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Directors Report of Kothari Petrochemicals Ltd.

Mar 31, 2015

To the Members

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2015.

Financial Summary of the Company (Rs.in Lakhs)

Financials Highlights

Particulars 2014 - 2015 2013 - 2014

Profit/(Loss) before Interest and 2,138.64 1,519.77 Depreciation

Interest 248.00 124.71

Depreciation 254.26 199.21

Proft/(Loss) Before Tax 1,636.38 1,195.85

Tax Adjustments including Deferred Tax 505.89 405.21

Proit / (Loss) after Tax 1,130.49 790.64

Proit brought forward from previous year 245.87 143.70

Proit available for appropriation 1,248.44 934.34

Proposed Dividend 588.46 588.46

Dividend Distribution Tax 119.80 100.01

Proit / (Loss) after Appropriation 540.17 245.87

The Company's total revenue is Rs. 28,227 Lakhs for the year ended March 31, 2015 as against Rs.33,978 Lakhs for the previous year 2013-14. The decrease in revenue was due to reduction in LPG & Poly Iso Butene (PIB) Sales and its realisations.

Operational Review and State of Affairs:

General Information about the Company, the Board's perception of future of the company considering market competition, production constraints, government polices etc. are highlighted below:

The existing PIB plant was commissioned in 1990 with a production capacity of 5500 TPA. Subsequently the capacity was enhanced to 11000 TPA. Considering the growing demand for PIB, the plant capacity was further expanded to 22000 TPA in 2007. Again, after carrying out an intensive study of the operational philosophy and suitable changes in the plant, the capacity was further increased to 24,000 TPA level since 2014 in terms of KVS 10.

Further studies are being undertaken to explore the possibilities of further enhancement of production from the current level.

Performance

As a result of continuous efforts, your Company's manufacturing plant once again recorded "Accident Free" operation throughout the year 2014-2015. All the personnel in the plant have been undergoing periodical training in their respective areas of operation which are frequently reviewed by the senior officials. The training sessions are conducted as class room as well as in the filed.

Your company achieved a production of 18714 MT which translates to a capacity utilisation of 90%. The company achieved total sales of 18681 MT and in particular, production and sales for the month of March 2015 were the highest.

The domestic sale price was better for the year as compared to previous year though the export price was slightly less. However, the overall average price realisation compared favourably than the previous year.

Your company continues to take lot of efforts to improve the quality of the product based on the feed back received from customers which facilitates penetration into new market segments.

In recognition of its commitment to quality and environment, M/s Det Norske Veritas, Netherlands has renewed the following certifications.

(i) ISO 9001:2008 (Quality Management systems)

(ii) ISO 14001:2004 (Environment Management System)

DIRECTORS' REPORT

It is significant to mention that your company has been able to re-enter the European Market by securing registration under "REACH" (Registration, Evaluation, Authorisation and Restriction of Chemicals).

Credit Ratings:

(i) Your company also secured the Credit Rating with an up gradation on the Long Term Rating (Line(s) of Credit - LOC) from ICRA BBB to ICRA A- and short term rating from ICRA A2 to ICRA A2 . The ratings are valid till January 31, 2016.

(ii) The credit rating certificate as required by the Liquefied Petroleum Gas (Regulation of Supply and Distribution), Order 2000 have been renewed by the rating agency ICRA dated December 01,2014. The rating Committee of ICRA after due consideration of the developments in your Company, has retained the rating as "2" (Satisfactory) valid till November 30,2016 for selling the LPG.

Prospects:

Due to diminishing demand from the automobile segment, which is the single largest consumer of PIB, there is need to explore possibilities of manufacturing other kind of PIB, which will have a good demand in future.

As of now there is no constraint for the plant in achieving the maximum production capacity as the plant is in good health and the availability of raw material is assured since a long term supply contract has been entered into with the suppliers.

Since Ministry of Petroleum and Natural Gases has notified that all the LPG manufacturers in the private sector should not sell LPG to parallel marketers, there is likelihood of PIB manufacturers losing heavily in the sales realisation of return stream supply to PSU Oil Marketing Companies. Representations have been made to the Government explaining the facts and requesting to exempt all PIB manufacturers from the above order.

Dividend:

The Directors recommend a dividend at the rate (@10%) of Re.1/- per equity Share of Rs.10/- each for the financial year ended March 31,2015 (last year Re.1/-). If approved by the Members at the ensuing Annual General Meeting to be held on 10th August, 2015, it will be disbursed before 09th September, 2015 to those Members whose names appear in the Company's Register of Members and to those persons whose names appear as Beneficial Owners (as per the details to be furnished by the Depositories in respect of the shares held in dematerialized form) as at the close of business hours on 03.08.2015.

Meetings:

During the year, 05 Board Meetings and 04 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period as prescribed under the Companies Act, 2013.

