Directors Report of Sudarshan Chemical Industries Ltd.

Mar 31, 2025

Your Directors are pleased to present the 74^th Annual Report together with the Audited Financial Statements of the Company for
the year ended 31^st March, 2025.

The annexed Financial Statements comply in all material aspects with the Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 (the Act), the Companies (Indian Accounting Standards) Rules, 2015, as amended from
time to time and other relevant provisions of the Act.

1. Financial Highlights:

(C in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Revenue from Operations	253,394.5	214,142.9
Earning Before Interest, Tax, Depreciation, Amortisation and Exceptional Item	38,134.4	29,250.5
Less : Interest	2,829.6	2,870.7
Less : Depreciation	14,069.8	13,689.3
Add: Exceptional Gain / (Loss)	(1,821.4)	31,166.0
Less : Provision for Tax	5,316.2	10,344.1
Total Profit After Tax	14,097.4	33,512.4
Other Comprehensive Income	1,133.1	(269.9)
Total Comprehensive Income	15,230.5	33,242.5
Add : Surplus Brought Forward	88,677.8	58,836.7
Transfer from OCI to Hedge Reserve	(1,406.3)	129.2
Transfer from Share Options (ESOP) Outstanding Reserve	215.4	0.0
Net Profit available for appropriation	102,717.4	92,208.4
Appropriation
Interim Dividend	(692.3)	(2,492.2)
Final Dividend	-	(1,038.4)
Surplus to be carried forward	102,025.1	88,677.8

2. (A) FINANCIALS:

Revenue from operations for the year ended
31^st March, 2025 aggregated to C253,394.5 lakhs
as against C214,142.9 lakhs achieved during the
previous year. Profit after tax for the year ended
31^st March, 2025 is C14,097.4 lakhs as against
C33,512.4 lakhs earned during the previous year.

For Subsidiary Companies'' performance please refer
to Annexure II.

On a Consolidated basis, your Company''s Total
Income for the year ended 31^st March, 2025 stood at

C337,898.8 lakhs, as compared to C255,586.3 lakhs in
Financial year 2023-24.

During the year under review, your Company
has delivered a robust financial and operational
performance on Revenue and EBITDA margins.
On a group level, highest ever EBITDA was achieved.
The group has adjusted EBITDA of C38,102 Lakhs
during the current financial year compared to
C31,641 Lakhs in previous year while acquired
group adjusted EBITDA achieved at C2,200 Lakhs.
Total adjusted EBITDA for FY 2024-25 for group stood
at C40,200 Lakhs.

On a standalone basis, highest ever EBITDA was achieved.
Company has reported EBITDA C35,089 Lakhs during
the current financial year compared to C27,511 Lakhs in
previous year. This business performance is result of our
overall strategy on building the Company''s core pillars
towards which your Company was working for past
few years.

(B) EXPORTS:

Your Company continues to focus on export markets.
Initiatives are directed towards engaging with overseas
markets with a view to testing and demonstrating
international competitiveness and seeking profitable
opportunities for growth. During the year under review,
export revenue of pigment business has grown by
32%. Your Company continues to remain watchful
towards international geographies considering ongoing
geo-political issues.

(C) OPERATIONS:

Information on the operations of the Company and details
on state of affairs of the Company are covered in the
Management Discussion and Analysis Report.

(D) CAPACITY EXPANSION:

During the year, the Company continued its expansion
plans and has incurred capex spend of C 1,107.4 Lakhs.
This capital expenditure is primarily aimed at augmenting
production capacities at Roha and Mahad facilities.

(E) ACQUISITION OF THE GLOBAL PIGMENT BUSINESS
OPERATIONS OF HEUBACH GROUP:

Sudarshan Europe B.V., Wholly Owned Subsidiary of the
Company had entered into a definitive agreement on
11^th October, 2024 for the acquisition of Global Pigment
Business Operations of Heubach Group through a
combination of an asset and share deal, subject to
completion of customary conditions and receipt of
requisite regulatory approvals. The said acquisition was
completed on 3^rd March, 2025 for a preliminary purchase
consideration of approx. ?138,990.0 lakhs.

The acquisition comprises of the acquisition of (a) Assets
and business operations of (i) Heubach Colorants Germany
GmbH, (ii) Heubach GmbH (iii) Dr. Hans Heubach GmbH
and (iv) Heubach Group GmbH and participations held
by Sudarshan Switzerland HLD1 AG (formerly known as
Heubach Holding Switzerland AG) in downstream Group
Companies in various countries; and (b) 100% shareholding
of Sudarshan Lux Holding S.a.r.l (formerly known as
Heubach Holding S.a.r.l) a Luxemburg based Heubach
Group Company having investments in shareholding of
companies based in India and USA.

Pursuant to the acquisition related agreements, the
acquisition of assets, business operations and shares were
interdependent and were executed together to acquire

the entire business operations of the Heubach Group.
This acquisition is a strategic move aimed at consolidating
market expertise and expanding global reach in the
pigment industry.

Consequent to the said acquisition, the Group now consists
of 58 subsidiaries (including step-down subsidiaries)
and 2 joint venture companies. Further as a result of
this acquisition, Sudarshan Europe B.V., Wholly Owned
Subsidiary has indirectly acquired 54.36% shareholding in
Heubach Colorants India Limited, an entity listed on BSE
Limited and National Stock Exchange of India Limited.
As per the provisions of SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 2011, as amended,
Sudarshan Europe B.V. is in a process of acquiring
upto 6,001,268 Equity Shares of Face Value C10/- each,
representing 26% of the voting share capital of Heubach
Colorants India Limited.

The said acquisition was funded by combination of equity
and debt. Details of funds raised by the Company through
issuance of Equity Shares are given in Point No. 4.(A) of
this Report.

(F) HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARY /
ASSOCIATE / JOINT VENTURE COMPANIES:

Shareholders are requested to refer Annexure II for
highlights of performance of subsidiaries associates and
joint venture companies and their contribution to the
overall performance of the Company during the year
under review.

As on 31^st March, 2025, the Company has 58 subsidiaries
(including step-down subsidiaries) and 2 joint venture
companies. Pursuant to Rule 8(5)(iv) of the Companies
(Accounts) Rules, 2014, the names of the companies which
have been incorporated or ceased to be the subsidiaries,
or associate companies during the year under review are
provided in Annexure II.

During the year under review, the Company entered into
the agreement for sale of its entire investment (in the
form of Equity Shares) in Sudarshan Japan Limited, Wholly
Owned Subsidiary of the Company to Sudarshan Europe
B.V., another Wholly Owned Subsidiary of the Company
on 25^th March, 2025.

As a result of this transaction, Sudarshan Japan Limited has
ceased to be a Wholly Owned Subsidiary and has become
a Step - Down Subsidiary of the Company.

3. Dividend

The Board of Directors at its meeting held on 6^th March,
2024 declared an Interim Dividend of ?3.60/- (Three
Rupees and Sixty Paise only) per Equity Share of ?2.00/-
each (180%), which was paid to the eligible Shareholders
within the statutory timelines. The Board of Directors at

its meeting held on 17^th May, 2024, recommended a Final
Dividend of C1.00/- (One Rupee only) per Equity Share of
C2.00/- each (i.e. 50%) for FY 2023-24, which was approved
by the Shareholders at the 73^rd Annual General Meeting.
The Interim Dividend along with the recommended Final
Dividend aggregated to a total Dividend of ?4.60/- (Four
Rupees and Sixty Paise only) per Equity Share of ?2.00/-
each (230%) for the Financial Year 2023-24. The aforesaid
Interim and Final Dividend was paid to the eligible
Shareholders within the statutory timelines.

The Board of Directors at its meeting held on 25^th July, 2025,
recommended a Final Dividend of C4.50/- (Four Rupees
and Fifty Paise only) per Equity Share of C2.00/- each (i.e.
225%), which shall be paid within statutory timelines after
receipt of approval of Shareholders at the ensuing 74^th
Annual General Meeting on or before 20^th October, 2025.

In view of the changes made under the Income Tax
Act, 1961, by the Finance Act, 2020, dividend paid or
distributed by the Company shall be taxable in the hands
of Shareholders. The Company shall accordingly make the
payment of Final Dividend after deduction of tax at source.

The dividend payout is in accordance with the Dividend
Distribution Policy of the Company. The Dividend
Distribution Policy is provided as Annexure III to this
Report, and is also available on the website of the Company
https://www.sudarshan.com/dividend-distribution-
policy.pdf

4. (A) SHARE CAPITAL:

During the year under review, the Authorized Capital
of the Company was increased from ?15,00,00,000/-
(Rupees Fifteen Crores Only) divided into 7,50,00,000
(Seven Crore Fifty Lakh only) equity shares of ?2/-
(Rupees Two only) each to ?20,00,00,000/- (Rupees
Twenty Crores Only) divided into 10,00,00,000 (Ten
Crore Only) equity shares of ?2/- (Rupees Two only)
each ranking pari-passu with the existing equity
shares of the Company. The paid-up Equity Share
Capital as on 31^st March, 2025 was ?1,571.5 Lakhs.
Based on the approval accorded by the Board of
Directors, Committee of the Board of Directors and
Shareholders of the Company, the Company carried
out a fund raising exercise as explained below:

Fund raising through Preferential
Issue (''PI'')

On 13^th December, 2024, the Company made
allotment of 9,80,000 Warrants each convertible
into, or exchangeable for 1 (one) fully paid up equity
share of the Company of face value of C2 each, which
may be exercised in one or more tranches during the
period commencing from the date of allotment of
the Warrants until expiry of 18 (Eighteen) months

to Mr. Rajesh Balkrishna Rathi, Member of the
Promoter and Promoter Group at a price of C 1,019.75
(Including premium of C 1,017.75 per Warrant) for
cash consideration not exceeding C9,993.55 Lakhs.

On 13^th January, 2025, the Company made allotment
of 18,69,000 fully paid-up equity shares of face
value of C2 each at a price of C1,043.33 (including
premium of C 1,041.33) per equity share aggregating
to approximately C19,499.84 Lakhs, to the identified
investors, not belonging to "Promoter and Promoter
Group" of the Company by way of a preferential issue
of Equity Shares on private placement basis, for cash
consideration, in accordance with the provisions of
Chapter V of the SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018.

Fund raising through Qualified Institutions
Placement (''QIP'')

On 29^th January, 2025, the Company made allotment
of 74,76,635 fully paid up equity shares of face value
of C2 each at a price of C1,070 per equity share
(including premium of C1,068 per equity share),
representing a discount of C37.89 to the floor price
of C1,107.89 per equity share, to the eligible Qualified
Institutional Buyers aggregating to approximately
C799,99.99 Lakhs, in accordance with the provisions
of Chapter VI of the SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2018.

Except above, there was no public issue, rights issue,
bonus issue during the year. The Company has not
issued shares with differential voting rights or sweat
equity shares.

(B) NON - CONVERTIBLE DEBENTURES:

The Board of Directors at its meeting held on
28^th March, 2022, had accorded its approval for
issue of unsecured non-convertible debentures
on private placement basis upto C20,000 Lakhs, in
one or more tranches / series, subject to approval
of Shareholders. Approval of Shareholders by way
of Special Resolution through Postal Ballot was
received on 13^th May, 2022. The Finance Committee
of the Board of Directors vide its resolution dated
18^th July, 2022, approved allotment of 990 (Nine
Hundred and Ninety only) Unsecured, Rated, Listed,
Taxable, Redeemable Non-Convertible Debentures
("NCDs") with face value of C1,000,000/- each on
private placement basis. The said NCDs are listed on
the Wholesale Debt Market Segment of BSE Limited
effective 21^st July, 2022 (ISIN: INE659A08036; BSE
Scrip Code: 974058).

Further, on 18^th July, 2025 the NCDs were
redeemed in full.

5. TRANSFER TO RESERVE:

As permitted by the Companies Act, 2013, and Rules made
thereunder, the Directors do not propose to transfer any
amount to the General Reserve for FY 2024-25.

6. FIXED DEPOSITS:

During the year under review, the Company has not
accepted any deposit from the public / members pursuant
to Section 73 and Section 76 of the Companies Act, 2013
read with the Companies (Acceptance of Deposits) Rules,
2014, as amended from time to time, and hence as on
31^st March, 2025, there are no deposits outstanding,
except as required statutorily and which have remained
unclaimed at the end of the year under review.

7. DIRECTOR''S RESPONSIBILITY STATEMENT:

As required under Section 134(3)(c) of the Companies
Act, 2013, Directors of the Company, to the best of
their knowledge and belief with respect to FY 2024-25,
state that:

i. in the preparation of the annual accounts, the
applicable accounting standards have been
followed with proper explanation relating to material
departures;

ii. the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of
the Company at the end of financial year and of the
profit and loss of the Company for that period;

iii. the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records
in accordance with the provisions of the Companies
Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial
controls to be followed by the Company and that
such internal financial controls are adequate and are
operating effectively; and

vi. the Directors have devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems are adequate and are
operating effectively.

8. CORPORATE GOVERNANCE:

Pursuant to SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations,
2015") a separate chapter titled ''Report on Corporate
Governance'' has been included in this Annual Report,

along with the reports on the Management Discussion
and Analysis and Shareholders'' Information.

The Managing Director and the Chief Financial Officer
have certified to the Board with regard to the financial
statements and other matters as specified under the SEBI
Listing Regulations.

A certificate from a Practicing Company Secretary
regarding compliance with the conditions of corporate
governance is given separately in this Annual Report.

9. MANAGEMENT DISCUSSION ANALYSIS:

A Management Discussion and Analysis Report covering a
wide range of issues relating to industry trends, Company
Performance, Business and Operations is given separately
in the Annual Report.

10. BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as
amended, inter alia, provides that the annual report of the
top 1000 listed entities based on market capitalisation
(calculated as on 31^st March of every financial year),
shall include a Business Responsibility and Sustainability
Report ("BRSR").

Since the Company is amongst the top 1000 listed entities
as on 31^st March, 2025, the Company has presented its BRSR
for FY 2024-25, which forms part of this Annual Report.

11. CONTRACTS AND ARRANGEMENTS WITH RELATED
PARTIES:

All transactions entered into with related parties during the
financial year were in the ordinary course of business and
at arm''s length basis, which were approved by the Audit
Committee. The Board has approved a policy for related
party transactions which is available on the Company''s
website at https://www.sudarshan.com/related-party-
transaction-policy.pdf

The particulars of contracts or arrangements made with
related parties pursuant to Section 188 is covered in
Notes to the Financial Statements and material contracts
/ arrangements made with related parties is given in
Form AOC-2 which is attached as Annexure IV to this
report. None of the transactions with any of the related
parties were in conflict with the interest of the Company.
Attention of the members is drawn to the disclosure set
out in Notes to Financial Statements forming part of the
Annual Report.

The particulars of loans / advances / investments etc.,
required to be disclosed pursuant to Para A of Schedule
V of the SEBI Listing Regulations, 2015, are furnished as a
part of the Financial Statements.

The transaction(s) of the Company with any person or
entity belonging to the promoter / promoter group which
hold(s) more than 10% shareholding in the Company as
required pursuant to Para A of Schedule V of the SEBI
Listing Regulations, 2015 is disclosed separately in the
Financial Statements of the Company.

Prior omnibus approval of the Audit Committee was
obtained for all related party transactions which were
foreseen and repetitive in nature as well as for transactions
which were not foreseen and details of which were not
available, upto the limits as specified in the Companies Act,
2013 and SEBI Listing Regulations, 2015.

There were no Material Related Party Transactions entered
into by the Company or its subsidiaries requiring approval
of the Members of the Company in terms of Regulation 23
of the SEBI Listing Regulations, 2015 and Section 188 of the
Companies Act, 2013.

12. AUDIT COMMITTEE:

Pursuant to the provisions of Section 177 of the Companies
Act, 2013, and Rules made thereunder and Regulation 18
of the SEBI Listing Regulations, 2015, the Company has in
place an Audit Committee.

As on 31^st March, 2025, the composition of the Audit
Committee is as under -

a) Mrs. S. P. Navandar - (Non-Executive and Independent
Director) Chairperson

b) Mr. N. T. Raisinghani - (Non-Executive and
Independent Director) Member

c) Ms. B. Batra - (Non-Executive and Independent
Director) Member

Changes in Audit Committee Members

Mrs. S. A. Panse ceased to be a Chairperson of the Audit
Committee and Mr. D. N. Damania, Mr. S. Padmanabhan
and Mr. S. K. Asher ceased to be Members of the
Audit Committee effective close of business hours on
2^nd August, 2024.

Mr. S. P. Navandar was appointed as a Chairperson and
Mr. N. T. Raisinghani and Ms. B. Batra was were appointed
as Members of the Audit Committee effective close of
business hours on 2^nd August, 2024.

All recommendations made by the Audit Committee were
deliberated and accepted by the Board during FY 2024-25.

Details of the current committee members are
also available on website of the Company at
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/
https://www.sudarshan.com/Composition%20of%20
Committees%20and%20KMP-new.pdf.

13. OTHER COMMITTEES OF THE BOARD

The following Committees constituted by the Board
to effectively cater its duties towards diversified role
under the Companies Act, 2013 and the SEBI Listing
Regulations, 2015:

Nomination and Remuneration Committee
Stakeholders'' Relationship Committee
Risk Management Committee
Corporate Social Responsibility Committee

Details of composition, terms of reference and number
of meetings held in FY 2024-25 for the aforementioned
committees are given in the Report on Corporate
Governance, which forms a part of this Report.

14. CORPORATE SOCIAL RESPONSIBILITY:

The Company has in place a Corporate Social Responsibility
("CSR") Committee constituted as per the provisions of
Section 135 of the Companies Act, 2013, and Rules made
thereunder, details of which are mentioned in the Report
on Corporate Governance forming part of this Annual
Report. The Company has been carrying out various
CSR activities in the areas specified in terms of Section
135 read with Schedule VII of the Companies Act, 2013,
and Rules made thereunder. The details of CSR activities
undertaken by the Company are annexed herewith as
Annexure V. The CSR Policy of the Company is available
on the Company''s website at https://www.sudarshan.
com/corporate-sustainability-(csr)-policy.pdf

CSR Policy in brief: The focus of the CSR activities is on
women empowerment, environment, health, community
development, and education etc., and the projects would
be planned and implemented accordingly.

The Company shall spend at least 2% (two per cent) of
the average net profits, calculated in accordance with the
provisions of the Companies Act, 2013, and Rules made
thereunder, made by it in the three immediately preceding
financial year. The Annual Report on CSR activities is
annexed herewith as Annexure V.

15. RISK MANAGEMENT AND CONTROL:

The Company has put in place appropriate risk assessment
and minimisation procedures, which are reviewed by the
Risk Management Committee, Audit Committee and the
Board. As per the requirements of SEBI Listing Regulations,
2015, a Risk Management Committee has been constituted
with responsibility of preparation of Risk Management
Plan, reviewing and monitoring the same on regular
basis, to identify and review critical risks on regular basis,
to report key changes in critical risks to the Board on an
ongoing basis, to report critical risks to Audit Committee

in detail on yearly basis and such other functions as may be
prescribed by the Board. The Committee is supported by an
Enterprise Risk Management ("ERM") team which provides
advice on various risks and the appropriate governance
framework and ensures that risks are identified, measured
and managed in accordance with the Company''s policies
and risk objectives. The Committee holds meetings
periodically where gap between two meetings does not
exceed 210 days and that at least two meetings are held
in a financial year. The risks faced by the Company and
their minimization procedures are assessed periodically.

According to Section 134(5)(e) of the Companies Act,
2013, and Rules made thereunder, the term Internal
Financial Control ("IFC") means the policies and
procedures adopted by the Company for ensuring the
orderly and efficient conduct of its business, including
adherence to Company''s policies, the safeguarding of
its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial
information. The Company has a well-placed, proper
and adequate internal financial control system which
ensures that all assets are safeguarded and protected
and that the transactions are authorised, recorded and
reported correctly. The Company''s internal financial
control system also comprises due compliances with
Company''s policies and Standard Operating Procedures
("SOPs") and audit and compliance checks by the Statutory
Auditors and the Internal Auditor. The Internal Auditors
independently evaluate the adequacy of internal controls
and concurrently audit the majority of the transactions in
value terms. Independence of the audit and compliance
is ensured by direct reporting of Internal Auditors to the
Audit Committee of the Board. To further strengthen
the compliance processes, the Company has an internal
compliance tool for assisting statutory compliances.
This process is automated and generates alerts for proper
and timely compliance. Risk Management Policy is available
on the Company''s website at https://www.sudarshan.
com/risk-management-policy.pdf

Details of the Risk Management Committee are given in
the Report on Corporate Governance.

16. POLICY ON DIRECTOR''S APPOINTMENT AND
REMUNERATION AND OTHER DETAILS:

The Company''s policy on appointment of Directors,
including criteria for determining qualifications, positive
attributes, independence of a Director is available on the
website of the Company at https://www.sudarshan.com/
perch/resources/remuneration-policy.pdf. The policy on
Remuneration and other matters provided in Section
178(3) of the Act, is available on https://www. sudarshan.
com/ perch/resources/remuneration-policy.pdf.

During the year under review, the managerial remuneration
paid to the Directors and Key Managerial Personnel was in
terms of the provisions of the Companies Act, 2013 and
Rules made thereunder and SEBI Listing Regulations, 2015
and the terms of approval granted by the Shareholders for
payment of Managerial Remuneration, as the case may be.

Further, as per the provisions of Sections 196, 197,
198, Schedule V and other applicable provisions of the
Companies Act, 2013, and Rules made thereunder, as
amended from time to time, and Regulation 17(6)(e) of SEBI
Listing Regulations, 2015, approval of the Shareholders
by way of Special Resolution was accorded at the 73^rd
Annual General Meeting for payment of remuneration to
Mr. R. B. Rathi (DIN: 00018628), Managing Director, in
excess of C5 Crores or 2.5% of the net profits of the
Company, whichever is higher, during the remaining
tenure of his appointment upto 31^st May, 2028 which shall
not exceed the limits specified in the applicable provisions
of The Companies Act, 2013 and Rules made thereunder,
read with Schedule V appended to the Act.

17. CHANGES IN DIRECTORS AND KEY MANAGEMENT
PERSONNEL:

During the year under review:

a. Mr. P. R. Rathi (DIN: 00018577), Non-Executive
and Non-Independent Director, was liable to
retire by rotation, and being eligible, had offered
himself for the re-appointment at the 73^rd Annual
General Meeting held on 2^nd August, 2024.
Based on the recommendation of the Nomination
and Remuneration Committee and the Board
of Directors, approval of Shareholders was
accorded at the 73^rd Annual General Meeting for
re-appointment of Mr. P. R. Rathi as a Non-Executive
and Non-Independent Director, liable to retire
by rotation.

b. Based on the recommendation of the Nomination
and Remuneration Committee and the Board of
Directors, Ms. B. Batra (DIN: 03502004), Mrs. A. A.
Wakhlu (DIN: 00122052) and Mrs. S. P. Navandar (DIN:
02804964) were appointed as Non-Executive and
Independent Directors, not liable to retire by rotation
for a term of 5 years effective from 2^nd August, 2024
to 1^st August, 2029, which were also approved by
the Shareholders at the 73^rd Annual General Meeting
held on 2^nd August, 2024.

c. Mr. D. N. Damania (DIN: 00403834), Mr. S. Padmanabhan
(DIN: 00001207), Mr. S. K. Asher (DIN: 00008221), and
Mrs. R. F. Forbes (DIN: 00137326), ceased to be Non -
Executive and Independent Directors of the Company
effective close of business hours on 6^th August, 2024
on account of completion of their second term as
Independent Directors of the Company.

d. Mr. A. N. Rathi (DIN: 00018683) resigned as a
Non-Executive and Non-Independent Director of the
Company effective 14^th February, 2025.

e. Subsequent to the financial year ended on 31^st March,
2025, Mr. P. R. Rathi (DIN: 00018577) resigned as a
Chairman and Non-Executive and Non-Independent
Director of the Company effective close of business
hours on 29^th May, 2025.

f. Consequently, the Board, at its meeting held on
29^th May, 2025, appointed Mr. R. B. Rathi, to act as a
Chairman of the Company effective close of business
hours on 29^th May, 2025, in addition to his current role
of Managing Director.

As per the provisions of Section 152 of the Companies
Act, 2013, and Rules made thereunder and as per the
Articles of Association of the Company, and based on the
recommendations of the Nomination and Remuneration
Committee and the Board of Directors, Mr. A. Vij
(DIN: 08140194) Wholetime Director of the Company
retires by rotation and being eligible, offers himself for
re-appointment. A resolution seeking Shareholders''
approval for his re-appointment forms part of Notice of
the 74^th Annual General Meeting.

During the year under review, the Non-Executive
Directors of the Company had no material pecuniary
relationship or transactions with the Company, other
than sitting fees, commission, if any and reimbursement
of expenses incurred by them for the purpose of attending
meetings of the Board / Committee of the Company.
The Board has made the recommendation for the
above appointment(s) / re-appointment(s) of Directors
based on the recommendation of the Nomination and
Remuneration Committee ("NRC"). NRC has made its
recommendation after ensuring that none of the Directors
seeking appointment(s) / re-appointment(s) is debarred
from holding the position of a Director by virtue of any
Order from SEBI, The Ministry of Corporate Affairs ("MCA")
or any other Regulatory Authority. The Board is of the
opinion that the Independent Directors appointed /
re-appointed / proposed to be appointed are of integrity
and possess the requisite expertise and experience
(including the proficiency). Details of the Directors seeking
appointment(s) / re-appointment(s) including profile of
such Directors, are given in the Notice convening the 74^th
Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 203 of
the Companies Act, 2013, and Rules made thereunder,
following are the Key Managerial Personnel of the
Company for the year ended 31^st March, 2025:

a. Mr. R. B. Rathi, Chairman and Managing Director
(Mr. R. B. Rathi was appointed as a Chairman effective
close of business hours on 29^th May, 2025, in addition
to his current role of Managing Director)

b. Mr. A. Vij, Wholetime Director

c. Mr. Nilkanth Natu, Chief Financial Officer

d. Mr. Mandar Velankar, General Counsel and
Company Secretary

18. DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act,
the Independent Directors have submitted declarations
that each of them meets the criteria of independence as
provided in Section 149(6) of the Act along with Rules
framed thereunder and Regulation 16(1)(b) of the SEBI
Listing Regulations, 2015.

The Independent Directors have also confirmed that they
have complied with the Code for Independent Directors
prescribed in Schedule IV of the Companies Act, 2013.
There has been no change in the circumstances affecting
their status of Independent Directors of the Company.
The Independent Directors have also given declaration
of compliance with Rules 6(1) and 6(2) of the Companies
(Appointment and qualification of Directors) Rules, 2014,
as amended from time to time, with respect to their name
appearing in the data bank of Independent Directors
maintained by ''The Indian Institute of Corporate Affairs,
Manesar'' ("IICA") and that they are exempt / have cleared
the Online Proficiency Assessment Test, as applicable.

In the opinion of the Board, all Independent Directors
possess requisite qualifications, experience, expertise and
hold high standards of integrity required to discharge
their duties with an objective independent judgment
and without any external influence. List of key skills,
expertise and core competencies of the Board, including
the Independent Directors forms part of the Report on
Corporate Governance.

The Board has also laid down a Code of Conduct for
Independent Directors pursuant to Section 149(8) read
with Schedule IV of the Act, which is a guide to professional
conduct for Independent Directors of the Company.
All Independent Directors have affirmed compliance with
this Code for the FY 2024-25.

Annual Evaluation of Board of Directors, its
Committees and Individual Directors:

The Board of Directors upon recommendation of the
Nomination and Remuneration Committee has laid
down the criteria for performance evaluation of Board
of the Company, its Committees and the individual
Board members, including Independent Directors, and
accordingly, an annual evaluation of the performance of

the Board, Committees and individual Directors has been
carried out pursuant to the provisions of the Act and SEBI
Listing Regulations, 2015.

The performance of the Board was evaluated by the
Board after seeking inputs from all the Directors on
the basis of criteria such as the board composition and
structure, effectiveness of board processes, information
and functioning etc.

The performance of the committees was evaluated
by the Board after seeking inputs from the committee
members on the basis of criteria such as the composition
of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note
on Board Evaluation issued by the Securities and Exchange
Board of India on 5^th January, 2017.

In a separate meeting of Independent Directors,
performance of Non-Independent Directors, the Board as
a whole and the Chairman of the Company was evaluated,
taking into account the views of Executive Directors and
Non-Executive Director.

The Board and the Nomination and Remuneration
Committee reviewed the performance of individual
Directors on the basis of criteria such as the contribution
of the individual Director to the Board and committee
meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in
meetings, etc.

At a separate Board Meeting, the performance of the
Board, its Committees, and individual Directors was
also discussed. Performance evaluation of Independent
Directors was done by the entire Board, excluding the
Independent Director being evaluated. The Directors
were satisfied with the evaluation results, which reflected
the overall commitment and sense of duty. The Board
has also adopted a Board Diversity Policy. The policies of
Board diversity and performance evaluation of Directors
of the Company can be accessed from the company''s
website at https://www.sudarshan.com/board-diversity-
remuneration-and-succession-policy.pdf

19. EMPLOYEE STOCK OPTION:

"Sudarshan Employee Stock Option Plan 2018 ("Sudarshan
ESOP Plan 2018 / Plan")" and "Sudarshan Employee Stock
Option Scheme 2018 ("Sudarshan ESOP Scheme 2018
/ Scheme")" were approved based on the approvals
accorded by the Nomination and Remuneration
Committee and Board of Directors dated 27^th June, 2018
and approval accorded by the Shareholders at the 67^th
Annual General Meeting held on 9^th August, 2018. The Plan
and Scheme were introduced pursuant to provisions of
SEBI (Share Based Employee Benefits) Regulations, 2014.

In 2021, SEBI introduced new Regulations viz.
SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021, for regulating the ESOP Schemes.
Therefore, an approval of Shareholders at the 73^rd Annual
General Meeting for making consequential amendments /
changes for implementation of Sudarshan ESOP Plan 2018
was obtained in terms of the aforesaid SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021.

During the year under review, the Nomination and
Remuneration Committee did not approve any options /
Stock Appreciation Rights ("SARs") to eligible employees.

During the financial year under review, there were no
material changes in the Employee Stock Option Plan of the
Company and the Plan is in compliance with SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations,
2021. Ms. Ruchi Bhave, Secretarial Auditor of the Company
has reviewed and certified that the Plan of the Company
has been implemented in accordance with SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations,
2021 and the resolutions passed by the Members for the
respective Plan. A copy of the compliance certificate will be
placed at the ensuing AGM for inspection by the Members.

Disclosures pursuant to SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 are given in
the Notes to Accounts section of this Annual Report.

20. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha
and Mahad plants and at R & D Laboratory situated at
Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors
records its appreciation of the commitment and support
of employees at all levels.

21. FAMILIARISATION PROGRAM FOR INDEPENDENT
DIRECTORS:

The Company believes that a Board, which is well
informed / familiarised with the Company and its affairs,
can contribute significantly and effectively discharge its
role of trusteeship in a manner that fulfills stakeholders''
aspirations and societal expectations. In pursuit of this,
the Directors of the Company are updated on changes
developments in the domestic / global corporate
and industry scenario including those pertaining to
statutes / legislations and economic environment and
on matters affecting the Company. The details of the
programmes are placed at https://www.sudarshan.com/
bpd-familiarisation-of-independent-directors.pdf

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013:

Pursuant to the provisions of ''The Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013'', the Company has complied with

the provisions relating to the constitution of the Internal
Complaints Committee under the said Act. During the
year under review, two complaints were received by the
Internal Complaints Committee. Both of these complaints
were redressed during the year. To build awareness
amongst its employees, the Company has been conducting
induction/training programmes in the organisation on a
continuous basis.

The Company has the Policy on Prevention of Sexual
Harassment at Workplace which is available on the website
of the Company at https://www.sudarshan.com/policy-on-
prevention-of-sexual-harassment-at-workplace.pdf

Pursuant to the provisions of ''The Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013'', Annual Report for Calendar Year
2024 was submitted for all locations of the Company
within the statutory timelines.

Further, below is the status of complaints received
under ''The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:

Sr.	Particulars	No. of
No.		Complaints
1.	Number of Sexual Harassment Complaints received during FY 2024-25	2
2.	Number of Sexual Harassment Complaints disposed off during FY 2024-25	2
3.	Number of Sexual Harassment Complaints pending beyond 90 days	Nil

23. AUDITORS AND AUDITORS'' REPORT:

Pursuant to the provisions of Section 139, 142 of the
Companies Act, 2013, and Rules made thereunder
M/s. S R B C & CO LLP (Firm Registration No.: 324982E/
E300003), Chartered Accountants, Pune, were appointed
as Statutory Auditors of the Company for a term of
5 (Five) years i.e. from the conclusion of 71^st Annual
General Meeting upto the conclusion of the 76^th Annual
General Meeting to be held in year 2027. The notes on the
Audited Financial Statements referred to in the Auditor''s
Report are self-explanatory and hence do not call for any
further comments. The Auditor''s Report on Standalone
Financial Statements does not contain any qualifications,
reservations, adverse remarks or disclaimer. However, the
Auditor''s Report on Consolidated Financial Statements
contain the following Qualifications-

"We draw your attention to the following paragraph
included in the audit report of Heubach Colorants India
Limited, a subsidiary of the Holding Company, issued by
other auditors vide their report dated July 16, 2025, and
reproduced by us as under:

We draw attention to Note 16 which describes that the
Board of Directors is assessing the effect on the financial
statements with respect to transfer of certain items of
property, plant and equipment. Pending Management
review and reconciliation, and in absence of an appropriate
valuation of the aforesaid items, we are unable to comment
on the consequential effects, if any, on the financial results.

The reply by the Management of Heubach Colorants
India Limited to the Statutory Auditors'' qualifications on
consolidated financial statements is reproduced below,
the contents of which are self-explanatory.

The Management of Heubach Colorants India Limited, a
subsidiary of the company is assessing the appropriate
course of action to evaluate the basis of valuation of
certain items of property, plant and equipment. The Board
of directors are unable to quantify the impact of aforesaid
qualification on the financial statements of the company
as the management of Heubach Colorants India Limited
is evaluating various legal options to determine the
appropriate course of action. As on the date of this report,
the final resolution and its effects are pending."

24. COST AUDITORS:

Pursuant to Section 148 of the Companies Act,2013 read
with the Companies (Cost Records and Audit) Rules, 2014,
as amended from time to time, the Board has appointed
Mrs. Ashwini Kedar Joshi (Sole Proprietor), Cost Accountant,
Pune (Registration No.: 102387) for conducting the cost
audit of the Company for FY 2025-26.

Mrs. Joshi has confirmed that her appointment is within
the limits of Section 141(3)(g) of the Companies Act,
2013, and Rules made thereunder, and has also certified
that she is free from any disqualifications specified under
Section 141(3)(g) of the Companies Act, 2013, and Rules
made thereunder, and has also certified that she is free
from any disqualifications specified under Section 141(3)
and proviso to Section 148(3) read with Section 141(4)
of the Act.

As required under the Companies Act, 2013, the
remuneration payable to the Cost Auditor is required
to be ratified by the Shareholders of the Company.
Accordingly, resolution seeking Shareholders'' ratification
for remuneration to be paid to Cost Auditor is included in
the Notice convening the 74^th Annual General Meeting.

Further, the Board hereby confirms that the maintenance
of cost records specified by the Central Government as per
Section 148(1) of the Companies Act, 2013, and Rules made
thereunder, is required and accordingly, such accounts /
records have been made and maintained.

The Cost Auditors'' Report for the Financial Year 2024-25
did not contain any qualifications, reservations, adverse
remarks or disclaimer.

