allcomplaintswheneverreceivedfromanyinvestorweretimelyattendedforredressal.Totalof4ComplaintswerereceivedfromtheShareholdersduring2011-2012,whichwereallattendedtoandresolvedandtherewerenocomplaintspendingattheendoftheyear.Theprocessofsharetransferisdelegatedandisdoneonceafortnight(dependingontransfersreceived)whichisconfirmedandratifiedinthenextmeeting.TheCommitteemeetsasoftenasisnecessary.

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Therehasbeennocomplaintsfromanyinvestorwhichhasnotbeenredressedpromptly.FourmeetingsoftheShareTransfer-InvestorsGrievancecommitteewereheldduringtheyear2011-2012.Ithasbeennotedthattheshareholdingindematerializedmodeason31stMarch2012was94.75.%

(c) BoardMeetings

NumberofBoardMeetingsheldduringtheyear2010-2011

FourMeetingsoftheBoardofDirectorswereheldonthefollowingdates:

26/05/201108/08/201111/11/201114/02/2012.

All information,whereverrelevantandmateriallysignificant,aresubmittedaspartof theagendapaperswell inadvanceof theBoardMeetingsand theCompanySecretaryor theDirector, inconsultationwith theChairman&ManagingDirector,draftstheagendaofthemeetings.

(d) Directorsattendancerecordanddirectorshipsheld

NameofDirectors AttendanceAt No.ofDirectorshipsof

otherPublic

Companies

No.ofMember-ships

ofBoard

Sub-committeesBoard

Meetings

Last

AGM

Mr.R.Sampath* 4 Yes 1 -

Ms.IndiraSundararajan** 2 Yes - -

Mr.S.Santhanam 4 Yes 1 2

Mr.NimishPatel 4 Yes 3 2

Mr.M.C.Choksi 4 Yes 2 1

Dr.G.G.Nair 4 Yes 3 4

Mr.S.Sridhar 4 Yes 1 2

Ms.K.R.Javeri 4 Yes - 2

(*)ChairmanandManagingDirector.

(**)Whole-timeDirector.

(e) RemunerationofDirectors

Remuneration paid or payable to Managing Director / Whole-time Director / Director during the year ended31-03-2012.

(Amountin`)

Name Salary PF Others Commission Total

1.Mr.R.Sampath-CMD 48,00,000 5,76,000 39,50,769 12,22,517 1,05,49,286

2.Ms.IndiraSundarajanan-WTD 42,75,000 5,13,000 55,06,827 2,54,459 1,05,49,286

3.Mr.S.Santhanam–Director Nil Nil Nil 21,09,857 21,09,857

Notes:Managerialremunerationiswithintheceilingaspertheresolutionapprovedbytheshareholders.Thecaption“others”ontheabovetableincludesLTA,MedicalandSuperannuation.

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SittingfeeispayabletotheNon-ExecutiveDirectorsforattendingtheBoard/Committeemeetings.Thesittingfeespaidtothenon-executiveDirectorsisasunder:

Name Amount(`)

Mr.NimishPatel 80,000/-

Mr.M.C.Choksi 80,000/-

Dr.G.G.Nair 2,40,000/-

Ms.K.R.Javeri 2,40,000/-

Mr.S.Sridhar 2,40,000/-

Mr.S.Santhanam 80,000/-

PaymentsaremadetotheNon-ExecutiveDirectorsdependingonthenumberofmeetingsattendedbythem.ThesepaymentsarereviewedbytheBoardofDirectorsfromtimetotime.

(f) ShareholdingsofDirectors

DetailsofSharesheldbyNon-ExecutiveDirectorsason31.03.2012

Name No.ofSharesheld

Mr.NimishPatel 52,589

Mr.M.C.Choksi 3,600

Dr.G.G.Nair 18,000

Mr.S.Sridhar 13,01,436

Mr.S.Santhanam 17,33,666

(g)BriefdetailsofGeneralBodyMeetings:

The Fifty First Annual General Meeting of the company for the financial year 2011 - 2012 would be held on……………….. day of …….. 2012 at 4.00 P.M. at Mysore Association Auditorium, 393, Bhaudaji Road, Matunga,Mumbai–400019.

ThelastthreeAnnualGeneralMeetingswereheldasunder:

FinancialYear Date Time Location

2010–2011 08-08-2011 4.00PM MysoreAssociationAuditorium,BhaudajiRoad,Matunga,Mumbai–400019

2009–2010 02-08-2010 4.00PM MysoreAssociationAuditorium,BhaudajiRoad,Matunga,Mumbai–400019

2008–2009 31-08-2009 4.00PM MysoreAssociationAuditorium,BhaudajiRoad,Matunga,Mumbai–400019.

(h) CodeofConduct TheCompanyhaslaiddowntheCodeofConductforallBoardMembersandSeniorManagementoftheCompany.

TheCodeisalsopostedontheCompany’swebsite. AllBoardmembersandSeniorManagementoftheCompanyhaveaffirmedcompliancewiththeirCodeofConduct

forthefinancialyearendedMarch31,2012.TheChairman&ManagingDirectorhasalsoconfirmedandcertifiedthesame.ThecertificationisannexedattheendofthisReport.

17


Disclosures

(i) InternalAuditFunctionsandStatutoryCompliance

InternalAuditfunctionsofthecompanyhavebeencarriedoutbyafirmofCharteredAccountants.TheReportsoftheInternalAuditorsontheoperationsandfinancialtransactionsandtheactiontakenthereonbythemanagementintheformofreportaredulysubmittedtotheAuditcumRemunerationCommitteeoftheBoardofDirectors.TheStatutoryAuditorsareprovidedwiththereportsoftheinternalauditorsforconsiderationandreportasalsotheactiontakenreportmadebytheCompany.TheInternalauditoralsomakespresentationtotheAuditCommitteewheneverrequired.

Foreveryquarter,theCompanySecretary/DepartmentHeadmakesreportofStatutorycomplianceswhichareplacedbeforetheAuditCommitteeandtheBoardMeeting.

(ii) Directors with materially significant related party transactions, pecuniary or business relationship withthecompany:

There were no material significant transactions with the Directors or the management or their subsidiaries orrelativesthathaveanypotentialconflictwiththeinterestoftheCompany.

iii) DetailsofNon-compliance:

There were no case of non-compliance by the company nor any cases of penalties, strictures imposed on thecompanybyStockExchangesorSEBIoranystatutoryauthorityonanymatterrelatedtocapitalmarketsduringthelastthreeyears.

iv) RiskManagement

TheCompanyhaswelllaiddownprocedurestoinformBoardmembersabouttheriskassessmentandminimizationprocedures.

(v) CEO/CFOCertification

AppropriatecertificationasrequiredunderunderparaVofClause49oftheListingrequirementshasbeenmadetotheBoardofDirectorsbytheCEO/CFOwhichhasbeentakennoteofbytheBoard.

(vi)Meansofcommunication:

The company has promptly reported all material information including quarterly results and press releases totheStockExchangeswherethecompany’ssecuritiesarelisted.ThequarterlyresultswerecommunicatedtotheshareholdersbywayofadvertisementinaNationalDailyandinavernacularlanguagenewspaper.

(vii)DisclosuresbyManagementtotheBoard:

All details relating to financial and commercial transactions where Directors may have a potential interestareprovidedtotheBoard,andtheinterestedDirectorsneitherparticipateinthediscussion,nordotheyvoteon

suchmatters.

(viii)ManagementDiscussionandAnalysis:

Thisannualreporthasadetailedchapteronmanagementdiscussionandanalysis.

18


(ix)GeneralShareholdersInformation:

1) Date,timeandvenueof51stAGM : ……………..,the…..Dayof…....2012at4.00p.m.

MysoreAssociationAuditorium,

BhaudajiRoad,Matunga,

Mumbai–400019.

2) DateofBookClosure : ……....….,2012to………2012(bothdaysInclusive)

3) ListingonStockExchanges : BombayStockExchangeLtd.

4) ListingFees : Paidasperthelistingagreement

5) ISINNo. :INE405A01021

6) BSEStockCode : 506685

7) RegisteredOffice :ThirumalaiHouse,

RoadNo.29,Sion-East,Mumbai-400022.

Phone:+91-22-24017834/41/61/69

Fax:+91-22-24011699

E.Mail:[email protected]

8) RegistrarsandShareTransferAgent : LinkIntimeIndiaPrivateLimited

C-13,PannalalSilkMillsCompound

LBSRoad,Bhandup(W),Mumbai–400078.

Phone:+91-2225946970

Fax:+91-2225946969

E.Mail:[email protected]

9) ComplianceOfficer :ShriN.Asokan–CompanySecretary

Ultramarine&PigmentsLtd.,

ThirumalaiHouse,RoadNo.29,

Sion(East),Mumbai–400022.

Phone:+91-22-24017841/24017853

Fax:+91-22-24011699

E.Mail:[email protected]/[email protected]

10) ShareTransferSystem : The Company’s shares are traded in the Stock Exchanges compulsorily in de-materialized mode Shares sentforphysicaltransferorde-materialisationrequestsare registeredpromptlywithin15daysfromthedateofreceiptof completedandvalidlyexecuteddocuments.

11) FinancialCalendar : AnnualResults :30thMay2012

MailingofAnnualReports :Junebegin2012

ResultsfortheQuarterending:

June30,2012 :15thAugust2012

September30,2012:By15thNov,2012

December31,2012:By15thFeb,2012

March31,2013:May,2013

19


12) DividendPaymentdates : By1st…….,2012

13) DematerialisationofShares : Ason31-03-201294.75%of Company’s shares representing 2,76,66,284 Shares were heldinthede-materializedform.

14) Plantlocation : No.556,VanagaramRoad,

Ambattur,Chennai–600053,Tamilnadu.

Tel:(044)26821195/96/97/98/99

Fax:(044)26821201

E.mail:[email protected]

25-B,SIPCOTIndustrialComplex,

Ranipet–632403,TamilNadu.

