Tata Chemicals Ltd

OF TATA CHEMICALS LIMITED

The Directors hereby present their seventy second Annual Report together with theAudited Statement of Accounts for the year ended March 31, 2011:

FINANCIAL RESULTS

Rupees in crores

DIVIDEND

For the year under review, the Directors have recommended a dividend of Rs. 10 pershare (Rs. 9.00 per share for the previous year), on the Equity Shares of the Company,aggregating to Rs. 293.55 crores [including Dividend Tax (net)].

PERFORMANCE REVIEW

The turnover of the Company increased from Rs. 5,412 crores to Rs. 6,225 croresregistering a growth of 15% over previous year. Profit Before Tax was Rs. 559 croreswhereas Profit After Tax was at Rs. 408 crores, a decrease of 5% and 6% respectively overprevious year.

Consolidated turnover increased from Rs. 9,449 crores to Rs. 10,895 crores, an increaseof 15% over previous year. On consolidated basis Profit Before Tax was Rs. 1,121 croreswhereas Profit After Tax was at Rs. 846 crores, an increase of 20% and 17% respectivelyover previous year. Profit attributable to the Group after deducting the minority interestwas at Rs. 653 crores, an increase of 8% over previous year.

Tata Chemicals Limited’s (TCL or the Company) operation is organized under foursegments i.e. (1) Inorganic Chemicals comprising of Soda Ash, Salt, Marine Chemicals,Caustic Soda, Cement and Bulk Chemicals, (2) Fertilisers segment comprising of Fertilisersand other traded products (3) Other Agri-inputs including Rallis operations and (4) Others- comprising of Water Purifier, Bio-fuels and Pulses. Performance review of thesebusinesses is as under:

1. INORGANIC CHEMICALS SEGMENT

1.1 INDIA OPERATIONS:

During the year, Industrial Chemicals in India achieved sales of Rs. 1,202 crorescompared to sales of Rs. 1,148 crores in the previous year. The year witnessed an increaseof 5% in Gross Sales Realisation (GSR) of Soda Ash at Rs. 14,400/ MT as compared toprevious year figure of Rs. 13,690/MT. Growth of all key consuming sectors such as floatglass, container glass and detergents led to a 5% demand growth for soda ash. Sodiumbicarbonate continued to experience robust demand with the market growing by 15% on theback of a 14% growth in Financial Year (FY) 2010-11. Key debottlenecking projects in bothsoda ash and sodium bicarbonate along with one fully automated packing line for sodiumbicarbonate were completed during the year. A branded food grade sodium bicarbonateoffering sodacarb was also launched during the year.

Soda Ash

Demand growth in FY 2010-11 was driven by growth of all key soda ash consumingsegments. The Company further strengthened its relationship with its customers and focusedon improving service levels to consolidate its position in the marketplace. Despitepressure on prices, the higher volume off take helped to achieve a superior performance.Key debottlenecking projects were completed in the plant at Mithapur. The announcement ofnew float glass and container glass projects by glass companies in the near future providean indication that demand for soda ash will continue to remain robust in the foreseeablefuture. The other key consuming sectors such as detergents and chemicals are also expectedto grow on the back of growing national economy.

The Company’s production of soda ash at Mithapur in FY 2010-11 was 696,746 MT asagainst previous year’s figure of 695,721 MT. This was despite the severe monsoon(~60" of rainfall) in 2010 which disrupted plant operations. The Company achievedsales of 668,774 MT of soda ash during the year as against the sales of 675,481 during theprevious year. Of this, 93% was sold in the domestic market compared to 87% in FY 2009-10.

Sodium Bicarbonate

During the year, the Company achieved the highest ever Sodium Bicarbonate production of78,278 MT which was 9% higher than in the previous year. Sales at 76,289 MT were 7% higherthan the previous year for a product which till now has been relatively insulated fromeconomic cyles. In FY 2011-12, the Company launched its Sodakarb, branded bicarbonate inthe Indian market, aimed at food applications. This is in line with our stated plans asthe domestic market matures and grows over a period of time to introduce other brands inour global portfolio.