25. SECRETARIAL AUDIT AND SECRETARIAL
STANDARDS:

The Secretarial Audit Report submitted by the Secretarial
Auditor in the prescribed form MR - 3 is attached as
Annexure VI and forms part of this report.

The Secretarial Audit Report does not contain any
qualifications, reservations, adverse remarks or disclaimer.

Secretarial Audit Report of Material Unlisted Subsidiary

Pursuant to Regulation 24(A) of SEBI Listing Regulations,
a listed company is required to annex the secretarial
audit report of its material unlisted subsidiary in India
to its Annual Report. The Secretarial Audit Report of
RIECO Industries Limited, a material unlisted Wholly
Owned Subsidiary, in the prescribed form MR-3 has
been annexed to this Report as Annexure-VI as per
SEBI Listing Regulations, 2015. The Secretarial Audit
was conducted by Mr. Rajesh Karunakaran, Proprietor,
M/s. Rajesh Karunakaran & Co., Company Secretaries,
(FCS: 7441, CP No. 6581) Pune, who was appointed as
the Secretarial Auditor of RIECO Industries Limited for
the Financial Year 2024-25. The said Report does not
contain any qualification, reservation, adverse remark or
disclaimer.

The Company is compliant with the Secretarial Standard on
Meetings of the Board of Directors ("SS-1") and Secretarial
Standard on General Meetings ("SS-2"), issued by ''The
Institute of Company Secretaries of India'' ("ICSI").

26. INTERNAL AUDITORS:

PricewaterhouseCoopers Pvt. Ltd., Chartered Accountants,
Pune, were appointed as Internal Auditors of the Company
for the Financial Year 2024-25. As prescribed under
Section 138 of the Companies Act, 2013, and Rules made
thereunder, PricewaterhouseCoopers Pvt. Ltd. carried out
the Internal Audit of the Company. The Internal Audit
was completed as per the scope defined by the Audit
Committee from time to time.

27. DETAILS IN RESPECT OF FRAUDS REPORTED BY
AUDITORS UNDER SECTION 143(12):

During the year under review, there were no frauds
reported by the auditors to the Audit Committee or the
Board under Section 143(12) of the Companies Act, 2013,
and Rules made thereunder.

28. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL
FINANCIAL CONTROLS WITH REFERENCE TO
FINANCIAL STATEMENTS:

Your Company has clearly laid down policies, guidelines
and procedures that form part of internal control systems,
which provide for checks and balances. The Company

has maintained a proper and adequate system of internal
controls. The system is designed to provide a reasonable
degree of assurance regarding the effectiveness and
efficiency of operations, the reliability of financial controls
and compliance with applicable laws and regulations.
The organisation is well structured and the policy guidelines
are well documented with pre-defined authority where
monetary decision is involved. Structured management
information and reporting systems together with an
exhaustive budgetary control process for all major
operational activities form part of the overall control
mechanism to ensure that requisite information related
to all operations are reported and are available for control
and review. The Company has established a well laid out
policy to maintain the highest standards of environment,
safety and health while maintaining operational integrity.
This policy is strictly adhered to at all locations of the
Company. The Company''s internal control systems
commensurate with the nature and size of its business
operations. The Audit Committee of the Board of Directors
regularly reviews the adequacy of internal control system.

The Company, with a view to encourage independent
approach, has appointed a team of qualified professionals
in the form of Internal Auditors duly supported by
the Finance Department who conduct operational
and system audits in accordance with an audit plan
approved by the Audit Committee. Internal Auditors
as part of their assignment, evaluate and assess the
adequacy and effectiveness of internal control measures
and the compliance with policies, plans and statutory
requirements. The internal audit reports are reviewed at
Audit Committee Meetings and appropriate action on the
recommendations is initiated by the Management.

29. RESEARCH AND DEVELOPMENT:

The Company recognizes the need to have well equipped
Research & Development ("R&D") facilities to meet
customer requirements and developing cutting edge
products. As a natural corollary, your Company continues
to invest in a comprehensive R&D Programme leveraging
its world-class infrastructure, benchmarked processes,
state-of-the-art technology and a business focused
R&D strategy.

The Company has spent C3,248.6 Lakhs during the year
under review on R&D. Company''s in-house R&D facilities
are recognised by The Ministry of Science and Technology,
New Delhi, on behalf of The Government of India.

Details related to Research and Development are
mentioned in Annexure I to this Report.

Details of Expenditure incurred on Research and
Development are as follows:

(C In Crores)

Particulars	2024-25	2023-24
Capital	6.6	5.1
Recurring	25.9	25.0
Total	32.5	30.1

30. RECLASSIFICATION UNDER REGULATION 31A OF
SEBI LISTING REGULATIONS, 2015:

Mr. Anuj Narayandas Rathi (5,447,620 equity shares held
i.e. 6.93%), Mr. Narayandas Jagannath Rathi (437,650
equity shares held i.e. 0.56%), Mrs. Archana Anuj Rathi
(nil equity shares held), Anuj Narayandas Rathi (HUF)
(nil equity shares held) and NJR Finance Private Limited
(nil equity shares held), belonging to the category of
"Promoter and Promoter Group" of the Company, had each
vide requests for reclassification dated 14^th February, 2025
under Regulation 31A of SEBI Listing Regulations, 2015
requested the Company for reclassification to the "Public"
category. The Board of Directors at its meeting held on
14^th February, 2025 considered the aforesaid requests and
were of the view that the aforesaid requests made were
in compliance with the provisions of Regulation 31A of
SEBI Listing Regulation, 2015. The Company received no
objection / approval letters from the Stock Exchanges
on 4^th April, 2025. Further, approval of the Shareholders
by way of an Ordinary Resolution was accorded on
24^th May, 2025. Accordingly Mr. Anuj Narayandas Rathi,
Mr. Narayandas Jagannath Rathi, Mrs. Archana Anuj Rathi,
Anuj Narayandas Rathi (HUF) and NJR Finance Private
Limited (collectively holding 5,885,270 equity shares
i.e. 7.49%) have been reclassified from "Promoter and
Promoter Group" category to "Public" category.

Mr. Pradeep Ramwilas Rathi (3,424,740 equity shares held
i.e. 4.36%), Mr. Rahul Pradeep Rathi (3,023,859 equity
shares held i.e. 3.85%) and Mrs. Subhadra Pradeep Rathi
(nil equity shares held), belonging to the category of
"Promoter and Promoter Group" of the Company, had
each vide requests for reclassification dated 29^th May,
2025 under Regulation 31A of SEBI Listing Regulations,
2015 requested the Company for reclassification to the
"Public" category. The Board of Directors at its meeting
held on 29^th May, 2025 considered the aforesaid requests
and were of the view that the aforesaid requests made
were in compliance with the provisions of Regulation 31A
of SEBI Listing Regulation, 2015. The Company received
no objection / approval letters from the Stock Exchanges
on 15^th July, 2025. The Company is in process of seeking
approval of Shareholders for reclassification of shares held
by Mr. Pradeep Ramwilas Rathi, Mr. Rahul Pradeep Rathi
and Mrs. Subhadra Pradeep Rathi (collectively holding
6,448,599 equity shares i.e. 8.21%) from "Promoter and
Promoter Group" category to "Public" category.

31. DISCLOSURES:

Board and its Committees:

The details of the Board and its Committees are given in
the Report on Corporate Governance.

Meetings of the Board:

During the Financial Year 2024-25, 9 (Nine) Board
Meetings were held, details of which are given in the
Report on Corporate Governance, which is a part of this
Annual Report.

The maximum interval between any two meetings did not
exceed 120 days as prescribed in the Companies Act, 2013
and Rules made thereunder.

Material changes and commitments if any, affecting
the financial position of the Company:

There have been no material changes and commitments
affecting the financial position of the Company, which
have occurred between the end of the financial year and
the date of this report.

Annual Accounts of Subsidiary Companies:

A copy of the Audited Financial Statements for each of
the Subsidiary Companies for the year ended 31^st March,
2025, wherever applicable, will be made available to the
members of the Company seeking such information at any
point of time and will also be available for inspection at the
Registered Office of the Company during working hours
till the date of the 74^th Annual General Meeting. The same
shall also be placed on the website at www.sudarshan.com.
The salient features of Financial Statements of Subsidiary
Companies is given in Annexure II of this report.

RIECO Industries Limited and Sudarshan Europe B.V. are the
Material Subsidiaries of the Company for the year ended
31^st March, 2025. The Company has complied with all the
legal requirements in respect of the Material Subsidiary.

In conformity with the provisions of the SEBI Listing
Regulations, 2015, the Board has formulated a
policy for determining "Material Subsidiaries".
The Policy can be accessed from the Company''s
website http://www.sudarshan.com/perch/resources/
material-subsidiarypolicy.pdf

There has been no material change in the nature of the
business of Subsidiaries.

Consolidated Financial Statements:

Your Company''s Board of Directors is responsible for the
preparation of the Consolidated Financial Statements of
your Company and its Subsidiaries ("the Group"), in terms
of the requirements of the Companies Act, 2013 and in
accordance with the accounting principles generally
accepted in India, including the Indian Accounting
Standards specified under Section 133 of the Act.

The respective Board of Directors of the companies
included in the Group are responsible for maintenance
of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets and for
preventing and detecting frauds and other irregularities,
the selection and application of appropriate accounting
policies, making judgments and estimates that are
reasonable and prudent, and the design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant
to the preparation and presentation of the financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error,
which have been used for the purpose of preparation of
the Consolidated Financial Statements by the Directors of
your Company, as aforesaid. The Consolidated Financial
Statements of the Company and its subsidiaries is provided
separately and forms part of the Annual Report.

Reporting on Audit Trail Feature:

In terms of requirements prescribed by proviso to Rule
3(1) of the Companies (Accounts) Rules, 2014, for the
Financial Year commencing on or after the 1^st day of April,
2023, every company that uses accounting software for
maintaining its books of account should ensure that the
accounting software used has an audit trail feature that
cannot be disabled.

Your Company has used accounting software for
maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has
operated throughout the year for all relevant transactions
recorded in the software, except that audit trail feature
is not enabled for changes, if any, made using certain
administrative access rights to the application and
underlying database, as more particularly described in
note 58 to the financial statements. These administrative
rights were restricted to limited users. Further, these
administrative access rights at the application level have
been revoked and audit trail feature at database is enabled
subsequent to the year end. Further, no instance of audit
trail feature being tampered with was noted in respect
of such accounting software where the audit trail has
been enabled.

Vigil Mechanism / Whistle Blower Policy:

Your Company''s Whistle Blower Policy encourages
Directors and employees and business associates to
bring to the Company''s attention, instances of unethical
behaviour, actual or suspected incidents of fraud or
violation of the Code of Conduct that could adversely
impact your Company''s operations, business performance
and / or reputation. The Policy provides that the Company
investigates such incidents, when reported, in an impartial
manner and takes appropriate action to ensure that

requisite standards of professional and ethical conduct are
always upheld. It is your Company''s Policy to ensure that
no employee is victimized or harassed for bringing such
incidents to the attention of the Company. The practice
of the Whistle Blower Policy is overseen by the Audit
Committee and no employee has been denied access to
the Committee.

During the year under review, no complaint was received
from a whistleblower.

The vigil mechanism / whistle blower policy is available on
the Company''s website at https://www.sudarshan.com/
whistle-blower-vigil-mechanism-policy.pdf

Annual Return:

Pursuant to Section 92(3) read with Section 134(3)(a) of
the Companies Act, 2013, and Rules made thereunder, the
Annual Return of the Company in Form MGT-7 for the year
under review is available on the website of the Company
at www.sudarshan.com

Particulars of loans, guarantees or investments
under Section 186:

Information regarding loans, guarantees and investments
covered under the provisions of Section 186 of the
Companies Act, 2013, has been disclosed in the Audited
Financial Statements.

Energy Conservation, Technology Absorption and
Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo
stipulated under Section 134(3)(m) of the Companies Act,
2013 and Rule 8 of the Companies (Accounts) Rules, 2014
is attached to this Report vide Annexure I.

Particulars of Employees and Related Parties:

The information required pursuant to Section 197(12)
of the Companies Act, 2013, read with Rule 5 of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, has been
provided as Annexure VII.

Disclosure pursuant to Section 197(14) of the
Companies Act, 2013, and Rules made thereunder:

The Managing Director and Wholetime Director of the
Company are not in receipt of any remuneration and / or
commission from any Holding / Subsidiary Company, as
the case may be.

Significant and Material Orders passed by the
Regulators and Courts:

There are no significant material orders passed by
regulators or courts which would impact the going
concern status of the Company and its future operations.

Restriction on purchase by Company or giving of
Loans by it for purchase of its Shares:

Pursuant to the provisions of Section 67(3)(c) of the
Companies Act, 2013, and Rules made thereunder, the
Company has not given any loan exceeding the limit
mentioned therein, to persons in the employment of
the Company other than its Directors or Key Managerial
Personnel, for purchase or subscribe shares of the Company.

Statement of Deviation(s) and Variation(s):

During the Financial Year 2022-23, the Company allotted
990 Rated, Listed, Taxable, Unsecured, Redeemable Non
- Convertible Debentures ("NCDs") on 18^th July, 2022, on
private placement basis. The said NCDs are listed on the
Wholesale Debt Market Segment of BSE Limited effective
21^st July, 2022. During the year under review, there is no
deviation / variation in use of debt issue proceeds.

The Company has made necessary disclosures to the Stock
Exchanges, Debenture Trustees, within statutory timelines,
as per the provisions of SEBI Listing Regulations, 2015,
and any other Rules & regulations as may be applicable
confirming no deviation / variation in use of debt issue
proceeds. Further, the said NCDs were redeemed on
18^th July, 2025 in full.

Fund raising through Preferential Allotment (''PI'')

On 13^th December, 2024, the Company made allotment of
9,80,000 warrants each convertible into, or exchangeable
for, 1 (one) fully paid up equity share of the Company of face
value of C2 each, which may be exercised in one or more
tranches during the period commencing from the date
of allotment of the Warrants until expiry of 18 (Eighteen)
months to Mr. Rajesh Balkrishna Rathi, Member of the
Promoter and Promoter Group and Managing Director at
a price of C1,019.75 (Including premium of C1,017.75 per
Warrant) for cash consideration of C2,498.31 Lakhs, being
25% of the total consideration amount of C9,993.55 Lakhs.

On 13^th January, 2025, the Company made allotment
of 18,69,000 fully paid-up equity shares of face value of
C2 each at a price of C1,043.33 (including premium of
C 1,041.33) per equity share aggregating to approximately
C19,499.84 Lakhs, to the identified investors, not belonging
to "Promoter and Promoter Group" of the Company by
way of a preferential issue of Equity Shares on private
placement basis, for cash consideration, the provisions
of Chapter V of the SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018.

Fund raising through Qualified Institutions
Placement (''QIP'')

On 29^th January, 2025, the Company made allotment of
74,76,635 fully paid up equity shares of face value of C2 each
at a price of C1,070 per equity share (including premium
of C1,068 per equity share), representing a discount of

C37.89 to the floor price of C1,107.89 per equity share, to
the eligible Qualified Institutional Buyers aggregating to
approximately C79,999.99 Lakhs, in accordance with the
provisions of Chapter VI of the SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2018.

Pursuant to the provisions of regulation 32(7A) of the SEBI
Listing Regulations, Issue proceeds of the Preferential Issue
of Convertible Warrants amounting to C2,498.31 Lakhs
(being 25% of the total consideration) and Preferential
Issue of Equity Shares of C19,499.84 Lakhs have been fully
utilized by the Company for the same objects or purposes
for which funds were raised and there is no unutilized
amount as at the end of the quarter ended 31⁵¹ March, 2025.

Out of the total proceeds of QIP Issue amounting to
C79,999.99 Lakhs, C286.87 Lakhs remained unutilized as
on 31^st March, 2025, and the rest of the proceeds were
utilized for the same objects or purposes for which funds
were raised.

The Company has made necessary disclosures to the Stock
Exchanges within statutory timelines, as per the provisions
of SEBI Listing Regulations, 2015, and any other Rules &
regulations as may be applicable confirming no deviation
/ variation in use of proceeds of preferential allotment and
qualified institutional placement.

Details of application made or any proceeding pending
under the Insolvency and Bankruptcy Code, 2016,
during the year along with their status as at the end of
the Financial Year: Nil, hence not applicable.

Details of difference between amount of the valuation
done at the time of one-time settlement and the
valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof:

Nil, hence not applicable.

No. of employees as on the closure of the Financial
Year:

Sr. No.	Particulars	No. of employees
1.	Male	966
2.	Female	295
3.	Transgender	Nil
	Total	1,261

Compliance of provisions of the Maternity Benefit
Act, 1961:

The company is in compliance with the applicable
provisions of Maternity Benefit Act, 1961.

32. RECOGNITION:

Details of the awards received during the year under
review are disclosed separately in this Annual Report.

33. APPRECIATION:

The Directors thank the Company''s employees, customers, vendors, investors and business partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries
and concerned Government departments and agencies for their co-operation.

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, ICICI Bank Limited, HDFC Bank
Limited, The Hongkong and Shanghai Banking Corporation Limited, Citi Bank N.A., Axis Bank Limited, Standard Chartered
Bank and The Federal Bank Limited for their co-operation and assistance.

The Directors appreciate and value the contribution made by every member of the Sudarshan family.

For and on Behalf of the Board of Directors

Date: 25^th July, 2025 R. B. RATHI

Place: Pune Chairman and Managing Director

DIN: 00018628

---

Mar 31, 2024

The Directors are pleased to present the 73^rd Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March, 2024.

The annexed Financial Statements comply in all material aspects with the Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("the Act"), the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Act.

1. FINANCIAL HIGHLIGHTS:

		(Rs. in Lakhs)
Particulars	FY 2023-24	FY 2022-23
Revenue from Operations	214,142.9	197,610.5
Earning Before Interest, Tax, Depreciation, Amortisation and Exceptional Item	29,250.5	18,562.3
Less : Interest	2,870.7	3,668.9
Less : Depreciation	13,689.3	11,110.7
Add : Exceptional income	31,166.0	-
Less : Provision for Tax	10,344.1	641.7
Total Profit After Tax	33,512.4	3,141.0
Other Comprehensive Income	(269.9)	(2,202.4)
Total Comprehensive Income	33,242.5	938.6
Add : Surplus Brought Forward	58,836.7	59,123.7
Transfer from OCI to Hedge Reserve	129.2	2,235.8
Net Profit available for appropriation	92,208.4	62,298.1
Appropriation
Interim Dividend	(2,492.2)	-
Final Dividend	(1,038.4)	(3,461.4)
Surplus to be carried forward	88,677.8	58,836.7

For the performance of Subsidiary Companies, please refer Annexure I.

On a Consolidated basis, your Company''s Total Income for the year ended 31^st March, 2024 stood at C255,586.3 lakhs, as compared to C230,652.2 lakhs for the year ended 31^st March, 2023.

2. (A) FINANCIALS:

Revenue from operations for the year ended 31^st March, 2024 aggregated to C 214,142.9 lakhs as against C197,610.5 lakhs achieved during the previous year. Profit after tax from for the year ended 31^st March, 2024 was C33,512.4 lakhs as against C3,141.0 lakhs earned during the previous year.

During the year under review, your Company has delivered a robust financial and operational performance on Revenue and EBITDA margins. Your Company went through a phase of subdued performance in the previous year but showed resilience to bounce back stronger. On a group level, highest ever quarterly EBITDA was registered above C100 Crores in the last quarter and an annual EBITDA above C300 Crores during the entire financial year.

This swift turnaround in business performance is result of our overall strategy on building the Company''s core pillars towards LEAP to 3, which your Company was working for past few years.

(B) EXPORTS:

Your Company continues to focus on export markets. Initiatives are directed towards engaging with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. During the year under review, export revenue of pigment business has grown by 4%. Your Company continues to remain watchful towards international geographies considering ongoing geo-political issues.

(C) OPERATIONS:

Information on the operations of the Company and details on state of affairs of the Company are covered in the Management Discussion and Analysis Report.

(D) CAPACITY EXPANSION:

During the year, the Company continued its expansion plans and has incurred capex spend of C3,336 Lakhs during the year under review. This capital expenditure is primarily aimed at augmenting production capacities at Roha and Mahad facilities.

(E) HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

Shareholders are requested to refer Annexure II for highlights of performance of above mentioned companies and their contribution to the overall performance of the Company during the year under review. The Company has Wholly Owned Subsidiaries viz., RIECO Industries Limited, Sudarshan CSR Foundation, Sudarshan Europe B.V., Sudarshan Japan Limited and Step-Down Subsidiaries viz., Sudarshan North America Inc., Sudarshan Mexico S de R. L. de CV and Sudarshan (Shanghai) Trading Company Limited.

During the year under review, the Company entered into the agreement for sale of its entire investment held by the Company (in the form of Equity Shares) in Sudarshan (Shanghai) Trading Company Limited, Wholly Owned Subsidiary of the Company to

Sudarshan Europe B.V., another Wholly Owned Subsidiary of the Company on 22^nd March, 2024.

As a result of this transaction, Sudarshan (Shanghai) Trading Company Limited has ceased to be a Wholly Owned Subsidiary and has become a Step - Down Subsidiary of the Company.

3. SALE OF FREEHOLD LAND AND SHIFTING OF REGISTERED OFFICE WITHIN THE LOCAL LIMITS

On 6^th April, 2023, the Company completed the sale of Company''s freehold, clear and marketable titled land admeasuring approximately 5.76 acres along with the structures standing thereon located at 162 Wellesley Road, Pune - 411 001, Maharashtra, India, for a total consideration of C356,00,00,000/- (Rupees Three Hundred and Fifty-Six Crores only). The buyer is a third-party buyer and not belonging to the Promoter or Promoter Group / Group Company(ies) and the transaction does not fall under the ambit of Related Party Transaction(s).

The Board of Directors also approved shifting of the Registered Office of the company from "162 Wellesley Road, Pune - 411 001, Maharashtra, India" to "7^th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune - 411 045, Maharashtra, India", i.e. within the local limits of Pune City and within the same jurisdiction of office of the Registrar of Companies, Pune (Maharashtra), with effect from closing of business hours on 6^th April, 2023.

Thereafter, during the year, as informed by the Postal Authority, the Board of Directors approved a change in the Pin Code of the Registered Office of the company from "411 045 to 411 069" effective 3^rd November, 2023. Accordingly, the Registered Office address of the Company is "7^th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune - 411 069, Maharashtra, India".

4. DIVIDEND:

The Board of Directors at its meeting held on 23^rd May, 2023, had recommended a Final Dividend of C1.50/- (One Rupee and Fifty Paise only) per Equity Share of C2.00/- each (75%) for FY 2022-23, which was approved by the Shareholders at the 72^nd Annual General Meeting held on 11^th August, 2023. The said Final Dividend was paid to the eligible Shareholders within the statutory timelines.

During the year, the Board of Directors at its meeting held on 6^th March, 2024 declared an Interim Dividend of C3.60/- (Three Rupees and Sixty Paise only) per Equity Share of C2.00/- each (180%), which was paid to the eligible Shareholders within the statutory timelines.

The Board of Directors at its meeting held on 17^th May, 2024 recommended Final Dividend of C1.00/- (One Rupee only) per Equity Share of C2.00/- each (50%), which shall be paid subject to approval of Shareholders at the ensuing 73^rd Annual General Meeting.

The Interim Dividend along with the recommended Final Dividend aggregates to a total Dividend of C4.60/- (Four Rupees and Sixty Paise only) per Equity Share of C2.00/- each (230%) for the Financial Year 2023-24. A proposal seeking Shareholders'' approval to confirm Interim Dividend paid on Equity Shares during the Financial Year 2023-24 and to declare the Final Dividend for the Financial Year 2023-24 is forming part of the Notice of the 73^rd Annual General Meeting. If approved by Shareholders, the Final Dividend shall be paid within the statutory timelines.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of Shareholders. The Company shall accordingly make the payment of Final Dividend after deduction of tax at source.

The dividend payout is in accordance with the Company''s Dividend Distribution Policy which is provided as Annexure III to this Report, and is also available on the website of the Company https://www.sudarshan.com/ perch/resources/dividend-distribution-policy-1.pdf

5. (A) SHARE CAPITAL:

The paid-up Equity Share Capital as on 31^st March, 2024 was C1,384.5 lakhs. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares.

(B) NON - CONVERTIBLE DEBENTURES:

The Board of Directors at its meeting held on 28^th March, 2022, had accorded its approval for issue of unsecured non-convertible debentures on private placement basis upto C 200 Crores, in one or more tranches / series, subject to approval of Shareholders. Approval of Shareholders by way of Special Resolution through Postal Ballot was received on 13^th May, 2022. The Finance Committee of the Board of Directors vide its resolution dated 18^th July, 2022, approved allotment of 990 (Nine Hundred and Ninety only) Unsecured, Rated, Listed, Taxable, Redeemable Non-Convertible Debentures ("NCDs") with face value of C1,000,000/-each on private placement basis. The said NCDs are listed on the Wholesale Debt Market Segment of BSE Limited effective 21^st July, 2022 (ISIN: INE659A08036; BSE Scrip Code: 974058).

6. TRANSFER TO RESERVE:

As permitted by the Companies Act, 2013, and Rules made thereunder, the Directors do not propose to transfer any amount to the General Reserve pertaining to FY 2023-24.

7. FIXED DEPOSITS:

During the year under review, the Company has not accepted any deposit from the public / members pursuant to Section 73 and Section 76 of the Companies Act, 2013

read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time, and hence as on 31^st March, 2024, there are no deposits outstanding, except as required statutorily and which have been unclaimed at the end of the year under review.

8. DIRECTOR''S RESPONSIBILITY STATEMENT:

As required under Section 134(3)(c) of the Companies Act, 2013, Directors of the Company, to the best of their knowledge and belief with respect to FY 2023-24, state that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

9. CORPORATE GOVERNANCE:

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015") a separate chapter titled ''Report on Corporate Governance'' has been included in this Annual Report, along with the reports on the Management Discussion and Analysis and Shareholders'' Information.

A certificate from a Practicing Company Secretary regarding compliance with the conditions of corporate governance is given separately in this Annual Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, Company

Performance, Business and Operations is given separately in the Annual Report.

11. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the Annual Report of the top 1000 listed entities based on market capitalisation (calculated as on 31^st March of every financial year), shall include a Business Responsibility and Sustainability Report ("BRSR").

Since the Company is fulfilling the above mentioned criteria, the Company has presented its BRSR for FY 2023-24, which forms part of this Annual Report.

12. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered into with related parties during the financial year were in the ordinary course of business and at arm''s length basis, which were approved by the Audit Committee. The Board has approved a policy for related party transactions which is available on the Company''s website at http://www.sudarshan.com/perch/resources/ related-party-transaction-policy.pdf

The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure IV to this report. None of the transactions with any of the related parties were in conflict with the interest of the Company. Attention of the members is drawn to the disclosure set out in Notes to Financial Statements forming part of the Annual Report.

The particulars of loans / advances / investments etc., required to be disclosed pursuant to Para A of Schedule V of the SEBI Listing Regulations, 2015, are furnished as a part of the Financial Statements.

The transaction(s) of the Company with any person or entity belonging to the promoter / promoters group which hold(s) 10% or more shareholding in the Company as required pursuant to Para A of Schedule V of the SEBI Listing Regulations, 2015 is disclosed separately in the Financial Statements of the Company.

13. AUDIT COMMITTEE:

Pursuant to the provisions of Section 177 of the Companies Act, 2013, and Rules made thereunder and Regulation 18 of the SEBI Listing Regulations, 2015, the Company has in place an Audit Committee.

As on 31^st March, 2024, the composition of the Audit Committee is as under -

a) Mrs. S. A. Panse - (Non-Executive and Independent Director) Chairperson

b) Mr. D. N. Damania - (Non-Executive and Independent Director) Member

c) Mr. S. Padmanabhan - (Non-Executive and Independent Director) Member

d) Mr. S. K. Asher - (Non-Executive and Independent Director) Member

All recommendations made by the Audit Committee were deliberated and accepted by the Board during FY 2023-24.

14. CORPORATE SOCIAL RESPONSIBILITY:

The Company has in place a Corporate Social Responsibility ("CSR") Committee constituted as per the provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, details of which are mentioned in the Report on Corporate Governance forming part of this Annual Report.

The Company has been carrying out various CSR activities in the areas specified in terms of Section 135 read with Schedule VII of the Companies Act, 2013, and Rules made thereunder. The details of CSR activities undertaken by the Company are annexed herewith as Annexure V. The CSR Policy of the Company is available on the Company''s website at http://www.sudarshan.com/perch/resources/ csr-policy.pdf

CSR Policy in brief:

The focus of the CSR activities is on women empowerment, environment, health, community development, and education etc., and the projects would be planned and implemented accordingly.

The Company shall spend at least 2% (two per cent) of the average net profits, calculated in accordance with the provisions of the Companies Act, 2013, and Rules made thereunder, made by it in the three immediately preceding financial years.

The Annual Report on CSR activities is annexed herewith as Annexure V.

15. RISK MANAGEMENT AND CONTROL:

The Company has put in place appropriate risk assessment and minimisation procedures, which are reviewed by the Risk Management Committee, Audit Committee and the Board. As per the requirements of SEBI Listing Regulations, 2015, a Risk Management Committee has been constituted with responsibility of preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to report key changes in critical risks to the Board on an ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. The Committee is supported by an

Wholetime Director for a period of 5 years effective 24^th May, 2023 upto 23^rd May, 2028 at the 72^nd Annual General Meeting held on 11^th August, 2023 by way of a Special Resolution.

d. Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, Mr. N. T. Raisinghani (DIN: 00568298) was re-appointed as an Independent Director, not liable to retire by rotation, for a second term of 5 years effective 24^th May, 2023 upto 23^rd May, 2028 at the 72^nd Annual General Meeting held on 11^th August, 2023 by way of a Special Resolution.

e. Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, Dr. Deepak Parikh (DIN: 06504537) was re-appointed as an Independent Director, not liable to retire by rotation, for a second term of 5 years effective 1⁵¹ April, 2024 upto 31^st March, 2029 at the 72^nd Annual General Meeting held on 11^th August, 2023 by way of a Special Resolution.

However, Dr. Deepak Parikh (DIN 06504537) resigned as an Independent Director with effect from close of business hours on 2^nd February, 2024 due to his professional commitments and pre-occupation. He had confirmed that there were no material reasons for his resignation other than those mentioned above. Your Directors place on record their sincere appreciation for the valuable contribution made and guidance provided by Dr. Deepak Parikh during his tenure as Director of the Company.

As per the provisions of Section 152 of the Companies Act, 2013, and Rules made thereunder and as per the Articles of Association of the Company, and based on the recommendations of the Nomination and Remuneration Committee and Board Mr. P. R. Rathi (DIN: 00018577) Chairman, Non-Executive and Non-Independent Director of the Company retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking Shareholders'' approval for his re-appointment forms part of Notice of the 73^rd Annual General Meeting.

As per the provisions of Section 149, 152 of the Companies Act, 2013, and Rules made thereunder, read with Schedule IV of the Act, and as per Regulation 17 of SEBI Listing Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on 17^th May, 2024, accorded its approval for the appointment of (i) Ms. Bhumika Batra (DIN: 03502004), (ii) Mrs. Anu Wakhlu (DIN: 00122052) and (iii) Mrs. Sudha Navandar (DIN: 02804964) as Independent Directors for a term of five years effective 2^nd August, 2024 upto 1^st August, 2029, subject to approval of Shareholders at the ensuing Annual General Meeting. The Company has

Enterprise Risk Management ("ERM") team which provides advice on various risks and the appropriate governance framework and ensures that risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Committee holds meetings periodically where the gap between two meetings does not exceed 180 days. The risks faced by the Company and their minimization procedures are assessed periodically.

According to Section 134(5)(e) of the Companies Act, 2013, and Rules made thereunder, the term Internal Financial Control ("IFC") means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures ("SOPs") and audit and compliance checks by the Statutory Auditors and the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. To further strengthen the compliance processes, the Company has an internal compliance tool for assisting statutory compliances. This process is automated and generates alerts for proper and timely compliance.

Risk Management Policy is available on the Company''s website at http://www.sudarshan.com/perch/resources/ risk-management-policy-2.pdf

Details of the Risk Management Committee are given in the Report on Corporate Governance.

16. POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company''s policy on appointment of Directors, including criteria for determining qualifications, positive attributes, independence of a Director is available on the website of the Company at https://www.sudarshan.com/ perch/resources/remuneration-policy.pdf. The policy on Remuneration and other matters provided in Section 178(3) of the Act, is available on https://www. sudarshan.com/ perch/resources/remuneration-policy.pdf.

During the year under review, the managerial remuneration paid to the Directors and Key Managerial Personnel was in terms of the provisions of The Companies Act, 2013 and

Rules made thereunder and SEBI Listing Regulations, 2015 and the terms of approval granted by the Shareholders for payment of Managerial Remuneration, as the case may be.

Pursuant to the provisions of Section 197, Schedule V and other applicable provisions of the Companies Act, 2013, and Rules made thereunder, as amended from time to time, approval of Shareholders was accorded at the 72^nd Annual General Meeting held on 11^th August, 2023 to pay Remuneration to Mr. Rajesh B. Rathi (DIN: 00018628), Managing Director as ''Minimum Remuneration'' in case of no profits / inadequacy of profits for the Financial Year 2023-24 notwithstanding that the remuneration payable to Mr. Rajesh Rathi exceeds the limits prescribed under the provisions of the Section 197 read with Schedule V of the Companies Act, 2013 and Regulation 17(6)(e) of SEBI Listing Regulations, 2015.

Further, as per the provisions of Sections 196, 197, 198, Schedule V and other applicable provisions of the Companies Act, 2013, and Rules made thereunder, as amended from time to time, and Regulation 17(6)(e) of SEBI Listing Regulations, 2015, approval of the Shareholders by way of Special Resolution has been requested at the ensuing Annual General Meeting for payment of remuneration to Mr. Rajesh B. Rathi (DIN: 00018628), Managing Director, in excess of C5 Crores or 2.5% of the net profits of the Company, whichever is higher, during the remaining tenure of his appointment upto 31^st May, 2028 which shall not exceed the limits specified in the applicable provisions of The Companies Act, 2013 and Rules made thereunder, read with Schedule V appended to the Act.

17. CHANGES IN DIRECTORS AND KEY MANAGEMENT PERSONNEL:

During the year under review:

a. Mr. A. Vij (DIN: 08140194) Wholetime Director, was liable to retire by rotation, and being eligible, had offered himself for the re-appointment at the 72^nd Annual General Meeting held on 11^th August, 2023. Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, approval of Shareholders was accorded at the 72^nd Annual General Meeting for re-appointment of Mr. A. Vij as a Director liable to retire by rotation.

b. Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, Mr. Rajesh B. Rathi (DIN: 00018628) was re-appointed as a Managing Director for a period of 5 years effective 1^st June, 2023 upto 31^st May, 2028 at the 72^nd Annual General Meeting held on 11^th August, 2023 by way of a Special Resolution.

c. Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, Mr. A. Vij (DIN: 08140194) was re-appointed as a

received notices from Shareholders under Section 160 of the Act, signifying their candidature for appointment as Independent Directors. The Company has also obtained necessary declarations from Ms. Bhumika Batra, Mrs. Anu Wakhlu and Mrs. Sudha Navandar including their consent in writing to act as Directors, Declaration of Independence and intimation that they are not disqualified to act as Directors and they are not debarred from holding the office of a Director by virtue of any Securities and Exchange Board of India ("SEBI") order or any such other authority, and that they are not related to any Director(s) or Key Managerial Personnel(s) of the Company. A brief profile of Ms. Bhumika Batra, Mrs. Anu Wakhlu and Mrs. Sudha Navandar is attached separately as part of the Notice of the 73^rd Annual General Meeting.

