The Directors are pleased to present the 13th Annual Report together
 with the audited accounts for the year ended 31st March 2011.
 
 1. Financial Results                         (Rupees in lacs.)
 
                                    Current Year      Previous Year
 
 Operating Income                      42969             42933
 
 Other income (including 
 non-recurring income)                  1144               790
 
 EBIDTA before exceptional items       12269             13589
 
 Less: Depreciation                     1355              1107
 
 Interest                                312               249
 
 Tax                                    3438              4797
 
 PAT before exceptional items           7164              7436
 
 Less: Exceptional items                  -                 -
 
 Proft after tax                        7164              7436
 
 Add: Surplus brought forward from 
 the previous year                      8502              3545
 
 Amount available for appropriation    15666             10981 
 
 Appropriation
 
 Transfer to debenture redemption reserve -                -
 
 Transfer to general reserve             716               744
 
 Interim Dividend                        656               656
 
 Proposed Final Dividend                 830               757
 
 Corporate dividend tax                  241               241
 
 Surplus carried to Balance Sheet      13223              8502
 
 Note: Figures are regrouped wherever necessary to make the information
 comparable.
 
 2. Dividend
 
 Your Company declared an interim dividend of Rs.6.50 per share in the
 month of October 2010 aggregating to Rs.656.49 lacs for 10099889 equity
 shares of nominal value of Rs.10/- each. The Board of Directors is
 pleased to recommend a fnal dividend for the year of Rs.8.50 per share
 on 9761097 equity shares of nominal value of Rs.10 each, aggregating to
 Rs.829.69 lacs taking the total dividend payout to Rs.15/- per share of
 a nominal value of Rs.10 each.
 
 3. Year in retrospect
 
 Turnover for the year remained fat at Rs. 42,969 lacs against Rs.
 42,933 lacs of the previous year. Proft after tax of Rs. 7,164.38 lacs
 remained broadly at the same level as that of the previous year.
 
 India in 2010-11 was clearly a high demand infation economy with a
 healthy demand pull. In contrast to the earlier years, 2008-09 being a
 year of economic meltdown and 2009-10 being a year of correction, this
 has been a year of consolidation for many Indian corporates.
 
 Global commodity prices have once again been on the upswing.  Crude Oil
 reached a high of $ 110 a barrel in last March from $ 75 a barrel in
 June ’10. Similarly, all the major raw material prices steadily
 escalated during the current fscal. There has been an increase of 30 %
 to 50 % in the prices of fuorspar, sulphur and chloroform, the most
 critical raw materials for the Company.  However, through some medium
 term strategic buying, your Company could smother the impact of rising
 raw material costs while progressively increasing the selling prices of
 its products.  During the year there have been steady price corrections
 for many of the fnished products of the Company, bringing their margins
 back on track. Their sustainability, which is a function of the global
 demand-supply equilibrium, now needs to be carefully watched. Demand
 for refrigerant gases, bulk fuorides and specialty chemicals was robust
 in the second half of the current fscal, both in the international and
 local markets.
 
 The Indian Rupee during the year remained volatile against the US $. It
 reached a low of Rs. 47.51 and a high of Rs. 44.03 during the year,
 fuctuating in a 10% band. The Indian Rupee remained weak from May to
 September ’10 and thereafter kept on strengthening for the balance part
 of the year. This resulted in weakening of the export value realisation
 in the second half of the year. Unlike the US $, the Euro steadily
 strengthened against the Indian Rupee in the second half of the fscal,
 which helped the Company’s Carbon price realisation. The Euro moved in
 a 15% band against the rupee from a low of Rs.56 in mid May to a high
 of Rs.64 in March ’11.
 
 During 2010 – 11, worldwide issuance of Certifed Emissions Reductions
 (CERs) from industrial gases projects, which includes your Company’s
 Project, were inordinately delayed due to an extensive study conducted
 by the Clean Development Mechanism (CDM) Board. As a result there was
 no issuance of CERs until the end of December ’10 and there was no CER
 income booked during the second and third quarter of the current fscal.
 Majority of the CERs issued since the third quarter has been utilised
 in fulflling the old long term contracts.
 
 The demand for carbon credits in the near term and until the end of
 2012 is expected to remain steady. However, there are growing
 uncertainties around the Kyoto Protocol, its continuity beyond 2012 and
 most importantly the eligibility of industrial gases, CERs for use
 within the European Union (80 % of the current market) beyond 2012 as a
 carbon of-set instrument.
 