Cement

The Company’s cement plant was set up in 1993 to handle solid wastes generated asby-products of soda ash manufacture. The Company uses technology to separate solideffluents and process them into Ordinary Portland Cement (OPC) and Masonry Cement. Duringthe year, the production of OPC cement and masonry cement were at 341,693 MT and 77,053 MTrespectively whereas the sale of OPC cement and masonry cement were 332,491 MT and 76,903MT respectively.

Consumer Products - Salt and Related Products

Consumer Products demonstrated robust performance during the FY 2010-11 by leveragingits distribution system and strong brand equity.

Iodized Salt production in Mithapur was 553,386 MT in FY 2010-11, up by 3% from 537,033MT in FY 2009-10. Overall salt sales grew by 9% from 744,598 MT in FY 2009-10 to 808,165MT in FY 2010-11. Tata Salt grew by 9% in volumes from 543,441 MT in FY 2009-10 to 591,334MT in FY 2010-11. I-Shakti registered a volume growth of 7% from 187,949 MT in FY 2009-10to 201,888 MT in FY 2010-11. Amongst the major brands, I-Shakti continues to maintain themost distributed brand after Tata Salt with a reach of 6.06 lacs retail outlets. TheCompany’s market share of its salt portfolio has increased to 62% in the NationalBranded Salt segment, up from 59% in FY 2009-10.

I-Shakti cooking soda sales showed an encouraging growth of 61% with sales of 1,003 MTin FY 2010-11 as compared to 623 MT in FY 2009-10.

Sales turnover of the consumer business grew by 18% from Rs. 652 crores in FY 2009-10to Rs. 772 crores in FY 2010-11.

Consumer Products continues its journey of innovation by new product developmentthrough salt variants, bi-carbonate based products and in other categories which are invarious stages of development.

1.2.1 Tata Chemicals North America Inc. USA (formerly known as General ChemicalsIndustrial Products Inc.,)

During the year, Tata Chemicals North America Inc. (TCNA) achieved gross sales of USD399 million (Rs. 1,818 crores) and EBITDA of USD 118 million (Rs. 538 crores). These werehigher by 3% and 5% respectively over previous year figures. During the year, thecompany’s Wyoming soda ash operations achieved record levels of production andproductivity (tons produced per employee), while also achieving a record low for number ofrecordable accidents at the site.

TCNA volumes during the year totaled 2,383,568 MT, 10% higher than the previous yeartotal of 2,182,000 MT. Export sales volumes were up 25% as against previous year, withsales to Latin America and Asia the primary drivers. Sales volumes to North Americacustomers were 98% of previous year with increase in flat glass, but volume demanddeclined in container glass, detergent and chemical end use markets. Price increasesthroughout the year were driven by high capacity utilization rates in the US soda ashindustry, raw materials cost increases at global synthetic soda ash producers, and aweakened dollar.

1.2.2 Tata Chemicals Europe Ltd. (formerly known as Brunner Mond Europe)

Tata Chemicals Europe Ltd. (TCEL), which includes 3 months of sales from its recentlyacquired salt operation of British Salt Ltd. achieved sales turnover of GBP 167 million(Rs. 1,185 crores) registering a decline of 12% over the previous year. EBITDA was down toGBP 21 million (Rs. 148 crores). Soda ash production volumes and increased carbon priceswere the two main causes of the fall in EBITDA compared to previous year of GBP 33 million(Rs. 251 crores).

Soda Ash

Soda Ash production was 783,671 MT down by 5% compared to previous year. The two mainissues were carbon supply problems for the kiln operations and much more importantly, theresult of extreme winter weather suffered in December/January which resulted in soda ashproduction volumes being severely impacted in 3rd and 4th quarters of the year while majorrepairs were completed. Production levels are now returning to normal levels.

Sodium Bicarbonate

Sodium bicarbonate production and sales were 99,447 MT and 99,741 MT respectively, a11% increase over previous year as the new production facility grew its output in linewith the growth plan.

Salt

The 3 months of British Salt Ltd.’s operation generated Sales of GBP 11 million(Rs. 78 crores) and EBITDA of GBP 4 million (Rs. 30 crores) ahead of forecasts made at thetime of acquisition.

