Dear Shareholder''s
 
 The world is becoming more colorful and this is no accidental hue of
 the decade. There is not only a profusion of color; there is also a
 wide range of colors being used; the world is also using color
 combinations, intensities and applications in a refreshingly unique way
 than before.
 
 This trend is the result of an inflection point that transpired a
 couple of decades ago through the IT-driven manipulation of software
 that widened the range, understanding, appreciation and management of
 colors. What was earlier a skill restricted only to the trained eye is
 now a general skill easily derived on the computer screen by graphic
 artists, interior designers, architects and other professionals.
 
 The result is a sustained growth in a mature pigments market the world
 over. The international pigments market has been growing at 15% a year.
 There has been an increase in the shift of manufacturing activity to
 Asia- Pacific region from the developed countries. Earlier, a majority
 of the manufacturing capacities were centered in the advanced markets
 of the US and Europe.  But as these countries became relatively high
 cost, pigment manufacturing capacities moved to the relatively lower
 cost economies of the Far East and eventually to China and India.
 Interestingly, this geographic shift in capacities and technologies
 appears to have stabilized in China and India for some important
 reasons: large captive markets in both the countries, low cost
 manufacturing capabilities and deep chemistry competencies.
 
 Other major developments happening in the global industry include
 consolidation. In order to capture the market share and revitalize
 assets, the activity gained momentum during the year. Additionally,
 environmental issues, regulatory compliances and rising input costs
 caused raw material prices to rise during the last fiscal year.
 
 Asahi Songwon Colors Limited is at the right place at the right time
 with the right competencies to capitalize on this structural shift.
 Over the last decade, the Company strengthened its systems, practices,
 customer relationships and technology alliances to emerge as a niche
 global mid-cap specialty chemicals company. The Company arrived at an
 attractive sweet-spot in its existence marked by a consistent customer
 profile, growing order book, margins predictability and business
 reinvestment - a virtuous cycle.
 
 This sweet-spot is reflected in our
 
 numbers: the Company reported a steady revenue growth from the
 financial year 2005-06 to the year under review. Besides, the Company
 reported a 27.01% increase in revenues and a 12.33% growth in its
 profit after tax despite a global economic slowdown in 2011-12. This
 outperformance and counter- economic performance only validates our
 business model.
 
 The global pigment market has not yet recovered to the pre-recession
 levels on account of the euro zone crisis and slowdown in the US
 economic recovery. The recession impacted the use of pigments,
 including the inks industry. Rising labour costs catalyzed the industry
 the increase in organic pigment costs.
 
 Considering the above challenges, your Company countered these
 challenges with following initiatives:
 
 - Established a research and development centre recognized by the
 Ministry of Science and Technology, Government of India.
 
 - Planned in advance to set up value- added downstream products to
 enhance the Company''s market share.
 
 - Executed water recycling and conservation projects at the
 manufacturing sites apart from improving and upgrading the waste
 disposal system.
 
 - Developed stronger bonds with major clients through on-time
 deliveries that eventually strengthened the order book.
 
 Outlook
 
 The outlook for the industry appears favorable as growth in key user
 industries like ink, paints, rubber and textiles will drive the global
 pigments industry. Looking ahead, the Company expects a greater focus
 on research and development, new product launches, process
 re-engineering and a reduction in carbon footprint. These initiatives
 will help us grow revenues 20% during the current financial year in a
 safely sustainable way.
 
 Based on our industrial reality and competitiveness, the Company
 expects to develop high performing pigments, improve product quality,
 reduce waste and rationalise energy to generate revenues of more than
 Rs. 450 cr by 2014-15 with attractive profitability.
 
 Mrs. Paru M. Jaykrishna
 
 Chairperson & Managing Director