During the year under review, the Non-Executive Directors of the Company had no material pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company. The Board has made the recommendation for the above appointment(s) / re-appointment(s) of Directors based on the recommendation of the Nomination and Remuneration Committee ("NRC"). NRC has made its recommendation after ensuring that none of the Directors seeking appointment(s) / re-appointment(s) is debarred from holding the position of a Director by virtue of any Order from SEBI, The Ministry of Corporate Affairs ("MCA") or any other Regulatory Authority. The Board is of the opinion that the Independent Directors appointed / re-appointed / proposed to be appointed are of integrity and possess the requisite expertise and experience (including the proficiency). Details of the Directors seeking appointment(s) / re-appointment(s) including profile of such Directors, are given in the Notice convening the 73^rd Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 203 of the Companies Act, 2013, and Rules made thereunder, following are the Key Managerial Personnel of the Company for the year ended 31^st March, 2024:

a. Mr. R. B. Rathi, Managing Director

b. Mr. A. Vij, Wholetime Director

c. Mr. Nilkanth Natu, Chief Financial Officer

d. Mr. Mandar Velankar, General Counsel and Company Secretary

DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations, 2015.

The Independent Directors have also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. There has been no change in the circumstances affecting their status of Independent Directors of the Company.

The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and qualification of Directors) Rules, 2014, as amended from time to time, with respect to their name appearing in the data bank of Independent Directors maintained by ''The Indian Institute of Corporate Affairs, Manesar'' ("IICA") and that they are exempt / have cleared the Online Proficiency Assessment Test, as applicable.

In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity required to discharge their duties with an objective independent judgment and without any external influence. List of key skills, expertise and core competencies of the Board, including the Independent Directors forms part of the Report on Corporate Governance.

Annual Evaluation of Board of Directors, its Committees and Individual Directors:

The Board of Directors upon recommendation of the Nomination and Remuneration Committee has laid down the criteria for performance evaluation of Board of the Company, its Committees and the individual Board members, including Independent Directors, and accordingly, an annual evaluation of the performance of the Board, Committees and individual Directors has been carried out pursuant to the provisions of the Act and SEBI Listing Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5^th January, 2017.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues

to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At a separate Board Meeting, the performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated. The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty. The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company''s website at https://www.sudarshan.com/perch/resources/ remuneration-policy.pdf

18. EMPLOYEE STOCK OPTION:

"Sudarshan Employee Stock Option Plan 2018 ("Sudarshan ESOP Plan 2018 / Plan")" and "Sudarshan Employee Stock Option Scheme 2018 ("Sudarshan ESOP Scheme 2018 / Scheme")" were approved based on the approvals accorded by the Nomination and Remuneration Committee and Board of Directors dated 27^th June, 2018 and approval accorded by the Shareholders at the 67^th Annual General Meeting held on 9^th August, 2018. The Plan and Scheme were introduced pursuant to provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.

In 2021, SEBI introduced new Regulations viz. SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, for regulating the ESOP Schemes. Therefore, a proposal seeking consent of Shareholders at the ensuing Annual General Meeting for making consequential amendments / changes for implementation of Sudarshan ESOP Plan 2018 in terms of the aforesaid SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, forms part of the Notice convening the 73^rd Annual General Meeting.

During the year under review, the Nomination and Remuneration Committee did not approve any options / Stock Appreciation Rights ("SARs") to eligible employees.

Disclosures pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are given in the Notes to Accounts section of this Annual Report.

19. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors records its appreciation of the commitment and support of employees at all levels.

20. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company believes that a Board, which is well informed / familiarised with the Company and its affairs,

can contribute significantly and effectively discharge its role of trusteeship in a manner that fulfills stakeholders'' aspirations and societal expectations. In pursuit of this, the Directors of the Company are updated on changes / developments in the domestic / global corporate and industry scenario including those pertaining to statutes / legislations and economic environment and on matters affecting the Company. The details of the programmes are placed on http://www.sudarshan.com/perch/resources/ familiarisation-of-independent-directors.pdf

21. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Pursuant to the provisions of ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', the Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the said Act. During the year under review, no complaint was received by the Internal Complaints Committee of the Company. To build awareness amongst its employees, the Company has been conducting induction/training programmes in the organisation on a continuous basis.

The Company has the Policy on Prevention of Sexual Harassment at Workplace which is available on the website of the Company at http://www.sudarshan.com/perch/ resources/policy-on-prevention-of-sexual-harassment-at-workplace.pdf

Pursuant to the provisions of ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', Annual Report for Calendar Year 2023 was submitted for all locations of the Company within the statutory timelines.

22. AUDITORS AND AUDITORS'' REPORT:

Pursuant to the provisions of Section 139, 142 of the Companies Act, 2013, and Rules made thereunder M/s. S R B C & CO LLP (Firm Registration No.: 324982E/E300003), Chartered Accountants, Pune, were appointed as Statutory Auditors of the Company for a term of 5 (Five) years i.e. from the conclusion of 71^st Annual General Meeting upto the conclusion of the 76^th Annual General Meeting to be held in year 2027.

The notes on the Audited Financial Statements referred to in the Auditor''s Report are self-explanatory and hence do not call for any further comments. The Auditor''s Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

23. COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit record

maintained by the Company is required to be audited. Based on the recommendation of the Audit Committee, the Board has appointed Mrs. Ashwini Kedar Joshi (Sole Proprietor), Cost Accountant, Pune (Registration No.: 102387) for conducting the cost audit of the Company for FY 2024-25.

Mrs. Joshi has confirmed that her appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013, and Rules made thereunder, and has also certified that she is free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified by the Shareholders of the Company. Accordingly, resolution seeking Shareholders'' ratification for remuneration to be paid to Cost Auditor is included in the Notice convening the 73^rd Annual General Meeting.

Further, the Board hereby confirms that the maintenance of cost records specified by the Central Government as per Section 148(1) of the Companies Act, 2013, and Rules made thereunder, is required and accordingly, such accounts / records have been made and maintained.

The Cost Auditors'' Report for the Financial Year 2022-23 did not contain any qualifications, reservations, adverse remarks or disclaimers.

24. SECRETARIAL AUDIT AND SECRETARIAL STANDARDS:

Mr. Jayavant Bhave, Proprietor J. B. Bhave & Co. Company Secretaries, (FCS No. 4266, C. P. No. 3068) Pune, was appointed as the Secretarial Auditor of the Company for the Financial Year 2023-24 as per Section 204 of the Companies Act, 2013, and Rules made thereunder. The Secretarial Audit Report submitted in the prescribed form MR - 3 is attached as Annexure VI and forms part of this report.

The Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Company is compliant with the Secretarial Standard on Meetings of the Board of Directors ("SS-1") and Secretarial Standard on General Meetings ("SS-2"), issued by ''The Institute of Company Secretaries of India'' ("ICSI").

25. INTERNAL AUDITORS:

PricewaterhouseCoopers Pvt. Ltd., Chartered Accountants, Pune, were appointed as Internal Auditors of the Company for the Financial Year 2023-24.

As prescribed under Section 138 of the Companies Act, 2013, and Rules made thereunder, PricewaterhouseCoopers Pvt. Ltd. carried out the Internal Audit of the Company.

The Internal Audit was completed as per the scope defined by the Audit Committee from time to time.

26. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12):

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013, and Rules made thereunder.

27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

Your Company has clearly laid down policies, guidelines and procedures that form part of internal control systems, which provide for checks and balances. The Company has maintained a proper and adequate system of internal controls. The system is designed to provide a reasonable degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with applicable laws and regulations. The organisation is well structured and the policy guidelines are well documented with pre-defined authority where monetary decision is involved. Structured management information and reporting systems together with an exhaustive budgetary control process for all major operational activities form part of the overall control mechanism to ensure that requisite information related to all operations are reported and are available for control and review. The Company has established a well laid out policy to maintain the highest standards of environment, safety and health while maintaining operational integrity. This policy is strictly adhered to at all locations of the Company. The Company''s internal control systems commensurate with the nature and size of its business operations. The Audit Committee of the Board of Directors regularly reviews the adequacy of internal control system.

The Company, with a view to encourage independent approach, has appointed a team of qualified professionals in the form of Internal Auditors duly supported by the Finance Department who conduct operational and system audits in accordance with an audit plan approved by the Audit Committee. Internal Auditors as part of their assignment, evaluate and assess the adequacy and effectiveness of internal control measures and the compliance with policies, plans and statutory requirements. The internal audit reports are reviewed at Audit Committee Meetings and appropriate action on the recommendations is initiated by the Management.

28. RESEARCH AND DEVELOPMENT:

The Company recognizes the need to have well equipped Research & Development ("R&D") facilities to meet customer requirements and developing cutting edge products. As a natural corollary, your Company continues to invest in a

comprehensive R&D Programme leveraging its world-class infrastructure, benchmarked processes, state-of-the-art technology and a business focused R&D strategy.

The Company has spent C3,010 Lakhs during the year under review on R&D. Company''s in-house R&D facilities are recognised by The Ministry of Science and Technology, New Delhi, on behalf of The Government of India.

Details related to Research and Development are mentioned in Annexure I to this Report.

Details of Expenditure incurred on Research and Development are as follows:

(C In crores)
Particulars	2023-24	2022-23
Capital	5.1	6.7
Recurring	25.0	27.3
Total	30.1	34.0

29. DISCLOSURES:Board and its Committees:

The details of the Board and its Committees are given in the Report on Corporate Governance.

Meetings of the Board:

During the Financial Year 2023-24, 8 (Eight) Board Meetings were held, details of which are given in the Report on Corporate Governance, which is a part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and Rules made thereunder.

Material changes and commitments if any, affecting the financial position of the Company:

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.

Annual Accounts of Subsidiary Companies:

A copy of the Audited Financial Statements for each of the Subsidiary Companies for the year ended 31^st March, 2024, wherever applicable, will be made available to the members of the Company seeking such information at any point of time and will also be available for inspection at the Registered Office of the Company during working hours till the date of the 73^rd Annual General Meeting. The same shall also be placed on the website at www.sudarshan.com. The salient features of Financial Statements of Subsidiary Companies is given in Annexure II of this report.

Sudarshan Europe B.V. is the Material Subsidiary of the Company for the year ended 31^st March, 2024. The Company

has complied with all the legal requirements in respect of the Material Subsidiary.

In conformity with the provisions of the SEBI Listing Regulations, 2015, the Board has formulated a policy for determining "Material Subsidiaries". The Policy can be accessed from the Company''s website at http:// www.sudarshan.com/perch/resources/material-subsidiary-policy.pdf

There has been no material change in the nature of the business of Subsidiaries.

Consolidated Financial Statements:

Your Company''s Board of Directors is responsible for the preparation of the Consolidated Financial Statements of your Company and its Subsidiaries ("the Group"), in terms of the requirements of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of your Company, as aforesaid. The Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Reporting on Audit Trail Feature

In terms of requirements prescribed by proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, for the Financial Year commencing on or after the 1^st day of April, 2023, every company that uses accounting software for maintaining its books of account should ensure that the accounting software used has an audit trail feature that cannot be disabled.

Your Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled for changes, if any, made using certain administrative access rights to the application and

underlying database, as described in note 58 to the financial statements. These administrative rights were restricted to limited users. Further, these administrative access rights at the application level have been revoked and audit trail feature at database is enabled subsequent to the year end. Further, no instance of audit trail feature being tampered with was noted in respect of such accounting software where the audit trail has been enabled.

Vigil Mechanism / Whistle Blower Policy:

Your Company''s Whistle Blower Policy encourages Directors and employees and business associates to bring to the Company''s attention, instances of unethical behavior, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact your Company''s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. It is your Company''s Policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle Blower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee.

During the year under review, no complaint was received from a whistleblower.

The vigil mechanism / whistle blower policy is available on the Company''s website at http:// www.sudarshan. com/perch/resources/whistle-blower-vigil-mechanism-policy.pdf

Annual Return:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, and Rules made thereunder, the Annual Return of the Company in Form MGT-7 for the year under review is available on the website of the Company at www.sudarshan.com

Particulars of loans, guarantees or investments under Section 186:

Information regarding loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, has been disclosed in the Audited Financial Statements.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report vide Annexure I.

Particulars of Employees and Related Parties:

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, has been provided as Annexure I and VII.

Disclosure pursuant to Section 197(14) of the Companies Act, 2013, and Rules made thereunder:

The Managing Director and Wholetime Director of the Company are not in receipt of any remuneration and / or commission from any Holding / Subsidiary Company, as the case may be.

Significant and Material Orders passed by the Regulators and Courts:

There are no significant material orders passed by regulators or courts which would impact the going concern status of the Company and its future operations.

Restriction on purchase by Company or giving of Loans by it for purchase of its Shares:

Pursuant to the provisions of Section 67(3)(c) of the Companies Act, 2013, and Rules made thereunder, the Company has not given any loan exceeding the limit mentioned therein, to persons in the employment of the Company other than its Directors or Key Managerial Personnel, for purchase or subscribe shares of the Company.

Statement of Deviation(s) and Variation(s):

During the Financial Year 2022-23, the Company allotted 990 Rated, Listed, Taxable, Unsecured, Redeemable Non - Convertible Debentures ("NCDs") on 18^th July, 2022, on private placement basis. The said NCDs are listed on the Wholesale Debt Market Segment of BSE Limited effective 21^st July, 2022. During the year under review, there is no deviation / variation in use of debt issue proceeds. The Company has made necessary disclosures to the Stock Exchanges, Debenture Trustees, within statutory timelines, as per the provisions of SEBI Listing Regulations, 2015, and any other Rules & regulations as may be applicable

confirming no deviation / variation in use of debt issue proceeds.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016, during the year along with their status as at the end of the Financial Year: Nil, hence not applicable.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof:

Nil, hence not applicable.

30. RECOGNITION:

Details of the awards received during the year under review are disclosed separately in this Annual Report.

31. APPRECIATION:

The Directors thank the Company''s employees, customers, vendors, investors and business partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, ICICI Bank Limited, HDFC Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Citi Bank N.A., Axis Bank Limited and The Federal Bank Limited for their co-operation and assistance.

The Directors appreciate and value the contribution made by every member of the Sudarshan family.

---

Mar 31, 2023

The Directors are pleased to present the 72^nd Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March, 2023.

The annexed Financial Statements comply in all material aspects with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Act.

1. FINANCIAL HIGHLIGHTS:

		Rs. in Lakhs
Particulars	FY 2022-23	FY 2021-22
Revenue from Operations	197,610.5	191,891.1
Earning Before Interest, Tax, Depreciation and Amortisation	18,562.3	24,166.4
Less: Interest	3,668.9	1,731.1
Less : Depreciation	11,110.7	8,689.5
Less : Provision for Tax	641.7	3,708.2
Total Profit After Tax	3,141.0	10,037.6
Other Comprehensive Income	(2,202.4)	187.1
Total Comprehensive Income	938.6	10,224.7
Add : Surplus Brought Forward	59,123.7	53,322.2
Transfer from OCI to Hedge Reserve	2,235.8	(269.6)
Net Profit available for appropriation	62,298.1	63,277.3
Appropriation
Final Dividend	(3,461.4)	(4,153.6)
Surplus to be carried forward	58,836.7	59,123.7

2. (A) FINANCIALS:

Revenue from operations for the year ended 31^st March, 2023 aggregated to H197,610.5 lakhs as against H191,891.1 lakhs achieved during the previous year. Profit after tax from for the year ended 31^st March, 2023 was H3,141.0 as against H10,037.6 lakhs earned during the previous year.

For Subsidiary Companies'' performance please refer to Annexure I.

On a Consolidated basis, your Company''s Total Income for the year ended 31^st March, 2023 stood at H230,652.2 lakhs, as compared to H220,580.8 lakhs in FY 2021-22.

During the year under review, your Company faced many challenges viz. complex geo-political situation arising out of Russia-Ukraine crisis, leading to adverse impact on global demand and unprecedented increases in prices of raw materials and indirect materials. Further, strict lock-down restrictions imposed in China resulted in drastic

reduction in domestic demand in China for pigment products. Global markets were flooded with excess supplies which also had an adverse impact on demand. The commercialization of capital expansion programmes of the Company were delayed on account of global restrictions imposed on account of two waves of Covid-19. These factors primarily resulted in lower sales volumes and lower margins.

(B) EXPORTS:

Your Company continues to focus on export markets. Initiatives are directed towards engaging with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. The performance of the Company''s Wholly Owned Subsidiaries had an impact on account of weak global demand arising from the evolving complex geo-political situation. Your Company is confident that the overseas subsidiaries have entered a

consolidation phase and will play a crucial role in positioning the Company as a dominant player in the Global Pigment Industry once there is improvement in the scenario of complex geopolitical situation.

(C) OPERATIONS:

Information on the operations of the Company and details on state of affairs of the Company are covered in the Management Discussion and Analysis Report.

(D) CAPACITY EXPANSION:

During the year, the Company continued its expansion plans and has incurred capex spend of H184.5 crores during the year under review. This capital expenditure is primarily aimed at augmenting production capacities at Roha and Mahad facilities.

(E) HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES:

Shareholders are requested to refer Annexure II for highlights of performance of abovementioned companies and their contribution to the overall performance of the Company during the year under review. The Company has Wholly Owned Subsidiaries viz., RIECO Industries Limited, Sudarshan CSR Foundation, Sudarshan Europe B.V., Sudarshan (Shanghai) Trading Company Limited, Sudarshan Japan Limited and Step-Down Subsidiaries viz., Sudarshan North America Inc. and Sudarshan Mexico S de R. L. De CV.

3. SALE OF FREEHOLD LAND AND SHIFTING OF REGISTERED OFFICE WITHIN THE LOCAL LIMITS

On 6^th April, 2023, the Company completed the sale of Company''s freehold, clear and marketable titled land admeasuring approximately 5.76 acres along with the structures standing thereon located at 162 Wellesley Road, Pune - 411 001, Maharashtra, India, for a total consideration of H356,00,00,000/- (Rupees

Three Hundred and Fifty-Six Crores only). The buyer is a third-party buyer and not belonging to the Promoter or Promoter Group / Group Company(ies) and the transaction does not fall under the ambit of Related Party Transaction(s).

The Board of Directors also approved shifting of the Registered Office of the company from “162 Wellesley Road, Pune - 411 001, Maharashtra, India” to “7^th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune - 411045, Maharashtra, India”,

i.e. within the local limits of Pune City and within the same jurisdiction of office of the Registrar of Companies, Pune (Maharashtra), with effect from closing business hours on 6^th April, 2023.

4. DIVIDEND:

The Board of Directors at its meeting held on 23^rd May, 2023, had recommended a Final Dividend of H1.50/- (One Rupee and Fifty Paise only) per Equity Share of H2/- each (i.e. 75 %) for FY 2022-23. A proposal seeking shareholders'' approval for declaration and payment of the said Final Dividend for FY 2022-23 is forming part of the Notice. If approved by shareholders, the Final Dividend shall be paid on or before 4^th September, 2023. In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of shareholders. The Company shall accordingly, make the payment of Final Dividend after deduction of tax at source. The dividend payout is in accordance with the Company''s Dividend Distribution Policy.

For the year ended 31^st March 2022, the dividend paid was H5/- per Equity Share of H2/- each, (i.e. 250%). The Dividend Distribution Policy of the Company is provided as Annexure III to this Report, and is also available on the website of the Company https://www. sudarshan. com/perch/resources/dividend-distribution-policy-1.pdf

5. (A) SHARE CAPITAL:

The paid-up Equity Share Capital as on 31^st March, 2023 was H1,384.5 lakhs. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares.

(B) NON - CONVERTIBLE DEBENTURES:

The Board of Directors at its meeting held on 28^th March, 2022, had accorded its approval for issue of unsecured non-convertible debentures on private placement basis upto H200 Crores, in one or more tranches / series, subject to approval of shareholders. Approval of shareholders by way of Special Resolution through Postal Ballot was received on 13^th May, 2023. The Finance Committee of the Board of Directors vide its resolution dated 18^th July, 2022, approved allotment of 990 (Nine Hundred and Ninety only) Unsecured, Rated, Listed, Taxable, Redeemable Non-Convertible Debentures (“NCDs”) with face value of H10,00,000/- each on private placement basis. The said NCDs are listed on the Wholesale Debt Market Segment of BSE Limited effective 21^st July, 2022 (ISIN: INE659A08036; BSE Scrip Code: 974058).

6. TRANSFER TO RESERVE:

As permitted by the Companies Act, 2013, and Rules made thereunder, the Directors do not propose to transfer any amount to the General Reserve pertaining to FY 2022-23 .

7. FIXED DEPOSITS:

During the year under review, the Company has not accepted any deposit from the public / members pursuant to Section 73 and Section 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time, and hence as on 31^st March, 2023, there are no deposits outstanding, except as required statutorily and which have been unclaimed at the end of the year under review.

8. DIRECTOR’S RESPONSIBILITY STATEMENT:

As required under Section 134(3)(c) of the Companies Act, 2013, Directors of the Company, to the best of their knowledge and belief with respect to FY 2022-23, state that :

i. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

9. CORPORATE GOVERNANCE:

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations, 2015”) a separate chapter titled ‘Report on Corporate Governance'' has been included in this Annual Report, along with the reports on the Management Discussion and Analysis and Shareholders'' Information.

A certificate from a Practicing Company Secretary regarding compliance with the conditions of corporate governance is given separately in this Annual Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

11. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the annual report of

the top 1000 listed entities based on market capitalisation (calculated as on 31^st March of every financial year), shall include a Business Responsibility and Sustainability Report (“BRSR”) with effect from FY 2022-23.

Since the Company is amongst the top 1000 listed entities as on 31^st March, 2023, the Company has presented its BRSR for FY 2022-23, which forms part of this Annual Report.

12. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered into with related parties during the financial year were in the ordinary course of business and at arm''s length basis, which were approved by the Audit Committee. The Board has approved a policy for related party transactions which is available on the Company''s website at http://www.sudarshan.com/ perch/resources/related-party-transaction-policy. pdf The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure IV to this report. None of the transactions with any of the related parties were in conflict with the interest of the Company. Attention of the members is drawn to the disclosure set out in Notes to Financial Statements forming part of the Annual Report.

The particulars of loans / advances / investments etc., required to be disclosed pursuant to Para A of Schedule

V of the SEBI Listing Regulations, 2015, are furnished as a part of the Financial Statements.

The transaction(s) of the Company with any person or entity belonging to the promoter / promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to Para A of Schedule

V of the SEBI Listing Regulations, 2015 is disclosed separately in the Financial Statements of the Company.

13. AUDIT COMMITTEE:

Pursuant to the provisions of Section 177 of the Companies Act, 2013, and Rules made thereunder and Regulation 18 of the SEBI Listing Regulations, 2015, the Company has in place an Audit Committee.

As on 31^st March, 2023, the composition of the Audit Committee is as under -

a) Mrs. S. A. Panse - (Non-Executive and Independent Director) Chairperson

b) Mr. D. N. Damania - (Non-Executive and

Independent Director) Member

c) Mr. S. Padmanabhan - (Non-Executive and

Independent Director) Member (inducted effective 9^th February, 2023)

d) Mr. S. K. Asher - (Non-Executive and Independent Director) Member

All recommendations made by the Audit Committee were deliberated and accepted by the Board during FY 2022-23.

14.CORPORATE SOCIAL RESPONSIBILITY:

The Company has in place a Corporate Social Responsibility (“CSR”) Committee constituted as per the provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, details of which are mentioned in the Report on Corporate Governance forming part of this Annual Report.

The Company has been carrying out various CSR activities in the areas specified in terms of Section 135 read with Schedule VII of the Companies Act, 2013, and Rules made thereunder. The details of CSR activities undertaken by the Company are annexed herewith as Annexure V. The CSR Policy of the Company is available on the Company''s website at http://www.sudarshan. com/perch/resources/csr- policy.pdf

CSR Policy in brief:

The focus of the CSR activities is on women empowerment, environment, health, community development, and education etc, and the projects would be planned and implemented accordingly.

The Company shall spend at least 2% (two per cent) of the average net profits, calculated in accordance with the provisions of the Companies Act, 2013, and Rules made thereunder, made by it in three immediately preceding financial years.

The Annual Report on CSR activities is annexed herewith as Annexure V.

15.RISK MANAGEMENT AND CONTROL:

The Company has put in place appropriate risk assessment and minimisation procedures, which are reviewed by the Risk Management Committee, Audit Committee and the Board. As per the requirements of SEBI Listing Regulations, 2015, a Risk Management Committee has been constituted with responsibility of preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to report key changes in critical risks to the Board on an ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. The Committee is supported by an Enterprise Risk Management (“ERM”) team which provides advice on various risks and the appropriate governance framework and ensures that risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Committee holds meetings periodically where the gap between two meetings does not exceed 180 days. The risks faced by the Company and their minimization procedures are assessed periodically.

According to Section 134(5)(e) of the Companies Act, 2013, and rules made thereunder, the term Internal Financial Control (“IFC”) means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (“SOPs”) and audit and compliance checks by the Statutory Auditors and the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. To further strengthen the

compliance processes, the Company has an internal compliance tool for assisting statutory compliances. This process is automated and generates alerts for proper and timely compliance.

Risk Management Policy is available on the Company''s website at http://www.sudarshan.com/perch/ resources/ risk-management-policy-2.pdf

Details of the Risk Management Committee are given in the Report on Corporate Governance.

16.POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company''s policy on Appointment of Directors, including criteria for determining qualifications, positive attributes, independence of a Director is available on the website of the Company at https://www. sudarshan. com/ perch/resources/ remuneration-policy. pdf.

The policy on Remuneration and other matters provided in Section 178(3) of the Act, is available on https://www. sudarshan.com/perch/resources/remuneration-policy. pdf.

The managerial remuneration amounting to 7500.8 Lakhs paid to Mr. R. B. Rathi, Managing Director (DIN: 00018628) is in excess of limits prescribed under Section 197 of the Companies Act, 2013, by 7277.3 Lakhs. The said remuneration is also marginally in excess of the limits prescribed by the provisions of Regulation 17(6)(e) of the SEBI Listing Regulations, 2015. The payment of remuneration has been recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. Approval of the shareholders by way of Special Resolution has been requested at the ensuing Annual General Meeting for such payment. Further, Mr. P. R. Rathi, Chairman and Non-Executive Director (DIN: 00018577) has been paid pension amounting to 745.9 Lakhs in terms of the approved Pension Policy of the Company. The said payment amounts to managerial remuneration in terms of Section 197 of the Companies Act, 2013 and the same is in excess of the limits prescribed by Section 197 of the Companies Act, 2013. The said payment has been recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. However, Mr. P. R. Rathi has voluntarily returned amount of 745.9 Lakhs paid on account of pension and hence approval of shareholders is not required for this payment.

17.CHANGES IN DIRECTORS AND KEY MANAGEMENT PERSONNEL:

Mr. A. N. Rathi (DIN: 00018683), Non - Executive and Non - Independent Director, was liable to retire by rotation, and being eligible, had offered himself for the re-appointment at the 71^st Annual General Meeting held on 9^th August, 2022. The shareholders'' approval was sought at the 71^st Annual General Meeting for reappointment of Mr. A. N. Rathi as a Non - Executive and Non - Independent Director, based on the recommendation of the Nomination and Remuneration Committee and Board.

As per the provisions of Section 152 of the Companies Act, 2013, and Rules made thereunder and as per the Articles of Association of the Company, Mr. A. Vij (DIN: 08140194) Wholetime Director of the Company retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholders'' approval for his re-appointment forms part of the Notice.

Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, the shareholders appointed Mr. R. B. Rathi (DIN: 00018628) as Managing Director at 67^th Annual General Meeting for a term of 5 years i.e. from 1^st June, 2018 upto 31^st May, 2023. Since the term as Managing Director is expiring on 31^st May, 2023, based on the recommendation of the Nomination and Remuneration Committee, considering his skills, experience and knowledge he possessed and the report of performance evaluation for the Financial Year 202223, the Board of Directors at its meeting held on 23^rd May, 2023, re-appointed Mr. R. B. Rathi as Managing Director, not liable to retire by rotation, for a further term of 5 years effective 1^st June, 2023 upto 31^st May, 2028. A resolution seeking approval of shareholders forms part of the Notice.

Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, the shareholders appointed Mr. A. Vij (DIN: 08140194) as Wholetime Director at 67^th Annual General Meeting for a term of 5 years i.e. from 24^th May, 2018 upto 23^rd May, 2023. Since the term is expiring on 23^rd May, 2023, based on the recommendation of the Nomination and Remuneration Committee, considering his skills, experience and knowledge he possessed and the report of performance evaluation for the Financial Year 2022-23, the Board of Directors at its meeting held on 23^rd May, 2023,

re-appointed Mr. A. Vij as Wholetime Director, liable to retire by rotation, for a further term of 5 years effective 24^th May, 2023 upto 23^rd May, 2028. A resolution seeking approval of shareholders forms part of the Notice.

Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, the shareholders appointed Mr. N. T. Raisinghani (DIN: 00568298) as an Independent Director at 67^th Annual General Meeting for a term of 5 years. Since the first term as Independent Director is expiring, based on the recommendation of the Nomination and Remuneration Committee, considering his skills, experience and knowledge he possessed and the report of performance evaluation for the Financial Year 2022-23, the Board of Directors at its meeting held on 23^rd May, 2023, re-appointed Mr. N. T. Raisinghani as an Additional Director (Independent) with effect from 24^th May, 2023, till the ensuing 72^nd Annual General Meeting, and further recommended for approval of shareholders, the re-appointment of Mr. Raisinghani as an Independent Director for a second term of 5 years effective 24^th May, 2023 upto 23^rd May, 2028, so as to ensure that his total tenure as Independent Director does not exceed 10 years, as stipulated by the provisions of the Companies Act, 2013, and Rules made thereunder. A resolution seeking approval of shareholders forms part of the Notice.

Based on the recommendation of the Nomination and Remuneration Committee and Board of Directors, the shareholders appointed Dr. D. Parikh (DIN: 06504537) as an Independent Director at 68^th Annual General Meeting for a term of 5 years i.e. from 1^st April, 2019 upto 31^st March, 2024. Since the first term as Independent Director is expiring on 31^st March, 2024, based on the recommendation of the Nomination and Remuneration Committee, considering his skills, experience and knowledge he possessed and the report of performance evaluation for the Financial Year 2022-23, the Board of Directors at its meeting held on 23^rd May, 2023, re-appointed Dr. D. Parikh as an Independent Director for a second term of 5 years effective 1^st April, 2024 upto 31^st March, 2029. A resolution seeking approval of shareholders forms part of the Notice.

During the year under review, the Non-Executive Directors of the Company had no material pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.The Board has made the recommendation for the above appointment(s) / re-appointment(s) of Directors based on the recommendation of the Nomination and Remuneration Committee (“NRC”). NRC has made its recommendation after ensuring that none of the Directors seeking appointment(s) / re-appointment(s) is debarred from holding the position of a Director by virtue of any Order from Securities and Exchange Board of India (“SEBI”), The Ministry of Corporate Affairs (“MCA”) or any other Regulatory Authority. The Board is of the opinion that the Independent Directors appointed / re-appointed are of integrity and possess the requisite expertise and experience (including the proficiency). Details of the Directors seeking appointment(s) / re-appointment(s) including profile of such Directors, are given in the Notice convening the 72^nd Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 203 of the Companies Act, 2013, and Rules made thereunder, following are the Key Managerial Personnel of the Company for the year ended 31^st March, 2023:

a. Mr. R. B. Rathi, Managing Director

b. Mr. A. Vij, Wholetime Director

c. Mr. Nilkanth Natu, Chief Financial Officer

d. Mr. Mandar Velankar, General Counsel and Company Secretary

DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations, 2015. The Independent Directors have also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. There has been no change in the circumstances affecting their status of Independent Directors of the Company.

The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended from time to time, with respect to their name appearing in the data bank of Independent Directors maintained by ‘The Indian Institute of Corporate Affairs, Manesar'' (“IICA”).

In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity to required to discharge their duties with an objective independent judgment and without any external influence. List of key skills, expertise and core competencies of the Board, including the Independent Directors forms part of the Report on Corporate Governance.

Annual Evaluation of Board of Directors, its Committees and Individual Directors:

The Board of Directors upon recommendation of Nomination and Remuneration Committee has laid down the criteria for performance evaluation of Board of the Company, its Committees and the individual Board members, including Independent Directors, and accordingly, an annual evaluation of the performance of the Board, Committees and individual Directors has been carried out pursuant to the provisions of the Act and SEBI Listing Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5^th January, 2017.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At a separate Board Meeting, the performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated. The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty. The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company''s website at https://www.sudarshan. com/ perch/resources/remuneration- policy.pdf

18. EMPLOYEE STOCK OPTIONS:

The Board of Directors of the Company had discussed and approved the Employee Stock Options Plan i.e. ‘Sudarshan Employee Stock Option Plan 2018'', in terms of applicable regulations.

During the year under review, the Nomination and Remuneration Committee did not approve any options / SARs to eligible employees.

Disclosures pursuant to Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are given in the Notes to Accounts section of this Annual Report.

19.INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

20.FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company believes that a Board, which is well informed / familiarised with the Company and its affairs, can contribute significantly and effectively discharge its role of trusteeship in a manner that fulfils stakeholders'' aspirations and societal expectations. In pursuit of this, the Directors of the Company are updated on changes / developments in the domestic / global corporate and industry scenario including those pertaining to statutes / legislations and economic environment and on matters affecting the Company. The details of the programmes, are placed on http://www.sudarshan.com/perch/ resources/ familiarisation-of-independent-directors.pdf

21. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Pursuant to the provisions of ‘The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', the Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the said act. During the year under review, no complaint was received by the Internal Complaints Committee of the Company. To build awareness amongst its employees, the Company has been conducting induction/training programmes in the organisation on a continuous basis.

The Company has the Policy on Prevention of Sexual Harassment at Workplace which is available on the website of the Company at http://www.sudarshan. com/perch/resources/policy-on-prevention-of-sexual-harassment-at- workplace.pdf

Pursuant to the provisions of ‘The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', Annual Report for calendar year 2022 was submitted for all locations of the Company within the statutory timelines.

22. AUDITORS AND AUDITORS’ REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, and rules made thereunder, B S R & Associates, LLP, Chartered Accountants, (Firm Registration No.: 116231W/W-100024) were appointed as Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of 66^th Annual General Meeting, till the conclusion of the 71^st Annual General Meeting.

As per the provisions of Section 139, 142 of the Companies Act, 2013, and Rules made thereunder and based on the recommendation of the Audit Committee, the Board of Directors at its meeting held on 26^th May 2022, had appointed M/s. S R B C & CO LLP (Firm Registration No.: 324982E/E300003), Chartered Accountants, Pune, as Statutory Auditors of the Company for a term of 5 (Five) years i.e. from the conclusion of 71^st Annual General Meeting upto the conclusion of the 76^th Annual General Meeting to be held in year 2027, which was approved by shareholders at the 71^st Annual General Meeting which was held on 9^th August, 2022.

The notes on the Audited Financial Statements referred to in the Auditor''s Report are self-explanatory and hence do not call for any further comments. The Auditor''s Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

23.COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the cost audit record maintained by the Company is required to be audited. The Board of Directors had on the recommendation of the Audit Committee, appointed Mrs. Ashwini Kedar Joshi (Sole Proprietor), Cost Accountant, Pune (Registration No.: 102387) for conducting the cost audit of the Company for FY 2023-24.

Mrs. Joshi has confirmed that her appointment is within the limits of Section 141 (3)(g) of the Companies Act, 2013, and Rules made thereunder, and has also certified that she is free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified by the members of the Company. Accordingly, resolution seeking members'' ratification for remuneration to be paid to Cost Auditor is included in the Notice convening the Annual General Meeting.

Further, the Board hereby confirms that the maintenance of cost records specified by the Central Government as per Section 148(1) of the Companies Act, 2013, and rules made thereunder, is required and accordingly, such accounts / records have been made and maintained.