1.2.3 Tata Chemicals Magadi Limited, Kenya (formerly known as Magadi Soda CompanyLimited)

Turnover during the year was at USD 97 million (Rs. 442 crores) as against USD 91.08million (Rs. 432 crores) of previous year, registering an increase of 7%. Sales ofStandard Ash (SAM) declined during the year mainly due to increased competition in theSouth African Market from American soda ash producers and loss of a major customer in thelast quarter of the year. The markets showed a strong recovery in the second half of theperiod and the company renegotiated new prices with the customers in the fourth quarter ofthe year. Premium Ash (PAM) sales increased in both quantities and prices. This was due toimproved production from the PAM plant in the period as well as a growing demand in theAsian market particularly India and Middle East.

Combined sales volumes for both PAM and SAM were 482,731 tonnes compared to 455,928tonnes for the previous year, an increase of 6%. The EBITDA was decreased by 28% to USD 9million (Rs. 41 crores) from USD 12 million (Rs. 57 crores) for the previous year. This isattributable to higher production costs arising from higher HFO prices and adverse PAMplant fuel efficiencies.

Going forward, the company is focused on plant optimization through initiatives such asLean Six Sigma, Magadi Return To Excellence (MRTE) and stringent cost control measures aswell as cash conservation.

2. FERTILISER SEGMENT

TCL has significantly grown in Agri space over the past few years. With its farmessentials portfolio, the Company has carved a niche in India as a crop nutrientsprovider. It is a prominent manufacturer of Urea and Phosphatic Fertilisers in India. Inaddition to the traditional Sales Channel, TCL also operates Retail Outlets under thebrand of Tata Kisan Sansar (TKS). TCL has a Joint Venture with IMACID, Morocco formanufacturing of Phosphoric Acid with 33% stake. With the acquisition of Metahelix LifeSciences by Rallis India, a subsidiary of the Company, TCL moved a step ahead to become anintegrated Agri solution provider.

2.1 CROP NUTRITION BUSINESS

Crop Nutrition business comprises of Nitrogenous Fertilisers i.e. Urea manufactured atBabrala Plant and Phosphatic Fertilisers like DAP, NPK, SSP manufactured at the Haldiaplant. In addition to these, the Company imports and sells MOP and DAP and supply othercrop nutrition products like Specialty Fertilisers and organic materials. The CropNutrition and Agribusiness operations of the Company achieved a turnover of Rs. 3,491crores during FY 2010-11.

During the year, TCL continued its efforts of establishing itself in the deregulatedcrop nutrients market while continuing to maintain its position in the core fertiliserbusiness. The Nutrient based subsidy introduced from April, 2010 is aimed at improvingagricultural productivity, encouraging balanced use of fertilisers and enhancingcustomization to suit crop and soil requirements.

Urea

At Babrala, the Plant achieved an annual Urea production of 1,117,153 MT, lower by114,058 MT compared to previous year. Urea sales quantity declined by 7% in FY 2010-11 dueto damage of R-502 convertor and a plant shut down due to floods. Market share of Urea inthe FY 2010-11 was 4% as against the previous year’s figure of 5%. The plant alsoachieved highest ever accident free Million Man hours of 13.01. The Energy consumptionlevel of plant during the year was 5.26 GCal/MT as against 5.17 GCal/MT of the previousyear due to the disruptions mentioned earlier.

DAP / NPK / SSP

The Haldia plant achieved a combined production of 710,379 MT of DAP, NPKs and SSPduring the FY 2010-11 against last year’s production of 675,996 MT. The sales of DAP,NPKs and SSP were 705,384 MT against 704,036 MT last year. Market share of DAP, NPK andSSP were 4.4%, 8.8% and 11% respectively during the year. Haldia site was awarded 5 Starrating (Score of 97%) by British Safety Council. During the year, the Unit signed theContract Labor Settlement as well as the Long Term Settlement with the unionized staff ofthe Unit. Government has recently allowed charging market based price for Boronated SSP inline with basic spirit of Nutrient Based Subsidy (NBS).

Imported Products (DAP / MOP)

With the implementation of NBS for NPK/DAP/MOP products, importers/manufacturers havebeen given free hand to plan their production and imports as per need of the market. Thiswill help in leveraging the best price from international suppliers as well as easyavailability of fertilisers in every corner of the country at market price.

