To The Members of Kiri Industries Limited
 
 The Directors have pleasure in presenting 14th Annual Report together
 with Audited Accounts of the Company for the financial year ended on
 31st March, 2012.
 
 REVIEW OF STANDALONE PERFORMANCE:
 
                                                          (Rs. In Lacs)
 
 Particulars                                         2011-12    2010-11
 
 Net Sales and Other income                         53704.08   57658.26
 
 Profit Before Finance Cost, Depreciation, 
 Tax and Prior period adjustments                    8735.22   11396.37
 
 Less :    Finance cost                              5238.86    4389.28
 
           Depreciation                              3025.62    1861.55
 
           Prior Period Adjustments                    21.54      16.25
 
 Profit before taxation and Extra ordinary Items      449.20    5129.29
 
 Less : Extra Ordinary Items                         2184.12    1283.88
 
 (Loss)/Profit Before Taxation                      (1734.92)   3845.41
 
 Less :    Provision for Taxation                     301.21     770.16
 
           Deferred Tax                               322.81     539.88
 
 Add :     MAT Credit Entitlement                       0.00    (769.65)
  
 Net (Loss)/ Profit After Tax                       (2358.94)   3305.02
 
 Add :     Surplus Brought Forward                   9463.27    6654.78
 
 Profit Available for Appropriation                  7104.33    9959.80
 
 Appropriation:
 
 1. Dividend on Equity Shares and tax thereon           0.00     331.23
 
 2. Transferred to General Reserve                      0.00     165.30
 
 3. Debenture Redemption Reserve                      800.00       0.00
 
 Balance Carried to Balance Sheet                    6304.33    9463.27
 
 During the year under review, the Company has recorded a total income
 of Rs. 53704.08 Lacs as against Rs. 57658.26 Lacs a decrease of 6.86
 the performance was impacted as the worldwide economy went through
 turmoil. Across the world, on account of economic crisis in various
 countries, demand has gone sluggish and hence we could see under
 utilization of our dyes production capacities making the same as loss
 making units. Pile up of inventories on lack of demand has also added
 to the wounds of the colours business. Profit before Finance Cost,
 Depreciation, Tax and Prior period adjustments decreased from Rs.
 11396.37 Lacs to Rs. 8735.22 Lacs in the reporting year, a decline by
 23.35% as compared to the previous financial year. The sharp
 depreciation of Rupee as against Dollar in FY 2011-12 had added to the
 adverse impact of the company''s performance and for the first time in
 the company''s history it reported a Net Loss. Out of the total Loss for
 the year 2011-12 of Rs. 2358.94 Lacs as against a Net Profit of Rs.
 3305.02 Lacs in the preceding financial year 2010-11, Rs. 2184.12 Lacs
 is on account of forex losses.
 
 REVIEW OF CONSOLIDATED PERFORMANCE:
 
                                                        (Rs. In Lacs)
 
 Particulars                                       2011-12      2010-11
 
 Revenue                                         410883.51    368182.11
 
 Cost of Sales                                  (306568.00)  (273972.70)
 
 Gross Profit                                    104315.51     94209.41
  
 Expenditure                                     (99165.84)  (102878.86)
 
 Other Income                                     11442.75      7148.10
 
 Profit/(Loss) from Operating activities          16592.42     (1521.35)
 
 Finance Cost                                    (21161.58)   (11079.70)
 
 Loss before taxation                             (4569.16)   (12601.05)
 
 Income tax (expenses)/Credit                     (2299.86)     1360.59
 
 Loss for the year                                (6869.02)   (11240.46)
 
 Other Comprehensive (Loss)/Income                 (388.31)     2424.78
 
 Total Comprehensive (Loss)                       (7257.33)    (8815.68)
 
 During the financial year under review, the consolidated revenue
 increased by 11.59% to Rs. 410883.51 Lacs from Rs. 368182.11 Lacs on
 account of sustained efforts of the Management. The Cost of sales
 increased by 11.90% as compared to the previous financial year from Rs.
 273972.70 Lacs to Rs. 306568.00 Lacs. The gross profit of the Company
 increased from Rs. 94209.41 Lacs to Rs. 104315.51 Lacs, showing an
 increase by 10.73% as compared to the previous financial year. The
 finance cost increased by 91% from Rs. 11079.70 Lacs to Rs. 21161.58
 Lacs, mainly on account of increased borrowings. However, the total
 comprehensive loss for the year has been reduced by 17.68% to Rs.
 7257.33 Lacs from Rs. 8815.68 Lacs that of previous financial year.
 