Share Capital:

The paid up share capital as on March 31,2015 was Rs.5,918.68 Lakhs. The company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

Directors and Key Managerial Personnel:

Shri B.H.Kothari, Chairman and Managing Director of the Company and Member of various Committees expired on 22.02.2015. The Board of Directors express their deep anguish and recalled the valuable contribution made by Mr. Kothari during his tenure as the Chairman and Managing Director of the Company and conveyed its heartfelt condolence to the family members of Shri B.H. Kothari.

On the unanimous suggestion of the Board, Mrs.Nina B. Kothari was elected as Chairperson of the Board of Directors of the Company w.e.f. 08.04.2015 in the place of Shri.B.H.Kothari, Chairman & Managing Director who expired on 22.02.2015.

The Board of Directors at its meeting held on April 08, 2015 appointed Mr.Arjun B Kothari (DIN 07117816) as an Additional Director of the Company to hold office up to the date of the forthcoming Annual General Meeting of the Company and he is eligible for appointment as Director by the members.

After the demise of Shri B.H.Kothari, Chairman and Managing Director (Key Managerial Person) of the Company, the Board of Directors appointed Mr.Arjun B. Kothari as Managing Director and Whole Time Key Managerial Person of the Company w.e.f. April 08, 2015 subject the approval from the Members and Central Government.

Mrs.Nina B Kothari, (DIN 00020119) Director is retiring by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Mrs.Jayalakshmi Ramaswamy, Chief Financial Officer (CFO) of the company resigned w.e.f. 30th November 2014 and Mr.Cyrus Kallupurackal appointed as Chief Financial Officer (CFO) w.e.f. 23rd February 2015.

Declaration from Independent Directors

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet the criteria of their Independence laid down in Section 149(6).

Composition of Audit Committee

The Audit Committee comprised of the following directors for the year ended 31st March 2015:

Name of Directors Designation

Mr.P.N.Devarajan Chairman (Independent Director)

Mr.Pranab Kumar Rudra Member (Independent Director)

Dr. R.K. Raghavan Member (Independent Director)

The Board has not rejected any proposal / recommendations of Audit Committee during the year.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Vigil Mechanism:

The Company has a Vigil Mechanism named Whistle Blower Policy to deal with genuine concern raised by the Directors / Employees, if any. The details of the Whistle Blower policy is explained in the Corporate Governance Report and also posted on the Company's website www.kotharipetrochemicals.com

Prevention of Insider Trading:

The Company has adopted a Code for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and Designated Employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the Code.

Director's Responsibility Statement:

In terms of Section 134(5) of the Companies Act, 2013, the Directors would like to state that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Subsidiary Companies

Your Company has incorporated M/s. Kothari Petrochemicals Pte. Ltd., Singapore (KPL SG) as wholly owned foreign subsidiary and Kothari Petrochemicals HK Ltd., Hong Kong (KPL HK) as a step down foreign subsidiary in the year 2013-14 to serve the customers in the Asia Pacific region to the fullest satisfaction of the customers.

While the subsidiary KPL SG recorded a loss of Rs.5.32 Lakhs for the year ended 31st March 2015 as against a loss of Rs.2.20 Lakhs for the previous year, the step down subsidiary KPL HK made a profit of Rs.68.35 Lakhs for the year ended 31st March 2015 as against a profit of Rs.1.4 Lakh for the previous year.

Further efforts are being taken by the subsidiaries to bring in new customers. The objective of incorporation of these foreign subsidiaries has started showing positive results. The subsidiary companies are now well accepted by the market and lots of enquiries are being received and this would help us to enlarge the company's market share in South East Asia region.

Pursuant to Section 136 of the Companies Act, 2013, the Companies are exempted from attaching the Audited Financial Statement and other particulars of its subsidiary Companies alongwith the Annual Report of the Company. However, a Statement containing salient features of the financial statement of the subsidiary Company in form AOC-1 is forming part of Financial Statements.

The Financial Statement of Kothari Petrochemicals Pte. Ltd., Singapore and Kothari Petrochemicals HK Ltd., Hong Kong, the subsidiaries of your company is kept at the registered office for inspection of members during working hours and the same is also available on the website of Kothari Petrochemicals Limited. The Company shall provide the copy of the financial statements of its subsidiary Companies to the shareholders upon their request.

Extract of Annual Return:

As required, pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT - 9 is annexed with this Report as Annexure I.

AUDITORS:

a) Statutory Auditors

The Statutory Auditors of the Company, M/s.R.Subramanian and Company, Chartered Accountants, Chennai, hold office till the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules framed there under.