Tel:(04172)244441/244442

Fax:(04172)244918


(ITEnabledServicesDivision)

LapizDigitalServices

“SreeEssarTowers,No:41,2ndFloor,

VenkatNarayanaRoad,T.Nagar,

Chennai-600017


LapizOnline

DLFIFPark,

2ndFloor,5thBlock,1/24,ShivajiGarden,

MountPoonamalleRoad,Chennai–600089

Tel:044-42901300

Fax:044-42901310

E-mail:[email protected]

15) CategoriesofShareholders No.ofShares %ofShareholders

(ason31.03.2012)

Promoters/Directors,

theirRelatives,GroupCompanies :1,39,36,276 47.73

FinancialInstitutions/Banks :2,47,645 0.85

NRI :5,20,394 1.78

Companies/BodiesCorporate :3,84,121 1.32

GeneralPublic :1,40,42,256 48.09

ClearingMember&Trusts :69,308 0.24

20


16)DistributionofShareholdingason31.03.2012

No.ofShares

No.ofShareholders

No.ofShareholders

Noofshares %ofShareholding

UPTO500 4032 58.37 818092 2.80501-1000 1041 15.07 861349 2.951001-2000 634 9.18 1016456 3.482001-3000 281 4.07 713243 2.443001-4000 213 3.08 746656 2.564001-5000 156 2.26 740865 2.545001-10000 288 4.17 2262674 7.75OVER5000 263 3.81 22040665 75.48TOTAL 6908 100.00 29200000 100.00

17) StockMarketpricedatafortheyear2011–2012

BombayStockExchangeLtd

Month High Low No.ofShares

April-2011 43.95 41.10 1,08,042May-2011 46.50 41.00 2,88,325June-2011 49.00 44.00 2,38,963July-2011 51.75 42.50 3,44,888August-2011 43.95 36.50 2,20,549September-2011 41.15 37.80 1,06,787October-2011 44.30 37.50 1,08,586November-2011 39.95 36.30 83358December-2011 38.50 34.00 89562January-2012 46.90 33.65 4,10,059February-2012 45.90 42.00 3,69,385March-2012 52.50 41.90 9,77,305

18) CorporateEthics The consistent endeavour of Ultramarine & Pigments Ltd. is to enhance the reputation of the Company and

irrespectiveofthegoalstobeachieved,themeansareasimportantastheend.TheCompanyhasadopted“TheCodeofConductforpreventionofinsidertrading”,whichcontainspoliciesprohibitinginsidertrading.TheCompanyhasalsopromulgatedCodeofConducttobefollowedbyDirectorsandManagementwhichisalsoavailableontheCompany’swebsite.

DeclarationbytheCEOunderClause491(D)oftheListingAgreementregardingadherencetotheTheCodeofConductIn accordance with Clause 49 sub-clause 1 (D) of the Listing Agreement with the Stock Exchange, I hereby confirmthat,alltheDirectorsandtheSeniorManagementPersonneloftheCompanyhaveaffirmedcompliancetotheCodeofConductfortheFinancialYearendedMarch31,2012.

ForUltramarine&PigmentsLtd.

R.SAMPATH


Mumbai

May30,2012

21


Auditors’ReportonCorporateGovernanceTo

Themembersof,

Ultramarine&PigmentsLimited

WehaveexaminedthecomplianceofconditionsofcorporategovernancebyUltramarine&PigmentsLimitedfortheyearendedon31stMarch2012asstipulatedinclause49oftheListingAgreementofthesaidCompanywithstockexchanges.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examinationwaslimitedtoproceduresandimplementationsthereof,adoptedbytheCompanyforensuringthecomplianceoftheconditionsofthecorporategovernance.ItisneitheranauditnoranexpressionofopiniononthefinancialstatementsoftheCompany.

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,wecertifythattheCompanyhascompliedwiththeconditionsofcorporategovernanceasstipulatedintheabovementionedListingAgreement.

Asrequiredby theGuidanceNote issuedby the InstituteofCharteredAccountantsof India,wehavetostatethatnoinvestorgrievanceispendingforaperiodexceedingonemonthagainsttheCompanyaspertherecordsmaintainedbytheShareholdersandInvestors’GrievanceCommittee.

WefurtherstatethatsuchcomplianceisneitheranassuranceastothefutureviabilityoftheCompanynortheefficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

Forandonbehalfof

ContractorNayak&Kishnadwala

CharteredAccountants

H.V.Kishnadwala

Partner

MembershipNo.37391

FirmRegistrationNumber101961W

Mumbai,

Dated:May26,2011

22


Auditors’ReportTo

Themembersof,

Ultramarine&PigmentsLimited1. WehaveauditedtheattachedBalanceSheetofUltramarine&PigmentsLimitedasat31stMarch2012(hereinafter

referredtoas“theCompany”),therelatedProfitandLossStatementandtheCashFlowStatementoftheCompanyfortheyearendedonthatdateannexedthereto.ThesefinancialstatementsaretheresponsibilityoftheCompany’smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

2. WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedinIndia.ThoseStandardsrequirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefreeofmaterialmisstatements.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinfinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

3. AsrequiredbytheCompanies(Auditor’sReport)Order,2003(hereinafterreferredtoas“theOrder”),issuedbytheCentralGovernment intermsofSection227(4A)oftheCompaniesAct,1956,andonthebasisofsuchchecksasconsideredappropriateandaccordingtotheinformationandexplanationsgiventousduringthecourseoftheaudit,weencloseintheAnnexureheretoastatementonthemattersspecifiedinparagraphs4and5oftheOrder.

4. FurthertoourcommentsintheAnnexurereferredtoinaboveparagraph,wereportthat:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessaryforthepurposesofouraudit;

b) Inouropinion,properbooksofaccount,asrequiredbylawhavebeenkeptbytheCompanysofarasappearsfromourexaminationofthebooksoftheCompany;

c) The Balance Sheet, Profit and Loss Statement and the Cash Flow Statement dealt with by the report are inagreementwiththebooksofaccountoftheCompany;

d) In our opinion, the Balance Sheet, Profit and Loss Statement and the Cash Flow Statement comply with themandatoryAccountingStandardsreferredtoinSection211(3C)oftheCompaniesAct,1956.

e) OnthebasisofwrittenrepresentationsreceivedfromthedirectorsoftheCompanyason31stMarch2012,andtakenonrecordbytheBoardofDirectors,wereportthatnoneofthedirectorsisdisqualifiedason31stMarch2012,frombeingappointedasadirectorintermsofSection274(1)(g)oftheCompaniesAct,1956.

f) Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thesaidfinancialstatementsreadtogetherwiththeNotestoFinancialStatementsinSchedule19,givetheinformationrequiredbytheCompaniesAct,1956inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia:

a. InthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasat31stMarch2012;

b. InthecaseoftheProfitandLossStatement,oftheProfitfortheyearendedonthatdate,

c. InthecaseoftheCashFlowStatement,ofthecashflowsoftheCompanyfortheyearendedonthatdate.

Forandonbehalfof

Contractor,Nayak&KishnadwalaCharteredAccountants

FirmRegistrationNo.:101961W

H.V.KishnadwalaPartner

MembershipNo.37391

FirmRegistrationNumber101961W

Mumbai,

Dated:May26,2011

23


Statement referred to in paragraph 3 of the Auditors’ Report of even date to the members ofUltramarine&PigmentsLimitedontheaccountsfortheyearended31stMarch2011Onthebasisofsuchchecksasconsideredappropriateandintermsoftheinformationandexplanationsgiventous,westateasunder:

1 (a) The Company has maintained proper records showing full particulars, including quantitative details and situationofthefixedassets;

1 (b) Asexplained tous, themanagementat reasonable intervalscarriesout thephysical verificationof thefixed assets.Thediscrepanciesnoticedonsuchverification,whichwerenotmaterial,havebeenappropriatelydealtwith inthefinancialstatements;

1 (c) The fixed assets disposed off by the company during the year were not substantial and therefore does not affectthegoingconcernassumption;

2 (a) Asexplainedtous,inventoriesexceptStocklyingwiththirdparties,confirmationforwhichhavebeenobtained, havebeenphysicallyverifiedduringtheyearbythemanagement.Inouropinion,havingregardtothenatureand locationofstocks,thefrequencyofthephysicalverificationisreasonable;

2 (b) Inouropinionandasexplainedtous,theproceduresofphysicalverificationofinventoryfollowedbythemanage mentarereasonableandadequateinrelationtothesizeoftheCompanyandthenatureofitsbusiness;

2 (c) Inouropinionandaccordingtotheinformationandexplanationgiventous,theCompanyismaintainingproper recordsof inventoryand thediscrepanciesnoticedonphysical verificationbetweenphysicalsstocksand the bookrecordswerenotmaterialinrelationtotheoperationsoftheCompanyandthesamehavebeenproperly dealtwithinthebooksofaccount;

3 (a) Aspertheinformationandexplanationsgiventous,theCompanyhasgrantedunsecuredloanstoaCompany coveredintheregistermaintainedundersection301oftheCompaniesAct,1956.Detailsofsuchunsecuredloan grantedisasunder:

NameoftheParty Balanceason31March2012(`)

Maximumbalanceoutstandingduringtheyear(`)

ThirumalaiChemicalsLimited Nil 131,149,352

3 (b) IncaseoftheaforesaidunsecuredloansgrantedtoaCompanycoveredintheregistermaintainedunderSection 301of theCompaniesAct,1956, therateof interestand theother termsandconditionsarenotprima-facie prejudicialtotheinterestsoftheCompany;

3 (c) IncaseoftheaforesaidunsecuredloansgrantedtoaCompanycoveredintheregistermaintainedunderSection 301oftheCompaniesAct,1956,therepaymentofprincipalamountandinterestisregular;

3 (d) Thereisnooverdueamountofloans,includinginterest,grantedtoaCompanycoveredintheregistermaintained underSection301oftheCompaniesAct,1956;

3 (e) Aspertheinformationandexplanationsgiventous,theCompanyhasnotacceptedsecuredorunsecuredloans fromcompanies,firmsorotherpartiescoveredintheregistermaintainedundersection301oftheCompanies Act,1956.Therefore,theprovisionsofclause3(f)and3(g)oftheparagraph4oftheOrderarenotapplicableto theCompany

4 Inouropinionandaccordingtoinformationandexplanationgiventous,thereisanadequateinternalcontrolsystemcommensuratewiththesizeoftheCompanyandthenatureofitsbusinesswithregardtopurchaseofinventoryandfixedassetsandforthesaleofgoodsandservices.Further,onthebasisofourexaminationofthebooksofaccount,andasexplainedtous,nomajorweaknesseshasbeennoticedininternalcontrolsysteminrespectoftheseareasandwehavenotobservedanycontinuingfailuretocorrectmajorweaknessinthesame;

5 (a) Basedontheauditproceduresappliedbyusandaccordingtotheinformationandexplanationsprovidedbythe management,weareoftheopinionthatthetransactionsthatneedtobeenteredintotheregistermaintained underSection301oftheCompaniesAct,1956havebeensoentered;

24


5 (b) Tothebestofourknowledgeandbeliefandaccordingtotheinformationandexplanationgiventous,thetrans actionsmadeinpursuanceofcontractsorarrangementsenteredintheRegistermaintainedundersection301 oftheCompaniesAct,1956andexceedingthevalueof` 5,00,000inrespectofeachpartyduringtheyearhave been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevanttime;

6 TheCompanyhasnotacceptedanydepositsfromthepublicaccordingly,Clause(vi)ofparagraph4oftheOrderarenotapplicabletothecompanyforthecurrentyear;