Subsequent to the announcement of NBS in the union budget for FY 2010-11, whereby theCompany is allowed to fix the MRP for all the Phosphates’ & Potassic fertiliser,the import in the country has sharply increased. The Company also imported Di–ammonium phosphate and Potassic fertiliser (for direct application) of 278,492 MTand 211,735 MT as against the previous volume of 66,650 MT and 182,072 MT respectively.

Specialty Crop Nutrients and Micro-Nutrients

Keeping customer centricity at the core, the engagement of the Company with the farmersfurther got strengthened with the introduction of two new products – Seaweed extractand MAP in addition to the existing range of Specialty Fertilisers products like CalciumNitrate, Zinc Sulphate, Bentonite Sulphur, etc. The Company continued to grow in thespecialty fertilisers category with a healthy growth rate. The Company’s extensivenetwork of dealers and retailers helped to achieve record sales primarily in north India.The Tata Paras brand continues to enjoy a very high farmer loyalty. The Company aspires toexpand its footprints to a national scale.

Customised Fertilisers – A new line of business

TCL entered into a new field of crop and region specific Customised Fertilisers thatprovides balanced crop nutrition to the soil, boosts the productivity of crops andimproves the overall soil health. Branded as "Paras Farmoola", these fertiliserscontain macro and micro nutrients required by selected crops in specific regions. Theyhave been designed and developed on the basis of geo-referenced soil, crop and watersamples for the Western UP region in North India. Paras Farmoola applications promotesustainable agriculture by maintaining soil health and providing the best nutritionalpackage for better plant growth and premium quality output. Paras Farmoola applicationincreases productivity levels by more than 20% in target crops like Paddy, Wheat,Sugarcane & Potato.

India’s first manufacturing facility for Customised Fertilisers at Babrala withannual capacity of 130,000 MT is expected to be commissioned during FY 2011-12.

2.2 TATA KISAN SANSAR

TCL operates retail outlets under the brand of Tata Kisan Sansar (TKS). It acts as onestop shop where it offers quality agricultural inputs and Agri Solutions such as advice oncrops, application services and farming practices etc. TKS centers provide generic as wellas store brands of Fertilisers (Urea, DAP, MOP, NPK, etc), Specialty Fertilisers (Zincsulphate, boron, micronutrients, calcium nitrate, organics, water soluble fertilisers)Seeds (Field crops, vegetable crops), entire range of Pesticides, Cattle feed and Farmimplements.

Along with the above mentioned inputs, TCL is providing products of other reputedcompanies through this retail network which helps farmer to get all nutrients and inputunder one roof. In addition to above inputs, training is also provided to farmers incontext to nutrient and pest management.

TKS also provides services such as soil and water testing, contract farming, seedproduction, application services and advisory services. On relationship building front,TCL provides Farmer membership (individual & group), Accident insurance to members,Farmer meets and Crop seminars.

During the year, continuous impetus has been laid upon stabilizing Supply Chain andimproving the look of the Branded TKS Outlets.

3. OTHER AGRI INPUTS

Rallis India Limited (Rallis)

Rallis’ Crop Protection Chemicals business performed well overall. Rallis posted asales turnover of Rs. 1,047 crores during the year registering a growth of 20% over theprevious year figure of Rs. 875 crores. Profit Before Tax was higher by 21% at Rs. 184crores with the highest ever net profit of Rs. 126 crores which is 25% growth over lastyear.

The Domestic Formulation business registered a growth of 20% over the previous year,driven by an excellent performance of the key brands. The International Business Divisionregistered an increase of 34% in sales as compared to the sales during FY 2009-10 and itcomprised 23% of the total revenues of the company during the year.

During the year, Rallis has acquired a 60.21% stake in Metahelix Life Sciences, aresearch led seeds company. This acquisition will firm up the Company’s presence inthe entire Seeds Value Chain that comprises breeding, production and marketing of seeds.