The Audit Committee and the Board of Directors recommend the re-appointment of M/s.R.Subramanian and Company, Chartered Accountants, Chennai as the Auditors of the Company in relation to the financial year 2015-16 till the conclusion of the next Annual General Meeting. The re-appointment proposed is within the time frame for transition under the third proviso to sub-section (2) of Section 139 of the Companies Act, 2013.

As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

b) Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit Records maintained by the Company in respect of its Poly Iso Butene (PIB) unit required to be Audited. Your Directors, on the recommendation of the Audit Committee, appointed M/s. P.RajuIyer, M.Pandurangan & Associates, Cost Accountant in practice for conducting the audit of cost records of the Company for the financial year 2015-16 on a remuneration of Rs.50,000/- (Rupees Fifty Thousand Only). 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 Member's ratification for the remuneration payable to M/s.PRajulyer, M.Pandurangan & Associates, Cost Accountant is included at Item No.7 of the Notice convening this Annual General Meeting.

c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs.V.Vasumathy, Company Secretary in Practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as "Annexure II".

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure IN".

Deposits

The Company has not accepted deposit either from member or public falling within the ambit of Chapter V of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 during the year.

Internal Control Systems and their Adequacy

The Company has an Internal Control system, commensurate with the size, scale and complexity of its operations. The Internal Auditor function is carried out by independent firm of Chartered Accountants. The scope and authority of the Internal Audit (IA) function is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee for its scrutiny and suggestions, if any. The Internal Auditors are present at all the meetings of Audit Committee.

The Internal Auditors monitor and evaluates the efficacy and adequacy of the internal control system in the company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the Internal Auditors, the Company undertakes corrective action in the respective areas and strengthen the controls.

Particulars of Loans, Guarantees or Investments:

The company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements.

Risk Management Policy:

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company laid down the procedures to inform Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Report to the Board for the review and suggestions.

Corporate Social Responsibility Policy:

Pursuant to the provisions of Section 135 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility Committee (CSR) was formed to recommend: (a) the policy on Corporate Social Responsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on Corporate Social Responsibility as approved by the Board is posted on the Company's website www.kotharipetrochemicals.com.

As part of its initiatives under "Corporate Social Responsibility" (CSR), the company has contributed funds for the schemes of promotion of education. The contributions in this regard have been made to the registered trust which is undertaking these schemes. Report on CSR activities in the prescribed format attached in Annexure IV.

Related Party Transactions:

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business and there are no 'material' contracts or arrangement or transactions at arm's length basis and thus disclosure in form AOC-2 is not required.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted, a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is posted on the Company's website www.kotharipetrochemicals.com.

Formal Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, with the format prescribed by the Nomination and Remuneration Committee of the Company.

The structured questionnaire is covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.

Separate Meeting of Independent Directors

The Independent Directors of the Company had met during the year to review the performance of Non-Independent Directors, Board as a whole and review the performance of the Chairperson of the Company and also reviewed the access, the quality, quantity and timeliness of flow of information between the company management and the Board with out the presence of the Non-Independent Directors and members of the Management.

Disclosure about Cost Audit

Filing of Cost Audit Report 2014 - 2015 2013 - 2014

27.09.2014 Due Date 09.09.2015 (Filed with MCA on 25.09.2014)

M/s. PRajuIyer M/s. PRajuIyer Cost Auditor Details M.Pandurangan & M.Pandurangan & Associates, Associates, M.No.27969, Chennai M.No.27969, Chennai

Audit Qualification in Report Nil Nil

Listing with Stock Exchanges

The Company listed in The National Stock Exchange of India Limited (NSE) and the Stock Code is KOTHARIPET. The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE where the Company's Shares are listed.

Corporate Governance and Shareholders Information

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement.

A report on Corporate Governance is included as a part of this Annual Report.

Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached with the Corporate Governance Report.

Particulars of Employees and related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.

No Employee draws remuneration in excess of the limits in terms of the provisions of the Section 197(12) of the Companies Act, 2013 read with rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Consolidated Financial Statements

As stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges, the Consolidated Financial Statements have been prepared by the Company in accordance with applicable Accounting Standards issued by the Institute of Chartered Accountants of India alongwith Auditors Report and form part of this Annual Report.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis as describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

Acknowledgement

Your Directors thank the Banks, Customers, Debenture Holders, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your directors also place on record their appreciation for the committed services by the employees of the Company.

On behalf of the Board for Kothari Petrochemicals Limited Place: Chennai Nina B. Kothari Date: 28th May, 2015 Chairperson


Mar 31, 2014

Dear Members,

The Directors present the 25th Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2014.