7 Inouropinion,theCompanyhasaninternalauditsystemcommensuratewiththesizeoftheCompanyandthenatureofitsbusiness;

8 WehavebroadlyreviewedthebooksofaccountmaintainedbythecompanyinrespectofmanufactureofdetergentspursuanttotheOrdermadebytheCentralGovernmentforthemaintenanceofcostrecordsprescribedundersection209(1)(d)oftheCompaniesAct,1956andareoftheopinionthatprima-facie,theprescribedaccountsandrecordshavebeenmadeandmaintained.Wehavenot,however,madeadetailedexaminationoftherecordswithaviewtodeterminingwhethertheyareaccurateorcomplete;

9 (a) According to the information and explanations given to us and the records examined by us, the Company is regularindepositingwithappropriateauthoritiesundisputedstatutoryduesincludingProvidentFund,Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax Customduty,Excise-duty,Cessandothermaterialstatutoryduesapplicabletoitandtherearenoundisputed statutory dues outstanding as at 31st March 2012, for a period of more than six months from the date they becamepayable;

9 (b) DisputedstatutoryduesthathavenotbeendepositedonaccountofdisputedmattersinrespectofIncomeTax andExcise-dutypendingbeforeappropriateauthoritiesareasunder:

NameoftheStatute Natureofthedues

Amount(`)

Yearstowhichtheamountrelates Forumwheredisputeis

IncomeTaxAct,1961 IncomeTax *51,434

AssessmentYear2006-2007

CommissionerofIncomeTax,Appeals

IncomeTaxAct,1961 IncomeTax *13,764,095 AssessmentYear

2008-2009CommissionerofIncome

Tax,Appeals

*Amountspaidunderprotestandnotchargedtoprofitandlossstatementhavenotbeenincludedabove.[ReferNoteNo.4.1(c)ofNotesformingpartofFinancialStatements]

TheCentralExciseAct,1944

ExciseDuty 2,118,944 2007-2008 TheCommissioner(Appeals),

CentralExcise

TheCentralExciseAct,1944 Penalty 3,437,170 2007-2008 TheCommissioner(Appeals),

CentralExcise

10 Thecompanydoesnothaveanyaccumulatedlossesason31stMarch2012andhasnotincurredanycashlossesduringthefinancialyearandintheimmediatelyprecedingfinancialyear;

11 According to the books of account examined by us and as explained to us, the Company has not defaulted inrepaymentofanyduestofinancialinstitutionsorbanks;

12 Basedonourexaminationof therecordsandasexplainedtous, theCompanyhasnotgrantedany loansand/oradvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities;

13 Inouropinion,andasperinformationandexplanationprovidedtous,theCompanyisnotachitfund/nidhi/mutualbenefitfund/society.Therefore,theprovisionsofclause(xiii)oftheparagraph4oftheOrderarenotapplicabletotheCompany;

25


14 Duringtheyear,theCompanydoesnothaveanytransactionsinrespectofdealingandtradinginshares,securities,debenturesandotherinvestments.Allshares,debenturesandothersecuritiesheldasinvestmentsbytheCompanyhavebeenheldbytheCompanyinitsownname;

15 Accordingtotheinformationandexplanationsgiventous,theCompanyhasnotgivenanyguaranteesforloanstakenbyothersfrombanksorfinancialinstitutions;

16 Accordingtotheinformationandexplanationsgiventous,termloanstakenbytheCompanyduringtheyear,hasbeenappliedforthepurposeforwhichloanswereobtained;

17 AsexplainedtousandonanoverallexaminationofthebalancesheetoftheCompany,inouropinion,therearenofundsraisedonshort-termbasiswhichhavebeenusedforlong-terminvestmentbytheCompany;

18 DuringtheyeartheCompanyhasnotmadeanypreferentialallotmentofsharestothepartiesorcompaniescoveredintheregistermaintainedundersection301oftheCompaniesAct,1956;

19 DuringtheyeartheCompanyhasnotissuedanydebentures;Thereforetheprovisionsofclause(xix)oftheparagraph4oftheOrderarenotapplicabletotheCompany;

20 TheCompanyhasnotraisedanymoneybywayofpublicissuesduringtheyear.Therefore,theprovisionsofclause(xx)oftheparagraph4oftheOrderarenotapplicabletotheCompany;

21 Aspertheinformationandexplanationsgivenbythemanagementtous,wereportthatnofraudonorbytheCompanyhasbeennoticedorreportedduringtheyear.

Forandonbehalfof

ContractorNayak&Kishnadwala

CharteredAccountants

FirmRegistrationNo.:101961W

H.V.Kishnadwala

Partner,MembershipNo.37391

Mumbai,May30,2012

26


BalanceSheetasat31StMarch2012(Amountin`)

Particulars Note Asat31.03.2012

As at 31.03.2011

Equityandliabilities

Shareholders’FundsShareCapital 3.1 58,400,000 58,400,000ReservesandSurplus 3.2 760,397,660 725,283,976

818,797,660 783,683,976Non-CurrentLiabilities Long-termborrowings 3.3 57,769,255 60,266,333Deferredtaxliabilities(net) 3.4 55,226,127 29,530,586Long-termprovisions 3.5 26,698,629 20,513,208

139,694,011 110,310,127

CurrentLiabilitiesShort-termborrowings 3.6 - 10,445,773Tradepayables 3.7 82,875,705 23,759,132Othercurrentliabilities 3.8 77,568,798 78,795,607Short-termprovisions 3.9 135,594,765 130,281,426

296,039,268 243,281,938Total 1,254,530,939 1,137,276,041

AssetsNon-currentassetsFixedassets 3.10 452,643,940 407,173,368Non-currentinvestments 3.11 132,170,372 132,170,372Longtermloansandadvances 3.12 58,791,727 20,979,593

643,606,039 560,323,332

CurrentassetsCurrentinvestments 3.13 - 30,600,000Inventories 3.14 159,024,883 124,011,404Tradereceivables 3.15 205,119,046 146,236,746Cashandbankbalances 3.16 186,471,637 192,497,182Short-termloansandadvances 3.17 9,594,089 56,694,870Othercurrentassets 3.18 50,715,245 26,912,507

610,924,900 576,952,709Total 1,254,530,939 1,137,276,041

SignificantaccountingpoliciesandnotestoFinancialStatements 2to6

Asperourreportofevendate ForandonbehalfoftheBoardofDirectors

For&onbehalfof

CONTRACTOR,NAYAK&KISHNADWALA

CharteredAccountants R.SAMPATH ChairmanandManagingDirector

H.V.KISHNADWALAN.ASOKAN

PartnerCompanySecretary

INDIRASUNDARARAJAN WholetimeDirectorPLACE:MUMBAI DATE:30thMay,2012

27


StatementofProfitandLossfortheyearended31StMarch,2012(Amountin`)

Particulars Note Asat31.03.2012

Asat31.03.2011

IncomeRevenuefromoperations 3.19 1,360,365,226 1,178,260,482Otherincome 3.20 22,099,940 58,952,167TotalRevenue 1,382,465,166 1,237,212,649

ExpensesCostofmaterialconsumed 3.21 539,523,284 433,437,309Purchaseofstock-in-trade 3.22 4,827,787 2,987,042Changesininventoriesoffinishedgoodsandwork-in-progress 3.23 (11,068,309) 14,847,718Employeesbenefitsexpense 3.24 198,480,587 159,306,315Financecosts 3.25 17,134,413 4,141,810Depreciationandamortizationexpenses 3.10 55,021,535 42,699,383Otherexpenses 3.26 395,933,939 338,638,117Totalexpenses 1,199,853,237 996,057,693

Profitbeforetax 182,611,929 241,154,956TaxExpensesCurrenttaxexpense (37,100,000) (77,050,000)MATCreditEntitlement 4,322,994 -Deferredtaxexpense/(credit) (25,695,541) 5,937,096Taxadjustmentsforearlieryears 12,785,212 66,856Profitfortheyear 136,924,594 170,108,908

EarningsperequityshareBasicandDiluted-Parvalue`2/-pershare 3.4 4.69 5.83

SignificantaccountingpoliciesandnotestoFinancialStatements 2to6


For&onbehalfof





INDIRASUNDARARAJAN WholetimeDirectorPLACE:MUMBAI DATE:30thMay,2012

28


CashFlowStatementfortheyearended31StMarch,2012(Amountin`)

Particulars Asat31.03.2012 As at 31.03.2011

CashflowsfromoperatingactivitiesNet-profit before taxation, and extraordinary item 182,611,929 241,154,956Adjustmentsfor:

Depreciationandamortisationexpenses 55,021,535 42,699,383 Interest income (16,135,631) (17,939,765) Dividend income - (10,980,455)Interestexpenses 17,134,413 4,141,810Effectofexchangeratechange 1,012,045 349,607Loss/(Profit)onsaleofinvestment - (26,038,978)Loss/(Profit)onsale/discardedasset(Net) 2,260,365 3,380

Operatingprofitbeforeworkingcapitalchange 241,904,656 233,389,938Adjustmentsfor:Increaseinsundrydebtors (59,315,261) 21,133,922Decrease/(Increase)ininventories (35,013,479) 9,081,683Increaseinsundrycreditors 69,147,795 (19,622,929)Cashgeneratedfromoperations 216,723,711 243,982,614

Income-taxespaid (61,786,369) (67,068,443)Netcashfromoperatingactivities(A) 154,937,341 176,914,171

CashflowsfrominvestingactivitiesPurchaseoffixedassets (102,983,803) (139,018,701)Saleoffixedassets 231,330 511,967Proceedsfromsaleofinvestment 30,600,000 53,714,119Interestreceived 16,135,631 21,770,385Dividendsreceived - 10,980,455(Increase)/DecreaseinBank/Intercorporatedeposit (40,141,936) (38,160,817)(Increase)/DecreaseinLoansandadvance (19,219,516) (22,986,304)Netcashfrominvestingactivities(B) (115,378,294) (113,188,896)

Cashflowsfromfinancingactivities(Re-paymentof)/proceedsfromlong-termborrowings (2,497,078) 47,992,986Repaymentofshorttermborrowings (10,445,773) -Interestpaid (17,134,413) (4,067,740)Dividendspaid (102,149,265) (102,149,265)Netcashusedinfinancingactivities(C) (132,226,529) (58,224,019)

Netincrease/(decrease)incashandcashequivalentsduringtheyear(A+B+C) (92,667,482) 5,501,256

Cashandcashequivalentsasatthebeginningoftheyear 136,573,093 131,071,838

Cashandcashequivalentsasattheendofyear 43,905,612 136,573,093

(a)Cashandcashequivalents(i)BalanceswithbanksIndepositaccountswithoriginlmaturityoflessthan3months 225,000 -Inotheraccounts 43,290,641 136,213,918(ii)Cashonhand 389,971 359,175

43,905,612 136,573,093

Asperourreportofevendate ForandonbehalfoftheBoardofDirectorsFor&onbehalfof CONTRACTOR,NAYAK&KISHNADWALA CharteredAccountants R.SAMPATH ChairmanandManagingDirectorH.V.KISHNADWALAN.ASOKAN PartnerCompanySecretary INDIRASUNDARARAJAN WholetimeDirectorPLACE:MUMBAI

DATE:30thMay,2012

29


NotestoFinancialStatementsfortheyearended31stMarch,2012

1 CORPORATEINFORMATION

UltramarineandPigmentsLimitedisapubliclimitedcompanydomiciledinIndia,incorporatedundertheprovisionsoftheCompaniesAct,1956.ItssharesarelistedinBombayStockExchangeLtd,India.Thecompanyisengagedinmanufacturingandsellingofpigments,surfactants,andalsoengagedinITenabledservices.Thecompanycaterstobothdomesticandinternationalmarkets.

