To The Members of VELJAN DENISON LIMITED Hyderabad
 
 The Directors take pleasure in presenting the 38th Annual Report on
 the affairs of the Company along with the Audited Accounts for the year
 ended 31st March, 2012.
 
 1.  FINANCIAL RESULTS:
 
                                         Rs. In Lakhs
 
                                    31-03-2012    31-03-2011
 SI 
 No. Particulars                   (12 Months)   (18 Months)
 
 1.  Profit/Loss (PBDIT)               2117.86       3068.71
 
 2.  Less: Depreciation                 328.87        492.85
 
 3.  Profit before Tax                 1788.99       2575.86
 
 4.  Less: Tax                          654.62        878.56
 
 5.  Profit After Tax                  1134.37       1697.30
 
 2.  OPERATIONS:
 
 During the year under report apparently the sales are 81.36 % lesser at
 Rs.  8269.94 Lacs as against Rs. 10163.96 Lacs in the previous year,
 but Previous Year sale was reported for 18 months as against 12 months
 in the Current Year.  The Profit before tax for the year Rs. 1788.99
 Lacs against Rs. 2575.86 Lacs for 18 months of Previous Year.
 
 3.  FUTURE OUTLOOK:
 
 The prevailing Market conditions world wide may likely to increase in
 the Turnover and Profitability of the Company for 2012-2013.
 
 4.  DIVIDEND:
 
 Your Company had a consistent Dividend policy that balances the dual
 objectives of appropriately rewarding Shareholders and retaining
 adequate funds, in order to maintain a healthy Capital adequacy ratio
 to support future growth.
 
 Consisting with this policy and based on the Company''s performance,
 the Directors are pleased to recommend a Dividend of Rs. 7.50 /- per
 equity share for the Financial Year which, if approved at the ensuing
 Annual General Meeting will be paid to those Members (Physical and
 Demat) whose names appear as Shareholders of the Company as at the end
 of business hours on 25.09.2012 as per particulars to be furnished for
 this purpose.
 
 The Dividend payout as proposed is in accordance with the Company''s
 policy to pay sustainable Dividend linked to long term performance,
 keeping in view the Capital needs for the Company''s growth plans and
 the intent to achieve optimal financing of such plans through internal
 accruals.
 
 The Dividend distributed would be tax free in the hands of the
 Shareholders.
 
 5.  RIGHTS ISSUE:
 
 The offer of 4,50,000 Equity Shares of Rs. 10/- each for cash at par
 for every 4 (Four) Equity Shares to the existing Shareholders of the
 Company aggregating to Rs. 45,00,000 on Right basis, for which the
 subscription was fully subscribed and shares were allotted. The subject
 Equity Shares have since been Listed with the Bombay Stock Exchange
 Limited. The funds have since been utilized for the purpose mentioned
 in the Letter of offer.
 
 6.  RESERVES:
 
 The Company has transferred Rs. 1.20 Crore, i.e. 10.58 % of the Current
 Profits to Reserves of the Company.
 
 7.  PARTICULARS OF EMPLOYEES:
 
 There are no employees whose particulars are to be provided as required
 under Sec 217(2A) of the Companies Act, 1956 read with Companies
 (Particulars of the Employees) Rules, 1975, since none of the employees
 drawing a salary in excess of the limits prescribed under the above
 rules.
 
 8.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 As required under the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules 1988, the necessary information is
 given in the Annexure I which is annexed to this report.
 
 9.  FIXED DEPOSITS:
 
 Your Company has not accepted any Deposits from the Public in the terms
 of Sec 58Aof the Companies Act, 1956 during the year under review.
 
 10.  DIRECTORS:
 
 Pursuant to Section 256 of the Companies Act, 1956, read with Articles
 of Association of the Company, Shri V. Pattabhi, Director who retire by
 rotation at the ensuing Annual General Meeting and being eligible offer
 himself for re appointment.
 
 11.  LISTING:
 
 The Company is listed in The Bombay Stock Exchange Limited and there
 have been no arrears of the listing fees payable to the Stock Exchange.
 
 12.  AUDITORS:
 
 M/s. Brahamayya & Co., Chartered Accountants, Hyderabad the existing
 Statutory Auditors of the Company retire at the conclusion of this
 Annual General Meeting and being eligible offer themselves for
 Reappointment. They have signified their willingness and confirmed
 their eligibility under the provisions of the Companies Act, 1956.
 
 13.  DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 In terms of Section 217 (2AA) of the Companies Act, 1956, the Directors
 would like to state that:
 
 i) In the preparation of Annual Accounts, the applicable Accounting
 Standards have been followed along with proper explanations relating to
 material departures, if any.
 
 ii) The Directors have selected such 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 and of the Profit of
 the Company for the year under review;
 
 iii) The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safe guarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 iv) The Directors have prepared the Annual Accounts on a going concern
 basis.
 
 14.  REPORT ON CORPORATE GOVERNANCE:
 
 In accordance with the Clause 49 of the Listing Agreement, the Company
 has complied with all mandatory recommendations. A Report on Corporate
 Governance is provided elsewhere in this report.
 
 15.  ACKNOWLEDGMENTS:
 
 Your Directors acknowledge with a deep sense of gratitude the continued
 support extended by Investors, Customers, Business Associates, Bankers
 and Vendors. Your Directors take this opportunity to thank the
 regulatory Authorities and Governmental Authorities. Your Directors
 also place on record their appreciation for the contribution of all the
 employees of the Company in achieving the performance.
 
                                               By order of the Board 
 
                                          FOR VELJAN DENISON LIMITED
 
 Place: Hyderabad                                 V. C. Janardan Rao
 
 Date: 03-09-2012                                           Chairman