1. Highlights of the Company''s Financial Performance for the year are summarized below.

(Rs. in Lakhs)

Particulars 2013 - 2014 2012 - 2013

PBIDT 1,519.77 1,117.29

Interest 124.71 129.84

Profit after Interest before 1,395.06 987.45 Depreciation and Tax

Depreciation 199.21 249.21

Tax Expenses 405.21 217.68

Profit After Depreciation 790.64 520.56 and Tax

Profit brought forward from 143.70 139.50 previous year

Profit available for 934.34 660.06

appropriation

Proposed Dividend 588.46 441.35

Dividend Tax on Proposed 100.01 75.01 Dividend

Balance Carried to Balance 245.87 143.70 Sheet

2. Performance for the financial year 2013-14

The Company''s total revenue is Rs.33,978.46 Lakhs for the year ended March 31, 2014 as against Rs.23,975.44 Lakhs for the previous year 2012-13. The increase in revenue was due to higher sales volume and higher selling price.

Your Company''s manufacturing plant continues to adhere to all the safety norms and conducts periodic safety reviews & technical audits to update / upgrade the norms to suit the latest requirements. This has resulted in achieving an "ACCIDENT FREE" operation throughout the year 2013-14. All the employees are periodically being given training in their respective areas of operation which are frequently reviewed by the senior officials to identify any gaps to take appropriate action to improve the efficiency.

Your company continues to take efforts to improve the quality of the product based on the feedback received from various customer segments which enables penetration into new market segments overseas.

In recognition of its commitment to quality and environment, your company has won the following awards:

* Quality Management System (ISO 9001:2008)

* Environmental Management System (ISO 14001: 2004)

by the reputed agency M/s.Det Naorske Veritas, Germany

3. Subsidiary Companies

Your Company incorporated a subsidiary company called "Kothari Petrochemicals Pte. Ltd., Singapore" and a step-down subsidiary Company called "Kothari Petrochemicals HK Ltd., Hong Kong" during the year 2013-14. The objective for incorporation of these foreign subsidiaries was to increase the sales and expanding the company''s market presence in the South East Asia / Asia Pacific region and also to serve the existing overseas customers in a much better way in terms of Full On Time delivery (F O T) by better coordination with logistics agencies.

Apart from this, the focus is also on bringing additional business from the potential market in the region to strengthen your company''s presence in South East Asian / Asia Pacific market as well as in other regions of the world. The subsidiary companies are now well accepted by the market and lots of enquiries are being received which would help to enlarge the market share in South East Asia region.

Pursuant to Ministry of Corporate Affairs (MCA) General Circular No.2/2011 dated 8th February, 2011 the accounts of the subsidiary company need not be attached along with the accounts of the holding company as required by Section 212 of the Companies Act, 1956 upon fulfilling certain conditions stipulated in the said circular. Therefore, Annual Accounts of the wholly owned Subsidiary and step down Subsidiary namely M/s.Kothari Petrochemicals Pte.Ltd (Singapore) & Kothari Petrochemicals HK Ltd. (Hong Kong) respectively for the year ended 31st March 2014 are not attached herewith.

The Annual Accounts of the above subsidiaries are kept at the registered office for inspection of members during working hours and the same are also available on the website of Kothari Petrochemicals Limited.

4. Dividend

The Directors recommend a dividend at the rate (@10%) of Re.1/- per equity Share of Rs.10/- each for the financial year ended March 31, 2014 (last year Re.0.75 paise). If approved by the Members at the ensuing Annual General Meeting to be held on 02nd September, 2014, it will be paid on or before 01st October, 2014 to those Members whose names appear in the Company''s Register of Members and to those persons whose names appear as Beneficial Owners (as per the details to be furnished by the Depositories in respect of the shares held in dematerialized form) as at the close of business hours on 26.08.2014.

5. Disclosure under Section 217(2A) and 217(1) (e) of the Companies Act, 1956

During the year no employee has drawn salary in excess of the amount prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

Information in accordance with Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is furnished in ''Annexure I''

6. Public Deposits

The Company has not accepted any Public Deposit during the year and there was no outstanding deposit at anytime during the year.

7. Directors

Mr.B.H.Kothari, Director, is retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment In accordance with Section 149 and other applicable provisions of the Companies Act, 2013, your Directors Mr.P.N.Devarajan and Mr.Pranab Kumar Rudra are seeking appointment as Independent Director for a term of five consecutive years upto 31 March, 2019. Details of the proposal for the appointment of Mr.P.N.Devarajan and Mr.Pranab Kumar Rudra are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 25th Annual General Meeting.

Mr.P.S.Balasubramanaim resigned from the Board with effect from 05.11.2013 and Mr.G.Narayanaswamy resigned from the Board with effect from 28.05.2014. The Board of Directors places on record its appreciation for the valuable services rendered by them.

The Board of Directors at its meeting held on May 27, 2014 appointed Mrs.Nina Bhadrashyam Kothari (Women Director & Non-Executive and Non-Independent) and Dr.R.K.Raghavan (Non-Executive & Independent) as Additional Directors of the Company to hold office up to the date of the forthcoming Annual General Meeting of the Company and they are eligible for appointment as Director by the members.