2 SIGNIFICANTACCOUNTINGPOLICIES:

I BASISOFACCOUNTING:

ThefinancialstatementsarepreparedincomfirmitywithGenerallyAcceptedAccountingprinciplesinIndia,the applicableAccountingStandardsnotifiedbytheCompanies(AccountingStandards)Rules,2006andtheother relevantprovisionsoftheCompaniesAct,1956.Thefinancialstatementshavebeenpreparedonthebasisof historical cost. The Company follows the mercantile system of accounting for recognising income and expenditureonaccrualbasis.

II USEOFESTIMATES

Thepreparationoffinancialstatementsrequiresestimatesandassumptionstobemadethataffectthereported amountofassetsandliabilitiesonthedateofthefinancialstatementsandthereportedamountofrevenuesand expensesduringthereportingperiod.Differencebetweentheactualandestimatesarerecognisedintheperiod inwhichtheresultsareknown/materialised.

III REVENUERECOGNITION:

RevenueisrecognisedtotheextentitisprobablethattheeconomicbenefitswillflowtotheCompanyandthe revenuecanbereliablymeasured.

(a) Sale of goods are recognised when risk and rewards of ownership of the products are passed on to thecustomers which is generally on despatch of goods. Sales include amounts recovered towards ExciseDutyandarenetofreturns.

(b)Incase of IT Enabled Services division, sale of services is recognised on despatch and subsequentapprovalbycustomers.

(c)Revenue from sale of power from wind operated generators is accounted when the same is transmittedandconfirmedbytheElectricityBoard.

(d)Income from Job work is accounted on accrual basis on dispatch of material and as per terms ofagreement

(e)Duty free imports of raw materials under Advance Licence for imports as per the Import and ExportPolicy are matched with the exports made against the said licences and the net benefit/obligation isaccounted by making suitable adjustment in raw material consumption. The benefits accrued under theDuty Entitlement Pass Book Scheme as per the Import and Export policy in respect of exports madeunderthesaidschemehavebeenincludedunderthehead‘ExportIncentives’.

(f) Interest is recognised on a time proportion basis taking into account the amount outstanding and therateapplicable.

(g)Dividend is recognised when the shareholders’ right to receive payment is established by the balancesheetdate

IV FIXEDASSETS:

TangibleAssets:

FixedAssetsarerecordedatcostofacquisitionorconstruction/erectionincludingtaxes,duties,freightand other incidentalexpensesrelatedtoacquisitionand installation. Interest incurredduringconstructionperiod on borrowings to finance qualifying fixed assets is capitalised. Fixed Assets which are not in active use are scrappedandwrittenoff.

30


V DEPRECIATION:

Depreciation on Plant and Machinery and Building is provided on Straight Line method. In the case of ComputersandNetworkEquipmentsacquiredfortheITEnabledServicesDivision,amortisationiscomputedon the Straight Line method over the estimated useful life of 4 years. Depreciation for Software costing upto ` 25,000/- is provided at the rate of 100% in the year of addition. Other Software acquired are depreciated overitsestimatedusefullifeof3years.Theratesatwhichdepreciationisprovidedasabove,areasprescribedby Schedule XIV to the Companies Act, 1956 and in terms of relevant circulars issued by the Department of CompaniesAffairs.

VI INVESTMENTS:

Investments which are all long-term are stated at cost of acquisition and related expenses. Provisions for diminutioninvalueismadetorecognizeadeclineotherthantemporaryinvalueoftheinvestments.

VII INVENTORIES:

ItemsofInventoryarevaluedontheprincipleslaiddownbyAccountingStandard2“ValuationofInventories”on thebasisgivenbelow

i StoresandSpareParts Atcost(onweightedaveragebasis)includingincidentalexpenseslikefreight,transportetc.,ornetrealizablevaluewhicheverislower.

ii RawMaterials Atcost(onweightedaveragebasis)includingincidentalexpenseslikefreight,transportetc.,ornetrealizablevaluewhicheverislower.

iii Work-in-Progress At raw material cost plus proportionate fixed and variable manufacturingexpensesornetrealisablevaluewhicheverislower.

iv FinishedGoods At Cost or net realisable value whichever is lower. Cost is calcualted at rawmaterialcostplusallfixedandvariablemanufacturingexpenses.Excisedutyisalsoincludedinvaluation

VIII EMPLOYEEBENEFITS:

i. Short-termemployeebenefits

Allemployeebenefitspayablewhollywithintwelvemonthsofrenderingtheserviceareclassifiedasshorttermemployeebenefits.Benefitssuchassalaries,wages,performanceincentive,paidannualleave,bonus,leave travel assistance, medical allowance, contributions to provident fund and superannuation etc.recognisedasactualamountsdueinperiodinwhichtheemployeerenderstherelatedservice.

ii. Post-employementbenefits

a.DefinedContributionPlans

Payments made to defined contribution plans such as Provident Fund is charged as expense as theyfalldue.

b.DefinedBenefitPlans

The cost of providing benefits i.e. gratuity is determined using the Projected Unit Credit Method, withactuarialvaluationcarriedoutasat thebalancesheetdate.Actuarialgainsand lossesarerecognisedimmediatelyintheProfitandLossAccount.

iii.OtherLong-termemployeebenefits

OtherLongtermemployeebenefitsisrecognisedasanexpenseintheprofitandlossaccountasandwhenit accrues. The company determines the liability using the Projected Unit Credit Method, with actuarialvaluationcarriedoutasattheBalanceSheetdate.Theactuarialgainsandlossesinrespectofsuchbenefitsarechargedtotheprofitandlossaccount.

31


IX FOREIGNCURRENCYTRANSLATION:

Transactiondenominated in foreigncurrenciesarerecorededat theexchangeratesprevailingat thedateof transaction.Monetaryitemsdenominatedinforeigncurrencyattheyearendaretranslatedatyearendrates. InrespectofMonetaryitemswhicharecoveredbyforeignexchangecontracts,thedifferencebetweentheyear endratesandtherateonthedateofcontractisrecognisedasexchangedifferenceandthepremiumonsuch forward contracts is recognised over the life of the forward contract. The exchange differences arising on settlement/translationoftransactionsarerecognisedintheprofitandlossaccount.

X BORROWINGCOSTS:

Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantialperiodoftimetogetreadyforitsintendeduse.Otherborrowingcostsarerecognisedasanexpense intheperiodinwhichtheyareincurred.

XI TAXATION:

Current Tax is determined as the amount of tax payable to the taxation authorities in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence, on timing differencebeingdifferencesbetweentaxable incomeandaccounting incomethatoriginate inoneperiodand are capable of reversal in one or more subsequent periods. The Company avails credit for Minimum AlternativeTaxifthereisareasonablecertainitythatthesamewouldbesetoffduringtheeligibleperiod.

XII PROVISIONS,CONTINGENTLIABILITIESANDCONTINGENTASSETS

Provisionsarerecognisedonlywhenthereispresentobligationasaresultofpasteventsandwhenareliable estimateoftheamountoftheobligationcanbemade.Contingentliabilitiesdisclosedfor(i)possibleobligations which will be confirmed only by future events not wholly within the control of the company or (ii) present obligtionsarisingfrompasteventswhereitisnotprobablethatanoutflowofresourceswillberequiredtosettle the obligation or a reliable estimate of the amount of obligation cannot be made. Contingent assets are not recognised in the financial statements, since this may result in recognition of income that may never berealised.

XIII EARNINGPERSHARE:

Basicearningspersharearecalculatedbydividingthenetprofitorlossfortheperiodattributablettoequity shareholdersbytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.Partlypaidequity sharesaretreatedasafractionofanequitysharetotheextentthattheywereentitiledtoparticipateindividends relativetoafullypaidequityshareduringthereportingperiod.Forthepurposeofcalculatingdilutedearnings pershare, thenetprofitor loss for theperiodattributable toequityshareholdersand theweightedaverage number of shares outstanding during the period are adjusted for the effects of all diluted potential equityshares.

IX CASHANDCASHEQUIVALENTS

TheCompanyconsidersallhighlyliquidfinancialinstruments,whicharereadilyconvertibleintocashandhave originalmaturitiesofthreemonthsorlessfromthedateofpurchase,tobecashequivalents.

32


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.1:Sharecapital

(Amountin`)Particulars Asat31.03.2012 As at 31.03.2011

AuthorisedShares50,000,000(March31,2011:50,000,000)equitysharesofRs2each 100,000,000 100,000,000

Issued,subscribedandfullypaid-upshares29,200,000(March31,2011:29,200,000)EquitySharesofRs2/-eachfullypaidup.

58,400,000 58,400,000

(a)Terms/rightsattachedtoequityshares TheCompanyhasonlyoneclassofsharereferredtoasequityshareshavingaparvalueof` 2/-.Eachholderofequitysharesisenttiledtoonevote.pershareIntheeventofliquidationoftheCompany,theholdersofequityshareswillbeentitledtoreceiveanyoftheremainingassetsoftheCompany,afterdistributionofallpreferentialamount.Thedistributionwillbeproportionatetothenumberofequitysharesheldbytheshareholders.

(b)Thereisnochangeinissuedandpaidupsharecapitalduringtheyear.

(c)Bonusshares34,50,000Equitysharesof`10/-each(laterdividedinto1,72,50,000equitysharesof` 2/-each)allottedasfullypaidbonussharesbycapitalisationofGeneralReserveintheyear2005-06.