 
 
 
 DIVIDEND:
 
 In view of losses incurred during the financial year 2011-12, your
 Directors do not recommend any Dividend for the year under review.
 
 NON CONVERTIBLE DEBENTURES:
 
 During the year under review, your Company has issued 400 Secured
 Redeemable Non Convertible Debentures (NCDs) of Rs. 10.00 Lacs each,
 aggregating to Rs. 4000.00 Lacs. The NCDs carry coupon rate of 10.75%
 p. a. and redemption premium of 2% is payable on redemption of NCDs.
 
 SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS:
 
 As per General Circular No: 2/2011 dated 8th February, 2011 issued by
 the Ministry of Corporate Affairs, Government of India, the Company has
 not attached the Balance Sheet, Statement of Profit and Loss and other
 documents of the subsidiary companies with the Balance Sheet of the
 Company. The Company has prepared Consolidated Financial Statements and
 its subsidiaries in accordance with the International Financial
 Reporting Standards (IFRS). The same has been attached with the Annual
 Report of the Company.  The summary of financial information of each of
 the subsidiary companies is attached herewith and forms part of the
 Annual Report.
 
 The Company will provide the annual accounts of its subsidiary
 companies and the related detailed information on the specific request
 made by any shareholder(s). The said annual accounts are open for
 inspection at the Registered Office of the Company during the business
 hours on all working days, except Sunday and public holidays.
 
 LISTING:
 
 The Equity Shares of your Company are listed and actively traded on the
 Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of
 India Limited (NSE). The Company has paid annual listing fees to the
 both stock exchanges for the year 2012- 2013. The Secured Redeemable
 Non Convertible Debentures are listed on the Bombay Stock Exchange
 Limited.
 
 DIRECTORS:
 
 Mr. Shanker R. Patel, Director of the Company retires by rotation at
 the forthcoming Annual General Meeting and being eligible, offers
 himself for re-appointment. A brief profile of Mr. Patel as required
 under clause 49 of the Listing Agreement is given as Annexure to the
 Notice.
 
 Mr. Yamal A. Vyas had resigned as a Director w.e.f 15th October, 2011
 and Mr. Ajay Patel had resigned as a Director w.e.f. 14th August, 2012.
 The Board of Directors places on record their sincere appreciation for
 the valuable services rendered by them during their tenure.
 
 
 The Board of Directors of the Company has, at its meeting held on 13th
 February, 2012, appointed Mr. V. Anish Babu as a Nominee Director of
 IFCI Limited.
 
 AUDITORS AND AUDITORS'' OBSERVATION IN AUDIT REPORT:
 
 M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, Statutory
 Auditors of the Company, retires at the ensuing Annual General Meeting
 and are eligible for re-appointment. They have issued a certificate
 stating that their appointment, if made, would be within the limits
 prescribed under Section 224(1B) of the Companies Act, 1956.
 
 In respect of the auditors observation regarding default in repayment
 of principal and interest to banks and financial institutions, it is
 hereby clarified that the said default in payment was temporary in
 nature due to mismatches in cash flow on account of delay in
 realization of receivables from the customers and global slowdown in
 dyes and chemicals industries.
 
 In respect of auditors observation regarding irregularity in payment of
 statutory dues, it is hereby clarified that the said delay was due to
 mismatches in cash flow and tight liquidity position of the Company.
 
 COST AUDITORS:
 
 As per notification F. No. 52/26/CAB-2010, dated January 24, 2012,
 issued by the Ministry of Corporate Affairs, Government of India, the
 Company is required to appoint a Cost Auditor for audit of the cost
 accounting records for the financial year 2012-13.  Pursuant to the
 provisions of Section 233B read with Section 224(1B) of Companies Act,
 1956, M/s. V. H. Savaliya & Associates had given their consent to act
 as Cost Auditors of the Company and accordingly, the Board of Directors
 at their meeting held on May 14, 2012, appointed them as Cost Auditors
 of the Company for the Financial Year 2012-13.
 