The Cost Auditors'' Report for the Financial Year 2021-22 did not contain any qualifications, reservations, adverse remarks or disclaimers.

24.SECRETARIAL AUDIT AND SECRETARIAL STANDARDS:

Dr. K. R. Chandratre, a Practicing Company Secretary, (FCS No. 1370, C. P. No. 5144) Pune, was appointed as the Secretarial Auditor of the Company for the financial Year 2022-23 as per Section 204 of the Companies Act, 2013, and Rules made thereunder. The Secretarial Audit Report submitted in the prescribed form MR - 3 is attached as Annexure VI and forms part of this report.

The Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Company is compliant with the Secretarial Standard on Meetings of the Board of Directors (“SS-1”) and Secretarial Standard on General Meetings (“SS-2”), issued by ‘The Institute of Company Secretaries of India''.

25.INTERNAL AUDITORS

Pricewaterhouse Coopers Pvt. Ltd., Chartered Accountants, Pune, were appointed as Internal Auditors of the Company for the Financial Year 2022-23.

As prescribed under Section 138 of the Companies Act, 2013, and Rules made thereunder, Pricewaterhouse Coopers Pvt. Ltd. carried out the Internal Audit of the Company. The Internal Audit was completed as per the scope defined by the Audit Committee from time to time.

26. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12):

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013, and rules made thereunder.

27. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

Your Company has clearly laid down policies, guidelines and procedures that form part of internal control systems, which provide for checks and balances. The Company has maintained a proper and adequate system of internal controls. The system is designed to provide a reasonable degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with applicable laws and regulations. The organisation is well structured and the policy guidelines are well documented with pre- defined authority where monetary decision is involved. Structured management information and reporting systems together with an exhaustive budgetary control process for all major operational activities form part of the overall control mechanism to ensure that requisite information related to all operations are reported and are available for control and review. The Company has established a well-laid out policy to maintain the highest standards of environment, safety and health while maintaining operational integrity. This policy is strictly adhered to at all locations of the Company. The Company''s internal control systems commensurate with the nature and size of its business operations. The Audit Committee of the Board of Directors regularly reviews the adequacy of internal control system.

The Company, with a view to encourage independent approach, has appointed a team of qualified professionals in the form of Internal Auditors duly supported by the Finance Department who conduct operational and system audits in accordance with an audit plan approved by the Audit Committee. Internal Auditors as part of their assignment, evaluate and assess the adequacy and effectiveness of internal control measures and the compliance with policies, plans and statutory requirements. The internal audit reports are reviewed at Audit Committee Meetings and appropriate action on the recommendations is initiated by the Management.

28.RESEARCH AND DEVEOPMENT:

The Company recognises the need to have well equipped Research & Development (“R&D”) facilities to meet customer requirements and developing cutting edge products. As a natural corollary, your Company continues to invest in a comprehensive R&D Programme leveraging its world-class infrastructure, benchmarked processes, state-of-the-art technology and a business-focused R&D strategy.

The Company has spent H34.0 Crores during the year under review on R&D. Company''s in-house R&D facilities are recognised by the Ministry of Science and Technology, New Delhi, on behalf of Government of India.

Details related to Research and Development are mentioned in Annexure I to this Report.

Details of Expenditure incurred on Research and Development are as follows:

(H in Crores)
Particulars	2022-23	2021-22
Capital	6.7	4.7
Recurring	27.3	22.5
Total	34.0	27.2

29.DISCLOSURES:

Board and its Committees:

The details of the Board and its Committees are given in the Report on Corporate Governance.

Meetings of the Board:

During the Financial Year 2022-23, 5 (Five) Board Meetings were held, details of which are given in the Report on Corporate Governance, which is a part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013.

Material changes and commitments if any, affecting the financial position of the Company:

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.

Annual Accounts of Subsidiary Companies:

A copy of the Audited Financial Statements for each of the Subsidiary Companies for the year ended 31^st March, 2023, wherever applicable, will be made available to the members of the Company seeking such information at any point of time and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The same shall also be placed on the website at www.sudarshan.com. The salient features of Financial Statements of Subsidiary Companies is given in Annexure II of this report.

Sudarshan Europe B. V. is the Material Subsidiary of the Company for the year ended 31^st March, 2023. The Company has complied with all the legal requirements in respect of the Material Subsidiary.

In conformity with the provisions of the SEBI Listing Regulations, 2015, the Board has formulated a policy for determining “Material Subsidiaries”. The Policy can be accessed from the Company''s website at http://www. sudarshan.com/perch/resources/material- subsidiary-policy.pdf

There has been no material change in the nature of the business of Subsidiaries.

Consolidated Financial Statements:

Your Company''s Board of Directors is responsible for the preparation of the Consolidated Financial Statements of your Company and its Subsidiaries (“the Group”), in terms of the requirements of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of your Company, as aforesaid. The Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Your Company''s Whistle Blower Policy encourages Directors and employees and business associates to bring to the Company''s attention, instances of unethical behaviour, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact your Company''s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. It is your Company''s Policy to ensure that no employee is victimised or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle Blower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee.

During the year under review, no complaint was received from a whistleblower.

The vigil mechanism / whistle blower policy is available on the Company''s website at http:// www.sudarshan. com/perch/resources/whistle-blower-vigil-mechanism-policy.pdf

Annual Return:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, and Rules made thereunder, the Annual Return of the Company in Form MGT-7 for the year under review is available on the website of the Company at www.sudarshan.com

Particulars of loans, guarantees or investments under Section 186:

Information regarding loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, have been disclosed in the Audited Financial Statements.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report vide Annexure I.

Particulars of Employees and Related Parties:

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, has been provided as Annexure I and VII.

Disclosure pursuant to Section 197(14) of the Companies Act, 2013, and Rules made thereunder:

The Managing Director and Wholetime Director of the Company are not in receipt of any remuneration and / or commission from any Holding / Subsidiary Company, as the case may be.

Significant and Material Orders passed by the Regulators and Courts:

There are no significant material orders passed by regulators or courts which would impact the going concern status of the Company and its future operations.

Restriction on purchase by Company or giving of Loans by it for purchase of its Shares:

Pursuant to the provisions of Section 67(3)(c) of the Companies Act, 2013, and rules made thereunder, the Company has not given any loan exceeding the limit mentioned therein, to persons in the employment of the Company other than its Directors or Key Managerial Personnel, for purchase or subscribe shares of the Company.

Statement of Deviation(s) and Variation(s):

During the year under review, the Company allotted 990 Rated, Listed, Taxable, Unsecured, Redeemable Non - Convertible Debentures (“NCDs”) on 18^th July, 2022, on private placement basis. The said NCDs are listed on the Wholesale Debt Market Segment of BSE Limited effective 21^st July, 2022. During the year under review, there is no deviation / variation in use of debt issue proceeds. The Company has made necessary disclosures to the Stock Exchanges, Debenture Trustees, within statutory timelines, as per the provisions of SEBI Listing Regulations, 2015, and any other rules & regulations as may be applicable confirming no deviation / variation in use of debt issue proceeds.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016, during the year along with their status as at the end of the Financial Year: Nil, hence not applicable.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof: Nil, hence not applicable.

30. RECOGNITION:

Details of the awards received during the year under review are disclosed separately in this Annual Report.

31. APPRECIATION:

The Directors thank the Company''s employees, customers, vendors, investors and business partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, ICICI Bank Limited, HDFC Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Citi Bank N.A., IDFC First Bank, Kotak Mahindra Bank Limited, Axis Bank Limited and The Federal Bank Limited for their co- operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI.

The Directors appreciate and value the contribution made by every member of the Sudarshan family.

---

Mar 31, 2022

Your Directors are pleased to present the 71^st Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March 2022.

The annexed Financial Statements comply in all material aspects with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Act.

1. FINANCIAL HIGHLIGHTS:

The Company''s financial performance for the year ended 31^st March 2022 is summarised below (Refer Notes to the Audited Standalone Financial Statements).

'' in lakhs
Particulars	FY 2021-22	FY 2020-21
Revenue from operations	191,891.1	170,850.1
Earning Before Interest, Tax, Depreciation and Amortisation	24,166.4	27,206.1
Less : Interest	1,731.1	1,640.0
Less : Depreciation	8,689.5	8,514.5
Add : Exceptional Income	-	1,072.8
Less : Provision for Tax	3,708.2	4,501.0
Total profit After Tax	10,037.6	13,623.4
Other Comprehensive Income	187.1	47.7
Total comprehensive Income	10,224.7	13,671.1
Add : Surplus Brought Forward	53,322.2	39,776.0
Transfer from OCI to Hedge Reserve	(269.6)	(124.9)
net profit available for appropriation	63,277.3	53,322.2
Appropriation
Final Dividend	(4,153.6)	-
Total Appropriation	(4,153.6)	-
surplus to be carried forward	59,123.7	53,322.2

2. (A) FINANCIALS:

Revenue from operations for the year ended 31^st March 2022 aggregated to '' 191,891.1 lakhs as against '' 170,850.10 lakhs achieved during the previous year. Profit after tax from for the year ended 31^st March 2022 was '' 10,037.6 lakhs as against '' 13,623.4 lakhs earned during the previous year. For Subsidiary Companies'' performance please refer to Annexure I.

On a Consolidated basis, your Company''s Total Income for the year ended 31^st March 2022 stood at '' 220,580.8 lakhs, as compared to '' 187,112.7 lakhs in FY 2020-21.

During the year under review, your Company faced many challenges viz. overall impact of two waves of Covid-19, energy crisis in China resulting in supply chain disruption, volatile geo-political situation on account of ongoing Russia-Ukraine crisis, unprecedented increase in raw material

and indirect material cost. Despite challenging environment, your Company managed to deliver resilient performance during the year under review.

(B) EXPORTS:

Your Company continues to focus on export markets. Initiatives are directed towards engaging with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. The Company''s overseas Wholly Owned Subsidiaries set up with the objective of marketing and selling Pigments continue to record improved performance. The Overseas Subsidiaries have entered a consolidation phase and will play a crucial role in positioning the Company as a dominant player in the Global Pigment Industry.

(C) OPERATIONS

Information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.

(D) CAPACITY EXPANSION:

Despite impact of Covid-19 on operations, the Company continued its expansion plans and has incurred capex spend of '' 302.44 crores during the year under review. This capital expenditure is primarily aimed at augmenting production capacities at Roha and Mahad facilities.

(E) HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARY / AssOcIATE / Joint vENTURE COMPANIES:

Shareholders are requested to refer Annexure II for highlights of performance of abovementioned companies and their contribution to the overall performance of the Company during the year under review. The Company has the Wholly Owned Subsidiaries viz., RIECO Industries Limited, Sudarshan CSR Foundation, Sudarshan Europe B.V., Sudarshan (Shanghai) Trading Company Limited, Sudarshan Japan Limited and Step-Down Subsidiaries viz., Sudarshan North America Inc. and Sudarshan Mexico S de R. L. De CV.

3. IMPAcT OF cOVID-19:

Outbreak of Covid-19 in India and world and partial lockdowns on account of the pandemic severely impacted the domestic demand during first quarter of the year. Several customers reported significant shrinkages in the margins.

Prioritisation of oxygen supply to medical sector instead of industrial requirements and non-availability of manpower impacted the execution of capex projects during the first quarter of the year. As compared to second wave, the impact on operations on account of third wave in the last quarter of the year was limited.

4. DIVIDEND:

The Board of Directors at its meeting held on 26^th May 2022, had recommended a Final Dividend of '' 5/- (Rupees Five only) per equity share of '' 2/- each (i.e. 250%) for FY 2021-22. A proposal seeking shareholders'' approval for the declaration and payment of the said Final Dividend for FY 2021-22 is forming part of the Notice. If approved by the Shareholders, the Final Dividend shall be paid between 22^nd August 2022 and 29^th August 2022. In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the Final Dividend after deduction of tax at source. The dividend payout is in accordance with the Company''s Dividend Distribution policy.

For the year ended 31^st March 2021, the dividend paid was '' 6/- per Equity Share of '' 2/- each, (i.e. 300%). The Dividend Distribution Policy of the Company is provided as Annexure III to this Report, and is also available on the website of the Company https://www. sudarshan.com/perch/resources/dividend-distribution-policy-1.pdf..

5. share capital:

The paid-up Equity Share Capital as on 31^st March 2022 was '' 1,384.5 lakhs. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares.

NON - CONVERTIBLE DEBENTURES:

During the year under review, the Board of Directors at its meeting held on 28^th March 2022, had accorded its approval for issue of unsecured non-convertible debentures on private placement basis upto '' 200 crores, in one or more tranches / series, subject to approval of shareholders. Approval of shareholders by way of Special Resolution through Postal Ballot was received on 13^th May 2022.

6. TRANSFER TO RESERVE:

Your Directors do not propose to transfer any amount to the General Reserve.

7. FIXED DEPOSITS:

The Company''s erstwhile Public Deposit Scheme was closed in the year 2015. There was no failure in making repayment of Fixed Deposits on maturity and the interest due thereon in terms of the conditions of the said scheme. During the year under review, the Company has not accepted any deposit from the public / members pursuant to Section 73 and Section 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time.

8. directors'' responsibility STATEMENT:

As required under Section 134(3)(c) of the Companies Act, 2013, Directors of the Company, to the best of their knowledge and belief with respect to FY 2021-22, state that :

i. in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit and loss of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

9. corporate governance:

Pursuant to SEBI Listing Regulations, 2015, a separate chapter titled ''Report on Corporate Governance'' has been included in this Annual Report, along with the reports on the Management Discussion and Analysis and Shareholders'' Information.

A certificate from Auditors of the Company regarding compliance of conditions of corporate governance is given separately in this Annual Report.

10. MANAGEMENT DIScUSSioN AND ANALYSIS:

A Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

11. BUSINESS RESpoNSIBILITY REpoRT:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the annual report of the top 1000 listed entities based on market capitalisation (calculated as on 31^st March of every financial year), shall include a Business Responsibility Report (BR Report).

Since Sudarshan Chemical Industries Limited is one of the top 1000 listed entities as on 31^st March 2022, the Company, as in the previous years, has presented its BR Report for FY 2021-22, which is part of this Annual Report.

12. contracts AND ARRANGEMENTS WITH RELATED pARTIES:

All transactions entered into with related parties during the financial year were in ordinary course of business and at arm''s length basis, which were approved by the

Audit Committee. The Board has approved a policy for related party transactions which is available on the Company''s website at http://www.sudarshan.com/ perch/resources/related-party-transaction-policy.pdf The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure IV to this report. None of the transactions with any of the related parties were in conflict with the interest of the Company. Attention of the members is drawn to the disclosure set out in Notes to Financial Statements forming part of the Annual Report.

The particulars of loans / advances / investments etc., required to be disclosed pursuant to Para A of Schedule V of the SEBI Listing Regulations, 2015, are furnished as a part of the Financial Statements.

The transaction(s) of the Company with any person or entity belonging to the promoter / promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to Para A of Schedule V of the SEBI Listing Regulations, 2015 is disclosed separately in the Financial Statements of the Company.

13. AUDIT COMMITTEE:

Pursuant to the provisions of Section 177 of the Companies Act, 2013, and rules made thereunder and Regulation 18 of the SEBI Listing Regulations, 2015, the Company has in place an Audit Committee.

As on 31^st March 2022, the composition of the Audit Committee is as under -

a) Mrs. S. A. Panse - Chairperson

b) Mr. D. N. Damania

c) Mr. S. K. Asher

All the recommendations made by the Audit Committee were deliberated and accepted by the Board during FY 2021-22.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has in place a CSR Committee constituted as per the provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, details of which are mentioned in the Corporate Governance Report forming part of this Annual Report.

The Company has been carrying out various CSR activities in the areas specified in terms of Section 135 read with Schedule VII of the Companies Act, 2013, and Rules made thereunder. The details of CSR activities undertaken by the Company are annexed herewith as Annexure V. The CSR Policy of the Company is available on the Company''s website at http://www. sudarshan.com/perch/resources/csr- policy.pdf csR policy in brief:

The focus of the CSR activities is on women empowerment, environment, health, etc., and the projects would be planned and implemented accordingly.

The Company shall spend at least 2% (two %) of the average net profits, calculated in accordance with the provisions of the Companies Act, 2013, and Rules made thereunder, made by it in three immediately preceding financial years.

The Annual Report on CSR activities is annexed herewith as Annexure v.

15. risk management and internal controls:

The Company has put in place appropriate risk assessment and minimisation procedures, which are reviewed by the Risk Management Committee, Audit Committee and the Board. As per the requirements of SEBI Listing Regulations, 2015, a Risk Management Committee has been constituted with responsibility of preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to report key changes in critical risks to the Board on an ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. The Committee is supported by an Enterprise Risk Management (ERM) team which provides advice on various risks and the appropriate Governance framework and ensures that risks are identified, measured and managed in accordance with the Companies Policies and risk objectives. The Committee holds meetings periodically where gap between two meetings does not exceed 180 days. The risks faced by the Company and their minimisation procedures are assessed periodically.

According to Section 134(5)(e) of the Companies Act, 2013, and rules made thereunder, the term Internal Financial Control (IFC) means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOPs) and audit and compliance checks by the Statutory Auditors and the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. To further strengthen the compliance processes the Company has an internal compliance tool for assisting statutory compliances. This process is automated and generate alerts for proper and timely compliance.

Risk Management Policy is available on the Company''s website at http://www.sudarshan.com/perch/ resources/ risk-management-policy-2.pdf

Details of the Risk Management Committee are given in the Corporate Governance Report.

16. POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company''s policy on Appointment of Directors, including criteria for determining qualifications, positive attributes, independence of a Director is available on the website of the Company at https://www. sudarshan. com/ perch/resources/ remuneration-policy. pdf.

The policy on Remuneration and other matters provided in Section 178(3) of the Act, is available on https://www. sudarshan.com/ perch/resources/remuneration-policy. pdf.

17. changes in directors and key managerial personnel:

Mr. P. R. Rathi (DIN:00018577), Chairman and Non - Executive and Non - Independent Director, was liable to retire by rotation, and being eligible had offered himself for the reappointment at the 70^th Annual General Meeting held on 6^th August 2021. The members'' approval was sought at the 70^th Annual General Meeting for re-appoinment of Mr. P. R. Rathi as a Non - Executive and Non - Independent Director, based on the recommendation of the Nomination and Remuneration Committee and Board.

As per the provisions of Section 152 of the Companies Act, 2013, and Rules made thereunder and as per the Articles of Association of the Company, Mr. A. N. Rathi (DIN: 00018683) Non - Executive and NonIndependent Director of the Company retires by rotation and being eligible, offers himself for reappointment. A resolution seeking members'' approval for his reappointment forms part of the Notice.

During the year under review, the non-executive directors of the Company had no material pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Committee of the Company.

The Board has made the recommendation for above appointment / re-appointment of Directors based on the recommendation of the Nomination and Remuneration Committee (NRC). NRC has made its recommendation after ensuring that none of the Directors seeking appointment / re-appointment is debarred from holding the position of a Director by virtue of any Order from Securities and Exchange Board of India (SEBI), The Ministry of Corporate Affairs (MCA) or any other Regulatory Authority.

The Board is of the opinion that the Independent Directors appointed / re-appointed are of integrity and possess the requisite expertise and experience (including the proficiency).

Details of the Director seeking appointment / re- appointment including profile of this Director, are given in the Notice convening the 71^st Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Section 203 of the Companies Act, 2013, and rules made thereunder, following are the Key Managerial Personnel of the Company for the year ended 31^st March 2022:

a. Mr. R. B. Rathi, Managing Director

b. Mr. A. Vij, Wholetime Director

c. Mr. Nilkanth Natu, Chief Financial Officer

d. Mr. Mandar M. Velankar, Deputy General Manager - Legal and Company Secretary.

DECLARATION BY INDEPENDENT DIRECTORS: Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations, 2015. There has been no change in the circumstances affecting their status of Independent Directors of the Company.

The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by The Indian Institute of Corporate Affairs, Manesar ("IICA"). Annual Evaluation of Board of Directors, its Committees and Individual Directors:

The Board of Directors upon recommendation of Nomination and Remuneration Committee has laid down the criteria for performance evaluation of Board of the Company, its Committees and the individual Board members, including Independent Directors, and accordingly, an annual evaluation of the performance of the Board, Committees and individual directors has been carried out pursuant to the provisions of the Act and SEBI Listing Regulations, 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5^th January 2017.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non- executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At a separate board meeting, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated. The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty. The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company''s website at https:// www.sudarshan. com/ perch/resources/remuneration- policy.pdf

18. employee stock options:

The Board of Directors of the Company had discussed and approved the Employee Stock Options Plan i.e. Sudarshan Employee Stock Option Plan 2018, in terms of applicable regulations.

At the meeting held on 28^th February 2020, the Board of Directors had approved the Scheme for grant of Stock Appreciation Rights Plan (SARs), for which approval of shareholders was sought by way of Postal Ballot.

During the year under review, the Nomination and Remuneration Committee did not approve any options/ SARs to eligible employees.

19. industrial relations:

Industrial relations continue to remain cordial at Roha and Mahad plants and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

20. FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company believes that a Board, which is well informed / familiarised with the Company and its affairs, can contribute significantly and effectively discharge its role of trusteeship in a manner that fulfils stakeholders'' aspirations and societal expectations. In pursuit of this, the Directors of the Company are updated on changes

/ developments in the domestic / global corporate and industry scenario including those pertaining to statutes / legislations and economic environment and on matters affecting the Company. The details of the programmes, are placed on http://www.sudarshan.com/perch/ resources/ familiarisation-of-independent-directors.pd.

21. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKpLAcE (pREvENTION, pROHIBITION AND REDRESSAU Act, 2013:

Pursuant to the provisions of ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', the Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the said act. During the year under review, no complaint was received by the Internal Complaints Committee of the Company. To build awareness amongst its employees, the Company has been conducting induction/training programmes in the organisation on a continuous basis.

The Company has the Policy on Prevention of Sexual Harassment at Workplace which is available on the website of the Company at http://www.sudarshan. com/perch/resources/policy-on-prevention-of-sexual-harassment-at- workplace.pdf

22. AUDITORS AND AUDITORS'' REpORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, and rules made thereunder, B S R & Associates, LLP, Chartered Accountants, (Firm Registration No.: 116231W/W-100024) were appointed as Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of 66^th Annual General Meeting, till the conclusion of the 71^st Annual General Meeting of the Company to be held in 2022.

As per the provisions of Section 139, 142 of the Companies Act, 2013, and Rules made thereunder and based on the recommendation of the Audit Committee, the Board of Directors at

its meeting held on 26^th May 2022, had appointed M/s. S R B C & CO LLP (Firm Registration No.: 324982E/E300003), Chartered Accountants, Pune, as Statutory Auditors of the Company for a term of 5 (Five) years i.e. from the conclusion of this 71^st Annual General Meeting upto the conclusion of the 76^th Annual General Meeting to be held in year 2027, subject to approval of shareholders.

Pursuant to Section 139 of the Companies Act, 2013 and Rules made thereunder, M/s. S R B C & CO LLP, Chartered Accountants, Pune, have confirmed that they are eligible to be appointed as Statutory Auditors.

A resolution seeking approval of shareholders for appointment of M/s. S R B C & CO LLP as Statutory Auditors forms part of the Notice convening 71^st Annual General Meeting.

The notes on the Audited Financial Statements referred to in the Auditor''s Report are self-explanatory and hence do not call for any further comments. The Auditor''s Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

23. cOST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the cost audit record maintained by the Company is required to be audited. The Board of Directors had on the recommendation of the Audit Committee, appointed Mrs. Ashwini Kedar Joshi (Sole Proprietor), Cost Accountant, Pune (Registration No.: 102387) for conducting the cost audit of the Company for FY 2022-23.

Mrs. Joshi has confirmed that her appointment is within the limits of Section 141 (3)(g) of the Companies Act, 2013, and Rules made thereunder, and has also certified that she is free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Act.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be ratified by the members of the Company. Accordingly, resolution seeking members'' ratification for remuneration to be paid to Cost Auditor is included in the Notice convening the Annual General Meeting. Further, the Board hereby confirms that the maintenance of cost records specified by the Central Government as per Section 148(1) of the Companies Act, 2013, and rules

made thereunder, is required and accordingly, such accounts / records have been made and maintained..

24. SECRETARIAL AUDIT AND SECRETARIAL STANDARDS:

Dr. K. R. Chandratre, a Practicing Company Secretary, (FCS No. 1370, C. P. No. 5144) Pune, was appointed as the Secretarial Auditor of the Company for FY 2021-22 as per Section 204 of the Companies Act, 2013, and rules made thereunder. The Secretarial Audit Report submitted in the prescribed form MR - 3 is attached as Annexure VI and forms part of this report.

The Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Company is compliant with the Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2), issued by the Institute of Company Secretaries of India.

25. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS Under Section 143(12):

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013, and rules made thereunder.

26. details in respect of adequacy of internal financial controls with reference to financial STATEMENTS:

Your Company has clearly laid down policies, guidelines and procedures that form part of internal control systems, which provide for checks and balances. The Company has maintained a proper and adequate system of internal controls. The system is designed to provide a reasonable degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with applicable laws and regulations. The organisation is well structured and the policy guidelines are well documented with pre- defined authority where monetary decision is involved. Structured management information and reporting systems together with an exhaustive budgetary control process for all major operational activities form part of the overall control mechanism to ensure that requisite information related to all operations are reported and are available for control and review. The Company has established a well laid out policy to

maintain the highest standards of environment, safety and health while maintaining operational integrity. This policy is strictly adhered to at all locations of the Company. The Company''s internal control systems commensurate with the nature and size of its business operations. The Audit Committee of the Board of Directors regularly reviews the adequacy of internal control system.

The Company, with a view to encourage independent approach, has appointed a team of qualified professionals in the form of Internal Auditors duly supported by the Finance Department who conduct operational and system audits in accordance with an audit plan approved by the Audit Committee. Internal Auditors as part of their assignment, evaluate and assess the adequacy and effectiveness of internal control measures and the compliance with policies, plans and statutory requirements. The internal audit reports are reviewed at Audit Committee Meetings and appropriate action on the recommendations is initiated by the Management.

27. research and development:

The Company recognises the need to have well equipped Research & Development (R&D) facilities to meet customer requirements and developing cutting edge products. As a natural corollary, your Company continues to invest in a comprehensive R&D Programme leveraging its world-class infrastructure, benchmarked processes, state- of-the-art technology and a business-focused R&D strategy.

The Company has spent '' 10.54 crores during the year under review on R&D. Company''s in-house R&D facilities are recognised by the Ministry of Science and Technology, New Delhi, on behalf of Government of India.

Details related to Research and Development are mentioned in the Annexure I to this Report.

28. DIScLoSURES:

board and its committees:

The details of the Board and it''s Committees are given in the Report on Corporate Governance.

MEETINGS oF THE BAoRD:

During FY 2021-22, 7 (Seven) Board Meetings were held, details of which are given in the Corporate Governance Report, which is a part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013.

Material changes and commitments if any, affecting the financial position of the Company:

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.

Annual Accounts of Subsidiary Companies:

A copy of the Audited Financial Statements for each of the Subsidiary Companies for the year ended 31^st March 2022, wherever applicable, will be made available to the members of the Company seeking such information at any point of time and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The same shall also be placed on the website at www.sudarshan.com. The salient features of Financial Statements of Subsidiary Companies is given in Annexure II of this report.

Sudarshan Europe B. V. is the Material Subsidiary of the Company for the year ended 31^st March 2022. The Company has complied with all the legal requirements in respect of the Material Subsidiary.

In conformity with the provisions of the SEBI Listing Regulations, 2015, the Board has formulated a policy for determining "material subsidiaries". The Policy can be accessed from the Company''s website at http://www.sudarshan.com/perch/resources/material-subsidiary- policy.pdf

There has been no material change in the nature of the business of Subsidiaries..

Consolidated Financial Statements:

Your Company''s Board of Directors is responsible for the preparation of the Consolidated Financial Statements of your Company and its Subsidiaries (''the Group''), in terms of the requirements of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of your Company, as aforesaid. The Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Your Company''s Whistle blower Policy encourages Directors and employees and business associates to bring to the Company''s attention, instances of unethical behaviour, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact your Company''s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. It is your Company''s Policy to ensure that no employee is victimised or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle Blower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee. During the year under review, no complaint was received from a whistleblower.

The vigil mechanism / whistle blower policy is available on the Company''s website at http:// www.sudarshan. com/perch/resources/whistle-blower-vigil-mechanism-policy.pdf Annual Return:

The Annual Return of the Company for the year under review is available on the website of the Company at www.sudarshan.com

Particulars of loans, guarantees or investments under Section 186

Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013, have been disclosed in the Audited Financial Statements.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report vide Annexure I.

particulars of Employees and Related parties

The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, has been provided as Annexure I and vII.

Disclosure pursuant to section 197(14) of the companies Act, 2013, and Rules made there under

Managing Director and Whole Time Director of the Company are not in receipt of any remuneration and / or commission from any Holding / Subsidiary Company, as the case may be.

significant and Material orders passed by the Regulators and courts

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

Restriction on purchase by company or giving of Loans by it for purchase of its shares

Pursuant to the provisions of Section 67(3)(c) of the Companies Act, 2013, and rules made thereunder, the Company has not given any loan exceeding the limit mentioned therein, to persons in the employment of the Company other than its Directors or Key Managerial Personnel, for purchase or subscribe shares of the Company.

statement of Deviation(s) or variation(s)

During the year under review, there was no instance to report containing Statement of Deviation(s) or Variation(s) as per Regulation 32 of SEBI Listing

Regulations, 2015.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy code, 2016, during the year along with their status as at the end of the Financial Year - Nil, hence not applicable.

Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or Financial Institutions along with the reasons thereof - Not Applicable.

29. REcoGNITIoN

Details of the awards received during the year under review are disclosed separately in this Annual Report.

30. appreciation

The Directors thank the Company''s employees, customers, vendors, investors and business partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, ICICI Bank Limited, HDFC Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Standard Chartered Bank, Citi Bank N.A., IDFC First Bank, Kotak Mahindra Bank Limited, Axis Bank Limited and Yes Bank Limited for their co- operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI.

The Directors regret the loss of lives due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

The Directors appreciate and value the contribution made by every member of the Sudarshan family.

For and on behalf of the Board of Directors For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

Date: 26^th May 2022 p. R. RATHI

Place: Pune CHAIRMAN

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Mar 31, 2018

DIRECTORS’ REPORT TO THE SHAREHOLDERS - 2017-18

Your Directors are pleased to present the 67^th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31^st March, 2018.

INDIAN ACCOUNTING STANDARDS:

The Ministry of Corporate Affairs (MCA) on 16^th February, 2015, notified that Indian Accounting Standards (Ind AS) are applicable to certain classes of companies in a phased manner from 1^st April, 2017 with a transition date of 1^st April, 2016. Ind AS has replaced the previous Indian GAAP prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable to the Company from 1^st April, 2017. The reconciliations and descriptions of the effect of the transition from previous GAAP to Ind AS have been set out in Note No.48 in the Notes to Accounts in the Standalone Financial Statements and in Note No.45 in the Notes to Accounts in the Consolidated Financial Statements.

1. FINANCIAL HIGHLIGHTS:

The Company’s financial performance (from continuing operations) for the year ended 31^st March, 2018 is summarised below (Refer Note No.31 of the Standalone Financial Statements).

Particulars	2017-18 (Rupees in Lakhs)	2016-17 (Rupees in Lakhs)
Revenue from operations (Refer Note No. 44 of the Standalone Financial Statements)	129,915.4	109,444.1
Earnings Before Interest, Tax, Depreciation and	20,858.7	18,772.6
Amortization (EBITDA)
Less: Interest	2,377.6	2,302.2
Less: Depreciation	5,821.1	4,854.8
Less: Provision for Taxation	4,076.9	3,019.7
Profit After Tax	8,583.0	8,595.9
Add: Profit from discontinuing operations	219.7	331.5
Total Profit After Tax	8,802.7	8,927.4
Other Comprehensive Income	(59.6)	(54.0)
Total Comprehensive Income	8,743.1	8,873.4
Add: Surplus brought forward	18.364.7 27.107.8	13,491.0 22,364.4
Net Profit available for appropriation Appropriations
1. General Reserve	1,500.0	1,500.0
2. Interim Dividend @ 125%	1,730.7	1,730.7
3. Final Dividend (pertaining to previous Financial Year) 4. Tax on Dividend TOTAL Surplus to be carried forward	692.3	346.1
	493.3	422.9
	4,416.3 22,691.5	3,999.7 18,364.7

2. (A) FINANCIALS:

Total Revenue from continuing operations for the year ended 31^st March, 2018 aggregated to Rs. 135,762 lakhs as against Rs.123,339 lakhs achieved during the previous year. Profit after tax from continuing operations for the year ended 31^st March, 2018 was Rs. 8,583 lakhs as against Rs. 8,596 lakhs earned during the previous year.

Pigment sales increased from Rs. 110,007 lakhs in the previous year to Rs. 131,148 lakhs in the year under review. Profits for the Pigment Division for the year under review amounted to Rs. 14,741 lakhs as compared to Rs. 14,449 lakhs of the previous year.

Agro Sales for the year ended 31^st March, 2018 amounted to Rs. 11,634 lakhs as against Rs. 14,453 lakhs achieved during the previous year. Profits for the Agro Division for the year under review amounted to Rs. 336 lakhs as against Rs. 507 lakhs for the previous year.

For Subsidiary Companies’ performance please refer to Annexure I.

On a Consolidated basis, your Company’s Total Revenues for the year ended 31^st March 2018 stood at Rs. 148,907 Lakhs, up by 7% as compared to Rs. 139,662 Lakhs in Financial Year 2016-17.

As on the date of adoption of accounts, the Agro Chemical Trading Business and the investment in Wholly Owned Subsidiary, Prescient Color Ltd., have been classified as “Held for Sale / Discontinued Operations”. This is pursant to the requirement of Ind AS 105 - ‘Non-current assets held for sale and discontinued operations’. The results of these businesses have been presented separately.

(B) EXPORTS:

Your Company continues to view focus on export markets. Initiatives are directed towards engaging with overseas markets with a view to testing and demonstrating international competitiveness and seeking profitable opportunities for growth. The Company’s overseas wholly owned subsidiaries set up with the objective of marketing and selling Pigments continue to record improved performance. The overseas subsidiaries have entered a consolidation phase and will play a crucial role in positioning the Company as a dominant player in the Global Pigment Industry. Revenue from pigment exports for the year ended 31^st March, 2018 amounted to Rs. 60,603 Lakhs as against Rs. 50,660 Lakhs for the previous year.

3. (A) SALE OF INVESTEMENT IN PRESCIENT COLOR LIMITED:

Pursuant to the decision of the Board of Directors, at its meeting held on 1^st June, 2018, the Company has entered into a Share Purchase Agreement with Americhem Inc. USA to sell the entire shareholding in its Wholly Owned Subsidiary, Prescient Color Limited for an “Enterprise Value” of Rs. 11,700 Lakhs. The Equity Value for sale of shares on “Closing Date” is Rs. 10,228 Lakhs.

(B) IN-PRINCIPLE APPROVAL FOR TRANSFER OF AGRO FORMULATION BRAND BUSINESS:

The Board of Directors in its meeting held on 27^th June, 2018, have in-principle approved the transfer of Agro Formulation Brand Business for a fixed consideration of Rs. 700 Lakhs and a variable component in terms of royalty payable on sales. The modalities for this transaction are being worked out.