(d)Thedetailsofshareholderholdingmorethan5%shares

FortheyearendedMarch31,2012 FortheyearendedMarch31,2011No.ofshares %held No.ofshares %held

(1)ThirumalaiChemicalsLimited 3,044,800 10.43 3,044,800 10.43(2)S.Santhanam 1,733,666 5.94 1,603,260 5.49

Note3.2:Reservesandsurplus(Amountin`)

Particulars Asat31.03.2012 Asat31.03.2011GeneralreserveBalanceatthebeginningoftheyear 367,500,000 350,000,000Add:Transferredduringtheyear 15,000,000 17,500,000Balanceattheendoftheyear 382,500,000 367,500,000

SurplusOpeningbalance 357,783,976 307,324,333Add:Profitfortheyear 136,924,594 170,108,908

494,708,570 477,433,241Less:AppropriationsProposeddividend (87,600,000) (87,600,000)Taxonproposeddividend (14,210,910) (14,549,265)Transfertogeneralreserve (15,000,000) (17,500,000)Closingbalance 377,897,660 357,783,976

Total 760,397,660 725,283,976

33


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.3:Longtermborrowings

(Amountin`)Particulars Asat31.03.2012 Asat31.03.2011

SecuredtermloanfromfinancialinstitutionExport-ImportBankofIndia(ReferNoteaandb) 46,666,665 60,266,333UnsecuredDeferredpaymentliabilities(ReferNotec) 11,102,590 -Total 57,769,255 60,266,333

Notes:

(a).Anexclusivechargebywayofhypothecationoverwindturbinegenerators,acquired/tobeacquiredbythecompanyandsecondparipassuchargebywayofhypothecationoftheCompanyothermovablefixedassetsincludingbooksdebts.(b).Repayableintwelvequarterlyequalinstalmentsstartingfrom20thMar2012of`66,66,667/[email protected]%.(c).RepayabletoGujaratIndustrialDevelopmentCorporationintwelvequarterlyequalinstalmentsstartingfrom30thJune2011of`27,75,645/[email protected]%.

Note3.4:Deferredtaxliabilities(net)

Deferredtaxliabilities

Relatedtofixedassets 78,992,282 50,438,266DeferredtaxassetsDisallowanceundertheIncomeTaxAct,1961 23,766,155 20,907,680Total 55,226,127 29,530,586

Note3.5:Longtermprovisions

ProvisionforemployeebenefitsProvisionforgratuity(non-funded) 19,640,334 17,251,353Provisionforcompensatedabsences(non-funded) 7,058,295 3,261,855Total 26,698,629 20,513,208

Note3.6:Shorttermborrowings

SecuredLoanrepayableondemandfrombanks(ReferNotea) - 10,445,773Total - 10,445,773

Notes:a).Cashcredit /exportcredit facilities issecuredbyhypothecationofstockof rawmaterials,work inprogress,finishedgoods,packingmaterials,storesandsparesandbookdebtsofthecompanyandsecuredbyasecondchargeontheimmovableproperties.

Note3.7:Tradepayables

TradePayables(referNoteno.6.1) 82,875,705 23,759,132Total 82,875,705 23,759,132

34


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.8:Othercurrentliabilities


Creditorsforcapitalgoods 650,228 16,948,798Currentmaturitiesoflong-termdebt 37,769,248 6,666,667Interestaccruedbutnotdueonborrowings 254,155 147,619UnpaidDividend(Refernotebelow) 3,267,800 3,014,837Interestfreedepositfromcustomers 886,952 997,952Others 34,740,415 51,019,734

Total 77,568,798 78,795,607

NoteUnpaiddividendrepresentsamountstobecreditedtotheInvestorEducationandProtectionFundasandwhentheybecomedue.

Note3.9:Shorttermprovisions

Provisionforgratuity(non-funded) 18,102,515 15,399,252Provisionforcompensatedabsence(non-funded) 6,902,048 5,495,259

Provisionforbonusandex-gratia 4,461,572 3,929,317Provisionforexciseduty 4,317,720 3,308,333Proposedequitydividend 87,600,000 87,600,000Provisionfortaxonproposedequitydividend 14,210,910 14,549,265Total 135,594,765 130,281,426

Note:TheBoardofDirectorshaverecommendeddividendof` 3/-persharefortheyearendedMarch31,2012(March31,2011:` 3/-pershare)

35


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.10:FixedAssets

(Amountin`)

Description GrossBlock AccumulatedDepreciation NetBlock

AsatApril1,2011

Additions Sales/Ad-justments

AsatMar31,2012

AsatApril1,2011

Chargefortheperiod

Sales/Ad-justments

AsatMar31,2012

AsatMar31,2012

AsatMar31,2011

Tangible

Land-Freehold 13,952,428 - - 13,952,428 - - - - 13,952,428 13,952,428

-Leasehold

(seenotebelow)

- 49,219,046 - 49,219,046 - 455,732 - 455,732 48,763,314 -

Buildings 68,404,442 884,485 - 69,288,927 34,980,996 1,912,739 - 36,893,735 32,395,192 33,423,446

Plant&Machinery 385,077,764 32,708,417 919,774 416,866,407 239,635,716 22,625,291 446,383 261,814,623 155,051,783 145,442,048

WindTurbine

Generators

121,663,922 110,750,110 - 232,414,032 58,670,096 19,718,181 - 78,388,278 154,025,754 62,993,826

Kilns 57,671,307 - - 57,671,307 54,791,644 - - 54,791,644 2,879,663 2,879,663

Computer

Equipments

44,027,170 1,059,404 4,778,410 40,308,164 35,498,162 3,246,575 4,578,020 34,166,717 6,141,447 8,529,008

FurnitureFixtures 18,569,162 216,251 2,353,323 16,432,090 8,832,216 2,402,484 1,042,163 10,192,536 6,239,554 9,736,947

OfficeEquipments 7,865,597 438,169 566,144 7,737,622 2,933,392 421,820 185,020 3,170,192 4,567,429 4,932,204

Vehicles 5,101,738 749,064 390,705 5,460,097 1,316,454 511,260 283,868 1,543,846 3,916,251 3,785,284

722,333,531 196,024,946 9,008,356 909,350,121 436,658,677 51,294,082 6,535,455 481,417,303 427,932,817 285,674,854

Intangible

Computer

Software

16,824,517 1,902,976 548,910 18,178,583 11,766,797 2,777,454 530,116 14,014,134 4,164,449 5,057,720

Intellectual

Property

1,900,000 - - 1,900,000 156,164 950,000 - 1,106,164 793,836 1,743,836

18,724,517 1,902,976 548,910 20,078,583 11,922,961 3,727,454 530,116 15,120,298 4,958,285 6,801,556

Total(A) 741,058,048 197,927,922 9,557,266 929,428,704 448,581,638 55,021,535 7,065,571 496,537,602 432,891,102 292,476,410

Capitalwork-in

-progress(B)

19,752,839 114,696,958

Total(A+B) 741,058,048 197,927,922 9,557,266 929,428,704 448,581,638 55,021,535 7,065,571 496,537,602 452,643,941 407,173,368

Previousyear 703,821,530 41,958,819 4,722,300 741,058,048 410,089,207 42,699,383 4,206,953 448,581,637 292,476,410 293,732,323

Note:Agreementforleasefor99yearswithGIDCtobeexcecutedaftercomplianceofstipulatedconditions

Note3.11:Non-currentinvestments(Atcost)(Amountin`)

Particulars Asat31.03.2012 Asat31.03.2011NontradeinvestmentinequitysharesQuoted2,045,177(March31,2011:2,045,177)equitysharesofThirumalai 132,153,971 132,153,971ChemicalsLimitedof`10/-eachfullypaidup

Unquoted350(March31,2011:350)equitysharesofUS$1eachofLAPIZInc.,U.S.A.(AssociateCompany)Total 132,170,372 132,170,372

(a)AggregateamountofQuotedInvestments`132,153,971/-(March31,2011`132,153,971/-)(b)AggregateamountofUnquotedInvestments`16,401/-(March31,2011`16,401/-)(c)MarketValueofQuotedInvestments`90,192,306/-(March31,2011:`204,619,959/-)

36


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.12:Long-termloansandadvances


Unsecured,consideredgoodCapitaladvances 641,500 2,864,150OtherloansandadvancesAdvanceincometaxes(netofprovisions) 39,293,117 1,821,536Loansandadvancestoemployees 2,237,267 2,681,109Depositswithrelatedparty 1,400,000 1,400,000Rentdeposits 10,863,766 8,275,340Electricityandotherdeposits 4,356,077 3,937,458Total 58,791,727 20,979,593

Note3.13:CurrentinvestmentsNonTrade-unquotedInDebentures - 30,600,000Nil(March31,2011:30)unsecuredredeemableoptionallyconvertibledebentureofKotakSecuritiesLtd.,`10,00,000eachTotal - 30,600,000

Note3.14:Inventories(valuedatlowerofcostandnetrealizablevalue)Rawmaterialsandcomponents 84,234,748 62,449,582Workinprogress 16,614,800 6,636,700Finishedgoods 42,931,050 41,840,841Packingmaterials 7,051,595 6,760,129Fuel 5,567,085 3,558,095Storesandspares 2,625,604 2,766,056Total 159,024,883 124,011,404

RawmaterialsPigments 16,192,741 6,809,114Detergents 1,990,015 1,930,626Sulphonation((includesintransit`Nil(Previousyear` 3,76,15,687/-)) 66,051,992 53,709,842Total 84,234,748 62,449,582

WorkinprogressPigments 16,614,800 6,636,700Total 16,614,800 6,636,700

FinishedgoodsPigments 33,903,700 35,765,400Detergents 2,235,434 826,268Sulphonation 6,791,916 5,249,173Total 42,931,050 41,840,841

37


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.15:Tradereceivables


DebtorsoutstandingforaperiodexceedingsixmonthsfromtheduedateSecured,consideredgood(Refernotebelow) 349,470 349,470Unsecured,consideredgood 16,603,960 10,909,524Unsecured,considereddoubtful 19,740,666 18,152,676Less:Provisionfordoubtfuldebts (19,740,666) (18,152,676)

16,953,430 11,258,994OtherdebtsUnsecured,consideredgood 188,165,616 134,977,752Total 205,119,046 146,236,746

NoteAmountdueisfullysecuredbyequityinstrumentshavingmarketvalueof`7,06,837/-(previousyear`9,34,288/-),includingthosesharesthemarketvalueofwhich`6,58,350/-(previousyear`8,75,490/-)whicharetransferredinthenameofthecompany.