4. OTHERS

4.1 Water Purifier Business

TATA SWACH water purifier which was launched in 2009 has been accepted very well in themarket place. Tata Swach is currently available for sale in more than 12 states includingMaharashtra, Karnataka, Andhra Pradesh, West Bengal, Delhi, Uttar Pradesh and othermarkets across the country. The key components of the Tata Swach unit are beingmanufactured at the TCL plant in Haldia, West Bengal which has an existing capacity of 1.8million units per annum. The capacity is being ramped up to meet the expected increase indemand.

The sale of the product as well as those of replacement bulbs have been in line withexpectations. In view of the increasing demand of bulbs, a second plant is beingcommissioned in Nanded, Maharashtra.

4.2 Pulses

During the year, pilot launch of I- Shakti pulses was done in the states of Tamil Naduand Maharashtra. The pilot was aimed to integrate the strength of the Company’spresence in both farm and consumer facing ends of the business. The Company worked closelywith farmers helping them to improve the productivity of pulses and also sourced goodquality pulses which was marketed through the consumer products distribution network. Theconsumer response to the pilot launch was favourable and the Company intends to take thebranded pulses business national in the coming year.

4.3 Biofuels

As a part of its Biofuels Research and Development Programme using non conventional rawmaterials, the Company has set-up a bio-ethanol test plant of 30 KLPD at Nanded,Maharashtra. The Company now plans to set up a first generation bioethanol plant based onsugarcane only at Mozambique.

5. JOINT VENTURES

5.1 Indo Maroc Phosphore S.A. (IMACID)

IMACID is a joint-venture company established in Morocco for the purpose of securingsupplies of Phosphoric Acid, in which the Company has a 33.33% shareholding, together withtwo other equal partners, Chambal Fertilizer Company Limited and OCP, Morocco, who are theworld’s largest producers of Phosphoric rock and other phosphatic products. IMACID isengaged in the manufacture of phosphoric acid. The Company secures phosphoric acid throughsupply from IMACID for manufacture of fertilizers.

The cumulative production of Phosphoric acid in this period was 362,842 MT against416,947 MT of the previous year. The lower production was in line with planning since amajor shutdown of the plant had been taken during December Quarter to replace a Boiled anda Super-heater in the Sulphuric Acid plant which had come to the end of their useful life.Major overhauling of other plant and machinery was also undertaken to remove otherweaknesses in the plant arising out of continuous operation of the plant.

5.2 Khet-Se Agriproduce India Private Limited

Khet-Se Agriproduce India Private Limited (Khet-Se) is a joint venture (JV) between TCLand Total Produce, Ireland, one of Europe’s largest fresh produce providers.

During the year, 2010-11, Khet-se achieved a total distribution of 5660 MT against 4077MT of fresh produce valued at Rs. 9.46 crores against Rs. 7.17 crores in the previousyear. Khet-Se brand of Banana is now available with all the major retail chains like Wal-Mart, Spencers, and Reliance as a premium brand. Volume of business for Khet-Se Greens(Vegetables) has doubled during the current year. Key customers for greens are organisedretails in Punjab and Chandigarh. This business is yet to achieve the break-even point andthe desired level of turnover.

5.3 JOil (Singapore) Pte. Limited (JOil)

JOil, a Jatropha seedling company, is based in Singapore in which the Company holds33.78% stake. JOil has been set up by the Temasek Life Sciences Laboratory Limited (TLL),Temasek Life Sciences Ventures Pte. Limited (a subsidiary of Temasek Holdings) and otherinvestors in Singapore. JOil will set up commercial seed orchards and tissue culture labsin various locations, to produce and market high yielding Jatropha seedlings. Through thisJV, the Company has secured exclusive marketing rights for JOil’s Jatropha seedlingsin India and East Africa and a preferential price for seedlings it requires for its owncultivation of Jatropha.

FINANCE

During the year, the Company issued 1,15,00,000 equity shares of Rs. 10/- each to TataSons Limited on a preferential basis, at a price of Rs. 316/- per equity share resultingin an infusion of Rs. 363.40 crores to fund the Company’s growth plans.

Despite the increase in the level of working capital and increase in interest rates theCompany was able to contain the borrowings at almost the same levels of the previous yearand as a result of which net borrowing cost for the year was lower than previous year.