8. Directors'' Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

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

ii. that the directors had selected such accounting policies and applied them consistently and made judgment 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 profit or loss of the company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv. that the directors had prepared the annual accounts on a going concern basis.

9. Corporate Governance

We believe that Corporate Governance is the crux of Shareholder value creation. Our governance practices along with the Auditor''s Certificate on its compliance are attached hereto as an Annexure to this report.

10. Re-appointment of Statutory Auditors

M/s.R.Subramanian and Company, Chartered Accountants, Chennai, the retiring Auditors, are eligible for re-appointment.

11. Cost Auditor

Pursuant to section 233B of the Companies Act, 1956 and the MCA General Circular No.15/2011 dated 11th April 2011 and subject to the approval of Central Government, the Audit Committee has recommended and the Board of Directors appointed M/s.P.RajuIyer, M.Pandurangan & Associates, Practising Cost Accountants, as Cost Auditor of the Company for the year 2014 - 2015.

Filing of Cost 2013 - 2014 2012 - 2013 Audit Report

Due Date 27.09.2014 27.09.2013

Actual Date (Target) 23.09.2013 25.09.2014

Cost Auditor Details M/s.P.RajuIyer, M/s.P.RajuIyer, M.Pandurangan & M.Pandurangan & Associates, Associates,M.No.27969, M.No.27969, Chennai Chennai

Audit Qualification in - Nil Repor

12. Acknowledgement

The Board acknowledges the co-operation and support extended by the employees, consultants, suppliers, customers and all its business associates. The Directors place on record their appreciation for the continued support and co-operation they have received from Financial Institutions, Banks, Central and State Governments.

On behalf of the Board for Kothari Petrochemicals Limited

Place: Chennai B.H. Kothari Date : May 27, 2014 Chairman and Managing Director


Mar 31, 2013

To the Members,

The Directors present the 24th Annual Report of the Company together with the Audited Accounts for the year ended March 312013.

1. Highlights of the Company''s Financial Performance for the year are summarized below.

(Rs. in Lakhs)

Particulars 2012 - 2013 2011 -2012

PBIDT 1,117.29 945.20

Interest 129.84 122.47

Profit after Interest before 987.45 822.73

Depreciation and Tax

Depreciation 249.21 171.95

Tax Expenses 217.68 221.99

Profit After Depreciation 520.56 428.79 and Tax

Profit brought forward from 139.50 52.67 previous year

Profit available for 660.06 481.46 appropriation

Proposed Dividend 441.35 294.23

Dividend Tax on Proposed 75.01 47.73 Dividend

Balance Carried to Balance 143.70 139.50 Sheet

2. Performance for the financial year 2012-13

The Company has achieved a total revenue of Rs.23,975.45 Lakhs for the year ended March 31, 2013 as against Rs.16,219.69 Lakhs for the previous year. The revenue increased due to higher sales volume and higher selling price.

Your Company''s manufacturing plant continues to adhere to all the safety norms and conducts periodic safety reviews & technical audits to update / upgrade the norms and to suit the latest requirements. All operators are continuously given adequate in-house training by senior executives. Due to tireless efforts, significant improvements are seen in the overall house keeping and a lot of awareness among the workers on the need for good housekeeping is witnessed.

Your company is embarking on a journey to improve the quality of the product based on the feed back being received from various customer segments to penetrate new market segments overseas.

In recognition of its commitment to quality and environment, your company has been awarded with:

- Quality Management System (ISO 9001:2008)

- Environmental Management System (ISO 14001: 2004)

by the reputed agency M/s.Det Naorske Veritas, Germany

3. Subsidiary Company

Your company incorporated a wholly owned subsidiary company namely Kothari Petrochemicals Pte. Ltd., Singapore in the month of July 2013 to explore and improve the market share in South East Asia region for our products.

4. Dividend

The Directors recommend a dividend of Re.0.75 paise per equity Share of Rs.10/- each for the financial year ended March 31, 2013 (last year Re.0.50 paise). If approved by the Members at the ensuing Annual General Meeting to be held on 05th September, 2013, it will be paid on or before 04th October, 2013 to those Members whose names appear in the Company''s Register of Members and to those persons whose names appear as Beneficial Owners (as per the details to be furnished by the Depositories in respect of the shares held in dematerialized form) as at the close of business hours on 27.08.2013.

5. Disclosure under Section 217(2A) and 217(1 )(e) of the Companies Act, 1956

During the year no employee has drawn salary in excess of the amount prescribed under provisions of sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 is furnished in Annexurer

6. Public Deposits

The Company has not accepted any Public Deposit during the year and hence there was no outstanding deposit at anytime during the year.