Note3.16:CashandBankbalances(a)Cashandcashequivalents(i)BalanceswithbanksIndepositaccountswithoriginalmaturityoflessthan3months 225,000 -Inotheraccounts 43,290,641 136,213,918

(ii)Cashonhand 389,971 359,17543,905,612 136,573,093

(b)OtherBankbalances(i)Marginmoneywithbanks 54,946 51,323(ii)Short-termbankdepositswithmaturityafter3monthsbutbefore12months. 139,243,279 52,857,929(ii)Un-claimeddividendaccounts 3,267,800 3,014,837Total 186,471,637 192,497,182

Note3.17:Short-termloansandadvances(Unsecured,consideredgood,unlessstatedotherwise)Intercorporatedeposits 6,000,000 52,500,000AdvancetosuppliersConsideredgood 3,036,065 3,565,846Considereddoubtful 212,000 -Lessprovisionfordoubtfuldebts (212,000) -

- -Loansandadvancestoemployees 558,024 629,024Total 9,594,089 56,694,870

38


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.18:Othercurrentassets


Interestaccruedbutnotdue 1,718,991 2,852,823Prepaidexpenses 4,264,171 3,524,762Minimumalternatetaxcreditentitlement 4,322,994 -Balancewithcentralexciseandsalestaxauthorities 30,467,604 18,053,804Exportincentivesreceivable 950,341 1,974,759UnbilledrevenueofITenabledservices 612,822 236,829Others 8,378,322 269,531Total 50,715,245 26,912,507

Note3.19:RevenuefromoperationsSaleofproductsPigments 508,256,009 479,203,228Detergents 66,024,941 66,406,400Sulphonation 579,062,791 492,572,469Tradedgoods 6,188,369 2,987,042

1,159,532,110 1,041,169,139Less:ExciseDutyrecoveredonsales 90,836,313 79,653,215

1,068,695,797 961,515,924SaleofpowerfromWindturbinegenerator 20,321,527 10,308,493

1,089,017,324 971,824,417IncomefromservicesIncomefromprocessing 99,060,441 76,582,278IncomefromITenabledservices 170,043,646 126,113,444

269,104,087 202,695,722OtheroperatingincomeExportIncentives 2,243,815 3,740,344

2,243,815 3,740,344Revnuefromoperations 1,360,365,226 1,178,260,482

Note3.20:OtherIncomeInterestreceivedFrombanks 6,178,841 1,012,579Fromcompaniesonshorttermdeposits 8,698,725 15,893,767Fromothers 1,258,064 1,033,418Dividendreceived-fromlongterminvestments - 10,980,455Rentreceived 2,557,317 1,202,272Sundryreceipts 745,421 1,513,132Sundrybalanceswrittenback(Net) 2,661,571 1,277,565Profitonsaleoflongterminvestments(net) - 25,904,188Profitonsaleofcurrentinvestments - 134,790Total 22,099,940 58,952,167

39


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.21:Costofmaterialconsumed


Inventoryatthebeginningoftheyear 24,833,895 39,238,420Add:Purchases 598,924,137 419,032,784

623,758,032 458,271,204Less:Inventoryattheendoftheyear 84,234,748 24,833,895Costofrawmaterialconsumed 539,523,284 433,437,309

DetailsofrawmaterialsconsumedSodaAsh 35,416,472 32,078,966ActiveMatter 388,869,663 317,826,416Sulphur 37,576,133 27,304,016Others 77,661,016 56,227,910Total 539,523,284 433,437,309

Note:Theabovefigureshavebeenascertainedonthebasisofopeningstockpluspurchaseslessclosingstockandtherefore,includeadjustmentsofexcessesandshortagesascertainedonphysicalcount,writeoffofun-serviceableitems,etc.

Note3.22:PurchaseofStock-in-TradePurchaseofTradedgoods 4,827,787 2,987,042Total 4,827,787 2,987,042

Note3.23:(Increase)/decreaseininventoriesInventoriesattheendoftheyearWork-in-progress 16,614,800 6,636,700Finishedgoods 42,931,050 41,840,841Total 59,545,850 48,477,541

InventoriesatthebeginningoftheyearWork-in-progress 6,636,700 16,547,100Finishedgoods 41,840,841 46,778,159

48,477,541 63,325,259(Increase)/decreaseinStocks (11,068,309) 14,847,718

(Increase)/decreaseinworkinprogressPigments (9,978,100) 9,910,400Total (9,978,100) 9,910,400

(Increase)/decreaseinfinishedgoodsPigments 1,861,700 1,595,500Detergents (1,409,166) 1,562,457Sulphonation (1,542,743) 1,779,361Total (1,090,209) 4,937,318

40


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note3.24:Employeebenefitsexpense


Salaries,Wages,Bonus,etc.. 175,084,558 137,444,874ContributiontoProvidentFundandotherfunds 14,308,587 11,293,191StaffWelfareexpenses 9,087,442 10,568,250Total 198,480,587 159,306,315

Note3.25:FinancecostsInterestontermloan 8,848,534 1,298,958Interestothers 4,889,632 121,096Otherborrowingcosts 3,396,247 2,721,756Total 17,134,413 4,141,810

Note3.26:OtherexpensesConsumptionofstoresandSpares 7,330,661 4,662,534PowerandFuel 151,155,100 112,048,027ExciseDutyonstocks(Net) 1,009,387 360,383RepairsandMaintenance:Machinery 23,456,405 31,093,611Buildings 10,109,610 9,757,781Others 4,156,097 4,722,820PackingExpensesandmaterialsconsumed 38,205,800 35,682,945ProcessingChargespaid 1,598,478 1,747,198FreightandForwardingexpenses 23,530,250 17,064,853Insurance 3,585,249 2,889,080Commission 1,229,637 2,676,602AdvertisementandSalesPromotionexpenses 11,591,837 10,438,833Rent 19,393,441 16,400,492Rates&Taxes 3,330,059 1,185,258Travellingexpenses 17,910,335 13,417,306Communicationexpenses 6,599,234 5,342,358LegalandProfessionalcharges 14,218,991 9,890,748Directors'Remuneration 23,208,429 27,060,363Donation 4,550,000 4,825,000AssetsScrapped/LossonSaleofAssets(Net) 2,260,365 3,380Provisionfordoubtfuldebts 1,944,988 3,003,582Lossonforeigncurencytransactions/translations 3,014,031 1,509,987Miscellaneousexpenses 22,545,554 22,854,978Total 395,933,939 338,638,117

41


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012PaymenttoAuditors(includedinmiscellaneousexpenses)


Asauditors:AuditFees 600,000 500,000Taxauditfees 100,000 100,000Certification 275,000 230,000Inothercapacity:Taxationmatters 75,000 75,000

Otherservices 150,000 50,000Servicetax 140,595 98,365Total 1,340,595 1,053,365

Note4:OtherdisclosuresasperrevisedscheduleVI

Note4.1:Contingentliabilitiesandcommitments(totheextentnotprovidedfor)(a)Contingentliabilities (i) ClaimsagainsttheCompany/disputedliabilitiesnotacknowledgedasdebts inrespectoflabourdisputes

1,680,000 1,680,000

(ii)BankGuaranteeissuedandoutstanding 624,005 350,000(iii)LetterofCreditissuedandoutstanding 584,820 Nil

(b)Commitments (i) Estimated amount of contracts remaining to be executed on capital account and notprovidedfor

3,103,187 9,846,863

Againstwhichadvancepaid 660,406 2,864,150

(ii) Import duty on Goods imported under advance licence pending fulfilment of exportobligation

5,683,937 5,683,937

[c]Noprovisionhasbeenmadeinrespectofthefollowingdemandsraisedbytheauthoritiessincethecompanyhasreasonstobelievethatitwouldgetreliefattheappellatestageasthesaiddemandsareexcessiveanderroneous

(i)BytheIncometaxauthorities 42,443,045 42,443,045Againstwhichamountalreadypaid. 28,627,516 12,627,516

(ii)CentralExcisedutyandpenalty. 5,556,114 5,556,114

(iii)InterestandpenaltyonaccountoftheallegeddelayinpaymentofduesundertheESIAct. 108,119 108,119

Note4.2:ValueofimportscalculatedonCIFbasis(onaccrualbasis)Rawmaterials 283,301,616 237,482,476Spareparts 764,075 69,323Capitalgoods 9,528,722 488,418

42


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note4.3:(a)ExpenditureinForeignCurrency(oncashbasis)

(Amountin`)

Particulars Asat31.03.2012

As at 31.03.2011

Travelling 4,338,097 2,122,995SoftwareExpenses - 101,564LegalandProfessionalExpenses 6,723,458 3,286,793Commission 148,993 410,338Othermatters - 1,095,212

Note4.3:(b)DetailsofconsumptionofimportedandindigenousitemsFortheyearendedMarch31,2012 FortheyearendedMarch31,2011

(`) % (`) %ImportedRawmaterials 281,119,102 52.11 261,924,580 60.02Stores&components 648,831 8.85 54,051 1.16

IndegenousRawmaterials 258,404,182 47.89 171,512,729 39.98Stores&components 6,681,830 91.15 4,608,483 98.84

Note4.4:Remittanceinforeigncurrenciesonaccountofdividends(Amountin`)

Particulars Asat31.03.2012 Asat31.03.2011

(i)No.ofNon-Residentshareholders None None

(ii)No.ofsharesheldbythem Nil Nil

Note4.5:Earningsinforeigncurrencies(onaccrualbasis)ExportofgoodscalculatedonFOBbasis 255,601,691 237,484,439IncomefromITenabledservices 156,569,521 123,085,203

43


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012Note5:DisclosuresinaccordancewithAccountingStandards(AS)notified


Note5.1:(AS)-15EmployeebenefitsDefinedcontributionplansTheCompanymakesProvidentFundandSuperannuationFundcontributiontodefinedcontributionplansforqualifyingemployees.UndertheSchemes,theCompanyisrequiredtocontributeaspecifiedpercentageofthepayrollcoststofundthebenefits.TheCom-panyrecognised`10,267,993(Yearended31March,2011`7,470,975)forProvidentFundcontributionsand`3,239,355(Yearended31March,2011`2,790,505)forSuperannuationFundcontributiosintheStatementofProfitandLoss.ThecontributionspayablebytheCompanyareatratesspecifiedintherulesoftheschemes.I.DefinedContributionPlans:TheCompanyhasrecognisedthefollowingamountsintheProfitandLossAccountfortheyear:a.ContributiontoEmployeesProvidentFund 6,844,619 7,470,975b.ContributiontoEmployeesStateInsuranceScheme 2,299,299 1,637,635

c.ContributiontoEmployeesSuperannuationFund 3,239,355 2,790,505Total 12,383,273 11,899,115

II.DefinedBenefitPlans:(i)Gratuityispayabletoallthemembersattherateof15days’salaryforeachcompletedyearofservice1.ChangesinthePresentValueofObligationinrespectofgratuitybenefitsa.PresentValueofObligationasatApril1,2011 32,650,605 28,082,035b.InterestCost 2,612,048 2,246,437c.PastServiceCost Nil 374,259d.CurrentServiceCost 2,917,878 2,628,998e.CurtailmentCost/(Credit) Nil Nilf.SettlementCost/(Credit) Nil Nilg.BenefitsPaid (392,264) (1,517,086)h.Actuarial(Gain)/Loss (45,418) 835,962I.PresentValueofObligationasatMarch31,2012 37,742,849 32,650,6052.ExpensesrecognisedintheProfitandLossAccountinrespectofgratuitybenefitsa.CurrentServiceCost 2,917,878 2,628,998b.PastServiceCost Nil 374,259c.InterestCost 2,612,048 2,246,437d.CurtailmentCost/(Credit) Nil Nile.SettlementCost/(Credit) Nil Nilf.NetActuarial(Gain)/Loss (45,418) 835,962g.TotalExpensesrecognisedinProfitandLossA/c 5,484,508 6,085,6563.FollowingarethePrincipalActuarialAssumptionsusedasatthebalancesheetdate: Gratuity Gratuitya.DiscountRate 8.50% 8.00%b.SalaryEscalationRate 7.00% 7.00%c.TurnoverRate 10.00% 10.00%d.MortalityTable LIC(1994-96) LIC(1994-96)