 A strategic plan to grow the Specialty Chemicals business was
 formulated and a medium term road-map was drawn-up.  Accordingly your
 Company took several steps in the past two years namely; investments in
 R&D, Pilot Plant, a multi-purpose plant and entry into Contract
 Research and Manufacturing Services (CRAMS).
 
 The state-of-the-art R&D centre commissioned in 2009-10 at Surat will
 help your Company to develop new value-added molecules based on specifc
 customer requirements whereas the pilot plant is expected to speed up
 the process of commercialization of the new molecules. Following
 signifcant investments in R&D and Pilot Plant, your Company also
 commissioned the state-of-the-art Multi Product Plant during the
 current fscal, which increased your Company’s ability to meet changing
 customer needs and provide fexible product mix of enhanced process
 capabilities. During this year a state-of-the- art Contract Research
 (CRO) facility was built at Surat which will support your Company’s
 entry into CRAMS. The contract manufacturing operations will
 predominantly emerge out of Dewas which will house the small batch cGMP
 (Current Good Manufacturing Practices) plant. Both the CRO and cGMP
 will become fully operational during the frst quarter of 2011-2012.
 
 Your Company as a good corporate citizen, is alert to its
 responsibilities in health, safety and environmental management, the
 details of which are covered in the management discussion and analysis.
 
 Your Company continues to be rated as (a) ‘CARE A+’ (indicating
 adequate safety for timely servicing of debt obligations and low credit
 risk) for borrowings with a tenure of more than one year and fund-based
 facilities and (b) ‘PR1+’ (indicating strong capacity for timely
 payment of short-term debt obligations and lowest credit risk) for its
 non-fund based facilities.
 
 During the year the residual debt of Rs. 801 lacs was paid.  Debentures
 worth Rs. 140 lacs were also repaid during the year and the balance
 debentures of Rs.140 lacs shall be paid of in the month of August 2011.
 
 During the year your Company purchased 61599 Sq. Ft (built up area) of
 ofce space in Lower Parel, Mumbai at a total investment of Rs. 4756.74
 lacs. The rental income from this property has handsomely contributed
 to the results of the Company.
 
 4. Subsidiary and associates
 
 Sulakshana Securities Limited (SSL), created through the Sanctioned
 Scheme of Rehabilitation (SS) of Mafatlal Industries Limited (MIL) for
 settlement of dues of the term lenders of MIL, continued to remain a
 wholly-owned subsidiary of your Company.
 
 Pursuant to the exemption granted to the Company by the Central
 Government vide its letter No. 47/41/2011-CL-III dated 31st January
 2011, the Company has not attached copies of the Balance Sheet and
 Proft and Loss Account, Directors’ Report and Auditors’ Report of the
 subsidiary company for the fnancial year ended 31st March 2011 and
 other documents required to be attached under Section 212(1) of the
 Companies Act, 1956, to the Balance Sheet of the Company. However, the
 other details, as required by the Central Government while granting the
 said exemption, are disclosed in this Report.
 
 The annual accounts and related information of the subsidiary company
 are open for inspection by any member / investor at the Registered Ofce
 of the Company on working days between 2.00 p.m. and 4.00 p.m. and the
 Company will make available these documents / details upon request by
 any member of the Company who may be interested in obtaining the same.
 The annual accounts and related information of the subsidiary company
 are also available on the Company’s website.
 
 Your Company continues to hold 43% of the equity share capital of
 Mafatlal Denim Limited (MDL) which is its only associate company.
 
 5. Industrial relations
 
 There were cordial and harmonious industrial relations during the year
 and the management received full cooperation from the employees. During
 the year, a long-term wage settlement with the Workmen has been entered
 into.
 
 During the year extensive training and developmental activities were
 undertaken, both in-house and out-bound, for the management as well as
 unionized employees. The workmen actively participated in several small
 group activities to identify and implement efciency improvement
 programmes wherein they demonstrated self initiative and sense of
 ownership.
 
 6. Insurance
 
 The properties and insurable assets and interests of your Company, like
 building, plant and machinery and stocks, among others, are adequately
 insured.
 
 7. Particulars of employees
 
 Information as per Section 217 (2A) of the Companies Act, 1956, read
 with the Companies (Particulars of Employees) Rules, 1975 forms a part
 of this Report and will be sent on demand to the shareholders. Any
 shareholder interested in obtaining a copy of the said statement may
 write to the Company Secretary.
 