4. DIVIDEND:

The Company has paid an interim dividend of 125% (Rs. 2.50 per share of Rs. 2 each) on 5^th March, 2018. Board is pleased to recommend a final dividend of 50% (Rs.1.00 per share of Rs. 2 each) for the Financial Year 2017-18. The final dividend, if approved by the members, will be paid to members within the period stipulated under the Companies Act. The aggregate dividend for the year will amount to 175% (Rs. 3.50 per share of Rs. 2 each) as against 175% (Rs. 3.50 per share of Rs. 2 each) declared last year. The total Dividend pay-out for the year would be Rs.2,917.7 Lakhs (Previous Year: Rs. 2,916.3 Lakhs). The dividend payout ratio for the current year, inclusive of corporate tax on dividend distribution, is 32%.

5. FIXED DEPOSITS:

Your Company’s erstwhile Public Deposit Scheme closed in the year 2015. There was no failure to make repayments of Fixed Deposits on maturity and the interest due thereon in terms of the conditions of your Company’s erstwhile Public Deposit Scheme. During May 2017, your Company has made prepayment of Fixed Deposits amounting to Rs. 4,034 Lakhs at the contracted rate of interest. Your Company has during the year under review not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

6. DIRECTORS’ RESPONSIBILITY STATEMENT:

In accordance with Section 134 of the Companies Act, 2013 the Directors based on the representation received from the management, confirm that:

i. in the preparation of accounts for the Financial Year ended 31^st March, 2018, the applicable accounting standards have been followed with no material departures;

ii. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of Financial Year and of the Statement of Profit and Loss of the Company for that period;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. CORPORATE GOVERNANCE:

Corporate Governance is the application of good management practices, compliance of law, adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for the sustainable development of all stakeholders. Sudarshan beholds Corporate Governance measures as an integral part of business strategy which adds considerable internal and external values and contributes to the business growth in ethical perspective. Besides complying with the prescribed Corporate Governance practices as per SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 good governance practices of the Company have been rewarded in terms of improved share valuations, stakeholder''s confidence, improved market capitalization, improved credit ratings and bagging of various awards for environmental protection, etc. These have propelled the Company to pay uninterrupted dividends to its shareholders ever since it went public.

A detailed report on Corporate Governance, duly certified by the Statutory Auditors of the Company i.e. B S R & Associates LLP, Chartered Accountants, Pune is given separately in the Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis Report covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

9. BUSINESS RESPONSIBILITY REPORT :

At Sudarshan, fulfilment of Environmental, Social and Governance Responsibility is an integral part of the way the Company conducts its business. A detailed information on the initiatives of the Company as enunciated in the “National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011” is provided in the Business Responsibility Report. kindly refer to Business Responsibility Report section which forms part of the Annual Report.

10. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered into during the Financial Year 2017-18 were on arm’s length basis and were in the ordinary course of the business. Apart from the Promoters interest in the continuing appointment of four Rathi Brothers Companies as selling agents of the Company which were approved by the members in terms of Regulation 23 of the SEBI Listing Regulations, 2015, there are no other materially significant related party transactions entered into by the Company with Promoters, Independent Directors, Key Managerial Personnel, Senior Management and / or their relatives which may have potential conflict with the interests of the Company at large.

All related party transactions are presented to the Audit Committee for their prior approval. Subsequent modifications of related party transactions are also placed before the Audit Committee for its approval. Omnibus approval, if any, is obtained for the transactions which can be foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on quarterly basis specifying the nature, value and terms and conditions of the transactions.

The related party transactions policy is uploaded on the Company’s website-www.sudarshan.com.

The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure VI to this report.

11. CORPORATE SOCIAL RESPONSIBILITY:

Your Company’s aspiration to create effective and sustainable societal value is demonstrated in its CSR initiatives that embrace the disadvantaged sections of society, especially those staying in the vicinity of its manufacturing locations at Roha and Mahad, through economic empowerment based on grassroots capacity building. All CSR activities of the Company are carried out under the aegis of “SUDHA” (Sudarshan’s Holistic Aspiration).

The Company’s grand vision is “Growing together” with all its stakeholders in a manner that is spiritually fulfilling, socially just and environmentally sustainable. SUDHA contributes to this vision by ensuring that all its initiatives are driven with this perspective in mind. SUDHA’s vision is ‘Aspiring wholesome sustainable growth for women and children of communities around the Company’s plants’ and Mission is ‘Reach out to communities by engaging in projects related to Livelihood, Health, Education & Community Development. SUDHA is envisaged as a movement to involve the Company and the community in which it operates to create better living standards and safeguard the environment.

To achieve the aforesaid goals, the Company adopted a series of CSR initiatives in 2017-18 which involved programmes, projects and activities to create a significant positive impact on identified stakeholders. All these programmes fall within the purview of Schedule VII of the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Various projects that SUDHA is working on are Livelihood Enhancement Project, Employment Enhancing Vocational Skill Project, Health Improvement Project, Promotion of Education, Community Development Project, Environment Sustainability Project etc.Through all these initiatives, SUDHA has touched the lives of thousands of people around the Company’s facilities.

The Board is pleased to inform that during the year the Company has spent an aggregate amount of Rs.189 Lakhs which includes mandatory spend for the year under review.

In 2017, SUDHA started work on the Ideal Village Development Project. Through this program, SUDHA is working in villages around the Roha, Mahad & Sutarwadi.

SUDHA CSR has been appreciated by :

1. ECGC Indian Exporters’ Excellence Awards 2017 under the category Most Socially Responsible Exporter Award 2017 - runner up

2. India CSR Award for CSR Community Initiative 2017-18- ‘Sustainable Village Waste Management, Environment’ - A Participatory Approach at Villages

The Annual Report on CSR activities are annexed as Annexure IV to this report.

12. RISK MANAGEMENT AND INTERNAL CONTROLS:

Company has put in place appropriate risk assessment and minimization procedures, which are reviewed by the Risk Management Committee, Audit Committee and the Board. During the year, as per the requirements of SEBI LODR Regulations, 2015, a Risk Management Committee was constituted with responsibility of preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to report key changes in critical risks to the Board on an on-going basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. The Committee is supported by an Enterprise Risk Management (ERM) team which provides advice on various risks and the appropriate Governance framework and ensures that risks are identified, measured and managed in accordance with the Companies Policies and risk objectives. The Committee holds meetings on a need basis to review the critical risks identified. The risks faced by the Company and their minimization procedures are assessed periodically. Your Company has an elaborate Risk Management procedure, which is based on three pillars: Business Risk Assessment, Operational Controls Assessment and Policy Compliance processes.

According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOPs) and audit and compliance checks by the Statutory Auditors and the Internal Auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. To further strengthen the compliance processes the Company has an internal compliance tool for assisting statutory compliances. This process is automated and generate alerts for proper and timely compliance.

13. REMUNERATION POLICY:

The Remuneration policy of the Company covering the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided separately as Annexure III.

14. SUCCESSION POLICY:

The Securities and Exchange Board of India (SEBI) has mandated the need for a succession policy pursuant to Regulation 17(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Regulations”). The Company has put in place a Succession Policy duly approved by the Board of Directors with the main objective to ensure the orderly identification and selection of new Directors, Working Directors or Senior Management in the event of any vacancy, whether such vacancy exists by reason of an anticipated retirement, re-organization, unanticipated departure, the expansion of the size of the Company, or otherwise. For details, members are requested to refer to the Company’s website www. sudarshan.com

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As a part of succession planning, Mr. P. R. Rathi, Chairman and Managing Director has stepped down as Managing Director of the Company effective from 1^st June 2018 and is continuing as Non-Executive Chairman thereafter. Mr. P. R. Rathi has been in the employment of the Company since 1^st April, 1976. The Board places on record the meritorious service rendered by Mr. P. R. Rathi as Working Director of the Company.

The Board of Directors in its meeting held on 8^th February, 2018 has appointed Mr. R. B. Rathi, Dy. Managing Director as the Managing Director of the Company effective from 1^st June 2018. Mr. R. B. Rathi is B.E. Mech. Engg. from MIT, Pune, B.S. Chem. Engg from Ohio University USA and MBA from Pittsburgh University USA. The Pigment operations have demonstrated strong growth under his dynamic leadership and is poised for greater heights. The Board recommends the appointment of Mr. R. B. Rathi as Managing Director of the Company not liable to retire by rotation.

Mr. Ashish Vij has been appointed as a Wholetime Director of the Company w.e.f. 24^th May, 2018. Mr. Ashish Vij, B.E.Chem. joined the Company on 8^th December, 2005 and has with him 26 years of diverse working experience. Prior to his elevation as Wholetime Director, he was designated as Chief Operating Officer, Pigment Division for both Roha and Mahad plants. Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on 24^th May, 2018 have approved the appointment of Mr. Ashish Vij as a Wholetime Director in full time employment of the Company subject to necessary approval by the Members in the ensuing Annual General Meeting. The Board recommends the appointment of Mr. Ashish Vij as a Wholetime Director in full time employment of the Company not liable to retire by rotation.

Mr. Naresh T. Raisinghani was originally appointed as a Non-Independent Director of the Company by the shareholders in the Annual General Meeting held on 14^th August, 2015. Mr. Naresh Raisinghani has represented that he presently meets the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and has requested the Board to consider his change in status as a Director and consider appointing him as an Independent Director.

In the opinion of the Board, Mr. Naresh T. Raisinghani fulfils the conditions for his appointment as an Independent Director as specified in the Companies Act and the SEBI Listing Regulations. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on 24^th May 2018 have approved the appointment of Mr. Naresh T. Raisinghani as an Independent Director of the Company subject to necessary approval by the shareholders in the ensuing Annual General Meeting. The Board recommends the appointment of Mr. Naresh T. Raisinghani as an Independent Director of the Company not liable to retire by rotation.

Mr. N. J. Rathi, Non-Independent, Non-Executive Director retires at the 67^th Annual General Meeting and is eligible for re-appointment. An item in this regard is included in the Notice of the 67^th Annual General Meeting and the same is placed for approval of the Members. The Board recommends the re-appointment of Mr. N. J. Rathi, as a Director of the Company by way of a Special Resolution.

Resolutions also have been proposed for the continuance of Mr. D. N. Damania and Mr. S. Padmanabhan as Independent Directors for their remaining tenure. This is as mandated by Regulation 17(1A) of the SEBI Listing Regulations, 2015. The Board recommends the same for approval by the Members by way of Special Resolutions.

Mr. K. L. Rathi, Non-Independent, Non-Executive Director has resigned as a Director from the Board of Directors of the Company w.e.f. 1^st June, 2018. The Board places on record its appreciation of significant contribution made by Mr. K. L. Rathi during his tenure of more than 4 decades as a Director of the Company.

Key Managerial Personnel

In accordance with the provisions of Section 203 of the Companies Act, 2013, the following are Key Managerial Personnel of the Company for the year ended 31^st March 2018:

a. Mr. P. R. Rathi, Chairman and Managing Director

b. Mr. R. B. Rathi, Dy. Managing Director

c. Mr. V. V. Thakur, Acting CFO

d. Mr. P. S. Raghavan, Company Secretary

Mr. P. S. Raghavan, Company Secretary on reaching the age of superannuation is due to retire from the services of the Company post conclusion of the 67^th Annual General Meeting. Mr. Mandar M. Velankar, Company Secretary (Designate) will take over as Company Secretary and Compliance Officer w.e.f. 10^th August, 2018.

Declaration by Independent Directors

Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6).

Annual Evaluation of Board of Directors, its Committees and Individual Directors

The Board of Directors upon recommendation of Nomination and Remuneration Committee has laid down the criteria for performance evaluation of Board of the Company, its Committees and the individual Board members, including Independent Directors. In compliance with SEBI LODR Regulations, 2015, the performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of the performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever their respective term expires.

The Independent Directors of the Company met separately on 30^th March 2018 without the presence of Non-Independent Directors and the members of management. The meeting was attended by all the Independent Directors. The meeting was was to enable the Independent Directors to discuss matters pertaining to the Company’s affairs and put forth their combined views to the Board of Directors. The Independent Directors evaluated the performance of the Chairman, Non-Independent Directors and the Board as a whole. The Independent Directors also reviewed the adequacy and flow of information between the Company Management and the Board.

The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty.

The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company’s website www.sudarshan.com

16. GREEN INITIATIVE:

Members are aware that the Company had started a sustainability initiative with the aim of going green and minimizing the impact on the environment. Like the previous year, electronic copies of the Annual Report 2017-18 and Notice of the 67^th AGM are being sent to all Members whose email addresses are registered with the Company / Depository Participant(s). For Members who have not registered their email addresses, physical copies of the Annual Report 2017-18 and the Notice of the 67^th AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

The Company is providing remote e-voting facility to all Members to enable them to cast their votes electronically on all resolutions set forth in the Notice of the AGM. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2015 read with Regulation 44 of the SEBI Listing Regulations, 2015. The instructions for remote e-voting are provided in the Notice of the AGM.

17. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

18. HUMAN RESOURCES:

Your Company’s Human Resource Management systems and processes are aimed at creating a responsive, market-focused, customer-centric culture besides enhancing organisational vitality, so that business remains internationally competitive and equipped to seize emerging market opportunities. It is your Company’s firm belief that the robustness and adaptability of its Human Resource systems and processes are critical for an organisation to remain relevant and competitive in today’s highly dynamic and rapidly evolving business landscape. The Human Resources function of your Company continues to align its strategic interventions and processes with your Company’s Vision of sustaining its position as India’s dominant Pigment manufacturing Company besides creating value for the Company’s stakeholders. The market position the Company enjoys are the result of the combined strength of its people. The Company during this year, took up an important project of Organisation Structure, where it has realigned itself with the industry practices. New bands, grades and designations have been implemented from 1^st April 2018 onwards. This makes the Company equally attractive like any other MNC for the kind of manpower required for the Company’s growth.

Your Company is dedicated to nurturing sustainable Employee Relations and continues to leverage the ‘Good Employee Relations’ approach in ensuring responsive manufacturing, flexible work systems and, at the same time, maintaining a cost and environment conscious ecosystem. The Company during the year, paid special attention to developmental activities comprising of sharpening of skills and abilities, developing academic and professional knowledge and cultivating appropriate behavioural skill sets, such as improving interpersonal relations, team building abilities, effective communication and presentation skills.

During the year under review several human capital enhancing measures were undertaken:

1. To meet organisational challenges, Company is looking at building capabilities at the Leadership Levels 1 & 2 and has taken up an initiative of Leadership Intervention for a period of 18 months. For both Level 1 & 2 leaders the process continued last year and has reached end of Phase 1. We are now planning Phase 2 of the initiative in FY 2018-19.

2. Communication of Company’s performance and its objectives to the employees at all levels by the top management has become a culture at the Company with SUDA CONNECT being celebrated for the fifth year in succession. The event also provided an opportunity to reward exemplary performances at individual level based on meritocracy. Employees with long services in the Company were also felicitated during this occasion. Employees demonstrated their talents through various cultural programmes. The meet established a perfect blend of communication, team bonding and celebrations.

3. Like last year, Fit Sudarshan continued to be one of the most appreciated initiative. This year also Roha Half Marathon (21Km) was organised. This event was enjoyed by all employees, their spouses and children. Sudarshan Marathon is not just organised to promote fitness among employees and their families but also its major focus is on spreading awareness on ‘Clean Roha, Healthy Roha’, which is one of the focus areas of our CSR activities. Cleanliness Drive was also organized post the run, where everyone participated in cleaning the nearby villages from our Roha facility.

4. Under Training & Development, Company initiated Supervisory Assessment & Development program for L4 - L5 grade employees who are working on shop floor. This was a huge success and the high-potential employees were identified to take higher responsibilities and for appropriate grooming.

5. All the Human Resource processes and initiatives launched in the last five years continue to be reinforced and strengthened by taking them to the next level. As an endorsement of these efforts, the Company received certification on global platform from Great Place to Work Institute consecutively for the second time, this year.

6. This year as well Company got several awards for CSR activities and were also recognised at the National level. For HR activities also in FY 2017-18, Company won the Recruitment Award at theWorld HRD Congress.

These global awards have reinforced Company’s belief of realizing Company’s vision of becoming one amongst the top three pigment producers in the World and taking the LEAP project forward with full enthusiasm.

The Board has formulated an ESOP Scheme for the benefit of Eligible Employees. This will contribute to a feeling of ownership, loyalty and a more focused approach towards achieving organisational objectives. For more details, please refer to Item Nos. 13 to 16 of the AGM Notice.

19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

Company believes that a Board, which is well informed / familiarised with the Company and its affairs, can contribute significantly and effectively discharge its role of trusteeship in a manner that fulfils stakeholders’ aspirations and societal expectations. In pursuit of this, the Directors of the Company are updated on changes / developments in the domestic / global corporate and industry scenario including those pertaining to statutes / legislations & economic environment and on matters affecting the Company, to enable them to take well informed and timely decisions. Visits to Company’s facilities are also organised for the Directors. Further details may be accessed on the Company’s corporate website www.sudarshan.com.

20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has Zero tolerance towards any action on the part of any one which may fall under the ambit of ‘’Sexual Harassment” at workplace, and is fully committed to uphold and maintain the dignity of every women working with the Company. The Policy framed by the Company in this regard provides for protection against sexual harassment of women at workplace and for redressal of such complaints within the framework of law. Details of the same are available on the website of the Company www.sudarshan.com.

No cases of sexual harassment have been reported during the year under review.

21. COST AUDITOR:

As per Section 148 of the Companies Act, 2013, the Company is required to have its cost records conducted by a Cost Accountant in practice. The Board of Directors of the Company has, on recommendation of the Audit Committee, approved the appointment of Parkhi Limaye & Co., Cost Accountants, Pune as the Cost Auditor of the Company to conduct cost audits of Insecticides and Industrial Mixers and cost records maintained by the Company for the year ending on 31^st March, 2019. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking ratification of the Members for the remuneration payable to Parkhi Limaye & Co., Cost Accountants, Pune is included at Item No. 6 of the notice convening the Annual General Meeting.

22. SECRETARIAL AUDITOR:

M/s Rajesh Karunakaran & Co., Company Secretaries, Pune were appointed as Secretarial Auditors of the Company for the Financial Year 2017-18 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted in the prescribed form MR - 3 is attached as Annexure VIII and forms part of this report. There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued for the Financial Year 2017-18 which calls for any explanation from the Board of Directors.

23. SUCCESSFUL COMMISSIONING OF TWO WIND MILLS FOR MAHAD SITE :

Board takes immense pleasure in informing you that the Company has successfully commissioned wind mills having a total capacity of 4.2 MW in Aurangabad District, Maharashtra for Mahad plant. This is a major step towards our commitment for Green energy & Environment friendly technologies. The generated power will be used at Mahad site. Approximate 55% of total energy requirement of Mahad site will be met through wind energy.

The Board takes this opportunity to congratulate the entire team involved in the commissioning of this project within a record time of 3 months.

24. ENVIRONMENT, HEALTH, SAFETY (EHS) AND POLLUTION:

Your Company’s Environment, Health & Safety (EHS) strategies are directed towards achieving the green and safe operations across all your Company’s manufacturing locations by optimising natural resource usage and providing a safe and healthy workplace. Systemic and structured efforts continue to be made towards natural resource conservation by continuously improving resource-use efficiencies and enhancing the positive environmental footprint following a life-cycle based approach. Your Company’s focus on inculcating a green and safe culture is supported through the adoption of EHS standards that incorporate best international standards, codes and practices and ensuring compliance through regular audits.

The Company continues to maintain “Zero lost time accident at the workplace” as its long term strategic goal. There was no major accident and no occupational health illness cases or major emergencies during the year across the Organization. Hits and Near Misses data are constantly evaluated and remedial measures taken. This has been achieved through highest commitment, supported by all levels of workforce across the Organization. Behaviour Based Safety, Safety training, Process Safety Management, Hazard Identification and Rectification, Near miss reporting and Contractor Safety and process safety were the key focus areas. “EHS” systems featuring various global safety practices including HAZOP, Risk Assessment, Layer of Protection Analysis (LOPA), Process Safety Management, Visual management, pre-start-up

reviews and rigorous training to all employees and contract workers are basic norms for the Organization. Elimination of potential Risks have helped us in the long run to achieve these results.

The Company continued to focus on Environment management by further strengthening the effluent treatment facility at Roha and Mahad. Modernization of ETP factored reduction in greenhouse gases by installing AHR (anaerobic hybrid reactor). Our Waste from wealth initiative at the design stage included new paddle dryer for both primary and secondary sludge, secondary sludge used in co-gen as a fuel. Advance technology used in our tertiary plant with auto disc filters & activated glass media filters which has resulted in our outlet TSS values as less than 20ppm. In addition, under this initiative plastic waste is converted as plastic noodles resulting in a useful by product.

As highlighted earlier, Company’s commitments towards sustainable development by contributions in renewable energy is achieved by, installing two windmills in Aurangabad District, Maharashtra having capacity of 4.2 MWH. It reduces fuel (Coal) consumption for power generation by 25,402 MT per year and supports to reduce CO2 emission by 43,546 MT/Year, SO2 emission by 254 MT/year and NOX emission by 160 MT/year.

Utility management and energy conservation initiatives have been given renewed focus in all manufacturing units.

All units of our Company are certified for OHSAS-18001 and ISO-14001 and awarded rating of five stars from British Safety Council. Standards are regularly reviewed at various levels and systems are aligned with the Company’s Process Management.

Product stewardship, transportation and warehouse safety continued to be strengthened by providing resources, standardization to match benchmark practices, training to drivers and warehouse workers for safe transportation, storage and loading / unloading and emergency plan for road accidents. As part of the same, Company has become member of NICER GLOBE an ICC initiative in coordination with major chemical industries.

The Company’s efforts and performance in the area of “EHS” have been recognized across the manufacturing units, through receipt of several awards.

ROHA & Mahad unit has been able to sustain zero lost time accident free days for more than 1,000 days, which has been an major milestone achievement in Company’s history.

25. RESEARCH AND DEVELOPMENT:

The Company recognizes the need to have well equipped R&D Facilities to meet customer requirements and developing cutting edge products. As a natural corollary your Company continues to invest in a comprehensive Research & Development programme leveraging its world-class infrastructure, benchmarked processes, state-of-the-art technology and a business-focused R&D strategy.

The Company has spent approx. Rs. 1,850 Lakhs during the year under report on research and development. Company’s in house R & D facilities are recognised by the Ministry of Science and Technology, New Delhi, on behalf of Government of India.

26. DISCLOSURES:

Material changes and commitments if any, affecting the financial position of the Company :

There are no adverse material changes or commitments occurring after 31^st March, 2018 which may affect the financial position of the Company or may require disclosure.

Annual Accounts of Subsidiary Companies:

The Annual Accounts of the Subsidiary Companies for the year ended 31^st March, 2018 will be made available to any shareholder of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid subsidiary companies and the related information will also be made available to the investors seeking such information at any point of time. The salient features of Financial Statements of Subsidiary Companies is given in Annexure VII of this report.

The Company as of now does not have a material subsidiary. In conformity with the provisions of Listing Regulations, 2015, the Board has formulated a policy for determining “material subsidiaries”. The Policy can be accessed from the Company’s website www.sudarshan.com.

Consolidated Financial Statements:

Your Company’s Board of Directors is responsible for the preparation of the Consolidated Financial Statements of your Company & its Subsidiaries (‘the Group’), in terms of the requirements of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of your Company, as foretasted. The Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Your Company’s Whistle blower Policy encourages Directors and employees and business associates to bring to the Company’s attention, instances of unethical behaviour, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact your Company’s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that requisite standards of professional and ethical conduct are always upheld. It is your Company’s Policy to ensure that no employee is victimised or harassed for bringing such incidents to the attention of the Company. The practice of the Whistle blower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee. The policy on vigil mechanism and whistle blower policy can be accessed from the Company’s website www.sudarshan.com.

Policies under SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015:

New Policies mandated under SEBI Listing Regulations 2015 have been adopted by the Board and can be accessed from the Company’s website - www.sudarshan.com. Some of the existing policies have also been revised on account of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 .

Annual Return:

The extract of the Annual Return of the Company in Form No. MGT - 9 as on 31^st March, 2018 as prescribed under Companies (Management & Administration) Rules, 2014 is given in Annexure V to this report.

Meetings of the Board:

During the Financial Year 2017-18, six Board Meetings were held, the details of which are given under the Corporate Governance Report.

Particulars of loans, guarantees or investments under Section 186:

The particulars of loans advanced, guarantees given or investments made under Section 186 form part of the Notes to Financial Statements provided in the Annual Report. All such Loans, guarantees or investments made during the Financial Year 2017-18 with requisite approvals wherever applicable were entered into in the ordinary course of business and comply with arm’s length principle.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report vide Annexure I.

Particulars of Employees and Related Disclosures:

The requisite information pursuant to Section 197(12) and Rule 5(2)(i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with regard to the details of employees drawing remuneration of Rs. 850,000 per month or Rs. 102 Lakhs per annum is attached as Annexure II to this report.

Significant and Material Orders passed by the Regulators or Courts:

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

27. RECOGNITION:

The Board of Directors is pleased to announce that the Company has received the following awards during the year under review :

Dyestuffs Manufacturers’ Association of India (DMAI) award for the Financial Year 2017- 2018 for -

a. Excellent performance in pollution control for Large Scale Unit

b. Excellent performance in Safety & Hazards control (Second Award for Large Scale Unit)

c. Excellent performance in exports of Pigments (Award for Large Scale Unit)

d. Outstanding performance in Pollution Control (Award for Large scale Unit)

e. Excellent performance in Energy Conservation by a Large Scale Unit (2nd Award)

These awards signify Company’s commitment towards Environment, Health, Safety and significant contribution in Exports.

28. OUTLOOK FOR THE FUTURE:

Your Company today, is the leader in Pigment manufacturing in India. Over the last many years your Company has seen good growth by developing a portfolio of world-class Pigment Products. During this period, your Company’s Gross Turnover and post-tax profit have recorded good growth. Return on Capital Employed has also improved. Total Shareholder Returns, measured in terms of increase in market capitalisation and dividends, have grown significantly in past few years in terms of efficiency of servicing financial capital.

Your Company’s Board and employees are inspired by the Vision of catapulting the Company as one of the most admired and valuable Pigment manufacturing companies, globally, creating enduring value for all stakeholders, including the shareholders. Inspired by this Vision, driven by Values and powered by internal Vitality, your Directors and employees look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders.

The global economic climate continues to be volatile, uncertain and prone to geo-political risks and may inhibit global growth. 2018-19 will be a key year for consolidating the Company’s leadership position in India and accelerating further growth. Despite challenging global headwinds, a stable macro performance will help India to remain an attractive investment destination. While currently inflation is expected to be moderate, upside pressures on inflation or due to competitive devaluation of currencies will pose challenges.

The Company aims to closely associate with its Customers and increase operational and technical excellence, while pruning costs. Research and Development will also play a bigger role in improving the competitiveness through innovations.

The Company’s overseas subsidiaries in Netherlands, North America, Mexico and Shanghai are fully geared up and will play a major role in achieving quantum growth in sales and profitability thereby pushing exports. This among other measures will help the Company consolidate its position further as a reliable global player in the Pigments market.

Barring any unforeseen circumstances, the current year’s prospects look favourable.

29. APPRECIATION:

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited, HSBC Limited, Standard Chartered Bank, Citi Bank N.A., IDFC Bank Limited, Kotak Mahindra Bank Limited, Yes Bank and Export Import Bank of India for their co-operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI and Pragati Leadership. The Board is also grateful to the Government Authorities, Members, Customers, Suppliers, Business Associates and Employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

P. R. RATHI

PUNE : 27^th June, 2018 CHAIRMAN

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Mar 31, 2017

The Directors are pleased to present the 66^thAnnual Report together with the Audited Statement of Accounts of the Company for the year ended 31^stMarch, 2017.

1. FINANCIAL HIGHLIGHTS:

The Company''s financial performance for the year ended 31^st March, 2017 is summarized below:

Particulars	2016-17	2015-16
	(Rupees in	(Rupees in
	Millions)	Millions)
Total Revenue	13,155.87	12,201.38
Earnings Before Interest, Tax, Depreciation and	1,961.99	1,686.28
Amortization (EBITDA)
Less : Interest	245.03	263.50
Less : Depreciation	498.78	437.91
Less : Provision for Taxation	324.08	268.58
Profit After Tax	894.10	716.29
Add :Surplus brought forward	1,309.24	942.92
Net Profit available for appropriation	2,203.34	1,659.21
Appropriations
1. General Reserve	150.00	100.00
2. Interim Dividend @ 125% (Rs. 2.50 per equity share)	173.07	173.07
3. Final Dividend (Proposed) @ 50%	-	34.61
(Previous Year dividend paid @ Rs.0.50 per share)
4. Tax on Dividend	35.24	42.29
TOTAL	358.31	349.97
Surplus to be carried forward	1,845.03	1,309.24

2. THE YEAR IN RETROSPECT:

During the year under review, subdued business sentiments, demonetization of the Indian Rupee, combined with difficult market conditions and slowdown in global demand, posed challenges. As a result Company could post only nominal sales growth. The Directors are pleased to inform that in spite of not so favorable conditions, your Company has registered much better performance in terms of growth in profits as compared to the previous year.

(A) FINANCIALS:

Total Revenue from operations for the year ended 31^st March, 2017 aggregated to Rs. 13,156 million as against Rs. 12,201 million achieved during the previous year. Profit after tax for the year ended 31^st March, 2017 was Rs. 894 million as against Rs. 716 million earned during the previous year.

Pigment sales increased from Rs. 10,656 million in the previous year to Rs. 11,001 million in the year under review. Profits for the Pigment Division for the year under review amounted to Rs. 1,803 million as compared to Rs. 1,637 million of the previous year.

Agro Sales for the year ended 31^st March, 2017 amounted to Rs. 1,445 million as against Rs. 1,163 million achieved during the previous year. Profits for the Agro Division for the year under review amounted to Rs. 84 million, as against Rs. 63 million for the previous year.

The Company''s Indian Subsidiaries have performed well. Prescient Color Limited continues to register good growth. RIECO Industries Limited has registered an improvement in the performance as compared to the preceding Financial Year. The Company''s overseas subsidiaries in the Netherlands, and North America continue to record improved performance.

On a Consolidated basis, your Company''s Total Revenues for the year ended 31^st March 2017 stood at Rs. 15,450 Million, up by 9 % as compared to Rs. 14,234 Million in Financial Year 2015-16. Net

Profit Before Tax after consolidation grew by 38% to Rs. 1,362 Million in Financial Year 2016-17 as compared to Rs. 990 Million in Financial Year2015-16.

(B) EXPORTS:

The Company''s overseas subsidiaries in The Netherlands and North America set up with the objective of marketing and selling Pigments, continue to record improved performance. Both the overseas subsidiaries have entered a consolidation phase and will play a crucial role in positioning the Company as a dominant player in the Global Pigment Industry. Revenue from exports for the year ended 31^st March, 2017 amounted to Rs. 5,079 million as against Rs. 5,176 million for the previous year.

3. DIVIDEND:

During the year, your Company had declared and paid an Interim Dividend of Rs. 2.50 (@ 125%) per Equity share (of Rs. 2.00 each). Your directors are pleased to recommend a Final Dividend of Rs. 1.00 (@50%) per Equity share (of Rs. 2.00 each) for the Financial Year 2016-17. The Interim Dividend along with recommended Final Dividend aggregates to a total Dividend of Rs. 3.50 (@ 175%) per Equity share (of Rs. 2.00 each) for the Financial Year 2016-17 as compared to the total Dividend of Rs. 3.00 (@ 150 %) per Equity share (of Rs. 2.00 each) for the Financial Year 2015-16. The total amount of Dividend pay-out for the year would be Rs.291.63 Million (Previous Year: Rs. 249.97 Million).

4. FIXED DEPOSITS:

The Company did not accept any fixed deposit during the year under review. Unclaimed deposits to the extent of Rs. 0.67 Million were outstanding as on 31^st March, 2017.

5. INCORPORATION OF STEP-DOWN SUBSIDIARY (SDS) IN MEXICO:

During the year, the Company has incorporated through its direct subsidiary in The Netherlands viz. Sudarshan Europe B.V. a step-down subsidiary (SDS) in Mexico, by name Sudarshan Mexico on 25^thJanuary, 2017 for marketing and selling pigments manufactured by Sudarshan, India. Further, the SDS will also be in a position to keep stocks of finished products and do invoicing. This will also enable the Company to service key customers in regions around U.S.A.

6. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with Section 134 of the Companies Act, 2013 the Directors based on the representation received from the management, confirm that:

i. in the preparation of accounts for the Financial Year ended 31^st March, 2017, the applicable accounting standards have been followed, with no material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of Financial Year and of the Statement of Profit and Loss of the Company for that period;

Hi. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. CORPORATE GOVERNANCE:

Members are aware that the Company has always strived to maintain applicable standards of good corporate governance and the commitment to good corporate governance is embodied in its vision, mission and corporate values. As a means to realize its goal of sustainable value creation, the Company has adopted performance excellence as part of its culture and its corporate values to foster a shared and common set of behavior amongst all the employees.

Members will be pleased to note that the Company has complied with the mandatory requirements of Corporate Governance set out under the SEBI (Listing Obligations and Disclosure Requirements),

Regulations, 2015.

A detailed report on Corporate Governance, duly certified by the Statutory Auditors of the Company, B.K. Khare &Co., Chartered Accountants, Mumbai is appearing separately in the Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

9. BUSINESS RESPONSIBILITY REPORT:

In terms of SEBI Listing Regulations, 2015, top 500 Companies in terms of market capitalization are mandatory required to include Business Responsibility Report as part of the Annual Report. The Company''s name has been included in the list of top 500 companies in terms of market capitalization. Accordingly, Business Responsibility Report for the year ended 31^st March, 2017 is separately provided.

10. CONTRACTS ANDARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered into during the Financial Year 2016-17 were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions entered into by the Company with Promoters, Independent Directors, Key Managerial Personnel .Senior Management and /or their relatives which may have potential conflict with the interests of the Company at large.

All related party transactions are presented to the Audit Committee for their prior approval. Subsequent modifications of related party transactions are also placed before the Audit Committee for its approval. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. Statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The related party transactions policy is uploaded on the Company''s website www.sudarshan.com.

The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure VI to this report.

11. CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility (CSR) activities of the Company are in accordance with Schedule VII to the Companies Act, 2013. All CSR activities of the Company are carried out under the aegis of “SUDHA” (Sudarshan''s Holistic Aspiration). As a responsible corporate citizen, the Company continues its efforts to meet, among others, the Environmental, Health and Safety expectations of society at large.

SUDHA is envisaged as a movement to involve the Company and the community in which it operates to create better living standards and safeguard the environment. As a part of Corporate Social Responsibility, SUDHA has been engaged in various social projects, embracing the people that live in the vicinity of its manufacturing and other facilities.

The Company''s grand vision is “Growing together” with all its stakeholders in a manner that is spiritually fulfilling, socially just and environmentally sustainable. SUDHA contributes to this vision by ensuring that all its initiatives are driven with this perspective in mind. SUDHA''s vision is ''Aspiring wholesome sustainable growth for women and children of communities around the Company''s plants'' and Mission is ''Reach out to communities by engaging in projects related to Livelihood, Health, Education and Community Development''.

Various projects that SUDHA is working on are Livelihood enhancement Project; Employment Enhancing Vocational Skill Project; Health Improvement Project; Promotion of Education; Community Development Project; Environment Sustainability Project etc. Through all these initiatives, SUDHA continues to touch the lives of thousands of people around the Company''s facilities.

As a testimony to its ongoing CSR activities, The Institute of Directors has conferred the Company as the Winner of ''Special Commendation'' for ''Golden Peacock Award for Corporate Social Responsibility'' for the year 2016. This Award for Corporate Social Responsibility has been instituted to encourage initiatives in Corporate Social Responsibility and promoting sustainable development.

The Board is pleased to inform that during the year the Company has spent an aggregate amount of Rs.14.31 Million.

The Annual Report on CSR activities are annexed as Annexure IV to this report.