Ultimate UltimateOtherLongTermbenefitsTheCompany’sLongTermbenefitincludesLeaveencashmentpayableatthetimeofretirementinfull,otherwiseitisencashableduringtheyearinwhichservicesarerenderedsubjecttoinexcesssof90days.Presentvalueofobligationasatthebeginningoftheyear is` 8,757,114(Prev.Year`7,326,711)andtheactuarialgainsand lossesarerecognised in full in theProfitandLossaccount for ` 5,203,229 (Prev. Year ` 1,430,403). The present value of obligation as at March 31,2012 is ` 13,960,343(Prev.Year`8,757,114)Theestimatesoffuturesalaryincreasesconsideredinactuarialvaluationtakesintoaccountinflation,seniority,promotionandotherrelevantfactors

44


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012(Amountin`)

Particulars Asat31.03.2012 Asat31.03.2011

Note 5.2 : Disclosure requirement of accounting Standard 17 “Segment Reporting” issued underCompanies(AccountingStandards)Rules2006.

a.PrimarySegmentsThe company has disclosed Business Segment as the primary segment. Segments have been identified taking into account thenatureof theproducts, thedifferingrisksandreturns, theorganisationstructureand internal reportingsystem.Thecompany’soperations predominantly relate to manufacture of Laundry and Allied products and its intermediaries and providing IT EnabledServices. b.SecondarySegments Thecompanycatersmainlytotheneedsofthedomesticmarket.Theexportturnoverisnotsignificant(exceptITEnabledServicesDivision)inthecontextoftotalturnover.Assuchtherearenoreportablegeographicalsegments.TheincomefromITEnabledServ-icesispre-dominntlyfromexports.

c.SegmentRevenue,SegmentResults,SegmentAssetsandSegmentLiabilitiesincludetherespectiveamountsidentifiabletoeachofthesegmentsasalsoamountsallocatedonareasonablebasis.Theexpenses,whicharenotdirectlyattributabletothebusinesssegment,areshownasunallocatedcorporatecost.

d.AssetsandLiabilitiesthatcannotbeallocatedbetweenthesegmentsareshownasapartofunallocatedcorporateassetsandli-abilitiesrespectively.

e.InterSegmenttransfersaremadeoncostplusbasis.

FortheyearendedMarch31,2012 FortheyearendedMarch31,2011(`) (`) (`) (`)

1.RevenueExternalRevenueLaundryandAlliedProducts 1,176,164,467 1,044,178,793ItEnabledServices 170,287,006 127,078,233WindmillOperations 20,321,527 10,308,493Unallocated/Corporate 15,692,166 55,647,131 1,237,212,650

Total 1,382,465,166

Inter-SegmentRevenue

WindmillOperations 1,626,318 1,626,318 3,294,860 3,294,860

Total 1,384,091,484 1,240,507,510

Less:Elimination(InterSegmentRevenue) 1,626,318 3,294,8601,382,465,166 1,237,212,650

2.ResultProfit/(Loss)beforeInterestandCorporateExpensesbutafterDepreciation/Amortisation

LaundryandAlliedProducts 197,387,499 216,446,117ITEnabledServices 14,519,421 (8,720,827)WindmillOperations (1,404,491) 2,589,905Unallocated/Corporate (137,874)

Total 210,502,429 210,177,321

InterestandFinancecharges (17,134,413) (4,141,810)

45


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012FortheyearendedMarch31,2012 FortheyearendedMarch31,2011

(`) (`) (`) (`)Add:UnallocatedExpenses/Income(Net)andCorporateExpenses (10,756,086) 35,186,301

ProvisionforTax (37,100,000) (77,050,000)

ExcessProvisionforTaxationforearlieryears 12,785,212

MATCreditentitlement 4,322,994

DeferredTax (25,695,541) 5,937,096

NetProfit 136,924,595 170,108,907

OtherInformation3.SegmentAssetsLaundryandAlliedProducts 639,338,614 464,801,969ITEnabledServices 77,787,180 72,659,557WindmillOperations 183,807,149 190,282,683Unallocated/Corporate 353,597,997 409,531,833

Total 1,254,530,940 1,137,276,042

4.SegmentLiabilitiesLaundryandAlliedProducts 158,812,684 105,397,656ITEnabledServices 13,399,686 14,265,835WindmillOperations 73,333,333 66,933,000Unallocated/Corporate 190,187,577 166,995,574

Total 435,733,281 353,592,065

5.CapitalExpenditureLaundryandAlliedProducts 101,194,147 35,850,049ITEnabledServices 1,789,656 6,253,301WindmillOperations 111,000,000Unallocated/Corporate - -

Total 102,983,803 153,103,350

6.DepreciationLaundryandAlliedProducts 25,645,844 23,448,666ITEnabledServices 9,428,227 10,485,843WindmillOperations 19,720,337 8,534,724Unallocated/Corporate 227,127 230,150

Total 55,021,535 42,699,384

46


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012FortheyearendedMarch31,2012 FortheyearendedMarch31,2011

(`) (`) (`) (`)

Note5.3:RelatedPartyDisclosuresasrequiredbyAS18ofCompanies(AccountingStandards)Rules2006isasfollows:

(a)RelatedPartiesandRelationship(a)Companiesinwhichthecompanyhassubstantialinterest(I.emorethan20%invotingpowerdirectlyorindirectly)ThirumalaiCharityTrustLapizInc,U.S.A.

(b)OtherrelatedpartiesThirumalaiChemicalsLimited.ChempakIndustriesHamsaInvestmentsAssociatesPvt.Ltd.VaradarajaCredits&InvestmentsPvt.Ltd.Ms.MeeraParthasarathy

(c)DirectorsoftheCompanyMr.R.Sampath,Chairman&ManagingDirectorMrs.IndiraSundararajan,WholetimeExecutiveDirectorMr.S.SanthanamMr.S.SridharMr.NimishPatelMr.M.C.ChoksiDr.G.G.NairMs.K.R.Javeri

(d)KeyManagementPersonnel:Mr.V.Bharatram,President(Operations),IT-EnabledServicesDivision.Mr.B.Sreenivasacharyulu-SeniorGeneralManager

47


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012B.Detailsoftransactionswithaboveparties

Particulars Companiesin

whichcompany

hasthesubstantialinterest

Otherrelatedparties

Key

Management

Personnel

Total

(`) (`) (`) (`)Purchaseofgoods-ThirumalaiChemicalsLimited - -

(23,516) (23,516)

Saleofgoods-ThirumalaiChemicalsLimited 118,269 118,269

(333,409) (333,409)IncomefromITEnabledServices-LAPIZInc.USA 140,575,955 140,575,955

(106,652,959) (106,652,959)

Reimbursementofexpensespaid-ThirumalaiChemicalsLimited 573,670 573,670

(14,268) (14,268)Remunerationpaidto-Mr.V.Bharathram 3,081,321 3,081,321

(2,782,776) (2,782,776)-Mr.B.Sreenivasacharyulu 1,744,866 1,744,866

(1,366,825) (1,366,825)-Ms.MeeraParthasarathy 1,107,360 1,107,360

(854,240) (854,240)RemunerationtoDirectors:-Mr.R.Sampath 10,549,286 10,549,286

(12,296,243) (12,296,243)-Mr.S.Santhanam 2,109,857 2,109,857

(2,459,249) (2,459,249)-Ms.IndiraSundararajan 10,549,286 10,549,286

(12,296,243) (12,296,243)

Reimbursementofexpensesreceived-ThirumalaiChemicalsLimited 47,000 47,000

(59,575) (59,575)

Rentpaidto-ThirumalaiChemicalsLimited 3,716,526 3,716,526

(2,920,049) (2,920,049)

48


Notesformingpartoffinancialstatementsfortheyearended31stMarch2012B.Detailsoftransactionswithaboveparties

Particulars Companiesinwhichcompany

hasthesubstantialinterest

Otherrelatedparties

KeyManagement

Personnel

Total

(`) (`) (`) (`)Receivingofservicesfrom-ThirumalaiChemicalsLimited 88,462 88,462

(354,417) (354,417)-HamsaInvestmentsAssociatesPvtLtd 1,698,929 1,698,929

(1,721,753) (1,721,753)-VaradharajaCredits&InvestmentsPvtLtd. 9,987,591 9,987,591

(8,998,239) (8,998,239)Outstandingpayables-ThirumalaiChemicalsLimited 491,692 491,692

(609,202) (609,202)-HamsaInvestmentsAssociatesPvtLtd 64,774 64,774

(75,070) (75,070)-VaradharajaCredits&InvestmentsPvtLtd. 1,127,019 1,127,019

(568,358) (568,358)Directors'RemunerationPayables-Mr.R.Sampath 1,222,517 1,222,517

(2,969,474) (2,969,474)-Mr.S.Santhanam 2,109,857 2,109,857

(2,459,249) (2,459,249)-Ms.IndiraSundararajan 254,459 254,459

(1,904,185) (1,904,185)Outstandingreceivables-ThirumalaiChemicalsLimited 2,632 2,632

(115,891) (115,891)-LAPIZInc.USA 44,290,197 44,290,197

(39,420,071) (39,420,071)

Donationspaid 4,050,000 4,050,000-ThirumalaiCharityTrust (4,800,000) (4,800,000)

Depositsgiven-ThirumalaiChemicalsLimited 131,149,352 131,149,352

(211,287,864) (211,287,864)

Interestincomeondepositsgiven-ThirumalaiChemicalsLimited 5,814,660 5,814,660

(10,821,828) (10,821,828)

Outstandingdepositsreceivables-ThirumalaiChemicalsLimited 1,400,000 1,400,000

(1,400,000) (1,400,000)

(i).MeetingfeespaidtoDirectors`9,60,000(Prev.Year`8,20,000)

49


Notesformingpartoffinancialstatementsfortheyearended31stMarch20125.4:AS19DetailsofLeasingarangements

TheCompanyhastakenpremisesforofficeuseandgodownundercancellableleaseagreements.Thetotalleaserentalsrecognisedasexpenseduringtheyear`19,071,721(Prev.Year` 4,284,283).