7. Directors

Mr.G.Narayanaswamy, Director, is retiring

by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment

8. Directors'' Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

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

ii. that the directors had selected such accounting policies and applied them consistently and made judgment 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 profit or loss of the company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv. that the directors had prepared the annual accounts on a going concern basis.

9. Corporate Governance

We believe that Corporate Governance is the crux of Shareholder value creation. Our governance practices along with the Auditor''s Certificate on its compliance are attached hereto as an Annexure to this report.

10. Re-appointment of Auditors

Mr.R.Subramanianand Company, Chartered Accountants, Chennai, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. As required under section 224 of the Companies Act, 1956, the company has obtained from them a confirmation to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said section.

11. Cost Auditor

Pursuant to section 233B of the Companies Act, 1956, M/s.P.Rajulyer, M.Pandurangan & Associates, a Practising Cost Accountants, were appointed as Cost Auditor forthe year 2013 - 2014.

Filing of Cost Audit Report 2012-2013 2011-2012

Due Date 27.09.2013 28.02.2013

Actual Date (Target) 25.09.2013 29.01.2013

Cost Auditor Details M/s.P.Rajulyer, M.Pandurangan M/s.P.Rajulyer, M.Pandurangan & Associates, M.No.27969, Chennai & Associates, M.No.27969, Chennai

Audit Qualification in Report -- NIL

12. Acknowledgement

The Board acknowledges the co-operation and support extended by the employees, consultants, suppliers, customers and all its business associates.

The Directors place on record their appreciation for the continued support and co-operation they have received from Financial Institutions, Banks, Central and State Governments.



On behalf of the Board

for Kothari Petrochemicals Limited

Place: Chennai B.H. Kothari

Date : July 31, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors present the 23rd Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2012.

The performance highlights of the Company for the year are summarized below.

1. Financial Performance

(Rs. in Lakhs)

Particulars 2011 - 2012 2010 - 2011

PBIDT 945.20 1,219.18

Interest 122.47 48.46

Profit after Interest before 822.73 1,170.72 Depreciation and Tax

Depreciation & Goodwill 171.95 279.90

Profit after Depreciation 650.78 890.82 &Goodwill

Tax Expenses 221.99 183.71

Profit After Tax 428.79 707.11

Profit/(Loss) brought 52.67 (312.47) forward from previous year

Profit available for 481.46 394.64 appropriation

Proposed Dividend 294.23 294.23

Dividend Tax on 47.73 47.73 Proposed Dividend

Balance Carried to 139.50 52.67 Balance Sheet

2. Performance for the financial year 2011-12

The Company has achieved a turnover of Rs. 17,338 Lakhs for the year ended March 31, 2012 as against Rs.15,957 Lakhs for the previous year.

Your Company's manufacturing plant adheres to all the safety norms and conducts periodic safety reviews & technical audits to update/upgrade the norms and to suit the latest requirement. All operators are given adequate in-house training by senior executives. The infrastructure within the plant area has been improved and modernised with substantial investment. Extra care has been taken for housekeeping including green belt development programme.

All the initiatives taken by your company to improve the product quality and to satisfy the customers are well recognised by the overseas as well as domestic customers and through their feed back and appreciation of the better quality of our product we infer that it is in line with international quality.

In recognition of its commitment to quality and environment, your company has been awarded with:

- Quality Management System (ISO 9001:2008)

- Environmental Management System (ISO 14001: 2004)

by the reputed agency M/s.Det Naorske Veritas, Germany

3. Dividend

The Directors recommend a dividend of Re.0.50 (Fifty paise only) per equity Share of Rs.10 each for the financial year ended March 31, 2012. If approved by the Members at the ensuing Annual General Meeting to be held on 20th September, 2012, it will be paid on or before 19th October, 2012 to those Members whose names appear in the Company's Register of Members and to those persons whose names appear as Beneficial Owners (as per the details to be furnished by the Depositories in respect of the shares held in dematerialized form) as at the close of business hours on 13.09.2012.

4. Disclosure under Section 217(2A) and 217(1)(e) of the Companies Act, 1956

During the year no employee has drawn salary in excess of the amount prescribed under provision of sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 is furnished in 'Annexure I'

5. Public Deposits

The Company has not accepted any Public Deposit during the year and hence there was no outstanding deposit at anytime during the year.

6. Directors

Mr. P.K. Rudra, Director, is retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment

7. Directors' Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

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

ii. that the directors had selected such accounting policies and applied them consistently and made judgment 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 profit or loss of the company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

iv. that the directors had prepared the annual accounts on a going concern basis.

9. Corporate Governance

We believe that Corporate Governance is the crux of Shareholder value creation. Our governance practices along with the Auditor's Certificate on its compliance are attached hereto as an Annexure to this report.