12. RISK MANAGEMENT AND INTERNAL CONTROLS:

Your Company has an elaborate Risk Management procedure, which is based on three pillars: Business Risk Assessment, Operational Controls Assessment and Policy Compliance processes. Your Company has set up a Risk Management Committee to monitor the risks and their mitigating actions. The key risks and mitigating actions are also placed before the Audit Committee of the Company. The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditor and coverall offices, factories and key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.

13. REMUNERATION POLICY:

The Remuneration policy of the Company covering the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided separately as Annexure III.

14. SUCCESSION POLICY:

The Company has a Succession Policy approved by the Board of Directors with the main objective to ensure the orderly identification and selection of new Directors, Working Directors and Senior Management in the event of any vacancy, whether such vacancy exists by reason of an anticipated retirement, re-organization, unanticipated departure, or otherwise. For full details, members are requested to refer to the Company''s web site www.sudarshan.com

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. A. B. Rathi was inducted as a Non-Executive, Non-Independent Director on the Board of Directors of the Company w.e.f. 11^th November, 2016. Mr. A. B. Rathi, is B.Tech, from University of Madras, M. S. Chemical Engg.from University of Detroit, U.S.A. and MBAfrom U.S.A.

Mr. A. B. Rathi is the Managing Director of RIECO Industries Limited (RIECO), a Wholly Owned Subsidiary of the Company. RIECO manufactures Air Pollution Control Equipments, Size Reduction Equipments and Pneumatic Conveying Systems. Mr. A. B. Rathi is also heading the Industrial Mixing Solutions Business of the Company which manufactures Industrial Mixers.

In terms of Section 152 and 161 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr.A.B.Rathi, Non-Executive, Non-Independent Director holds the Office up to the date of this Annual General. Board recommends the appointment of Mr. A.B.Rathi, as a Non-Executive, Non Independent Director of the Company liable to retire by rotation.

In terms of Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. K.L.Rathi, Non-Executive, Non-Independent Director will retire at the 66^th Annual General Meeting and being eligible offers himself for reappointment. The Board of Directors recommend the reappointment of Mr. K.L.Rathi, as a Non-Executive, Non Independent Director of the Company liable to retire by rotation.

Key Managerial Personnel

In accordance with the provisions of Section 203 of the Companies Act, 2013, the following are Key Managerial Personnel of the Company:

a. Mr. P. R. Rathi, Chairman and Managing Director

b. Mr. R. B. Rathi, Dy. Managing Director

c. Mr. V. V. Thakur, Dy. General Manager (Acting CFO)

d. Mr. P. S. Raghavan, Company Secretary

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013.

Annual Evaluation of Board of Directors, its Committees and Individual Directors

At a separate meeting of the Independent Directors held on 27^th March, 2017, the performance evaluation of the Chairman, Non-Independent Directors and the Board of Directors was carried out by the Independent Directors who also reviewed the adequacy and flow of information between the Company Management and the Board. The evaluation of the Independent Directors was carried out by the entire Board.

The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty.

The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of the Directors of the Company can be accessed from the Company''s website www.sudarshan.com

16. GREEN INITIATIVE:

Members are aware that the Company had started a sustainability initiative with the aim of going green and minimizing impact on the environment. This year also, electronic copies of the Annual Report for FY 2016-17 and Notice of the 66^th AGM are being sent to all Members whose email addresses are registered with the Company / Depository Participant(s). For Members who have not registered their email addresses, physical copies of the Annual Report 2016-17 and the Notice of the 66^th AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

The Company is providing remote e-voting facility to all Members to enable them to cast their votes electronically on all resolutions set forth in the Notice of the AGM. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2015 read with Regulation 44 of the SEBI Listing Regulations, 2015. The instructions for remote e-voting are provided in the Notice of the AGM.

17. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants, GHO Pune and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

18. HUMAN RESOURCES:

Human resources continue to be an invaluable and intangible asset and key success factor for the Company to grow and sustain its market position in a highly competitive and challenging environment. Company firmly believes that people are the pivotal force behind the growth and excellence in business operations. The overall performance and the market position the Company enjoys are the result of the combined strength of its people. The Company during the year, paid special attention to developmental activities comprising of sharpening of skills and abilities, developing academic and professional knowledge and cultivating appropriate behavioural skill sets, such as improving interpersonal relations, team building abilities, effective communication and presentation skills. Focus on developing leadership skills and building talent for the future and the process of improving organizational and human capability through competency mapping of managerial positions in all areas of the Company''s operations, continued as a major initiative

During the year under review several human capital enhancing measures were undertaken:

1. To meet organizational challenges, Company has initiated measures aimed at building capabilities at the Leadership Levels 1 and 2 and have also taken up an initiative of Leadership Intervention for them for a period of 18 months. For both Level 1 and 2 leaders, the process has started and the reports have been generated based on data collected from various sources. Also Individual Development Plans have been made and Coaching sessions have started.

2. Communication of Company performance and objectives to employees at all levels by the top management have become a culture at the Company with SUDA CONNECT being celebrated for the fourth year in succession. The event also provided an opportunity to reward exemplary performances at individual level based on meritocracy. Employees with long services in the Company were also felicitated during this occasion. Employees demonstrated their talents through various cultural programmes. The meet demonstrated a perfect blend of communication, team bonding and celebrations.

3. Like last year, “Fit Sudarshan” continued to be one of the most appreciated initiatives. This year Roha Half Marathon (21Km) was organized. This event was enjoyed by all employees, their spouses and children. Sudarshan Marathon is not just organized to promote fitness among employees and their families, but also, its major focus is on spreading awareness on ''Clean Roha, Healthy Roha'' .which is one of the focus areas of our CSR activities. Cleanliness Drive was also organized post the run, where everyone from the Dy. MD level to the children of the employees participated in cleaning the nearby areas of our Roha facility.

4. Under Training and Development, Company initiated Supervisory Assessment and Development program for L4-L5 grade employees who are working on shop floor. This was a huge success and the high potential people were identified to take higher responsibilities and for appropriate grooming .

5. All the Human Resource processes and initiatives launched in the last four years have been further reinforced and strengthened by taking them to the next level. As an endorsement of these efforts, the Company received certification on global platform from Great Place to Work institute.

6. Last year we made it to the list of TOP 50 “Dream Companies to work” at World HRD Congress. This year as well we have been recognized as Dream Company to work for in Chemical Sector, which is another feather in the cap.

This year was very fruitful and encouraging considering our various talent management initiatives, and Company''s efforts were recognized for our Talent Management initiatives at World HRD Congress 2017.

These global awards have reinforced Company''s belief of realizing Company''s vision of becoming one amongst the top four pigment producers in the World.

19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company has an ongoing familiarization Programme for Independent Directors with regard to their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company etc. The Company also has an ongoing programme where Directors in the course of meetings of the Board of Directors are given information about the operational and functional areas of the Company, business model as also developments in legal and regulatory areas which impact the working of the Company so as to enable them to discharge their roles, rights and responsibilities in the Company effectively. Details of the same are available on the website of the Companywww.sudarshan.com.

20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)ACT, 2013:

Your Company has Zero tolerance towards any action on the part of any one which may fall under the ambit of "Sexual Harassment" at work place, and is fully committed to uphold and maintain the dignity of every woman working with the Company. The Policy framed by the Company in this regard provides for protection against sexual harassment of women at the workplace and for prevention and redressal of such complaints within the framework of law. Details of the same are available on the website of the Company www.sudarshan.com.

No case of sexual harassment has been reported during the year under review.

21. AUDITORS:

In line with the provisions of Section 139 (2) (b) of the Companies Act, 2013, B.K.Khare & Co. Statutory Auditors hold office as Statutory Auditors of the Company up to the conclusion of the 66^th Annual General Meeting i.e. 10^th August, 2017.

The Board of Directors on the recommendation of the Audit Committee have approved the appointment of B S R& Associates, LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of 5 years from the conclusion of the ensuing 66^th AGM up to the conclusion of the 71^stAGM.

The Board recommends the appointment of B S R & Associates, LLP, Chartered Accountants as the Statutory Auditors of the Company.

22. COST AUDITOR:

As per Section 148 of the Companies Act, 2013, the Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors of the Company has, on recommendation of the Audit Committee, approved the appointment of Parkhi Limaye & Co., Cost Accountants, Pune as the Cost Auditor of the Company to conduct cost audits of “Agro Chemicals” and “Industrial Mixers” and cost records maintained by the Company for the year ending on 31^st March, 2018. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking ratification of the Members for the remuneration payable to Parkhi Limaye & Co., Cost Accountants, Pune is included at Item No. 6 of the notice convening the Annual General Meeting.

23. SECRETARIAL AUDITOR:

The Board of Directors had appointed Mr. Rajesh Karunakaran, Practicing Company Secretary, to conduct Secretarial Audit for the year under review.

The Secretarial Audit Report issued by Mr. Rajesh Karunakaran, Practicing Company Secretary for the year ended 31^st March, 2017 as required under Section 204 of the Companies Act, 2013 and Rules there under appears as Annexure VIII to the Directors'' Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark.

24. SUCCESSFUL COMMISSIONING OF COGEN PLANT AT ROHA:

Board takes immense pleasure in informing you that the Company has successfully commissioned the COGEN plant of 8.24 megawatt capacity at its Roha site. This will make the Company self-reliant in power as far as requirements of Roha factory is concerned .This is the biggest Cogen plant in the Konkan Industrial Belt.

The Board takes this opportunity to congratulate the entire team involved in the commissioning of this project within a record time of 12 months.

25. SUDHAMANTHAN PROJECT:

The Company has engaged the services of Renoir Consulting for a 30 week project in Operations function. Renoir is a worldwide leading Change Implementation Specialist who delivers operational and financial outcomes that are measurable and sustainable. The coverage of the project includes both the Roha and Mahad Plants as well as the Supply Chain and Purchase departments. The main purpose of the project is to develop and implement solutions, processes and industry best practices to improve operational efficiencies and foster a culture that can sustain these improvements over a longer period of time.

26. ENVIRONMENT, HEALTH, SAFETY(EHS) AND POLLUTION:

Environment, Health and Safety continues to be a major focus area for our Company in all its operations across the organization. As in earlier years, the Company maintains “Zero lost time accident at the workplace” as its long term strategic goal. There was no major accident during the year across the Organization. There was also no occupational health illness cases or major emergencies across the Organization. This has been achieved through highest commitment from the top management, supported by all levels of workforce across the Organization. Behavior Based Safety, Safety training, Process Safety Management, Hazard Identification and Rectification, Near miss reporting, Contractor Safety and Process Safety were the key focus areas. During the year in all the sites model “EHS” systems and practices were implemented by instilling various global safety practices including HAZOP, Risk Assessment, Layer of Protection Analysis (LOPA), Process Safety Management, Visual management, pre-start-up reviews and rigorous training to all employees and contract workers.

During the year, the Company continued to focus on Environment management by further strengthening the effluent treatment facility at Roha and Mahad. The Company is in the process of installing new technologies and facility in effluent treatment to further strengthen the Pollution abatement plan.

Utility management and energy conservation initiatives have been given renewed focus in all manufacturing units.

All units of our Company are certified for OHSAS-18001 and ISO-14001 and awarded Five Star rating from British Safety Council. Standards are regularly reviewed at various levels and systems aligned with the Company''s Process Management.

Product stewardship, transportation and warehouse safety continued to be strengthened by providing resources, standardization to match benchmark practices, training to drivers and warehouse workers for safe transportation, storage and loading / unloading and emergency plan for road accidents. As part of the same, Company has become member of “NICER GLOBE” an ICC initiative in coordination with major chemical industries.

The Company''s efforts and performance in the area of “EHS” have been recognized across the manufacturing units, through receipt of several awards.

Mahad unit has been able to sustain zero lost time accident free days for more than 1,000 days, which has been an major milestone achievement in the Company''s history.

27. RESEARCH AND DEVELOPMENT:

The Company recognizes the need to have well equipped R & D Facilities to meet customer requirements and developing cutting edge products. Members are aware that the Company has renovated its R & D facilities at Ambadvet (Sutarwadi), Pune and Roha, Dist. Raigad to match global standards.

The formal inauguration of the renovated R & D Centre was done on 18^th March, 2017 by Dr. R. A. Mashelkar

- Renowned Scientist and Padma Vibhushan and Dr. Abul Iqbal - Scientific Advisor, Technical Mentor of DPP Pigment. The Guest of Honour was Mr. Sunil Ramanand, Joint Police Commissioner, Pune.

The Company has spent approx. Rs. 163 million during the year under report on Research and Development. The Ministry of Science and Technology, New Delhi, on behalf of Government of India vide letter dated 1^st April, 2016 has recognized our in house R& D facilities for a further period of 3 years i.e. upto 31^st March,2019.

28. DISCLOSURES:

Indian Accounting Standards (IndAS)-IFRS Converged Standards:

The Ministry of Corporate Affairs vide its notification dated 16^th February, 2015 has notified the Companies (Indian Accounting Standard) Rules, 2015. Companies having a net worth of less than Rs. 500 Crores (as per the standalone financial statements as on 31^st March, 2014) are required to comply with Ind AS (Accounting standards converged with the International Financial Reporting Standards - IFRS) in the preparation of their financial statements for accounting periods beginning on or after 1^st April, 2017, with the comparatives for the periods ending 31^st March, 2017, or thereafter. In pursuance of the above notification, the Company and its subsidiaries will adopt Ind AS with effect from 1^st April, 2017. The implementation of Ind AS is a major change process for which the Company has established a project team and is dedicating considerable resources. The impact of the change on adoption of Ind AS on Company''s financials is being assessed.

Material changes and commitments if any, affecting the financial position of the Company:

There are no adverse material changes or commitments occurring after 31^st March, 2017 which may affect the financial position of the Company or may require disclosure.

Annual Accounts of Subsidiary Companies:

The Annual Accounts of the Subsidiary Companies for the year ended 31^st March, 2017 will be made available to any shareholder of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid subsidiary companies and the related information will also be made available to the investors seeking such information at any point of time. The salient features of Financial Statements of Subsidiary Companies is given in Annexure VII of this report.

The Company as of now does not have a material subsidiary. In conformity with the provisions of Listing Regulations, 2015, the Board has formulated a policy for determining “material subsidiaries”. The Policy can be accessed from the Company''s website www.sudarshan.com.

Consolidated Financial Statements:

In accordance with the requirements of Accounting Standard (AS) 21, the Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Pursuant to the provisions of Section 177 (9) and (10) of the Companies Act, 2013 read with Rule 7 of the Company (Meetings of the Board and its powers) Rules, 2014 as amended, a vigil mechanism for directors and employees to report genuine concerns has been established. The policy on vigil mechanism and whistle blower policy can be accessed from the Company''s website www.sudarshan.com. The Company affirms that no Director or Employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Policies under SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

New Policies mandated under SEBI Listing Regulations 2015 have been adopted by the Board and can be accessed from the Company''s website - www.sudarshan.com. Some of the existing policies have also been revised on account of the changes imposed under SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

Annual Return:

The extract of the Annual Return of the Company in Form No. MGT -9 as on 31^st March, 2017 as prescribed under Companies (Management and Administration) Rules, 2014 is given in Annexure V to this report.

Meetings of the Board:

During the Financial Year 2016-17, five Board Meetings were held, the details of which are given under the Corporate Governance Report.

Particulars of loans, guarantees or investments under Section 186:

The particulars of loans advanced, guarantees given or investments made under Section 186 form part of the Notes to the Financial Statements provided in the Annual Report. All such loans, guarantees or investments made during the Financial Year 2016-17, with requisite approvals, wherever applicable, were entered into in the ordinary course of business and comply with arm''s length principle.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report.

Particulars of Employees and Related Disclosures:

The requisite information pursuant to Section 197(12) and Rule 5(2)(i)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with regard to the details of employees drawing remuneration of Rs. 0.85 Million per month or Rs. 10.20 Million per annum is attached as Annexure II to this report.

Significant and Material Orders passed by the Regulators or Courts:

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

29. RECOGNITION:

A. The Board of Directors is pleased to announce that the Company has been selected for the following awards from Dyestuffs Manufacturers'' Association of India (DMAI) during the year 2016-17 as detailed below:

a. Award in recognition of excellent performance in the field of exports of Pigments by a Large Scale Unit.

b. Second Award for the outstanding performance in Domestic Market by a Large Scale Unit.

c. First Award in recognition of excellent performance in Pollution Control by a Large Scale Unit.

d. Second Award in recognition of excellent performance in Safety & Hazards Control by a Large Scale Unit.

These awards signify Company''s commitment towards Environment, Health, Safety and significant contribution in Exports.

B. The Board of Directors is also pleased to announced the receipt of following awards from WORLD HRD Congress for

a. Great Place to Work - We are glad to inform that we have been declared as a Great Place to Work.

b. Last year we made it to the list of TOP 50 “Dream Companies to work” at World HRD Congress. This year as well we have been recognized as Dream Company to work for in Chemical Sector, which is another feather in the cap.

c. This year Company has also been recognized for best Talent Management initiatives at World HRD Congress, held at Taj Land Ends, Mumbai in February 2017.

30. OUTLOOK FOR THE FUTURE:

The global economic climate continues to be volatile, uncertain and prone to geo-political risks. Weak consumer sentiment and low commodity prices are expected to affect global growth adversely. For India, 2017-18 will be a key year for consolidating its recovery and accelerating its growth. Despite challenging global headwinds, a stable macro performance will help India to remain an attractive investment destination. However, execution of the reforms agenda and commencing the investment cycle will be key determinants of India''s economic performance on a long term basis. While currently inflation is expected to be volatile, upside pressures on inflation exist from the vagaries of monsoon or due to competitive devaluation of currencies. Roll out of Goods and Services Tax regime from July 2017 is a key need of the hour to remove cascading incidence of tax, simplifying tax compliance environment and enhancing ease of doing business.

The Company''s overseas subsidiaries in The Netherlands and North America are fully geared up and will play a major role in achieving quantum growth in Sales and Profitability. The setting up of the China and Mexico subsidiaries will also help the Company consolidate its position further as a reliable global player in the Pigments market.

The Company aims to closely associate with its Customers and increase operational and technical excellence, while pruning costs. Research and Development will also play a bigger role in improving the competitiveness through innovations.

Agro Chemicals Division is also expected to do well. However, much depends on the monsoon which has played truant in the past. As per IMD reports published by the Central Government. The monsoon is expected to be moderate.

Barring any unforeseen circumstances, the current year''s prospects look favourable.

31. APPRECIATION:

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited, HSBC Limited, Export Import Bank of India, State Bank of India, Dubai and IDFC Bank Limited for their co-operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI and Pragati Leadership. The Board is also grateful to the Members, Customers, Suppliers, Business Associates and Employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

P.R.RATHI

Pune : 26^th May, 2017 CHAIRMAN AND MANAGING DIRECTOR

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Mar 31, 2016

The Directors are pleased to present the 65th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2016.

1. FINANCIAL HIGHLIGHTS:

The Company''s financial performance for the year ended 31st March, 2016 is summarized below:

Particulars 2015-16 2014-15 (Rupees in (Rupees in Million) Million)

Total Revenue 12,201.38 11,131.77

Earnings Before Interest, Tax, Depreciation and 1,686.28 1,340.41 Amortization (EBITDA)

Less: Interest 263.50 346.67

Less: Depreciation 437.91 397.53

Less: Provision for Taxation 268.58 172.14

Profit After Tax 716.29 424.07

Add: Surplus brought forward 942.92 724.67

Net Profit available for appropriation 1,659.21 1,148.74 Appropriations

1. General Reserve 100.00 60.00

2. Interim Dividend 125% (Rs.2.50 per equity share) 173.07 -

3. Final Dividend (Proposed) 25% (Rs.0.50 per equity share) 34.61 121.15

(Previous Year dividend paid @ Rs.1.75 per share on a face value of Rs. 21- per share i.e. 87.50%)

4. Tax on Dividend 42.29 24.67

TOTAL 349.97 205.82

Surplus to be carried forward 1,309.24 942.92

2. THE YEAR IN RETROSPECT:

During the year under review, subdued business sentiments, combined with difficult market conditions and slowdown in global demand, posed challenges. The Directors are pleased to inform that in spite of unfavourable conditions, the Company has registered better performance in terms of growth in sales and much better performance in terms of growth in profits as compared to the previous year.

(A) FINANCIALS:

Total Revenue from operations for the year ended 31st March, 2016 aggregated to Rs. 12,201 million as against Rs. 11,132 million achieved during the previous year. Profit after tax for the year ended 31st March, 2016 was Rs. 716 million as against Rs. 424 million earned during the previous year.

Pigment sales increased from Rs. 9,578 million in the previous year to Rs. 10,656 million in the year under review. Profits for the Pigment Division for the year under review amounted to Rs. 1,637 million as compared to Rs. 1,167 million of the previous year.

Agro Sales for the year ended 31st March, 2016 amounted to Rs. 1,163 million as against Rs. 1,155 million achieved during the previous year. Profits for the Agro Division for the year under review amounted to Rs. 63 million, as against Rs.77 million for the previous year.

Sales from other operations for the year ended 31st March, 2016, include sales generated from the Industrial Mixing business of the Company. As compared to the previous year, current year''s operating margins have improved.

The Company''s Indian Subsidiaries have performed well. RIECO Industries Ltd. has registered an improvement in the performance as compared to the preceding financial year. Prescient Color Ltd. continues to register good growth. The Company''s overseas subsidiaries in the Netherlands and

North America continue to record improved performance.

On a Consolidated basis, the Company''s Total Revenues for the year ended 31st March, 2016 stood at Rs. 14,234 Million, up by 15% as compared to Rs. 12,418 Million in Financial Year 2014-15. Net Profit Before Tax after consolidation grew by 38% to Rs. 990 Million in Financial Year 2015-16 as compared to Rs. 716 Million in Financial Year2014-15.

(B) EXPORTS:

The Company''s overseas subsidiaries have entered a consolidation phase and will play a crucial role in positioning the Company as a dominant player in the Global Pigment Industry. Revenue from Pigment exports for the year ended 31st March, 2016 amounted to Rs. 5,176 million as against Rs. 4,612 million for the previous year thereby recording a growth of 12%.

3. DIVIDEND:

During the year, the Company had declared and paid an Interim Dividend of Rs. 2.50 (125%) per Equity share (of Rs. 2 each). Your directors are pleased to recommend a Final Dividend of Rs. 0.50 paise (25%) per Equity share (of Rs. 2 each) for the Financial Year 2015-16. The Interim Dividend along with recommended Final Dividend aggregates to a total Dividend of Rs. 3.00 (150%) per Equity share (of Rs. 2 each) for the Financial Year 2015-16 as compared to the total Dividend of Rs. 1.75 (87.50 %) per Equity share (of Rs. 2 each) for the Financial Year 2014-15. The total amount of Dividend pay-out for the year would be Rs. 249.97 Million (Previous Year: Rs. 145.81 Million).

4. FIXED DEPOSITS:

The Company has accepted fixed deposits during the year under review. For details, please refer to Annexure I. Unclaimed deposits to the extent of Rs. 0.67 Million were outstanding as on 31st March, 2016.

5. INCORPORATION OF WHOLLY OWNED SUBSIDIARY (WOS) IN CHINA:

The Company is in the process of incorporating a Wholly Owned Subsidiary (WOS) in China primarily for sourcing raw materials locally at competitive prices. Further, the WOS will also be in a position to keep stocks of finished products and raise the invoices. The WOS will also enable the Company to service key customers in the Asia Pacific region.

6. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with Section 134 of the Companies Act, 2013 the Directors based on the representation received from the Management, confirm that:

i. in the preparation of accounts for the Financial Year ended 31st March, 2016, the applicable accounting standards have been followed, with no material departures;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of Financial Year and of the Statement of Profit and Loss of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. CORPORATE GOVERNANCE:

Members are aware that the Company has always strived to maintain applicable standards of good corporate governance and the commitment to good corporate governance is embodied in its vision, mission and corporate values. As a means to realise its goal of sustainable value creation, the Company has adopted performance excellence as part of its culture and its corporate values to foster a shared and common set of behaviour amongst all the employees.

Members will be pleased to note that the Company has complied with the mandatory requirements of Corporate Governance set out under the SEBI (Listing Obligations and Disclosure Requirements),

Regulations, 2015 which has superseded the requirements of Corporate Governance laid down in erstwhile Clause 49 of the Listing Agreement.

A detailed report on Corporate Governance, duly certified by the Statutory Auditors of the Company, B. K. Khare &Co., Chartered Accountants, Mumbai is appearing separately in the Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

9. CONTRACTS ANDARRANGEMENTS WITH RELATED PARTIES:

All related party transactions that were entered into during the Financial Year 2015-16 were on an arm''s length basis and were in the ordinary course of the business. Apart from the Promoters interest in the continuing appointment of the four Rathi Brothers Companies as selling agents of the Company, which were prior approved by the members in terms of Regulation 23oftheSEBI Listing Regulations, 2015, there are no other materially significant related party transactions entered into by the Company with Promoters or Independent Directors, Key Managerial Personnel, Senior Management and / or their relatives which may have potential conflict with the interests of the Company at large.

All related party transactions are presented to the Audit Committee for their prior approval. Subsequent modifications of related party transactions are also placed before the Audit Committee for its approval. Omnibus approval is obtained for the transactions which can be foreseen and repetitive in nature. A statement of all related party transactions is placed before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions.

The related party transactions policy is uploaded on the Company''s website-www.sudarshan.com.

The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in Notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure VI to this report.

10. CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility (CSR) activities of the Company are in accordance with Schedule VII to the Companies Act, 2013. All CSR activities of the Company are carried out under the aegis of "SUDHA" (Sudarshan''s Holistic Aspiration). As a responsible corporate citizen, the Company continues its efforts to meet, among others, the Environmental, Health & Safety expectations of the society at large.

SUDHA is envisaged as a movement to involve the Company and the community in which it operates to create better living standards and safeguard the environment. As a part of CSR, SUDHA has been engaged in various social projects, embracing the people that live in the vicinity of its manufacturing and other facilities.

The Company''s grand vision is "Growing together" with all its stakeholders in a manner that is spiritually fulfilling, socially just and environmentally sustainable. SUDHA contributes to this vision by ensuring that all its initiatives are driven with this perspective in mind. SUDHA''s vision is ''Aspiring wholesome sustainable growth for women and children of communities around the Company''s plants'' and Mission is ''Reach out to communities by engaging in projects related to Livelihood, Health, Education & Community Development''.

Various projects that SUDHA is working on are Livelihood enhancement Project; Employment Enhancing Vocational Skill Project; Health Improvement Project; Promotion of Education; Community Development Project; Environment Sustainability Project etc. Through all these initiatives, SUDHA has touched the lives of thousands of people living around the Company''s facilities.

The Board is pleased to inform that during the year the Company has spent an aggregate amount of Rs.132 Lacs which includes mandatory spend for the year under review and an unspent amount of Rs. 35 Lacs carried forward from the previous Financial Year 2014-15.

The Annual Report on CSR activities are annexed as Annexure IV to this report.

11. RISK MANAGEMENT:

The Company''s approach to Risk Management is designed to clarify risk levels and encourage entrepreneurial behaviour throughout the organisation. The Company''s risk management policy broadly covers measures to safeguard the Company''s property, interests, and interest of all stakeholders; laying down a framework for identification, measurement, evaluation, mitigation & reporting of various risks; evolving culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects, which the business and operations of the Company are exposed to; balance between the cost of managing risk and the anticipated benefits; creating awareness among the employees to assess risks on a continuous basis and develop risk mitigation plans in the interest of the Company and not the least to provide a system for setting up priorities when there are competing demands on limited resources

Adequate measures have been adopted by the Company to combat various risks including business risks (competition, consumer preferences, technology changes), financial risks (cost, credit, liquidity, foreign exchange) hazard risks (environment, safety and health), operational risks (system, process, people) and regulatory and compliance risks. The Company has adopted a focused approach towards risk management in the form of a corporate insurance program which has the goal of optimizing the financing of insurable risks by using a combination of risk retention and risk transfer techniques.

12. REMUNERATION POLICY:

The Remuneration policy of the Company covering the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided separately as Annexure III.

13. SUCCESSION POLICY:

The Company has a Succession Policy approved by the Board of Directors with the main objective to ensure the orderly identification and selection of new Directors, Working Directors or Senior Management in the event of any vacancy, whether such vacancy exists by reason of an anticipated retirement, re-organization, unanticipated departure, the expansion of the size of the Company, or otherwise. For full details, members are requested to refer to the Company''s website-www.sudarshan.com

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. P. P. Chhabria, Independent Director on the Board of Directors of the Company expired on 5th May, 2016 at Pune. The Board expresses its heartfelt condolences to the members of the bereaved family.

Mr. P. P. Chhabria, joined the Board of Directors of the Company on 15th March, 1997. He was also the Chairman of the Stakeholders Relationship Committee and Nomination and Remuneration Committee. He had a long association with the Company. The Board places on record its appreciation of the invaluable guidance and advise given by him during his tenure as Director of the Company.

Mr. P. P. Chhabria, was the Founder of the Finolex Group of Companies. He was a great visionary and has left a tremendous legacy behind him. He also contributed immensely in the field of education and philanthropy.

In terms of Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. N. J. Rathi, Director will retire at the 65th Annual General Meeting and being eligible offers himself for reappointment. The Board of Directors recommend the reappointment of Mr. N. J. Rathi, as a Director of the Company liable to retire by rotation.

Mr. R. B. Rathi , Deputy Managing Director of the Company is proposed to be appointed as a Director not liable to retire by rotation. The Board of Directors recommend the reappointment of Mr. R. B. Rathi, Deputy Managing Director as a Director of the Company not liable to retire by rotation.

Key Managerial Personnel

In accordance with the provisions of Section 203 of the Companies Act, 2013, the following are Key Managerial Personnel of the Company:

a. Mr. P. R. Rathi, Chairman and Managing Director

b. Mr. R. B. Rathi, Dy. Managing Director

c. Mr. V. V. Thakur, Dy. General Manager (Acting CFO)

d. Mr. P. S. Raghavan, Company Secretary Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation16oftheSEBI Listing Regulations, 2015.

Annual Evaluation of Board of Directors, its Committees and Individual Directors

During the year, the Board has made an evaluation of its own performance and that of its Committees and individual Directors, including the Chairman of the Board. At a separate meeting of the Independent Directors held on 28th March, 2016, the performance evaluation of the Chairman, Non-independent Directors and the Board of Directors was carried out by the Independent Directors who also reviewed the adequacy and flow of information between the Company Management and the Board. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall commitment and sense of duty.

The Board has also adopted a Board Diversity Policy. The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company''s website www.sudarshan.com

15. GREEN INITIATIVE:

Members are aware that the Company had started a sustainability initiative with the aim of going green and minimizing impact on the environment. Like the previous year, Electronic copies of the Annual Report 2015- 16 and Notice of the 65th AGM are being sent to all Members whose email addresses are registered with the Company / Depository Participant(s). For Members who have not registered their email addresses, physical copies of the Annual Report 2015-16 and the Notice of the 65th AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

The Company is providing remote e-voting facility to all Members to enable them to cast their votes electronically on all resolutions set forth in the Notice of the AGM. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2015 read with Regulation 44 of the SEBI Listing Regulations, 2015. The instructions for remote e-voting are provided in the Notice of the AGM.

16. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at all the plants, GHO Pune and at R&D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

17. HUMAN RESOURCES:

Human resources continue to bean invaluable and intangible asset and key success factor for the Company to grow and sustain it''s market position in a highly competitive and challenging environment. The Company firmly believes that people are the pivotal force behind the growth and excellence in business operations. The overall performance and the market position the Company enjoys are the result of the combined strength of it''s people. The Company during the year, paid special attention to developmental activities comprising of sharpening of skills and abilities, developing academic and professional knowledge and cultivating appropriate behavioural skill sets, such as improving interpersonal relations, team building abilities, effective communication and presentation skills. Focus on developing leadership skills and building talent for the future and the process of improving organizational and human capability through competency mapping of managerial positions in all areas of the Company''s operations, continued as a major initiative

During the year under review several human capital enhancing measures were undertaken:

1. An Organisation Development intervention was taken up called ''Living Sudarshan Culture''which was a Vision, Mission, Values cascade within the organisation. Workshops were conducted for the same for Employees in English and for Workers in Marathi. Value stories are being shared on how people are living the organisation values at work. Also the Leadership level 1 and 2 went through a 360 degree feedback on values, planned on half yearly basis, on how well they are adopting these values at work. Based on the feedback received Company also rewarded the employees scoring the highest on each of the values at the Annual Communication Meet held at Roha on 8th April 2016.

2. To meet organisational challenges, Company is looking at building capabilities at the Leadership Levels 1 & 2 and have taken up an initiative of Leadership Intervention for them for a period of 18 months. For Level 1 leaders the process has started and the reports have been generated based on data collected from various sources. Also Individual Development Plans have been made and Coaching sessions have started. For L2 level leadership intervention initiatives will be taken forward this year onwards.

3. Communication of Company performance and objectives to employees at all levels by the top management has become a culture at the Company with SUDA CONNECT being celebrated for the third year in succession. The event also provided an opportunity to reward exemplary performances at individual levels based on meritocracy. Employees with long services in the Company were also felicitated during this occasion. Employees demonstrated their talents through a cultural programme. The meet established a perfect blend of communication and also celebrations.

4. Company also took out ''Fit Sudarshan'' initiative to the next level by adding ''Run Sudarshan'' program to it. For this Company tied up with professional coach from Run India Run for training in running marathon. Company organised ''Roha Minithon 2015'' on 1st November, 2015, which was a 10km run at Roha. for all employees and their spouses and children. It was a one of its kind event in Roha, which saw participation from employees all over the globe. This initiative was very well appreciated by everyone and the event was a grand success.

5. Under Training & Development, the Company has initiated two innovative programs during the year. One was the Business English Communication through the British Council, which was for the Technical Service team members interfacing with customers regularly. The other one was Basic Business Management Skills (BBMS) by The Strategy Academy with an objective of improving decision making skills among members in operations, from a business perspective.

6. All the Human Resource processes and initiatives launched in the last four years are being reinforced and strengthened by taking them to the next level. As an endorsement of these efforts, the Company received four accolades at "World HRD Congress 2016" as detailed below:

1. TOP 50 "Dream Companies to work" and was the only one selected from the Chemical Industry;

2. "Managing Health at Work" for our Fit Sudarshan initiative;

3. "Best Organisation Development Programme (OD)" for Living Sudarshan Culture initiative;

4. "Best Strategy inline with Business" for our Performance Management System;

These global awards have reinforced Company''s belief of realizing it''s vision to be amongst the top four pigment producers in the World.

18. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company has an ongoing familiarisation programme for Independent Directors with regard to their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business models of the Company etc. The Company also has an ongoing programme where Directors in the course of meetings of the Board of Directors are given information about the operations and functional areas of the Company, business model and also developments in legal and regulatory areas which impact the working of the Company so as to enable them to discharge their roles, rights and responsibilities in the Company effectively. Details of the same are available on the website of the Company-www.sudarshan.com.

19. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance towards any action on the part of any one which may fall under the ambit of "Sexual Harassment" at work place and is fully committed to uphold and maintain the dignity of every woman working with the Company. The Policy framed by the Company in this regard provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints within the framework of law. Details of the same are available on the website of the Company-www.sudarshan.com.

No cases of sexual harassment have been reported during the year under review.

20. AUDITORS:

B.K. Khare & Co., Statutory Auditors of the Company are due to retire at the ensuing 65th Annual General Meeting and are eligible for reappointment. Members are requested to consider reappointing them and to authorise the Board of Directors to fix their remuneration. The Company has received confirmation regarding their consent and eligibility under Section 141 of the Companies Act, 2013 for reappointment as Statutory Auditors of the Company.