Aspertheaboveleaseagreementstherentandcarparkingchargeswillbeenhancedby15%overthelastpaidrentattheendofthirtysixmonthsfromthedateofcommencementoftheleaseagreement.Theoptiontorenewtheleasedeedforafurtherperiodshallbeatthesoleoptionofthelesseetobeexcercisedbygivingsixmonthspriornoticeinwritingbeforetheendofleasetermofsixtymonthsfromthedateofcommencementoflease.

5.5:AS20Disclosureregardingearningpershare(EPS)ThebasicanddilutedEPSiscalculatedasunder: 2011-12 2010-11Profitattributedtoequityshareholders(`) 136,924,594 170,108,908No.ofequityshares(of` 2each) 29,200,000 29,200,000Earningpersharein` 4.69 5.83

5.6:DISCLOSURESASREQUIREDBYAS27FINANCIALREPORTINGOFINTERESTINJOINTVENTURES.Thecompanyhasinvestmentsinajointlycontrolledentitiesasperthefollowingdetails:

NameandCountryofIncorporation :LAPIZINC,USA.

Proportionofownershipinterest :35.00%Proportionatesharefortheyearended31stMarch2012inrespectofi.Assets ` 15,862,285(Prev.Year` 13,874,358)ii.Liabilities ` 16,203,253(Prev.Year` 14,408,557)iii.Income ` 56,278,182(Prev.Year` 41,728,118)iv.Expenses ` 56,027,260(Prev.Year` 40,916,653)

6.1:DisclosuresrequiredasperMicro,SmallandMediumEnterprisesDevelopmentAct,2006. SundryCreditorsincludeduetoMicroandSmallEnterprisestowhomthecompanyowesamountsoutstandingformorethan45days.TheaboveinformationregardingMicroandSmallEnterpriseshadbeendeterminedtotheextentsuchpartieshavebeenidentified.

Particulars 2011-12 2010-11

(i)Principalamountandinterestduethereonremainingunpaidtoanysupplierasattheendoftheaccountingyear 830,387 830,151

(ii)TheamountofinterestpaidbythebuyerintermsofSec.16oftheMicro,SmallandMediumEnterprisesDevelopmentAct,2006alongwiththeamountofpaymentmadetothesupplierbeyondtheappointeddayduringeachaccountingyear

Nil Nil

(iii)Theamountofinterestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedundertheMicro,SmallandMediumEnterprisesDevelopmentAct2006

236 Nil

(iv)TheamountofInterestaccruedandremainingunpaidattheendofeachaccountingyear. 830,387 830,151(v)Theamountoffurtherinterestremainingdueandpayableeveninthesucceedingyears,untilsuchdatewhentheinterestduesasaboveareactuallypaidtothesmallenterprise,forthepurposeofdisallowanceasdeductibleexpenditureu/s23ofMicro,Small,andMediumEnterprisesDevelopmentAct2006

236 Nil

50


Notesformingpartoffinancialstatementsfortheyearended31stMarch20126.2 : The Company enters into forward exchange contracts for hedging purpose. As at the year end, the exposure in foreign

currencyfortheCompanyisasunder:Particulars 2011-12 2010-11

ForeignCurrency Amtin` ForeignCurrency Amtin`AccountReceivable $1,495,349.41 76,053,471 $1,607,785.00 71,433,898

€278.75 18,838 $15.00 938£23,453.26 1,900,418 $40,901.00 2,916,628

AccountsPayable $469,583.60 24,089,639 $243,214.95 10,900,894€22,000 1,397,000

£1,381.46 111,940ForwardContract $91,980.00 4,678,103 $100,000.00 4,443,000

6.3:TherevisedscheduleVIhasbecomeapplicablefrom1stApril,2011,forthepreparationoffinancialstatements.Thishassignificantlyimpactedthedisclosureandpresentationmadeinthefinancialstatements.Previousyearsfigureshavebeenregrouped/reclassifiedwhereverneccessarytocorrespondwiththecurrentyear`sclassification/disclosure.


For&onbehalfof





INDIRASUNDARARAJAN WholetimeDirectorPLACE:MUMBAI DATE:

51


FINANCIALHIGHLIGHTSFOR10YEARS` in Lakhs

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03

ShareCapital 584 584 584 584 584 584 584 365 365 365

Reserves&Surplus 7,604 7,253 6,573 7,415 6,706 6,205 5,365 4,756 3,882 3,361

NetWorth 8,188 7,837 7,157 7,999 7,290 6,789 5,949 5,121 4,247 3,726

FixedAssets(Net) 4,526 4,072 2,973 3,196 2,243 2,122 2,136 2,282 2,322 2,408

Sales/OtherIncome 13,825 12,372 10,839 11,125 8,832 8,139 6,342 6,363 5,382 4,954

GrossProfitbeforeInterest&Depreciation

2,548 2,880 2,120 2,276 2,347 2,866 2,073 2,050 1,524 842

Interest&FinanceCharges 171 41 90 74 29 20 19 28 71 142

Depreciation 550 427 430 346 285 284 278 301 307 301

CurrentTax/FringeBenefitTax

371 771 671 156 563 413 331 328 254 147

DeferredTax/MATEntitle-ment/TaxAdjustment

86 (60) (149) 309 (56) 138 (115) (105) (40) (45)

NetProfit 1,369 1,701 1,078 1,392 1,525 2,010 1,560 1,499 932 297

Dividend(incl.DividendTax) 1,018 1,021 1,021 683 1,025 1,170 732 624 412 206

Dividend(%) 150 150 150 100 150 175 110 150 100 50

EarningsperShare(`) 4.69 5.83 3.69 4.77 5.22 6.88 5.34 41.06 25.54 8.12

Spread over two campuses with good facilities for congenial atmosphere of learning, we continue our mission to provide holistic education. More than 2300 students study in our schools. We give you a sample of our activities during the year for you to get a feel of how learning takes place here. Grandparents were happy when the KG children gave them a glimpse of their work on ‘Grandparents day’. Parents were thrilled to receive postcard greetings after their children visited the post office.Primary school children dressed up as the poet Bharathiar and sang his songs. In traditional costumes, children danced their way into the hearts of the audience to highlight Tamil culture. Value education through stories and activities helped clarify many conflicting issues for middle school children. Continuous Comprehensive Evaluation activities were evidenced by the wonderful charts put up by the students of the high school on the display boards. Rigorous training for the Board exams coupled with supervision of caring teachers for students’ well being was visible in the higher secondary sections.Activity packed special weeks in Science, Maths, English, Environment and Sports provided ample opportunities for children to explore, experiment, experience and understand many things. Projects, exposure visits and field trips enabled learning. Book fairs were organized. Programmes on Teachers’ Day and Children’s Day helped understand and appreciate each other’s priorities. Traditional sports and games were rediscovered in activities and displays on the Sports day. A variety of students’ talents found expression on the Annual day. Computers skills learnt throughout the year were demon-strated by all classes on a special day. The Art and Craft exhibition displayed the work of the students in all the classes and left the visitors spellbound. Dr. Arvind Gupta demonstrated scientific principles in action by making toys out of trash. Environment activist Mr. Srinivasan highlighted the need for waste management. Eco Warrior Mr. Yoganathan stressed upon the need for growing trees. Soil Biologist Dr. Sultan Ismail impressed upon the need to protect Mother Earth. Ms. Devika explained the relevance of Gandhian principle of Ahimsa. Mr. Arun Karthick, an alumna who plays for the IPL interacted with the children. The training in school enables students to perform well not only in public examinations but also in national competitions. Our students also won prizes in zonal, district and CBSE sports events. Our alumni stand out because of their confidence and competence. They are team leaders because of their analytical thinking, communication and inter-personal skills. We are proud of our students and alumni. The tiny tots who stepped into our school now come back to admit their children. We welcome you to visit us. Our children will be eager to show you around the school and explain how learning takes place here.

The Akshaya Vidya TrustVedavalli Vidyalaya Senior Secondary School, Walaja - CBSE (1994)Vedavalli Higher Secondary School, Walaja - Tamilnadu State Board (1999)Vedavalli Vidyalaya School, Ranipet - CBSE ( 2003)

Two core beliefs that have guided us are: � ‘Learning by doing’ is the best way to understand fundamental

concepts thoroughly� Learning can take place only in a fear-free atmosphere.

Visit us: www.vedavallividyalaya.org

“Bringing the rural poor together in building their own future” — That’s TCT, Thirumalai Charity Trust, started in 1970 by the Thirumalai Group of Industries. Volunteerism, women empowerment and community involvement have been the hallmark of our programmes. We count on the involvement of our many volunteers, women beneficiaries, treated alcoholics, disabled people and their families. We enjoy the goodwill of the local community. We currently serve more than 100,000 people in 25,000 families in 225 villages of Vellore District in Tamilnadu.

Because of our three decades of engagement with the community, we are uniquely positioned to develop a good community health model. We started the Thirumalai Mission Hospital in April 2010 as a not-for- profit facility to provide accessible, affordable quality healthcare to all.

The hospital, located on a 5-acre plot now has 30 beds in a built up area of 15,000 sq.ft., spread over three floors. Equipped with modern facili-ties, the hospital provides a comprehensive range of services, through a team of highly qualified and experienced surgeons and physicians.

Every aspect of the functioning of Thirumalai Mission Hospital is guided by a quality policy that stresses transparency, ethics and an adherence to good, standard medical practices.

As we reach out to more people to serve in more ways, we also reach out to those who would like to participate in our efforts. Visit us in person to get a first hand feel of our activities.

Thirumalai Charity TrustResponding to a need, Reaching out to the poor…

The highlights of 2011–2012 include the following:

� Nearly 40,000 patients were given primary health care in the villages.

� The hospital provided secondary care to nearly 16,000 patients in the outpatients department and more than 200 patients were given in-patient care.

� More than 2000 patients were served in camps at the hospital.� In our 20th de-addiction camp, 30 persons received help. At a

meeting of the beneficiaries, the treated alcoholics and their family members resolved to sensitise the rural families on the dangers of drinking and come together to protect children and women from violence.

� We assisted nearly 200 senior citizens for cataract surgery.� We performed checkups for more than 15,000 students in schools.� In a pilot programme for screening women for cervical and breast

cancer, 670 women were screened by our gynaecologist in the villages. We are following up with and working out a treatment plan for those with cancer and possible risks of cancer.

� Nearly 200 women were screened for osteoporosis with the help of Dexa Bone scan. We are providing treatment with calcium & vitamin D supplements, and counselling and follow-up for those with risks and problems.

� An expansion was undertaken on the second floor and the hospital facilities were improved.

� In order to improve the quality of work, the laboratory, the medical record system and the training for the staff received a lot of attention.

Also visit us: www.thirumalaicharitytrust.org http://www.youtube.com/watch?v=e7DJVoE08lA

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