 The Central Government has approved the appointment of cost auditors
 for conducting Cost Audit for the financial year 2012-13.  
 
 
 PUBLIC DEPOSITS:
 
 During the year under review, your Company has not accepted any
 deposits as per the provisions of section 58A of the Companies Act.
 1956.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 In compliance of Section 217(2AA) of the Companies Act, 1956, with
 respect to Directors'' Responsibility Statement, it is hereby confirmed:
 
 1. That in the preparation of the annual accounts for the financial
 year ended 31st March, 2012, all applicable accounting standards have
 been followed and no material departure have been made from the same.
 
 2. That the Directors have selected appropriate accounting policies and
 applied them consistently and made judgments and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year 2011-12 and
 of the loss of the company for the year under review.
 
 3. That the Directors have taken proper and sufficient care to the best
 of their knowledge and ability, for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of the Company and for preventing
 and detecting fraud and other irregularities.
 
 4. That the Directors have prepared the annual accounts for the
 financial year ended 31st March, 2012 on a ''going concern'' basis.
 
 EMPLOYEE RELATIONS:
 
 The relations with the employees have been cordial throughout the year.
 Your Directors place on record their sincere appreciation in respect of
 the services rendered by the employees of the Company at all levels.
 
 PARTICULARS OF EMPLOYEES:
 
 The information required under Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, is required to be set out in Directors1 Report. As per the
 provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
 report is being sent to all the shareholders of the Company excluding
 the aforesaid information. Any shareholder interested in obtaining the
 particulars may obtain it by writing to the Company Secretary of the
 Company.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
 EARNING AND OUTGO:
 
 Additional information on conservation of energy, technology
 absorption, foreign exchange earning & outgo as required to be
 disclosed in term of Section 217(1)(e) of the Companies Act, 1956, read
 together with the Companies (Disclosures of Particulars in the Reports
 of Board of Directors) Rules, 1988, is given as an annexure to this
 report.
 
 CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS:
 
 A separate report on the Corporate Governance and Management Discussion
 and Analysis Report, along with the Certificate from the Statutory
 Auditors of the Company in compliance with clause 49 with the Listing
 Agreement is annexed herewith and forms part of this Annual Report.
 
 QUALIFYING PERSONS FOR INTER SE TRANSFER OF SHARES:
 
 As per the information provided by the promoters and as required under
 regulation 10(1)(a) of Securities and Exchange Board of India
 (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
 persons constituting qualifying persons as defined in the said
 regulations is given as under:
 
 (1) Mr. Pravin Kiri, (2) Mr. Manish Kiri, (3) Mrs. Aruna Kiri, (4) Mrs.
 Anupama Kiri, (5) Ms. Amisha Kiri, (6) Master Hemil Kiri, (7) Synthesis
 International Limited, (8) Kiri Infrastructure Private Limited, (9)
 DyStar Global Holdings (Singapore) Pte. Ltd.  (formerly known as Kiri
 Holding Singapore Private Limited), (10) Kiri International (Mauritius)
 Private Limited, (11) Lonsen Kiri Chemical Industries Limited, (12)
 Kiri Investment and Trading Singapore Private Limited, (13) Kiri
 Peroxide Limited, (14) S.M.S.  Chemicals Co. Limited, (15) APK Advisory
 Services Private Limited, (16) Chemhub Exim Private Limited, (17)
 Chemhub Tradelink Private Limited.
 
 ACKNOWLEDGEMENT:
 
 Your Directors wish to place on record their sincere appreciation for
 the support received from the government, bankers and financial
 institutions, customers, suppliers, business associates and
 shareholders and look forward for their continues support in the
 future. Your Directors would also like to place on record, sincere
 appreciation for significant contributions made by the employees
 through their dedication and commitment towards the Company.
 
                            For and on behalf of the Board of Directors
 
 Place : Ahmedabad                                       Pravin A. Kiri
 
 Date : 3rd September, 2012                                    Chairman