During the year, an amount of GBP 150 million (Rs. 1077 crores) has been raised by theCompany’s subsidiary, Tata Chemicals Europe Holdings Limited, without recourse to theCompany, to finance the acquisition of British Salt and to part refinance the existingloans of Tata Chemicals Europe Limited (formerly known as Brunner Mond).

During the year, the Company and its step-down subsidiary, Homefield Pvt. UK Limitedhave bought back a part of the USPP notes of USD 50 million (Rs. 223 crores). This is inaddition to the USD 50 million (Rs. 225 crores) bought back during F.Y. 2009-10.

During the year, the Company’s step-down subsidiary, Tata Chemicals Magadi Limited(formerly known as The Magadi Soda Company Limited) has repaid Shareholders’ loan tothe extent of USD 40 million (Rs. 178 crores).

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Ministry of Corporate Affairs, Government of India has vide Circular No. 2/2011dated February 8, 2011 granted general exemption subject to fulfillment of certainconditions from attaching the Balance Sheet of the Subsidiaries to the Balance Sheet ofthe Company without making an application for exemption. Accordingly, the Balance Sheet,Profit and Loss Account and other documents of the subsidiary companies are not beingattached with the Balance Sheet of the Company. Financial information of the subsidiarycompanies is disclosed in the Annual Report. The Annual Accounts of these subsidiaries andrelated detailed information will be made available to any member of the Company/ itssubsidiaries seeking such information at any point of time and are also available forinspection by any member of the Company/ its subsidiaries at Registered Office of theCompany. The Annual Accounts of the said Subsidiaries will also be available forinspection, as above, at the Head Offices of the respective subsidiary companies.

The Consolidated Financial Statements of subsidiaries and joint-ventures have beenprepared in accordance with Accounting Standards 21 and 27 of The Institute of CharteredAccountants of India which forms part of the Annual Report and are reflected in theConsolidated Accounts of the Company.

The consolidated financial results reflect the operations of following Subsidiaries:

• Homefield Pvt. UK Limited, UK, the holding company for Tata Chemicals EuropeHoldings Limited and Tata Chemicals Africa Holdings Limited and its holding companyHomefield International Pvt. Limited, Mauritius.

• Valley Holding Inc., US, the holding company for Tata Chemicals North AmericaInc. (formerly known as General Chemicals Industrial Products Inc.,) US, Gusiute Holdings(UK) Limited, the UK SPV, Wyoming 2 (Mauritius) Pvt. Limited, Mauritius SPV and itsholding company, Wyoming 1 (Mauritius) Pvt. Limited.

• Grown Energy (Proprietary) Limited, South Africa, the holding company for GrownEnergy Zambeze Limitada, Mozambique and its holding company Grown Energy Zambeze HoldingsPvt. Limited, Mauritius.

• Tata Chemicals Asia Pacific Pte Limited Singapore, Bio Energy Venture-2(Mauritius) Pvt. Limited and its holding company Bio Energy Venture-1(Mauritius) Pvt.Limited.

• Rallis India Limited

The consolidated financial results reflect the operations of following Joint Ventures:

• IMACID to the extent of the Company’s 1/3rd share in the Joint-Venture,

• Khet-se Agriproduce India Private Limited to the extent of the Company’s50% share in that Joint-Venture.

• JOil (Singapore) Pte. Limited to the extent of 33.78% share in theJoint-Venture.

DIRECTORS

During the year, Mr. Kapil Mehan, Executive Director, resigned from the services of theCompany with effect from August 31, 2010 and also ceased to be a Director on the Board ofthe Company with effect from August 31, 2010. The Board wishes to place on record itsappreciation for his valuable contribution during his long association with the Company.

Mr. Nasser Munjee, Dr. Yoginder K. Alagh, Dr. M.S. Ananth, Directors of the Company,are due for retirement by rotation and are eligible for re-appointment.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion and Analysisand the Corporate Governance Report together with the Auditors’ Certificate oncompliance with the conditions of Corporate Governance as laid down forms part of theAnnual Report.

INFORMATION TECHNOLOGY

As part of the Company’s efforts to unify the IT platform across the Company andits subsidiaries, SAP was implemented at Tata Chemicals Magadi Limited which went live inJanuary 2011 and will now be followed by other overseas subsidiaries. Further, as part ofthe global rebranding exercise all overseas subsidiaries of the Company have migrated to acommon email platform hosted from the Mumbai server. To comply with the impending IFRSlegislation system, configuration changes are in progress to get financial statements asper IFRS.