21. COST AUDITOR:

As per Section 148 of the Companies Act, 2013, the Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors of the Company has, on recommendation of the Audit Committee, approved the appointment of Parkhi Limaye &Co., Cost Accountants, Pune, as the Cost Auditor of the Company to conduct cost audit of''Specified Products'' and cost records maintained by the Company for the year ending on 31st March, 2017. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking ratification of the Members for the remuneration payable to Parkhi Limaye & Co., Cost Accountants, Pune is included at Item No. 6 of the notice convening the Annual General Meeting.

22. SECRETARIAL AUDITOR:

The Board of Directors had appointed Mr. Rajesh Karunakaran, Practicing Company Secretary, to conduct Secretarial Audit for the year under review.

The Secretarial Audit Report issued by Mr. Rajesh Karunakaran, Practicing Company Secretary for the year ended 31st March, 2016, as required under Section 204 of the Companies Act, 2013 and Rules there under appears as Annexure VIII to the Directors'' Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark.

23. ENVIRONMENT, HEALTH, SAFETY (EHS)AND POLLUTION:

Environment, Health and Safety continues to be a major focus area for our Company in all its operations across the organization. As in earlier years, the Company maintains "Zero lost time accident at the workplace" as its long term strategic goal. The Company strives and is able to maintain zero major incident, emergencies, occupational health illness cases during the year across the organization. This has been achieved through highest commitment from the top management, supported by all levels of workforce across the Organization. Behaviour Based Safety, Safety training, Process Safety Management, Hazard Identification and Rectification, Near miss reporting and Contractor Safety were the key focus areas. During the year in all the sites model "EHS" systems and practices were implemented including HAZOP, Risk Assessment, Layer of Protection Analysis (LOPA), Process Safety Management, Visual management, pre- start-up reviews and rigorous training to all employees and contract workers on regular basis.

During the year, the Company continued to focus on Environment management by further strengthening the pollution control facilities at Roha and Mahad. The Company always believes in exploring new technologies in effluent treatment, environment management to further strengthen the Pollution abatement Plan. The focus is always to go beyond the statutory requirement and conserve the natural resources and environment. Utility management and energy conservation initiatives have been given renewed focus in all manufacturing units.

All units of the Company are certified for OHSAS-18001 and ISO-14001 and awarded rating of five star from British Safety Council. Standards are regularly reviewed at various levels and systems are aligned with the Company''s Process Management.

Product stewardship, transportation and warehouse safety continued to be strengthened by providing resources, standardization to match benchmark practices, training to drivers and warehouse workers for safe transportation, storage and loading / unloading and emergency plan for road accidents. As part of the same, Company is associated with "NICER GLOBE" an ICC initiative in coordination with major chemical industries.

The Company''s efforts and performance in the area of "EHS" have been recognized across the manufacturing units, through receipt of several awards.

24. RESEARCH AND DEVELOPMENT:

The Company recognizes the need to have well equipped R & D Facilities to meet customer requirements and developing cutting edge products. Members are aware that the Company has spruced up its R & D facilities at Ambadvet (Sutarwadi), Taluka Mulshi, Dist. Pune and Roha, Dist. Raigad. The Company has spent approx. Rs. 99 million during the year under report on research and development. The Ministry of Science and Technology, New Delhi, on behalf of Government of India vide letter dated 1st April, 2016 has recognized our in house R & D facilities for a further period of 3 years i.e. upto 31st March, 2019.

25. DISCLOSURES:

Annual Accounts of Subsidiary Companies:

The Annual Accounts of the Subsidiary Companies for the year ended 31st March, 2016 will be made available to any shareholder of the Company on request and will also be available for inspection at the registered office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid subsidiary companies and the related information will also be made available to the investors seeking such information at any point of time. The salient features of Financial Statements of Subsidiary Companies is given in Annexure VII of this report.

The Company as of now does not have a material subsidiary . In conformity with the provisions of SEBI Listing Regulations, 2015,the Board has formulated a policy for determining "material subsidiaries". The Policy can be accessed from the Company''s website-www.sudarshan.com.

Consolidated Financial Statements:

In accordance with the requirements of Accounting Standard (AS) 21, the Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report.

Vigil Mechanism / Whistle Blower Policy:

Pursuant to the provisions of Section 177 (9) and (10) of the Companies Act, 2013, read with rule 7 of the Companies (Meetings of the Board and its powers) Rules, 2014 as amended, a vigil mechanism for directors and employees to report genuine concerns has been established. The policy on vigil mechanism and whistle blower policy can be accessed from the Company''s website - www.sudarshan.com. The Company affirms that no Director or Employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

Policies under SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

New Policies mandated under SEBI Listing Regulations 2015 have been adopted by the Board and can be accessed from the Company''s website - www.sudarshan.com. Some of the existing policies have also been revised on account of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

Annual Return:

The extract of the Annual Return of the Company in Form No. MGT - 9 as on 31st March, 2016 as prescribed under Companies (Management & Administration) Rules, 2014 is given in Annexure V to this report.

Meetings of the Board:

During the Financial Year 2015-16, eight Board Meetings were held, the details of which are detailed under the Corporate Governance Report.

Particulars of loans, guarantees or investments under Section 186:

The particulars of loans advanced, guarantees given or investments made under Section 186 form part of the Notes to Financial Statements provided in the Annual Report. All such Loans, guarantees or investments made during the Financial Year 2015-16 with requisite approvals wherever applicable were entered into in the ordinary course of business and comply with the arm''s length principle.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report.

Particulars of Employees and Related Disclosures:

The requisite information pursuant to Section 197(12) and Rule 5(2)(i) Of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with regard to the details of employees drawing remuneration of Rs. 0.5 million per month or Rs. 6.0 million per annum is attached as Annexure II to this report.

Significant and Material Orders passed by the Regulators or Courts:

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

26. RECOGNITION:

The Board of Directors is pleased to announce that the Company has received the following awards during the year under review:

A. Dyestuffs Manufacturers''Association of India (DMAI) award for the Financial Year 2014- 2015for-

a. Excellent performance in pollution control for large Scale Unit

b. Excellent performance in Safety & Hazards control (Second Award for large scale unit)

c. Excellent performance in exports of Pigments (Award for large scale Unit)

These awards signify Company''s commitment towards Environment, Health, Safety and significant contribution in Exports.

B. WORLD HRD

Congress for-

1. Dream Company to Work for - This is a very prestigious award. About 400 companies had participated and the Company is listed as one among the top 50 companies in India More so Sudarshan is the only Chemical company on the top 50 list.

2. Global Excellence award - Managing Health at Work-For Fit Sudarshan initiative.

3. Best Organisational Development Programme - Living Sudarshan Culture - For Training and Development Congress for our strategic initiative this year on the Vision Mission Values Cascade which was towards creating unique Sudarshan Culture

4. Best HR strategy in line with Business - Appreciative Conversation - Performance Management System - For delivering towards business objective where Company showcased the Performance Management System where the base philosophy is of Appreciative Conversations.

27. OUTLOOK FORTHE FUTURE:

The Financial Year 2016-17 is expected to be another challenging year. Indications are that the global economy will grow as compared to the Previous Year. With the changed business scenario and promising signs of revival in demand and growth, the Indian Economy is expected to do better. The Company''s overseas subsidiaries in The Netherlands and North America are fully geared up and will play a major role in achieving quantum growth in Sales and Profitability. The setting up ofthe China subsidiary will also enable the Company to achieve economies of direct sourcing of raw material as well as invoicing of finished products to customers in the Asia Pacific region.

The Company aims to closely associate with its Customers and increase operational and technical excellence, while pruning costs. Research and Development will also play a bigger role in improving the competitiveness through innovations.

Agro Chemicals Division is also expected to do well. However, much depends on the monsoon which has played truant in the past. As per IMD reports published by the Central Govt, the monsoon is expected to be good during F.Y. 2016-17.

Barring any unforeseen circumstances, the current year''s prospects Look favourable.

29. APPRECIATION:

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited, HSBC Limited, Export Import Bank of India and State Bank of India, Dubai for their co-operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI and Pragati Leadership. The Board is also grateful to the Members, Customers, Suppliers, Business Associates and Employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED





P.R.RATHI

Pune : 27th May, 2016 CHAIRMAN AND MANAGING DIRECTOR

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Mar 31, 2015

Dear Members,

The Directors are pleased to present the 64th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015.

1. FINANCIAL HIGHLIGHTS:

The Company''s financial performance for the year ended March 31, 2015 is summarized below:

Particulars 2014-2015 2013-2014 (Rupees in (Rupees in million) million)

Total Revenue 11,113.23 10,313.79

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA ) 1,321.87 1,277.76

Less : Interest 328.13 375.97

Less : Depreciation 397.53 353.51

Less : Provision for Taxation 172.14 204.10

Profit after Tax 424.07 344.18

Add : Surplus brought forward 724.67 561.98

Net Profit available for appropriation 1,148.74 906.16

Appropriations

(1) General Reserve 60.00 60.00

(2) Dividend proposed @ 1.75 per share on the face value of Rs 2 per 121.15 103.84 equity share ( 87.50 % ) (previous year dividend paid @ 150 % on the face value of Rs. 10 per equity share)

(3) Tax on Dividend 24.67 17.65

Total 205.82 181.49

Surplus to be carried forward 942.92 724.67

2. THE YEAR IN RETROSPECT:

(A) SALES:

Total Revenue from operations for the year ended 31st March, 2015 aggregated to Rs. 11,113 million as against Rs. 10,314 million achieved during the previous year. Profit after tax for the year ended 31st March, 2015 was Rs.424 million as against Rs. 344 million earned during the previous year.

Pigment sales increased from Rs. 9,125 million in the previous year to Rs. 9,578 million in the year under review. Profits for the Pigment Division for the year under review amounted to Rs. 1,167 million as compared to Rs. 1,058 million of the previous year.

Agro Sales for the year ended 31st March, 2015 amounted to Rs. 1,155 million as against Rs. 1,100 million achieved during the previous year. Profits for the Agro Division for the year under review amounted to Rs. 77 million, which when compared, remained the same as in the previous year.

The results of the Company for the year under review viewed in the background of adverse macro economic conditions and negative business sentiments are nevertheless considered satisfactory.

(B) EXPORTS:

The Company''s overseas subsidiaries in Netherlands and North America set up with the objective of marketing and selling Pigments continue to record improved performance. Revenue from pigment exports for the year ended 31st March, 2015 amounted to Rs. 4,602 million as against Rs. 4,380 million for the previous year.

3. SUB DIVISION OF EQUITY SHARES AND ISSUE OF BONUS SHARES:

As a means to reward its Members, the Board of Directors in its meeting held on 9th August, 2014 recommended the sub division of Equity Shares of the Company from Rs. 10 each to Rs. 2 each along with issue of Bonus Shares in the ratio of 1:1. Post sub division of the equity shares and issue of bonus shares, the paid-up capital has increased to Rs. 138,454,500 consisting of 69,227,250 equity shares of Rs. 2 each.

4. DIVIDEND:

Considering the overall performance of the Company, the Directors recommend, subject to approval of the Members, a dividend of Rs. 1.75 per share on a face value of Rs. 2 (87.50 % ) for the year ended 31st March, 2015. The total outgo on account of dividend @ 87.50% and dividend distribution tax @ 20.36% will be Rs. 145.81 million for the year under review.

The dividend will be paid to Members whose names appear in the Register of Members as on 14th August, 2015 and in respect of shares held in dematerialized form, it will be paid to Members whose names are furnished by the National Securities Depository Limited and Central Depository (Services) India Limited, as beneficial owners as on that date.

5. FIXED DEPOSITS:

Your Company has accepted Fixed Deposits from Members and Public deposits after complying with relevant provisions of the Companies Act, 2013 . All prior deposits accepted from Members and Public under the erstwhile provisions of the Companies Act , 1956 have been repaid before the statutory deadline of 31st March, 2015.For more information on Deposits , please refer to the Annexure I of the Directors Report.

6. NEW BUSINESS OPPORTUNITIES :

(A) PURCHASE OF INDUSTRIAL MIXING SOLUTIONS BUSINESS OF RATHI VESSELS AND SYSTEMS PRIVATE LIMITED

Members may be aware that the Company has been using Mixers since inception for mixing of various Pigment preparations. These Mixers were sourced from Rathi Mixers Private Limited and thereafter from Rathi Vessels and Systems Private Limited. Considering the fact that there is synergy in terms of managerial resources, common customers and good potential of scale up, the Board of Directors have given their consent to purchase the Industrial Mixing Solutions Business of Rathi Vessels and Systems Private Limited. The purchase is effective from 1st October, 2014 and the transaction was completed on 30th March, 2015. Presently, the business integration process is going on and barring unforeseen circumstances, the expected benefits will be reflected in the results of the ensuing years.

(B) PURCHASE OF SHARES CONSISTING OF THE ENTIRE PAID UP SHARE CAPITAL OF RIECO INDUSTRIES LIMITED :

RIECO Industries Limited is, among others, into the manufacturing of size reduction equipments, pollution control equipment. Considering the fact that there is synergy in terms of managerial resources and good potential of scale up, the Board of Directors based on an assessment of the business potential of RIECO Industries Limited, have given their consent to purchase shares consisting of the entire paid-up share capital of the Company. The transaction was closed on 10th February, 2015, effectively making RIECO Industries Limited a Wholly-Owned Subsidiary of the Company.

It is expected that the strategic purchases or investments made by the Company will enhance stakeholders'' value in the long run.

7. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with Section 134 of the Companies Act, 2013 the Directors based on the representation received from the management, confirm that:

(i) in the preparation of accounts for the Financial Year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of Financial Year and of the Statement of Profit and Loss of the Company for that period;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding 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;

(v) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

8. CORPORATE GOVERNANCE:

Your Company is committed to maintain high standards of Corporate Governance keeping in mind the requirements and the aspirations of various stakeholders. It is the endeavour of the Board of Directors and the executive management of your Company to ensure that actions are always based on principles of responsible corporate management. The Board of Directors is pleased to inform its Members that it has complied with the mandatory requirements of corporate governance set out by the Securities and Exchange Board of India.

A detailed report on Corporate Governance , duly certified by the Statutory Auditors of the Company B.K. Khare & Co., Chartered Accountants, Mumbai is appearing separately in the Annual Report.

9. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis covering a wide range of issues relating to industry trends, Company Performance, Business and Operations is given separately in the Annual Report.

10. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements made with related parties pursuant to Section 188 is covered in notes to the Financial Statements and material contracts / arrangements made with related parties is given in Form AOC-2 which is attached as Annexure VI to this report. All related party transactions entered into during the Financial Year 2014-15 were in the ordinary course of business of the Company and on arm''s length basis. Further all such transactions were scrutinized by the Audit Committee to ensure that they are in the overall interests of the Company. The above contracts and arrangements also includes transactions of Non Executive Directors with the Company.

The policy on related party transactions as approved by the Board of Directors can be accessed from the Company''s website -www.sudarshan.com

11. CORPORATE SOCIAL RESPONSIBILITY:

As per the Companies Act, 2013, all companies having a net worth of Rs. 500 Crore or more, or a turnover of Rs. 1,000 Crore or more or a net profit of Rs. 5 Crore or more during any Financial Year will be required to constitute a Corporate Social Responsibility Committee (''CSR Committee'') of the Board of Directors comprising three or more directors, at least one of whom shall be an independent director.

Accordingly, Board has constituted a CSR Committee comprising Mrs. Rati F.Forbes, Independent Director as the Chairperson with Mr.P.R.Rathi and Mr.R.B.Rathi, Directors as its Members. The CSR Committee is responsible for formulating and monitoring the CSR policy of the Company. The CSR Committee has adopted a policy that intends to :

- Strive for economic development that positively impacts the society;

- Be responsible for the corporation''s actions and encourage a positive impact through its activities on the environment, communities and stakeholders.

Corporate Social Responsibility (''CSR'') activities as per the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, can be undertaken by the Company through a registered trust or a registered society. The Company has, accordingly, set up Sudarshan CSR Foundation (''the Foundation'') as a non-profit company and the same has been incorporated on 3rd March, 2015. The Foundation will work closely with and support the Board of Directors and the Committee in CSR activities. The Foundation will assist the CSR Committee in identifying the areas of CSR activities, programs and execution of initiatives as per pre-defined guidelines. The Foundation will also assist the Board of Directors and the CSR Committee in reporting progress of deployed initiatives and in making appropriate disclosures (internal / external) on a periodic basis.

The CSR activities of the Company are largely in accordance with Schedule VII to the Companies Act, 2013. All CSR activities of the Company are carried out under the aegis of "SUDHA" (Sudarshan''s Holistic Aspiration). As a

responsible corporate citizen, the Company continues its efforts to meet the Environmental, Health & Safety expectations of society at large.

The Company''s grand vision is "Growing together" with all its stakeholders in a manner that is Spiritually fulfilling, Socially just and Environmentally sustainable. SUDHA contributes to this vision by ensuring that all its initiatives are driven with this perspective in mind. SUDHA''s vision is ''Aspiring wholesome sustainable growth for women and children of communities around the Company''s plants'' and Mission is ''Reach out to communities by engaging in projects related to Livelihood, Health, Education & Community Development''.

SUDHA was envisaged as a movement to involve the company and the community in which it operates to create better living standards and safeguard the environment. As a part of Corporate Sustainability, SUDHA has been engaged in various social projects, embracing the people that live in the vicinity of its manufacturing and other facilities.

Various projects that SUDHA is working on are Livelihood project where Paper Bag project is the Flagship project. Approximately 150 ladies are directly associated with this project and are earning a livelihood of Rs. 2,000 to Rs. 3,000 per month on an average. SUDHA is also working on vocational enhancing skill projects like Stitching and Paper craft. Health being a very important aspect, SUDHA is also working on improving the health of village ladies. Initiatives taken during the last year include setting up Health check up camps, follow ups for 554 ladies and medication given to the ladies for low HB.

Education and Environment focus is another important area where SUDHA has been involved. Through all these initiatives, SUDHA has touched the lives of thousands of people around the Company''s facilities.

Out of the total entitlement of Rs.87.69 Lacs which the Company was required to spend for designated CSR activities as mandated under Section 135 of the Companies Act, 2013, the Company could spend an amount of Rs.52.67 Lacs. Prime reason for the shortfall in CSR spending were delays in identifying and finalising tie -ups with NGOs for discharging the CSR Obligations. The balance unspent CSR amount of Rs. 35.02 Lacs is being carried over and will be spent on CSR activities in the current year.

The Corporate Sustainability Policy and Annual Report on CSR activities are annexed as Annexure IV to this report.

12. RISK MANAGEMENT:

Risks are events, situations or circumstances which may negatively impact the Company''s business. The Company is adopting a formal approach to risk management in such a way that key risks are managed within a unitary framework.

In a dynamic and volatile environment, all companies face uncertainty, and the challenge for your Company is to determine how much uncertainty to accept as it strives to grow stakeholder value. The Board of Directors on the recommendation of the Risk Management Committee has approved a Risk Management Policy providing guidelines to effectively identify and deal with risks contributing to uncertainty, balancing risk and opportunity and enhancing the capacity to build stakeholders'' value.

The Risk Management Committee has identified specific risks which may critically impact the operations of the Company and has recommended suitable measures to counter them so that the impact is minimized. The Company also has insurance policies in place to reduce adverse impact of any untoward incidents which are critical in nature.

13. REMUNERATION POLICY:

The Remuneration policy of the Company covering the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided separately as Annexure III.

14. SUCCESSION POLICY:

The Company has a Succession Policy approved by the Board of Directors with the main objective to ensure the orderly identification and selection of new Directors, Working Directors or Senior Management in the event of any vacancy, whether such vacancy exists by reason of an anticipated retirement, re-organization, unanticipated departure, the expansion of the size of the Company, or otherwise. For full details, members are requested to refer to the Company''s web site www.sudarshan.com

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In terms of Section 152 of the Companies Act, 2013 and Article 116 of the Articles of Association of the Company, Mr. K.L.Rathi, Director will retire at the 64th Annual General Meeting and will be eligible for reappointment. The Board of Directors recommend the reappointment of Mr. K.L.Rathi, as a Director of the Company. Further Mr. K.L.Rathi has expressed his desire to step down as Chairman at the conclusion of the ensuing 64th Annual General Meeting. The Board of Directors record its appreciation for the services rendered by Mr. K.L.Rathi as Chairman of the Board of Directors.

Mr. Naresh T. Raisinghani has joined the Board of Directors of the Company w.e.f. 13th February, 2015 as a Non-Independent Director and holds office upto the conclusion of the ensuing 64th Annual General Meeting. A brief profile of Mr. Naresh T. Raisinghani is detailed in the Report of Corporate Governance as also in the Notice of the 64th Annual General Meeting. Members are requested to consider appointing Mr. Naresh T. Raisinghani as a Non- Independent Director. The Board of Directors recommend his appointment as a Non-Independent Director.

Mrs. Shubhalakshmi A. Panse was co-opted as an Independent Director of the Company w.e.f. 27th May, 2015 and holds office upto the conclusion of the ensuing 64th Annual General Meeting. A brief profile of Mrs. Shubhalakshmi A. Panse is detailed in the Report of Corporate Governance as also in the Notice of the 64th Annual General Meeting. Members are requested to consider appointing Mrs. Shubhalaxmi A. Panse as an Independent Director for a period of 5 years. The Board of Directors recommend her appointment as an Independent Director.

Key Managerial Personnel

In accordance with the provisions of Section 203 of the Companies Act, 2013, the following are Key Managerial Personnel:

a. Mr. P.R. Rathi, Vice Chairman and Managing Director

b. Mr. R.B. Rathi, Dy. Managing Director

c. Mr. V.V. Thakur, Dy. General Manager (Acting CFO)

d. Mr. P.S. Raghavan, Company Secretary Declaration by an Independent Director

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Annual Evaluation of Board of Directors, its Committees and Individual Directors

The Nomination and Remuneration Committee has devised a criteria for performance evaluation of independent directors, Board, Committees of the Board of Directors and other individual directors which includes criteria for performance evaluation of the Non-executive Directors and Executive Directors.

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors have carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board of Directors. The performance evaluation of the Independent directors was carried out by the entire Board of Directors.

At a separate meeting of the Independent directors, the performance evaluation of the Chairman, Non-independent directors and the Board of Directors was carried out by the Independent directors who also reviewed the adequacy and flow of information to the Board of Directors. The Directors expressed their satisfaction with the evaluation process.

The policies of Board diversity and performance evaluation of Directors of the Company can be accessed from the Company''s website www.sudarshan.com

16. GREEN INITIATIVE:

Members are aware that the Company had started a sustainability initiative with the aim of going green and minimizing impact on the environment. Like the previous year, Electronic copies of the Annual Report 2014-15 and Notice of the 64th AGM are being sent to all Members whose email addresses are registered with the Company / Depository Participant(s). For Members who have not registered their email addresses, physical copies of the Annual Report 2014-15 and the Notice of the 64th AGM are sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.

The Company is providing remote e-voting facility to all Members to enable them to cast their votes electronically on all resolutions set forth in the Notice of the AGM. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2015. The instructions for remote e-voting is provided in the Notice of the AGM.

17. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants, GHO Pune and at R & D Laboratory situated at Ambadvet (Sutarwadi), Dist. Pune. The Board of Directors record its appreciation of the commitment and support of employees at all levels.

18. HUMAN RESOURCES :

During the year under review several human capital enhancing measures were undertaken:

- In order to improve the productivity and ability of the organization to meet future challenges, a manpower restructuring and organization structure augmentation project was initiated and successfully completed. The process started with a scientific study with support by a professional partner using various methodologies to arrive at the right size and skills required. The surplus manpower thus identified were either out placed with a professionally designed outplacement programme or were allowed to separate with best in industry severance packages.

- Communication of Company performance and objectives to employees at all levels by the top management has become a culture at the Company with SUDA CONNECT being celebrated for the second year in succession. The event also provided an opportunity to reward exemplary performances at individual level based on meritocracy. Employees with long services in the Company were also felicitated during this occasion. The culture of transparency was demonstrated through a question answer session where employee questions were responded by leadership team of the Company. Employees demonstrated their talents through a cultural programme where the organisation''s new Mission and Values were launched. The meet established a perfect blend of communication and celebrations.

- The Performance Management System got a shot in the arm with the introduction of cloud based IT system which is SAP based.

- All the Human Resource processes and initiatives launched in the last three years are being reinforced and strengthened. As an endorsement of these efforts, the company received two accolades at "World HRD Congress 2015" as described below:

1. "Organisations with Innovative HR Practices" for our Spiritually Fulfilling Life at Sudarshan initiative;

2. "Best Leadership Development Programme for Middle management" for our Wholesome Leadership Development Program (WLDP) initiative

These global awards have reinforced our belief of realizing Company''s vision of becoming one among the top four pigment producers in the World.

19. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

The Company has formulated an induction programme designed to acclimatize new Directors joining the Board of Directors of the Company. Further, the Company also has an ongoing programme where Directors in the course of meetings of the Board of Directors are given information about the operations / functional areas of the Company, business model as also developments in legal and regulatory areas which impact the working of the Company so as to enable them to discharge their roles, rights and responsibilities in the Company effectively.

Members are requested to refer to the website of the Company www.sudarshan.com for more details about the familiarization program.

20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has a Policy for prevention, prohibition and redressal of sexual harassment at work place and also has constituted an Internal Committee. No cases of sexual harassment have been reported during the year under review.

21. AUDITORS:

B.K. Khare & Co., Statutory Auditors of the Company are due to retire at the ensuing 64th Annual General Meeting and are eligible for reappointment. Members are requested to consider reappointing them and to authorise the Board of Directors to fix their remuneration.

22. COST AUDITOR:

The Board of Directors, in pursuance of an order issued under Section 148 of the Companies Act, 2013, issued by the Central Government, have appointed Parkhi Limaye & Co., Cost Accountants, Pune as Cost Auditors to audit the Pigment Products and Insecticides Products cost records maintained by the Company for the year under review.

23. SECRETARIAL AUDITOR:

The Board of Directors had appointed Mr. Rajesh Karunakaran, Practicing Company Secretary, to conduct Secretarial Audit for the year under review.

The Secretarial Audit Report issued by Mr. Rajesh Karunakaran, Practicing Company Secretary for the year ended 31st March, 2015 as required under Section 204 of the Companies Act, 2013 and Rules thereunder appears as Annexure VIII to the Directors'' Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark.

24. ENVIRONMENT, HEALTH, SAFETY (EHS) AND POLLUTION:

Environment, Health and Safety continues to be a major focus area for our Company in all its operations across the organization. As in earlier years, the Company maintains "Zero lost time accident at the workplace" as its long term strategic goal. There was no reportable accident during the year across the organization. There was also no occupational health illness cases or major emergencies across the Organization. This has been achieved through highest commitment from the top management, supported by all levels of workforce across the Organization. Behaviour Based Safety, Safety training, Process Safety Management, Hazard Identification and Rectification Near mis identification & analysis and Contractor Safety were the key focus areas. During the year in all the sites model "EHS" systems and practices were implemented by instilling various global safety practices including HAZOP, Risk Assessment, Layer of Protection Analysis (LOPA), Process Safety Management, Visual management, pre-start-up reviews and rigorous training to employees and contract workers. To showcase our good work to all our internal as well as external stake holders we have started "EHS Magazine" and published first Edition of our quarterly Magazine this year with a strong belief that facing the challenges together yield better and sustainable results.

During the year, the Company continued to focus on Environment management by further strengthening the effluent treatment facility at Roha and Mahad. The Company is in the process of exploring few more technologies in effluent treatment to further strengthen the Pollution abatement Plan.

Utility management and energy conservation initiatives have been given renewed focus in all manufacturing units. This has helped in improving the "Greening Index" of the Company.

All units of our Company are certified for OHSAS-18001 and ISO-14001,and awarded rating of five star from British Safety Council. Standards are regularly reviewed at various levels and systems aligned with the Company''s Process Management. As a strategic long term goal we have planned to implement ''''Responsible Care initiatives'''' and preparing for certification audits in year 2015-16.

Product stewardship, transportation and warehouse safety continued to be strengthened by providing resources, standardization to match benchmark practices, training to drivers and warehouse workers for safe transportation, storage and loading / unloading and emergency plan for road accidents. As part of the same, Company has become member of NICER GLOBE a ICC initiative in coordination with major chemical industries.

The Company''s efforts and performance in the area of "EHS" have been recognized across the manufacturing units, through receipt of several awards. These awards include :

- National Safety Council - Maharashtra Chapter Safety Award for Roha unit.

- DMAI Award for Excellent Performance in the field of Pollution Control by a Large Scale Unit.

- DMAI Second for Excellent Performance in the field of Safety & Hazards Control by a Large Scale Unit.

- "Certificate of Appreciation" from National Safety Council in Nation Safety Award in manufacturing sector: "Group B".

25. RESEARCH AND DEVELOPMENT :

The Company recognizes the need to have well equipped R & D Facilities to meet customer requirements and developing cutting edge products. Members are aware that the Company has spruced up its R & D facilities at Ambadvet (Sutarwadi), Pune and Roha, Dist. Raigad. The Company has spent approx. Rs. 177 million during the year under report on research and development .The Ministry of Science and Technology, New Delhi, on behalf of Government of India vide letter dated 2nd April, 2012 has recognized our in house R & D facilities for a period of 4 years

i.e. upto 31st March, 2016.

26. DISCLOSURES:

Annual Accounts of Subsidiary Companies:

The Annual Accounts of the Subsidiary Companies for the year ended 31st March, 2015 will be made available to any shareholder of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid subsidiary companies and the related information will also be made available to the investors seeking such information at any point of time. The salient features of Financial Statements of Subsidiary Companies is given in Annexure VII of this report.

The Company as of now does not have a material subsidiary . In conformity with the provisions of Clause 49 of the Listing Agreement, the Board has formulated a policy for determining "material subsidiaries". Members are requested to refer to the website of the Company www.sudarshan.com for more details.

Consolidated Financial Statements:

In accordance with the requirements of Accounting Standard (AS) 21, the Consolidated Financial Statements of the Company and its subsidiaries is provided separately and forms part of the Annual Report .

Vigil Mechanism / Whistle Blower Policy:

Pursuant to the provisions of Section 177 (9) and (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established. The policy on vigil mechanism and whistle blower policy can be accessed from the Company''s website www.sudarshan.com

Annual Return:

The extract of the Annual Return of the Company in Form No. MGT - 9 as on 31st March, 2015 as prescribed under Companies (Management & Administration) Rules, 2014 is given in Annexure V to this report.

Meetings of the Board:

During the Financial Year 2014-15, five Board Meetings were held, the details of which are covered under the Corporate Governance Report .

Particulars of loans, guarantees or investments under Section 186:

The particulars of loans advanced, guarantees given or investments made under Section 186 form part of the notes to Financial Statements provided in the Annual Report. All such Loans, guarantees or investments made during the Financial Year 2014-15 were in the ordinary course of business and comply with arm''s length principle.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this Report.

Particulars of Employees and Related Disclosures:

The requisite information pursuant to Section 197(12) and Rule 5(2)(i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with regard to the details of employees drawing remuneration of Rs. 0.5 million per month or Rs. 6.0 million per annum is attached as Annexure II to this report.

Significant and Material Orders passed by the Regulators or Courts:

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

27. RECOGNITION:

The Board of Directors is pleased to announce that the Company has received the following awards during the year under review :

1. Dyestuffs Manufacturers'' Association of India (DMAI) award for the Financial Year 2013- 2014 for -

1. Excellent performance in pollution control for large Scale Unit

2. Excellent performance in Safety & Hazards control (Second Award for large scale unit )

3. Excellent performance in exports of Pigments (Award for large scale Unit)

These awards signify Company''s commitment towards Environment, Health, Safety and significant contribution in Exports.

2. WORLD HRD Congress for -

1. "Organisations with Innovative HR Practices" for spiritually fulfilling life @Sudarshan.

2. "Best Leadership Development Programme for Middle management" for initiatives with regard to Wholesome Leadership Development Program.

28. OUTLOOK FOR THE FUTURE:

The Financial Year 2015-16 is expected to be another challenging year. Indications are that the global economy will grow as compared to the previous Year. With the changed political scenario and promising signs of revival in demand and growth, the Indian Economy is expected to do better. The Company''s overseas subsidiaries in Netherlands and North America are fully geared up and will play a major role in achieving quantum growth in Sales and Profitability.

The Company aims to closely associate with its Customers and increase operational and technical excellence, while pruning costs. Research and Development will also play a bigger role in improving the competitiveness through innovations.

Agro Chemicals Division is also expected to do well. However, much depends on the monsoon which has played truant in the past.

Barring any unforeseen circumstances, the current year''s prospects look favourable.

29. APPRECIATION:

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited, HSBC Limited and Export Import Bank of India for their co-operation and assistance. Your Directors also place on record their appreciation of the services rendered by BMGI and Pragati Leadership. The Board is also grateful to the Members, Customers, Suppliers, Business Associates and Employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

K.L.RATHI Pune : 27th May, 2015 CHAIRMAN

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Mar 31, 2013

The Directors are pleased to present the 62nd Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2013.

1. FINANCIAL HIGHLIGHTS:

Particulars 2012-2013 2011-2012 (Rupees in (Rupees in millions) millions)

Total Revenue 7967.54 7522.18

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 812.66 886.43

Less: Interest 311.79 213.10

Less : Provision for Taxation 39.95 140.34

Less : Depreciation 250.37 171.48

Profit after Tax 210.55 361.51

Add : Surplus in the Statement of Profit & Loss as per last Balance Sheet 482.67 421.73

Net Profit available for appropriation 693.22 783.24

Appropriations

(1) Dividend proposed @ Rs.12.50 per share on the face value 86.53 86.53 of Rs 10/- (125 %) (previous year dividend paid @ 125%)

(2) Tax on Dividend 14.71 14.04

(3) General Reserve 30.00 200.00

Total 131.24 300.57

Balance to be carried forward 561.98 482.67



2. THE YEAR IN RETROSPECT:

BACKGROUND:

Overall the business sentiment during the year under review remained extremely challenging on account of steep rise in input prices coupled with a slowdown in demand and also delay in commissioning capacities installed as a part of the on going capital expenditure.

The Global Business recessionary conditions continued with Europe and America showing no signs of a major recovery, impacting exports as well as realizations. A direct fallout of this on the Company was a major build up in inventory and export receivables. Interest costs also went up significantly on account of major capital expenditure undertaken in the last few years. All these factors had an impact on the Sales and Profitability. Overall it has been a difficult year for the Company.

Given the difficult operating conditions, the results achieved for the year ended 31st March, 2013 are considered to be satisfactory.

(A) SALES:

Total Revenue for the year ended 31st March, 2013 amounted to Rs. 7967 million as against Rs. 7522 million achieved during the previous year. Profit after tax for the year ended 31s1 March, 2013 was Rs. 211 million as against Rs. 361 million earned during the previous year.

Pigment sales rose from Rs. 6647 million in the previous year to Rs. 6966 million in the year under review recording a nominal growth of 5%. Profits for the Pigment Division for the year under review amounted to Rs. 772 million as compared to Rs. 869 million of the previous year.

Pesticides Sales for the year ended 31st March, 2013 amounted to Rs. 885 million as against Rs. 795 million achieved during the previous year recording growth of 11%. Profits for the Agro Division for the year under review amounted to Rs. 45.30 million as compared to Rs. 34.58 million of the previous year.

(B) EXPORTS:

The Company''s subsidiaries in The Netherlands and North America continue to make aggressive efforts to tap new markets and key customers by offering, among others, customized products at competitive prices. The China Representative Office has been reorganized keeping in mind the market requirements and customer preferences in the Asia Pacific Region.

The acquisition of the natural mica based pearlescent business for cosmetics sold under the brand "Prestige" and "Flonac C" from Eckart, GmbH and its Affiliates has been well integrated in the Cosmetic Pigment Products Portfolio and has added more value to the Exports.