10. Re-appointment of Auditors

M/s. R.Subramanian and Company, Chartered Accountants, Chennai, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. As required under section 224 of the Companies Act, 1956, the company has obtained from them a confirmation to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said section.

11. Cost Auditor

Pursuant to section 233B of the Companies Act, 1956, M/s.P.RajuIyer, M.Pandurangan & Associates, a Practising Cost Accountants, were appointed as Cost Auditor for the year 2012 - 2013.

Filing of Cost 2011 - 2012 2010 - 2011 Audit Report

Due Date 31.12.2012 Order No.F.No.52/26/CAB-2010 dated 2nd May 2011, issued by Ministry of Corporate Actual Date (Target) Affairs, Cost Audit Branch 30.11.2012 pertaining to the Cost Accounting Records (Petroleum Cost Auditor M/s.P.RajuIyer, Industry) Rules 2002, the Details M.Pandurangan & Cost Audit is necessary Associates, for our product Poly M.No.27969, Isobutene (PIB) for Chennai every financial year Audit commencing on or after Qualification - the 1st day of April 2011. Report

12. Acknowledgement

The Board acknowledges the co-operation and support extended by the Employees, consultants, suppliers, customers and all its business associates.

The Directors place on record their appreciation for the continued support and co-operation they have received from Financial Institutions, Banks, Central and State Governments.

On behalf of the Board for Kothari Petrochemicals Limited

B.H. Kothari Chairman and Managing Director

Place: Chennai Date : August 02, 2012


Mar 31, 2000

The Board of Directors of your Company present the 11th Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March, 2000.

OPERATIONS:

The Plant had commenced its commercial production in the year 1997 attained a capacity utilisation of 84.66% in the year 1999-2000 and overall performance of the Plant operations are good. Consumption of major raw materials, chemicals and utility was lower compared to the budgeted norms. During the year the plant has produced 16763.851 MTs of Caustic Soda and the Company has consolidated its position as a reliable supplier of various products.

The Production, Sales and Financial details are furnished below: PRODUCTION & SALES DETAILS FOR THE YEAR 1999 - 2000

(QUANTITY MTs)

PRODUCT PRODUCTION SALES

Caustic Soda Lye 16763.851 15905.930

Chlorine 14852.768 11481.709

Hydrogen NM3 4945334 359911

Hydrochloric Acid 9660.824 9254.661

Hypo 6101.508 6069.063

FINANCIAL RESULTS:

(Rs. in lakhs)

PARTICULARS 1999-2000 1998-1999

PBIDT 264 346

Interest 582 574

PAID (318) (228)

Depreciation 310 308

PAID (628) (536)

Preliminary Expenses 15 15

PBT (643) (551)

Provision for Tax NIL Nil

PAT (643) (551)

WORKING CAPITAL FROM BANKS :

The working capital is being presently provided by the State Bank of India and the South Indian Bank to the tune of Rs.196 lakhs and Rs.195 lakhs respectively.

MARKETING SCENARIO:

In view of the supply being higher than the demand, there was a glut in the market this year also which has resulted in low realisation and sales.

However, in view of the excise duty exemption announced by the Central Government in the Union Budget, small scale paper industries have become active and due to this, the prices of Caustic Soda and Chlorine had shown a slight upward trend during the last quarter.

PERFORMANCE :

The Company was able to produce 16763 metric tonnes of Caustic Soda during the year under review as against 16679 metric tonnes last year. The Company sold 15906 metric tonnes of Caustic Soda during the year under review as against 15605 metric tonnes last year. The Company expects to produce more during the current year.

DIVIDEND:

As the Company has incurred a loss in the financial year 1999-2000, the Directors have not recommended any dividend this year.

ENERGY CONSERVATION :

Information in accordance with the provisions of Section 21 7 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A.

POWER :

By operating the electrolyser with stable load of 19KA, we achieved a considerable saving in power consumption. It is proposed to install variable speed drive for critical rotary equipments, for further conservation in energy.

WATER :

The average water consumption per day was 382 m3 against the design value of 610 m3. The annual water consumption was less than last year mainly due to recycling and utilisation of waste water to process and gardening. We are in the process of conducting energy audit by engaging a consultant to achieve optimum levels in energy consumption.

INSURANCE:

All Properties and insurable interests of the Company including Building, Plant & Machinery and Stocks have been adequately insured. Your Company has also taken necessary insurance coverage under the Public Liability Insurance Act, 1991.

As per SEBI notification dated 29-05-2000, trading of Kothari Petrochemicals Shares in dematerialised form has been made compulsory for all categories of investors with effect from 24.07.2000. All the shareholders are therefore requested to get their physical holdings dematerialised. A brief write-up on depositories and dematerialisation is given below for the information of the shareholders.

WHO IS A DEPOSITORY?

