Gurgaon, 27 January, 2005

FINANCIAL RESULTS
Continuing businesses performed strongly during the quarter and also for the nine months ended 31 December 2004, as can be seen from the segment results. However, the overall results are not comparable with those of the corresponding period of the previous year in view of the sale of the Nitrocellulose and Trading Businesses towards the end of 2003-04 and non-recurring exceptional income in the corresponding period last year.

QUARTER: October- December 2004
Sales from the continuing businesses grew 24% while the segment profit recorded a growth of 49% compared to the corresponding period last year. The total income of Rs 220 cr and gross profit from operations of Rs 25.6 cr for the quarter compared favourably with those of the corresponding quarter last year at Rs 199 cr and Rs 25.1 cr respectively. Depreciation for the quarter at Rs 5.1 cr is lower than last year due to asset impairment recognized in the April-June 2004 quarter.

With no major exceptional items during the quarter (as against previous year's income of Rs 49.5 cr), the PAT for the quarter was Rs 12.6 cr as against Rs 61.5 cr during the same period last year.

Business Segments

Paints: Sales for the quarter at Rs 165 cr grew well ahead of the market with strong performance of key brands both in Deco and Refinish. Higher volumes and improved mix offset the pressure on margins due to increase in input costs to result in a profit of
Rs 12.6 cr, a growth of 35% over the previous corresponding quarter.

Chemicals: During this quarter, Chemicals sales at Rs 85 cr grew by 14% on the back of good growth in Adhesives sales. This, together with improved mix resulted in profit of Rs 7.5 cr representing a growth of 78% over the corresponding period of the previous year. All the businesses in the segment posted strong growth in topline. Margins continue to be under pressure, especially in Rubber Chemicals, due to increase in input costs, which could only partially be offset by price corrections.

As a prudent accounting practice, it has been decided to continue the impairment provision for the Rubber Chemicals net fixed assets.

Nine months - April - December 2004
Sales and operating profit from the continuing businesses grew by 23% and 51% respectively, with robust growth in the company's core businesses and lower depreciation charge. However, on account of the divestment of Nitrocellulose and trading Businesses in March 2004 and large exceptional income in the previous year, the PAT for nine months April-December 2004 at Rs 48.2 cr was lower against Rs 76.0 cr in the corresponding period last year.

For further information:

R Guha
Tel: +91 124 2540810
Fax: +91 124 2540839
E mail: r_guha@ici.com