The Company is continuing with the process of staffing and building an efficient sales and distribution network, tapping key customers and appointment of key personnel to increase export penetration. All these measures are expected to give a boost to exports.

Revenue from exports for the year ended 31st March, 2013 amounted to Rs. 3015 million as against Rs. 2746 million for the previous year registering a growth of 10 % over the previous year.

3. DIVIDEND:

While the results for the year under Report have seen a down-turn, the Board believes that the results for the coming years will reflect the beneficial effect of the substantial capital expenditure incurred by the Company till now and having regard thereto, recommend maintaining the rate of dividend @ 125% (Rs. 12.50 per share on a face value of Rs. 10) for the year ended 31st March, 2013 subject to approval of the members. The total outgo on account of dividend @ 125% and dividend distribution tax @16.99 % will be Rs. 101.24 million for the year under review.

4. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 read with the Articles of Association of the Company, Mr. S. N. Inamdar and Mr. S. Padmanabhan, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.

Details of aforesaid Directors seeking re-appointment are provided in the Notice of the 62nd Annual General Meeting as required under Clause 49 of the Listing Agreement with Stock Exchanges.

5. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, it is hereby confirmed that :

(i) in the preparation of accounts for the Financial Year ended 31st March, 2013, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 Statement of Profit and Loss 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 the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the Annual Accounts for the year under review on a going concern basis.

6. SUBSIDIARY COMPANIES:

During the year under review, the Company''s overseas subsidiaries, Sudarshan Europe B.V. and Sudarshan North America, Inc. have shown better performance in sales and profitability. With key focus on improving market share the subsidiaries are expected to record better performance.

The other Indian Wholly Owned Subsidiary, Prescient Color Ltd., has recorded good financial performance with good growth in Sales and Profit. The domestic slowdown notwithstanding, indications point to a better performance in the current year.

7. EXEMPTION UNDER SECTION 212 (8) OF THE COMPANIES ACT, 1956 :

Government of India, Ministry of Corporate Affairs, New Delhi vide Press Note No. 3/2011 dated 8.2.2011, has exempted and directed all Companies under Section 212 of the Companies Act, 1956 from attaching the Balance Sheet and the Statement of Profit and Loss of the Subsidiary Company with the Annual Report of the Holding Company, subject to fulfillment of certain terms and conditions. The Company complies with all the terms and conditions.

The Annual Accounts of the aforesaid Subsidiary Companies for the year ended 31st March, 2013 will be made available to any shareholder of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid Subsidiary Companies and the related detailed information will also be made available to the investors seeking such information at any point of time.

8. CONSOLIDATED FINANCIAL STATEMENTS :

In accordance with the requirements of Accounting Standard - 21, the Consolidated Financial Statements of the Company and its subsidiaries is annexed and forms part of the Annual Report.

9. CORPORATE GOVERNANCE:

Your Company has always focused on improving standards of good Corporate Governance keeping in mind the regulatory requirements and meeting the aspirations of stakeholders. The Board is pleased to inform that the Company has complied with the mandatory requirements of the Corporate Governance as detailed in Clause 49 of the Listing Agreement.

A separate statement on Management Discussion and Analysis and Corporate Governance is enclosed as a part of the Annual Report along with the certificate of the Statutory Auditors, B. K. Khare & Co., Chartered Accountants, Mumbai confirming compliance of the code of Corporate Governance.

10. COST AUDIT:

The Board of Directors in pursuance of an order under Section 233B of the Companies Act, 1956 issued by the Central Government, has appointed Parkhi Limaye & Co., Cost Accountants, Pune as Cost Auditors to audit the cost accounts maintained by the Company in respect of Pigments and Insecticides.

11. COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988:

Information in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in the annexure and forms part of this report.

12. INDUSTRIAL RELATIONS:

Industrial relations continue to remain cordial at Roha and Mahad plants, Dist. Raigad and at R & D Laboratory situated at Ambadvet, Amralevadi, Tal. Mulshi, Dist. Pune. The Board records its appreciation of the commitment and support of employees at all levels.

Details of employees drawing remuneration of Rs. 0.5 million per month or Rs. 6.0 million per annum are given in the annexure and they form part of this report.

13. HUMAN RESOURCES :

The Company believes that people are its core assets to build a "Soaring Global" culture towards achieving its vision to be - the 4th largest pigment player by the year 2015.

During the year the Company organized developmental activities such as team building, improving skills and

building talent and improving organizational and human capability through competency mapping of managerial positions. The Company has put in place structures aiding career aligned roles, best practices people policies, world class HR practices and a culture of "Fun@work". It is with a sense of pride that we inform that the Company has won "Fun@work" Award at the World HRD Congress-2013. This is the first Global HR Award in recognition of our Best in Class practices of HR across Industries.

The Company has also launched a performance management system branded as "Appreciative Conversations" which has helped to build a vibrant work culture through alignment of organization goals with individual performance. Campus hiring from management and engineering schools have helped in infusing young blood in the organization and building long-term managerial and leadership talent pipeline.

The Company continues to put great emphasis on the Six Sigma process to identify further opportunities of cost savings and process improvements. The Company is committed to provide the right environment to its employees to work and to inculcate a sense of ownership and pride.

14. FIXED DEPOSITS:

The Company''s amended Fixed Deposit Scheme which opened during mid February, 2013 had a very good response both from the general public as well as shareholders. The Board of Directors thank the investing public and the shareholders for their support to the Fixed Deposit mobilization of the Company.

During the year under review, the Company accepted deposits amounting to Rs. 269.78 million. The total amount of deposits at the end of 31st March, 2013 stood at Rs. 319.04 million.

In respects of deposits accepted, deposits amounting to Rs. 0.145 million from 4 Depositors, which fell due for repayment, but which remained unclaimed before 31st March, 2013, still remain unclaimed as on the date of this report.

15. AUDITORS:

B. K. Khare & Co., Statutory Auditors of the Company are due to retire at the ensuing Annual General Meeting. Members are requested to consider reappointing them and to authorise the Board of Directors to fix their remuneration.

16. ENVIRONMENT, HEALTH AND SAFETY (EHS):

Sudarshan''s Environment, Health and Safety Programme primarily focuses on "Health" which essentially means ensuring the well being of our employees. The Company is committed to providing its employees a safe workplace and offering programs that promote and improve their health and well being. Systems are in place to identify and reduce any potential injuries and occupational illnesses that could arise out of the workplace as a result of exposure to physical, chemical, biological or ergonomic factors. Emergency Management System is put in place to quickly respond and minimize the consequences of any negative impact. Towards this end the Company conducts continuous risk assessment and implementation of the best safety practices and periodic medical examination. Systems are also in place to ensure that all our products are safe and environmentally compatible from the research and development phase through the production and distribution phase.

The Company''s relentless efforts in conserving the environment and promoting Health and Safety have been appreciated and recognized by several government and safety regulating bodies.

17. CORPORATE SOCIAL RESPONSIBILITY:

Societal well being is a part of Sudarshan''s business strategy. Initiatives are monitored on monthly basis to ensure no negative impact on society. Members are aware that the Company has started SUDHA, a movement to involve its people and the community around to create better living standards. SUDHA is mainly driven by women power within the Company to reach out to women, children and the under privileged sections of the society. This movement is an off shoot of the Company''s aspirations to create holistic awareness and impact the lives of people in a positive way. The Company''s pet social projects - JAGRUTI aimed at creating awareness of the importance of health, hygiene, nutrition and societal balance for creating a better life, PHULORA aimed at blossoming of lives by encouraging use of organic food items through organic farming, JEEVIKA aimed at empowering under privileged ladies by giving them sustainable livelihood sources and UDAAN aimed at improving lives of children today for a better of tomorrow have all taken off successfully.

18. RESEARCH AND DEVELOPMENT:

The Company has upgraded its R & D Facilities at Amralevadi, Tal. Mulshi, Dist. Pune and Roha, Dist. Raigad to meet customer requirements and for developing cutting edge products. The Company has spent approximately Rs. 128 million during the year under report on Research and Development. The Board is pleased to inform that The Ministry of Science and Technology, New Delhi, on behalf of Govt, of India vide letter dated 2nd April, 2012 has recognized our in house R&D facilities for a further period of 4 years i.e. upto 31st March, 2016 .

19. RECOGNITION:

The Board is pleased to announce that the Company has received the following awards :

1. The Company''s Roha unit has been awarded in 2012 by National Safety Council - Maharashtra Chapter for achieving -

(a) Longest Accident Free period in 2011

(b) Lowest Accident Frequency Rate in 2011

2. Receipt of 5 Star award - Sword of Honour from the British Safety Council for Health & Safety Management Audit.

3. Receipt of Awards from the Dyestuffs Manufacturers Association of India (DMAI) for the year 2012-13 for: i. Excellent performance in Pollution Control.

ii. Excellent performance in Safety and Hazards Control.

iii. Excellent performance in respect of Export of Pigments of a Large Scale Unit.

4. Conferring of the Business Leader of the Year for Environment, Leadership & Excellence in 2013 by CHEMTECH.

5. SAP ACE Award for Customer Excellence, 2012 in the category of "Best Run Award in Supply Chain in the Indian Subcontinent".

6. EDGE Award for Roha plant (Enterprise Driving Growth and Excellence Through IT - SAP-WMS (Warehouse Management System)).

20. OUTLOOK FOR THE FUTURE :

The year 2013-14 is expected to be another challenging year. Indications are that the global economy will grow slightly faster than in the previous year. The Indian economy is also expected to do better with promising signs of revival in demand and growth.

The Company aims to harness its efforts to align more closely with its customers and increase operational and technological excellence, while reining in costs. Research and Development will also play a key role in improving competitiveness through Innovations. The Company''s overseas subsidiaries are also fully geared up and are expected to play a key role in achieving organizational objectives.

Barring any unforeseen circumstances, the current year''s prospects look to be good.

21. ACKNOWLEDGEMENT:

The Board of Directors place on record its sincere appreciation for the dedicated efforts put in by all employees and their commitment and contribution in the operations of the Company. Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited and Export - Import Bank of India for their co-operation and assistance. Your Directors are also grateful for the support and co-operation that your Company has received from the customers, suppliers, business associates whom your Company regards as partners in progress. Your Directors thank the members for their confidence in the Company.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

K.LRATHI

Pune, 30th May, 2013 EXECUTIVE CHAIRMAN

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Mar 31, 2012

The Directors are pleased to present the 61st Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2012.

1. FINANCIAL HIGHLIGHTS : Particulars 2011-2012 2010-2011

(Rupees in (Rupees in million) million)

Sales and Other Income 7522.18 7120.11

Gross Profit 673.33 924.07

Less : Depreciation 171.48 132.14

Profit before Tax and Contingencies Written Back 501.85 791.93

Less : Provision for Taxation 140.34 233.82

Profit after Tax 361.51 558.11

Add : Surplus in Profit & Loss Account as per last Balance Sheet 421.73 364.19

Net Profit available for appropriation 783.24 922.30

Appropriations

(1) Dividend proposed @ 12.50 per share on the face value 86.53 86.53 of Rs. 10/- (125 %) (previous year dividend paid @ 125%)

(2) Tax on Dividend 14.04 14.04

(3) General Reserve 200.00 400.00

Total 300.57 500.57

Balance to be carried forward 482.67 421.73

2. THE YEAR IN RETROSPECT : BACKGROUND :

The domestic business environment was challenging. Slowdown in demand coupled with high inflation led to higher input costs affecting growth and profitability. The global Pigment market continued to be under pressure resulting in a slump in demand which led to a reduction in exports and profits.

Given the challenging economic conditions, the results achieved for the year ended 31st March, 2012 are considered satisfactory.

(A) SALES :

Gross Revenue for the year ended 31st March, 2012 amounted to Rs. 7522 million as against Rs. 7120 million achieved during the previous year. Profit after tax for the year ended 31st March, 2012 was Rs. 361 million as against Rs. 558 million earned during the previous year. Profitability was under pressure on account of higher interests costs owing to the ongoing capital expenditure programme and on account of rising input costs, part of which had to be absorbed by the Company.

Pigment sales rose from Rs. 6237 million in the previous year to Rs. 6647 million in the year under review. Profits from the Pigment Division for the year under review amounted to Rs. 869 million as compared to Rs. 950 million of the previous year.

Agro Sales for the year ended 31st March, 2012 amounted to Rs. 795 million as against Rs. 834 million achieved during the previous year. Profits from the Agro Division for the year under review amounted to Rs. 34.58 million as compared to Rs. 64 million of the previous year.

(B) EXPORTS :

The Company's subsidiaries in The Netherlands and North America continue to make aggressive efforts to tap new markets and key customers. The Company has also recently set up a Representative Office in China to tap new markets in the Asia Pacific region and also provide better service to key customers.

Members are aware that the Company has acquired from Eckart, GmbH and its Affiliates the natural mica based pearlescent business for cosmetics sold under the brand "Prestige" and "Flonac C" giving a boost to the cosmetic products portfolio.

All these measures are expected to give a fillip to the Company's efforts to further consolidate its position in the export market.

Revenue from exports for the year ended 31st March, 2012 amounted to Rs. 2746 million as against Rs. 2667 million for the previous year registering a marginal growth.

3. DIVIDEND :

Considering the overall performance of the Company, the Directors recommend maintaining, subject to approval of the members, a dividend of Rs. 12.50 per share on the face value of Rs. 10/- (125%) for the year ended 31st March, 2012. The total outgo on account of dividend @ 125% and dividend distribution tax @ 16.22% will be Rs. 100.57 million for the year under review.

4. DIRECTORS :

Mr.D.N.Damania and Mr.S.K.Asher, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

5. DIRECTORS' RESPONSIBILITY STATEMENT :

In accordance with the requirement under section 217 (2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of accounts for the Financial Year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and have applied them consistently, made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of 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 the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the Annual Accounts for the year under review on a going concern basis.

6. SUBSIDIARY COMPANIES :

During the year under review, the Company's overseas subsidiaries have shown an improved performance in sales. With continued focus on staffing, building an efficient sales and distribution network and tapping key customers, the subsidiaries are expected to record better performance.

The other Wholly Owned Indian Subsidiary, Prescient Color Ltd., has recorded improved financial performance with good growth in Sales and Profit. The present scenario looks encouraging with indications of Prescient Color Limited recording a better performance in the current year.

7. EXEMPTION UNDER SECTION 212 (8) OF THE COMPANIES ACT, 1956 :

Government of India, Ministry of Corporate Affairs, New Delhi vide General Circular No. 2/2011 dated 8.2.2011, has exempted and directed all Companies under Section 212 of the Companies Act, 1956 with regard to not attaching the Balance sheet and profit and loss account of the Subsidiary Company with the Annual Report of the Holding Company, subject to fulfillment of certain terms and conditions. The Company complies with all the terms and conditions.

The Annual Accounts of the aforesaid Subsidiary Companies for the year ended 31st March, 2012 will be made available to shareholders of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid Subsidiary Companies and the related detailed information will also be made available to the investors seeking such information at any point of time.

8. CONSOLIDATED FINANCIAL STATEMENTS :

In accordance with the requirements of Accounting Standard AS-21, the Consolidated Financial Statements of the Company and it's Subsidiaries are annexed and forms part of the Annual Report.

9. CORPORATE GOVERNANCE :

Your Company has always endeavoured to set up appropriate standards of Corporate Governance keeping in mind the requirements of the statute. The Board is pleased to inform you that the Company has complied with the mandatory requirements of Corporate Governance as detailed in Clause 49 of the Listing Agreement.

A separate statement on Management Discussion and Analysis and Corporate Governance is enclosed as a part of the Annual Report along with the certificate of the Statutory Auditors, B.K. Khare & Co., Chartered Accountants, Mumbai confirming compliance of the code of Corporate Governance.

10. COST AUDIT :

The Board of Directors in pursuance of an order under section 233 B of the Companies Act, 1956 issued by the Central Government, has appointed Parkhi Limaye & Co., Cost Accountants, Pune as cost auditors to audit the cost accounts maintained by the Company for Pigments and Insecticides.

11. COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 :

Information in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in the annexure and forms part of this report.

12. INDUSTRIAL RELATIONS :

Industrial relations continue to remain cordial at Roha and Mahad plants and R & D Laboratory situated at Sutarwadi, Ambadvet, Dist. Pune. The Board records its appreciation of the commitment and support of employees at all levels.

Details of employees drawing remuneration of Rs. 0.5 million per month or Rs. 6.0 million per annum are given in the annexure and they form part of this report.

13. HUMAN RESOURCES :

The key to the success of the Company lies in its people whose skills, expertise and talent help the Company to achieve and sustain its market position. The Company involves its employees at all levels in personal development programmes and provides requisite training at regular intervals. The process of improving organizational and human capability continues through competency mapping, development of leadership skills and building of talent for the future. HR systems were also improved, refined and upgraded to align with organizational objectives.

14. FIXED DEPOSITS :

During the year under review, the Company accepted deposits amounting to Rs. 4.75 million from the public. The total amount of deposits at the end of 31st March, 2012 stood at Rs. 175.25 million.

Out of the deposits an amount of Rs. 0.01 million from 1 Depositor, which fell due for repayment, but which remained unclaimed before 31st March 2012, still remains unclaimed as on date of this report.

15. AUDITORS :

B.K. Khare & Co., Statutory Auditors of the Company are due to retire at the ensuing Annual General Meeting. Members are requested to consider reappointing them and to authorise the Board of Directors to fix their remuneration.

16. ENVIRONMENT, HEALTH , SAFETY (EHS) AND POLLUTION :

The Company attaches the highest priority to the safety of employees, independent contractors who work within Company premises and above all, the safety of the neighbouring community. The Company believes that protection of the environment is of utmost importance and has made environmental protection initiatives an integral part of it's corporate culture.

In order to uphold commitments to the Environment, Health & Safety (EHS) of employees and the community around the factory, the Company has upgraded and implemented EHS standards. These standards have been used to support the implementation of EHS Policy and the Responsible Care Management System (RCMS).

The Board is pleased to inform you that Roha & Mahad sites have achieved successful up-gradation and implementation of Safety Management Systems as per the British Safety Council's guidelines, as well as, OHSAS 18001:2007 & ISO 14001:2004 standards.

In order to continuously improve EHS related activities, internal audits are regularly carried out at the plants for effecting improvements and initiating new measures.

During the year, the Company has further consolidated its position through compliance of recommendations arising out of various national & international safety audits conducted in the financial year. Safety audits by BVC, BMG & other statutory bodies were also conducted. This has further strengthened the existing safety management system at the plants.

A three-year EHS Improvement Plan has been formulated by EHS Leadership Team in consultation with senior business leaders. The highlights of this plan are integrated into the business plan and are an essential part of specific business goals. The EHS Improvement Plan and business goals are reviewed annually and upgraded in order to achieve continuous improvement.

17. CORPORATE SOCIAL RESPONSIBILITY :

As a responsible corporate citizen, the Company continues its efforts to meet the Environmental, Health & Safety expectations of its neighbours. Tree plantation, waste management (vermiculture), self employment development, emergency preparedness & response plan & environment control initiatives continue to be an integral part in the overall objective to make the neighbourhood and the community a better place to live.

Another initiative in this direction is the SUDHA movement started by the Company to involve its people and the community around, to create better living conditions. SUDHA is mainly driven by woman power within the Company aimed at reaching out to women, children and the under privileged sections of society. The initiative was launched in August, 2011. Around 150 spouses of employees from Roha participated in the official launch on August 11, 2011. A team of dedicated volunteers have been enrolled in four different projects viz. Jagruti, Udaan, Phulora and Jivika. All these projects have taken off successfully.

18. RESEARCH AND DEVELOPMENT :

The Company recognizes the need to have well equipped R & D Facilities to meet customer requirements and to develop cutting edge products. Members are aware that the Company has spruced up its R & D facilities at Sutarwadi, Dist. Pune and Roha, Dist. Raigad. The Company has spent Rs. 101.48 million during the year under report on research and development. The Ministry of Science and Technology, New Delhi, on behalf of Govt. of India vide letter dated 2nd April, 2012 has recognized our in house R & D facilities at Roha, Dist. Raigad and Ambadvet, Amralevadi, Tal. Mulshi, Dist. Pune for a further period of 4 years i.e. upto 31st March, 2016.

19. RECOGNITION :

The Board is pleased to announce that the Company has received the following awards :

1. Roha unit has been recognized by the Federation of Indian Chambers of Commerce & Industry (FICCI) for its excellent performance in Safety by awarding the Silver prize in the large scale category - 'Safety Excellence Award 2011'.

2. Roha unit has also been recognized by the National Safety Council - Maharashtra Chapter for meritorious performance in industrial safety for the year 2010.

3. The Five Star Safety Award for the Company's Roha and Mahad plants from the British Safety Council, U.K.

4. Receipt of Awards from the Dyestuffs Manufacturers Association of India (DMAI) for the year 2011-12 for :

i. Excellent performance in Pollution Control for Large Scale Unit.

ii. Excellent performance in Safety and Hazards Control (2nd Award for Large Scale Unit).

iii. Excellent performance in respect of Export of Pigments of a Large Scale Unit.

20. OUTLOOK FOR THE FUTURE :

The domestic demand for Pigments continues to be sluggish and the rising input costs on account of inflationary conditions, coupled with the adverse foreign currency situation does not augur well for the Company. The Pigment export market even though still reeling under sluggish demand prevailing in the US and European markets looks promising as the Company's overseas subsidiaries and the China Representative Office are fully geared up to overcome the market complexities by tapping into new markets.

Barring any unforeseen circumstances, the current year's prospects look good.

21. APPRECIATION :

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited , HDFC Bank Limited and EXIM Bank for their co-operation and assistance . Your Directors are also grateful to the shareholders, customers, suppliers, business associates and employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

K.L.RATHI

Pune, 25th May, 2012 EXECUTIVE CHAIRMAN

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Mar 31, 2011

The Directors are pleased to present the 60th Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 2011.

1. FINANCIAL HIGHLIGHTS :

Particulars 2010-2011 2009-2010

(Rupees in (Rupees in million) million)

Gross Sales and Other Income 7120.11 5770.50

Gross Profit 924.07 791.97

Less : Depreciation 132.14 134.05

Profit before Tax and contingencies written back 791.93 657.92

Less : Provision for Taxation 233.82 198.83

Profit after Tax 558.11 459.09

Add : Surplus in Profit & Loss Account as per last Balance Sheet 364.19 206.00

Net Profit available for appropriation 922.30 665.09

Appropriations

(1) Dividend proposed @ Rs.12.50 per share on the face value 86.53 86.53 of Rs 10/- ( 125 % ) ( previous year dividend paid @ 125% )

(2) Dividend Distribution Tax 14.04 14.37

(3) General Reserve 400.00 200.00

Total 500.57 300.90

Balance to be carried forward 421.73 364.19

2. THE YEAR IN RETROSPECT :

BACKGROUND :

The domestic Pigment market has been buoyant as a result of rising incomes and increase in per capita spending. This backed by efficient cost management has enabled the Company to post all round growth in sale of Pigments for the year under review . Pigment Products catering to different segments recorded good growth. The macro environment prevailing in the western and European markets were challenging post recessionary conditions which had set in early 2008 . The Company with its High Performance Pigments were in a position to compete with global majors resulting in higher Pigment exports .

Agro Chemicals also fared reasonable well considering the constraints. Lower pest formation, change in product mix, unseasonal and unfavourable monsoon were some of the factors that impeded growth.

Overall the growth has been good and Sudarshan is fully geared up for exploiting and consolidating the opportunities ahead.

(A) SALES :

Gross Revenue for the year ended 31st March, 2011 amounted to Rs. 7120 million as against Rs. 5771 million achieved during the previous year, registering a growth of 23%. Profit after tax recorded excellent growth as compared to the previous year. Profit after tax for the year ended 31st March, 2011 aggregated to Rs. 558 million as against Rs. 459 million earned during the previous year recording a growth of 22%.

During the current year, the Pigment Division has performed well. Pigment sales rose from Rs. 4905 million in the previous year to Rs. 6213 million in the year under review, registering an impressive growth of 27%. Profits for the Pigment Division for the year under review amounted to Rs. 950 million as compared to Rs. 860 million of the previous year recording a growth of 10% .

Agro Sales for the year ended 31st March, 2011 amounted to Rs. 834 million as against Rs. 775 million achieved during the previous year recording a growth of 8%. Profits for the Agro Division for the year under review amounted to Rs. 64 million as compared to Rs. 73 million of the previous year.

(B) EXPORTS :

Members are aware that the Company has set up subsidiaries in Netherlands and North America. The Company also has set up Sales and distribution channels in Latin America and other Asian Countries. This has enabled Sudarshan to further consolidate its position in the international Pigment market.

Revenue from exports for the year ended 31st March, 2011 amounted to Rs. 2667 million as against Rs. 1879 million for the previous year registering an excellent growth of 42% over the previous year. More than 97% of the exports were accounted by Pigments Division.

3. DIVIDEND :

Notwithstanding the good performance, the Directors feel the need to conserve resources for the on going capex programme and hence recommend maintaining, subject to approval of the members, dividend of Rs. 12.50 per share on a face value of Rs. 10/- (125%) for the year ended 31st March, 2011. The total outgo on account of dividend @ 125% and dividend distribution tax @ 16.22% will be Rs. 100.57 million for the year under review.

4. DIRECTORS :

Mr.B.S.Mehta and Mr.P.P.Chhabria, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

5. DIRECTORS RESPONSIBILITY STATEMENT :

In accordance with the requirement under section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed that :

(i) in the preparation of accounts for the Financial Year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of Financial Year and of the Profit and Loss account 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 the Companies Act , 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the Annual Accounts for the year under review on a going concern basis.

6. SUBSIDIARY COMPANIES :

During the year under review, the Companys overseas subsidiaries have shown improved sales performance. The initial teething troubles witnessed is a thing of the past and with appropriate staffing and efficient Sales and distribution channels to back, the subsidiaries are poised to consolidate.

The other Indian Wholly Owned Subsidiary, Prescient Color Ltd., continues to augment and validate its product range especially for textile and specialty plastics segment. The operations of Prescient Color Limited has also improved in the year under review by posting a modest profit of Rs.3.65 million. The current scenario looks stable and encouraging.

7. EXEMPTION UNDER SECTION 212 (8) OF THE COMPANIES ACT, 1956 :

Government of India, Ministry of Corporate Affairs, New Delhi vide General Circular No. 2/2011 dated 8.2.2011, has exempted and directed all Companies under Section 212 of the Companies Act, 1956 with regard to not attaching the Balance Sheet and Profit and Loss account of the Subsidiary company/s with the Annual Report of the Holding Company, subject to fulfillment of certain terms and conditions. The Company complies with all the terms and conditions.

The Annual Accounts of the aforesaid Subsidiary Companies for the year ended 31st March, 2011 will be made available to any shareholder of the Company on request and will also be available for inspection at the Registered Office of the Company during working hours till the date of the Annual General Meeting. The Annual Accounts of the aforesaid subsidiary companies and the related detailed information will also be made available to the investors seeking such information at any point of time.

8. CONSOLIDATED FINANCIAL STATEMENTS :

In accordance with the requirements of Accounting Standard AS-21, the Consolidated Financial Statements of the Company and its subsidiaries is annexed herewith and form part of the Annual Report.

9. CORPORATE GOVERNANCE :

The Board is pleased to inform that the Company has complied with the mandatory requirements of the Corporate Governance as detailed in Clause 49 of the Listing Agreement.

A separate statement on Management Discussion and Analysis and Corporate Governance is enclosed as a part of the Annual Report along with the certificate of the Statutory Auditors, B.K. Khare & Co., Chartered Accountants, Mumbai confirming compliance of the code of Corporate Governance.

10. COST AUDIT :

The Board of Directors in pursuance of an order under section 233 B of the Companies Act, 1956 issued by the Central Government, has appointed Parkhi Limaye & Co., Cost Accountants, Pune as cost auditors to audit the cost accounts maintained by the Company in respect of Insecticides.

11. COMPANIES ( DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS ) RULES, 1988 :

Information in accordance with Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in the annexure and forms part of this report.

12. SUDARSHAN BUSINESS EXCELLENCE MODEL :

Sudarshan Business Excellence Model (SBEM) recognizes many approaches to achieving sustainable excellence in all aspects of performance. Policies and programs, are designed in partnership with stakeholders, to provide sustainable economic growth in a dynamic business environment.

The Company strives for an innovative culture, which would encourage sustainable growth by developing a system that drives knowledge creation, cutting edge science and research based technology , international competitiveness and increased productivity.

13. UPGRADATION OF ROHA MANUFACTURING FACILITY :

As part of its globalization strategy, the Company has embarked on upgrading its manufacturing facility at Roha with an initial investment of Rs. 100 Crores. The facilities include setting up of :

- A state of the art ultra modern warehouse, spread over 1,20,000 sq ft. This will have ground plus 8 stacking levels with a total of 5,121 pallet positions having a storage capacity of 1,600 MT. The warehouse will be operated by "Very Narrow Aisle, (VNA)" trucks and online stock updation with help of SAP Warehouse Management System.

- High Performance Pigment plant to cater to automotive coatings and high end plastic industry. These plants will have a high level of automation and instrumentation for better process control.

- New plant for Effect Pigments to cater to the automotive coatings and cosmetic industry and for recycling 1000 cubic meters of water per day.

- A Cogeneration plant with a high efficiency boiler incorporating Reverse Osmosis (RO) and Electro Static Precipitator (ESP) is installed in an area of 12,200 sq.ft. to reduce effluent load and Suspended Particulate Matter (SPM) levels, impacting the environment in a positive way.

- An Ultra-modern employee facility.

It is expected that the investment in facilities as indicated apart from benefitting the customers and other stake holders will also benefit the local communities in Roha and Mahad.

14. INDUSTRIAL RELATIONS :

Industrial relations continue to remain cordial at Roha and Mahad plants and at R & D Laboratory situated at Sutarwadi, Ambadvet, Dist. Pune. The Board records its appreciation of the commitment and support of employees at all levels.

Details of employees drawing remuneration of Rs. 0.5 million per month or Rs. 6.0 million per annum are given in the annexure and they form part of this report.

15. FIXED DEPOSITS :

During the year under review, the Company accepted deposits amounting to Rs. 24.77 million from the public. The total amount of deposits at the end of 31st March, 2011 stood at Rs. 198.02 million.

Out of the total deposits a sum amounting to Rs. 0.56 million from 4 Depositors, which fell due for repayment but which remained unclaimed before 31st March, 2011 is still remaining unclaimed as on date of this report.

16. AUDITORS :

B.K. Khare & Co., Statutory Auditors of the Company are due to retire at the ensuing Annual General Meeting. Members are requested to consider reappointing them and to authorise the Board of Directors to fix their remuneration.

17. ENVIRONMENT, HEALTH, SAFETY (EHS) AND POLLUTION :

The Company is committed to achieving greater levels in environmental excellence, employee safety & improvement in the human conditions. The Company focuses on the Global EHS standards as the foundation to achieve Environmental, Health & Safety (EHS) excellence. The motto is to strive for continuous improvement in EHS and Pollution. The Company recognizes and believes that sustainable development keeping in mind preservation of the environment is one of the most important and critical issues facing the Industrial community & initiatives are being undertaken to implement EHS and Pollution control as an integral part of our corporate values. The Company is committed to conserving resources & acting as responsible stewards of the Environment.

The companys Environment, Health & Safety (EHS) policy provide the guiding principles that ensure high standards are achieved at all sites & and offer means of promoting continuous improvement based on careful risk assessment & comprehensive EHS management systems. The EHS policy is formally reviewed at regular intervals by the EHS Committee. The EHS committee meets every month to review & monitor EHS performance which includes key policy as well as operational issues. To ensure effective monitoring of EHS performance, Environment, Health & Safety index is complied monthly. Environmental & resource efficiency information within the Company is monitored & analyzed annually & actions are incorporated accordingly. Effluents from the Plants are continuously monitored to ensure compliance to standards.

Environment management system conforming to ISO 14001:2004, occupational health & safety assessment series conforming to OHSAS 18001:2007, have been successfully established & implemented at all sites. Behaviour Based Safety System has also been implemented to focus on human factor to increase safe behavior of employees at work place.

EHS compliance audits are an integral part of EHS management system. During the year 4 in-depth EHS audits were conducted across our operations in Roha & Mahad. No major non conformances were observed. A feature of the year has been the high level of capital investment in our existing businesses. This has led to many Environmental & Safety improvements that have given us opportunities to design & operate process that are inherently safer & resource efficient.

18. CORPORATE SOCIAL RESPONSIBILITY :

As a responsible corporate citizen, the Company is committed to meeting the Environmental, Health & Safety expectations of our neighbours, where we operate. As a part of community awareness, we have adopted village Barsoli located near our factory at Roha. The Company has undertaken tree plantation, waste management (vermiculture) self employment development, emergency preparedness & response plan & environment control measures. To support community development, activities such as village meetings, social functions, paper bags making, cloth stitching, construction of bus shelters and safety equipment exhibitions have been held.

19. RESEARCH AND DEVELOPMENT :

The Company has a modern R & D facility with over 100 technicians working at three different locations. All the laboratories are ISO 17025: 2001 certified by National Accreditation Board for Testing and Calibration Laboratories, NABL, Government of India. The Company recognizes that R & D Facilities have to be adequately equipped to keep pace with technological advances relevant to be a dominant player in the global pigment industry. The Company has spent approx. Rs. 66 million during the year under report on research and development.

20. RECOGNITION :

The Board is pleased to announce that the Company has received SAP ACE Award 2010, given by SAP India for customer excellence in the category – "Best Run Award in Medium Enterprises – Manufacturing."

The Dyestuffs Manufacturers Association of India (DMAI) has recognized the efforts of the Company for the Financial Year 2009-2010 in the following categories.

a) Excellent performance in the field of Safety & Hazards Control.

b) Excellent performance in the field of Pollution Control.

The DMAI has selected the Company for an award in recognition of excellent performance in respect of export of Pigments of a large scale unit in 2010-2011.

The Companys Roha unit has also been recognized by National Safety Council - Maharashtra Chapter, for achieving lowest accident frequency rate for 2009, & our Mahad unit received certificate of merit for meritorious performance in Industrial Safety during the year 2009.

The Board is also pleased to announce that the Company has received a trophy from Export Credit Guarantee Corporation, Pune for being a major and loyal exporter during the year 2010, amongst various exporters from Maharashtra.

21. VISION 2014 :

The Company has outlined a vision to be amongst the top four pigment players in the world by the year 2014. The key initiatives include becoming a world class color solution provider; Focusing on exceptional and sustainable results, Value creation for stakeholders and providing an exciting, vibrant and performance driven environment. The catchword is "growing together" in a manner which is spiritually fulfilling, socially just and environmentally sustainable.

The Company has drawn a road map to spruce up manufacturing and R & D facilities, developing cutting edge technologies, staffing and implementation of global practices and systems.

22. OUTLOOK FOR THE FUTURE :

The domestic demand for Pigments continues to be robust and holds promise for the Companys Pigment Products. The export market even though still reeling under sluggish demand prevailing in the US and European markets holds promise as the Companys overseas subsidiaries are strategically placed to take advantage of the local conditions.

Agro Chemicals business also is expected to perform reasonably well. However excessive and unseasonal rains can play truant.

Barring any unforeseen circumstances, the current years prospects look to be good.

23. APPRECIATION :

Your Directors place on record their gratitude to Bank of Maharashtra, State Bank of India, Bank of Baroda, ICICI Bank Limited, HDFC Bank Limited and EXIM Bank for their co-operation and assistance. Your Directors are also grateful to the shareholders, customers, suppliers, business associates and employees of the Company for their continued co-operation and support.

For and on behalf of the Board of Directors

For SUDARSHAN CHEMICAL INDUSTRIES LIMITED

K.L.RATHI

Pune, 27th May, 2011 EXECUTIVE CHAIRMAN