A depository is an organisation where the securities of an investor are held in electronic form. There are two depositories in India -

1. National Securities Depository Limited (NSDL), Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013. Phone: 022-4972964-70 Fax: 022-4972993/ 6351 E-Mail: info@nsdl.co.in

2. Central Depository Services (India) Limited (CDSL), PJ Towers, 28th Floor, Dalai Street, Fort, Mumbai - 400 023. Phone: 022-2673333 Fax :91-22-2673199

The Securities and Exchange Board of India (SEBI) governs the functioning of both the depositories. The addresses of Depository Participants can be obtained from NSDL and CDSL.

WHO ARE DEPOSITORY PARTICIPANTS ?

A Depository Participant (DP) is an agent of the depository and offers depository services to the investors. Presently, Banks, Financial Institutions and Stock Brokers authorised by SEBI are Depository Participants. Examples of Depository Participants are : ICICI Ltd., Standard Chartered Bank, Karvy Consultants Ltd., Integrated Enterprises (India) Ltd., Cholamandalam Securities Ltd. etc. A Depository Participant will charge fees for its services.

WHAT IS DEMATERIALISATION ?

Dematerialisation is a process by which physical certificates are converted into electronic form in the depository. Dematerialisation of securities is not mandatory. Securities can be held in physical form or demat form or in partly physical and partly demat forms at the option of the shareholder. However, for selling the shares through the Stock Exchange, the shares have to be demated.

BENEFITS TO THE INVESTOR ON DEMATERIALISATION :-

- No bad deliveries and no stamp duty on transfer of shares

- No risk of loss, mutilation or theft of share certificates

- No loss in transit

- Regular account status updates available from DP at any point of time

WHAT SHOULD YOU DO NOW FOR DEMATERIALISATION :-

- Approach a Depository Participant (DP) of your choice and open an account with them.

- Submit a Demat Request Form (DRF) along with the original share certificates to the DP.

- Your DP will forward the original share certificates to our Companys Registered Office and we in turn will forward them to our Registrars and Transfer Agents, Cameo Corporate Services (India) Ltd. after verification.

- You will receive confirmation from your DP about the conversion of your physical shares into electronic form in due course.

- After dematerialisation, your depository account with your DP will be credited with the dematerialised securities.

SAFETY AND ENVIRONMENT:

The Company has achieved 941 continuous safe days as on 31st March, 2000 and there was no lost time due to accidents. Safety, Health and Environment protection are given utmost importance. The Company celebrated 29th National Safety day on 10th March, 2000. A bimonthly safety bulletin is being published by the Safety Committee. Periodical internal safety audit, safety training classes for the employees and contract labourers are being conducted. Special training has been given by an external agency to our employees to handle emergency situations. Periodical monitoring of ambient air quality and stack are being carried out and are well within the pollution norms. A green belt of around 12 acres is being developed in the periphery of the plant with the aid of the local agricultural department.

PUBLIC DEPOSIT:

The Company has not accepted any deposits from Members or Public.

DEPOSITORY:

The Securities and Exchange Board of India through its Circular No.SMDRP/POLICY/CIR-23/2000 dated May 29, 2000 informed that dematerialisation of our equity shares would be made compulsory for all categories of investors with effect from 24.07.2000. The Company last year entered into an agreement with the National Securities Depository Limited (NSDL). The Company signed an agreement on 06.03.2000 with Central Depository Services (India) Limited (CDSL) for joining the depository system so as to facilitate trading in the Stock Exchanges in electronic form. With this, the members have the option to hold the demat shares in the Company through the National Securities Depository Limited or Central Depository Services (India) Limited.

DIRECTORS:

Mr.V.R.Deenadayalu and Mr.T.Dulip Singh, Directors of the Company retire by rotation at this Annual General Meeting and offer themselves for re-appointment. The Board of Directors have constituted an Audit Committee which will be verifying the various financial statements and documents before they are placed for approval. The Chairman of the Committee is Mr. V.R. Deenadayalu and the members of the Committee are Mr.T. Dulip Singh and Mr. B.H.Kothari.

AUDITORS:

The Companys Auditors M/s Fraser & Ross, Chartered Accountants, retire at this Annual General Meeting and being eligible, have offered themselves for re-appointment. You are requested to appoint the Auditors and authorise your Directors to fix their remuneration.

DISCLOSURE UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956:

Statement showing the particulars of Employees, pursuant to Sec.217(2A) of the Companies Act, 1956 is given in Annexure B.

ACKNOWLEDGEMENT:

The Board acknowledges the co-operation and support extended by the Employees, consultants, suppliers and customers.The Directors also wish to place on record their appreciation of support and co-operation they have received from Financial Institutions, Banks, Central and State Governments.

On Behalf of the Board

B.H. KOTHARI Chairman

Place: Chennai Date :24th July, 2000

 
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