AWARDS AND RECOGNITIONS

The Company during the year has won many awards some of which are listed below:

Quality

• Sustained Excellence Award at JRDQV 2010

Corporate Sustainability and SHE

• "ICC" award for Excellence in Management of Safety, Health andEnvironment

• 4th in top ten Carbon Disclosure Leadership Index in CDP2010 - India 200 report

• CII ITC Sustainability Awards for TCL Babrala and Mithapur

• Serious Adopters’ of Affirmative Action by Tata Group

• Gujarat Safety Council Award for TCL, Mithapur

Communications

• Gold Quill Awards for Excellence in Communications

• 11 ABCI National Awards and Star Communicator Company of the year for CorporateCommunications

• 5 PRCI awards for communication excellence

Finance

• Silver ICAI Award for Excellence in Financial Reporting

Product

• Tata Salt Hall of Fame award at the Economic Times Brand Equity Survey 2010

• Pitch Marketing Award for Tata Swach in the ‘Bottom of the Pyramid’category

• Gold at IDSA Design Awards for Tata Swach Design

• Sniff Award for Tata swach for New Product Innovation in Leapvault Changeleadership Awards 2010

Innovation

• Global ICIS award for Best Product Innovation – Tata Swach

• Gold at the Asian Innovation Awards 2010 for Tata Swach

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956, read withthe Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988 is annexed hereto as Annexure ‘A’ and forms part of this Report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975 as amended, the names and otherparticulars of the employees are set out in the Annexure to the Directors’ Report.However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, theAnnual Report excluding the aforesaid information is being sent to all the members of theCompany and others entitled thereto. Any member interested in obtaining such particularsmay write to the Company Secretary at the Registered Office of the Company.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the statutoryauditors of the Company, hold office till the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment. It is proposed to reappoint them as StatutoryAuditors of the Company for the FY 2011-12. The members are requested to consider theirappointment and authorise the Board of Directors to fix their remuneration. The auditorshave, under Section 224(1B) and Section 226 of the Companies Act, 1956, furnishedcertificate of their eligibility for the appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on therepresentations received from the Operating Management, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed and that there are no material departures;

ii) they have in the selection of the accounting policies, consulted the StatutoryAuditors and have applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year viz., March 31, 2011 and of the profit of theCompany for the year ended on that date;

iii) they have taken proper and sufficient care, to the best of their knowledge andability, for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956, for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for their continued supportand co-operation by Financial Institutions, Banks, Government authorities and otherstakeholders. Your Directors also acknowledge the support extended by the Company’sUnions and all the employees for their dedicated service.

Annexure ‘A’

(UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956)

(a) Energy Conservation measures taken:

• Installation of variable speed drives for HCT and HRT in ESF plant.

• Installation of solar powered 50 no’s of street lights at various locationsin the plant as well as in the township.

• Rectifier up-gradation in chloro caustic plant.

• Replacement of inefficient compressor with efficient compressor. Cl2

• Increasing the height of Lime kiln and modification of top mechanism andreplacement of brick lining.

• Supply Voltage optimization.

• Energy efficient lighting using T5 & MH.

• Replacement of Split ACs and Township fans by 5 star rated ones.

• Astronomical Timers for twilight switching.

• Steam consumption improved in Turbo Generator in Sulphuric Acid Plant byimproving vacuum conditions & steam conditions from upstream Boiler.

• In Single Super Phosphate plant, Ball Mill efficiency was improved from 11 to12.8 TPH. By this, Specific Energy consumption in Single Super Phosphate plant improved.

• Energy Audit was carried out internally and the areas where power was wastedwere identified & provided with timer. Transpak sheets were introduced in Ware Houseareas to minimize day time power consumption.

• Replaced 15 nos 125W Hg. Vapour lamps with 70 Watt Metal Halide lamps for streetlight illumination & power saving.

• Major Inspection (MI) of GT-2 has been carried out, which resulted in increasein overall output by 3.3% and heat rate reduced by 2.05%.