 8. Energy, technology and foreign exchange
 
 Additional information on conservation of energy, technology
 absorption, foreign exchange earnings and outgo as required, to be
 disclosed in terms of Section 217(1)(e) of the Companies Act, 1956,
 read with the Companies (Disclosure of Particulars in the Report of
 Board of Directors) Rules, 1988, is annexed hereto and forms part of
 this Report.
 
 9. Employee Stock Option Scheme 2007
 
 Pursuant to the provision of Guidelines 12 of the Securities and
 Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme), Guidelines 1999, as amended, the details of
 stock options as on 31st March 2011 under the “Employee Stock Option
 Scheme 2007” are set out in the Annexure to the Directors’ Report.
 
 10. Reports on Corporate Governance and Management Discussion Analysis
 
 As required under the Listing Agreement with stock exchanges, reports
 on corporate governance as well as management discussion and analysis
 are attached and forms part of the Directors’ Report.
 
 11. Directorate
 
 Shri Satish Kakade, Managing Director of the Company tendered his
 resignation with efect from 1st January 2011. The Board of Directors
 places on record its appreciation for the valuable services rendered by
 Shri Satish Kakade.
 
 Shri Shekhar Khanolkar, who was President – Fluorochemicals and a
 Member of the Board, has been elevated as Managing Director with efect
 from 1st January 2011.
 
 The Board of Directors has appointed Shri Sudhir Mankad as an
 Additional Director with efect from 29th April 2011. He will hold ofce
 up to the ensuing Annual General Meeting of the Company and being
 eligible, ofers himself for reappointment.  Notices under Section 257
 of the Companies Act, 1956, have been received by the Company from
 members signifying their intention to propose the candidature of Shri
 Sudhir Mankad as a Director of the Company.
 
 Shri T.M.M. Nambiar and Shri V.P. Mafatlal both retire by rotation at
 the ensuing Annual General Meeting and being eligible, ofer themselves
 for reappointment.
 
 12. Buy Back of Shares
 
 The Board of Directors at their Meeting held on 24th September 2010,
 announced Buy Back of 338792 Equity Shares of the Company at a price of
 Rs.400/- per share. Accordingly, 338792 Equity Shares of the Company
 were bought back and extinguished. Consequently the paid up share
 capital of the Company stands reduced from 10099889 Equity Shares of
 Rs.10/- each to 9761097 Equity Shares of Rs.10/- each.
 
 13. Directors’ responsibility statement
 
 As required under the provisions of Section 217 (2AA) of the Companies
 Act, 1956, your Directors report that:
 
 i) In the preparation of the annual accounts, the applicable accounting
 standards were followed along with proper explanation relating to
 material departures.
 
 ii) The Directors selected such accounting policies and applied them
 consistently and made judgments and estimates that were reasonable and
 prudent. The purpose was to give a true and fair view of the state of
 afairs of your Company and the proft of the Company at the end of the
 fnancial year.
 
 iii) The Directors took proper and sufcient care for the maintenance of
 adequate accounting records in accordance with the provisions of this
 Act for safeguarding your Company’s assets and for preventing and
 detecting fraud and other irregularities.
 
 iv) The Directors prepared the annual accounts on a going concern
 basis.
 
 14. Auditors
 
 At the Annual General Meeting, members are requested to appoint
 Auditors for the current year and fx their remuneration.  The specifc
 notes forming part of the accounts referred to in the Auditors’ Report
 are self explanatory and give complete information.
 
 15. Cost Auditors
 
 As per the requirements of the Central Government and pursuant to the
 provisions of Section 233 B of the Companies Act, 1956, the audit of
 the Cost Accounts relating to the product “Sulphuric Acid” is being
 carried out every year. The Company has appointed Shri I.V. Jagtiani,
 Cost Auditor, Mumbai to audit the cost accounts for the year 2010-2011
 i.e. from 1st April 2010 to 31st March 2011 for which necessary
 approval of the Central Government has been received vide their letter
 no.  52/801/CAB/1989 dated 26th May 2010. The Cost Audit Report in
 respect of Financial Year 2010-2011 will be fled on or before the due
 date i.e. 27th September 2011.
 
 16. Donation
 
 During the year, your Company made donation of Rs.15 lacs for
 charitable and other purposes.
 
 17. Appreciation
 
 The Directors wish to place on record their appreciation of the devoted
 services of the workers, staf and ofcers who have largely contributed
 to the efcient management of your Company. The Directors also place on
 record their appreciation for the continued support from the
 shareholders, the lenders and other business associates.
 
                                For and on behalf of the Board 
 
 Mumbai,                                        H. A. Mafatlal
 
 Dated: 29th April 2011                               Chairman