• Prevacuum separator (MV-29) internals modification carried out to reduce steamconsumption in Urea plant.

• Titanium Urea Stripper replaced with Bi-metallic Urea Stripper in 21-Urea Streamto reduce steam consumption in Urea plant.

• High temperature steam condensate line (LC header) insulated to reduce heatlosses in 11&21 Urea streams.

• Ammonia Cooling Tower cells (03Nos.) renovation carried out to improve CTefficiency resulting in ammonia energy improvement.

• Variable Frequency Drives (VFD) installed for waste water transfer pumps (11/21P-21 A/B) in Urea Plant to reduce urea plant power consumption.

• Medium Temperature Shift Converter (MTS) catalyst replaced in ammonia plant,which reduced the pressure drop in the front end of the plant.

(b) Additional investments and proposals, if any, being implemented for reduction ofenergy consumption:

• New capital projects being done with energy efficient motors, energy efficientlighting, high efficiency distribution transformers & Intelligent Motor ControlCentres.

• New Energy Audit - Power plant energy audit awarded to ERDA, Cement Plant energyaudit awarded to CII. Measurement phase in progress.

• Renovation of Fur-C with new burner blocks and tie rods.

• Replacement of Membrane, CTMM for Electrolyser.

• Existing Titanium Urea Stripper replacement is planned with Bi-metallic UreaStripper in 11-Urea Stream to reduce steam consumption in Urea plant.

• Arrangement for back flushing of Urea Exchangers to improve efficiency.

• Implementation of Advanced Process Controller (APC) in Captive Power Plant (CPP)to improve CPP efficiency.

(c) Impact of the measures at (a) and (b) for reduction of energy consumption andconsequent impact on the cost of production:

• Reduction in specific consumption of steam in soda ash.

• Reduction in specific consumption of steam in salt.

• Reduction of power consumption.

• Reduction in green house gas emission.

• By improving vacuum conditions & steam conditions from upstream Boiler,Steam consumption improved from 6.1 TPH to 4.8 TPH in Turbo Generator in Sulphuric AcidPlant.

• In Single Super Phosphate plant, throughput improved from 20 to 23.5 TPH. Bythis, Specific Energy consumption in Single Super Phosphate plant improved from 28 KWH/Tto 24 KWH/T of SSP & Improved cost of production.

• By closing Energy Audit points, the areas where power was wasted in day timewere reduced through timer implementation. Transpak sheets were introduced in Ware Houseareas to minimize day time electric power usage.

• Improved energy efficiency of Ammonia Plant by reducing fuel consumption andsteam consumption.

• Improved energy efficiency of O&U by reducing fuel consumption.

• Improved energy efficiency of Urea Plant by reducing steam/ power consumption.

Form A

The captive Steam Power plant at Mithapur is based on "Total Energy" concept,co-generating steam and power and therefore the cost of steam and power is shown as acomposite number in the following calculation:

POWER AND FUEL CONSUMPTION

Research and Development (R&D)

1. Specific areas in which R&D is carried out by the Company

• KTMS type mixed salt & KCL recovery from sea bittern.

• Developments of manufacturing process of Papad khar.

• Improved vacuum salt quality & productivity through the absorption ofEvatherm Technology, Switzerland.

• Improvement in Bicarbonate efficiency.

• Improvement in effluent filtration efficiency.

• Fluorine reduction in liquid effluent by incorporating two stage neutralizersteps in process.

• Incorporation of additional 4 nos spray nozzles in gas duct to reduce Fluorine& SPM from stack of SSP Plant.

• Lab scale trials for two new products viz., Potassium Nitrate & watersoluble NPK 19:19:19 completed.

2. Benefits derived as a result of above R & D

• Collection of data for process scale up and validation of technical &economical feasibility.

• Achieved Fluorine reduction by 85 % in liquid effluent.

• Achieved 20 % reduction in Fluorine reduction & SPM reduction.

3. Future plan of action

• Installation of manufacturing plant of sulphate of potash from sea bittern.

• Continued R&D efforts to attain objectives of cost reduction, energyconservation, waste minimization / recycling & reuse, related value added products,reduction in carbon footprints and environmental improvement.