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Directors Report of National Peroxide Ltd.

Mar 31, 2014

The Directors take pleasure in presenting their Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS

For the year ended For the year ended

31st March, 2014 31st March, 2013 (in lac) (in lac)

Gross Turnover
Profit before Interest & Depreciation 6,713.39 7,178.95

Less: Interest 21.65 34.72

Profit before Depreciation 6,691.74 7,144.23

Less: Depreciation 973.44 1,100.23

5,718.30 6,044.00

Exceptional Items 119.56 -

Profit before Tax 5,837.86 6,044.00

Less: Provision For Tax:

Current Tax 1,928.00 1,932.00

Deferred Tax 48.03 131.35

Profit after Tax 3,861.83 3,980.65

Balance brought forward from previous year 14,332.94 11,753.64

AMOUNT AVAILABLE FOR APPROPRIATIONS 18,194.77 15,734.28

Appropriations:

Proposed Dividend 862.05 862.05

Corporate Dividend Tax 146.51 140.30

Transfer to General Reserve 387.00 399.00

Balance carried to Balance Sheet 16,799.21 14,332.93

18,194.77 15,734.28

YEAR IN RETROSPECT

The gross sales and other income for the year under review were Rs. 24,063 lac as against Rs. 21,731 lac for the previous year, registering an increase of 11%. The profit before tax was Rs. 5,838 lac (after interest and depreciation charges of Rs. 995 lac) and the profit after tax was Rs. 3,862 lac for the year under review as against 6,044 lac and Rs. 3,981 lac respectively, for the previous year, registering decrease of 3% and 3% respectively.

The increase in sales was due to a significant increase in the sales price of Hydrogen Peroxide and Hydrogen Gas.

2. DIVIDEND

Considering the Company''s performance, the Board of Directors recommends a dividend of Rs. 15/- per equity share of Rs. 10/- each for the year ended 31st March, 2014 to be paid, if declared by the members at the Annual General Meeting to be held on 11th August, 2014.

3. OPERATIONS

The Company produced the highest ever quantity of 83,931 MT of Hydrogen Peroxide, during the year under review, as compared to 79,127 MT during the previous year.

The Company sold 78,295 MT of Hydrogen Peroxide during the year under review, as against 80,334 MT during the previous year, due to restricted sales to build inventory for the expansion shutdown. In addition, the Company imported and sold 1,680 MT of Hydrogen Peroxide, during the year. The Company continues to maintain its prime position in the market and held 40% market share during the year.

4.07 Million Cubic Meters (MCM) of Hydrogen Gas were also sold during the year as against 4.28 MCM during the previous year. The sale of Hydrogen Gas was lower due to lower availability of Natural Gas, which is a key input in its production.

As per the contract with GAIL Ltd., price of Natural Gas continued to rise during the year, resulting in increased cost of production. From January 2014, the gas price has become fully variable with Japanese Crude Cocktail, as per agreed formula. Further change in gas price will depend on change in Japanese crude oil price. There were problems of gas availability during the year, as GAIL Ltd. declared force majeure due to pipeline problems. As a result, both the supply and price of Natural Gas were affected.

Since the Company is debt free, the cash surplus has been invested in financial instruments. The interest & dividend income on account of such investments amounts to Rs. 508 lac. As a result, the other income of the Company was Rs. 611 lac as against Rs. 507 lac in the previous year.

During the year under review, your Company continued its plant expansion activities to increase the capacity of the Hydrogen Peroxide Plant from 84,000 MTPA to 95,000 MTPA. The Kalyan plant was shut down on 28th April, 2014 to bring the expanded capacity on line. The shutdown is planned for a period of 60 days and the plant is expected to come back on stream by end June 2014. The stock of Hydrogen Peroxide increased by 5,638 MT during the year, to meet the requirements of the customers during the shutdown.

4. AWARDS AND RECOGNITION

The Company received the following awards during the year 2013-14:

i. National Safety Award under Scheme VII (Lowest Average Frequency Rate) from Government of India, Ministry of Labour

& Employment, for the year 2011. ii. National Safety Award under Scheme VIII (Accident Free Year) from Government of India, Ministry of Labour & Employment,

for the year 2011. iii. Certificate of Merit for achieving Zero Accident Frequency Rate from National Safety Council – Maharashtra Chapter,

Mumbai, for the year 2012.

5. SAFETY & ENVIRONMENT

The Company continues to maintain a good safety and environmental record and has worked for 87 days without Lost Time Injury as on 31st March, 2014.

6. INSURANCE

All the properties of the Company, including buildings, plant and machinery, stocks and materials have been adequately insured. The Company also has a public liability insurance policy as per the Public Liability Insurance Act, 1991.

7. FIXED DEPOSITS

There are no outstanding or unclaimed deposits as on 31st March, 2014. The Company does not accept fresh deposits at present.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Company''s Articles of Association, Mr. Ness N. Wadia retires by rotation and being eligible, offers himself for re-appointment.

Mr. S. Ragothaman was appointed as Additional Director, w.e.f. 29th August, 2013. He holds office up to the date of the ensuing Annual General Meeting. Mr. Ragothaman, with his experience and in-depth knowledge, of the finance sector would be an advantage to the Company.

Mr. D. N. Mehta resigned from the Board w.e.f. 10th March, 2014. The Board places on record its appreciation for the valuable contribution made by Mr. Mehta during his association with the Company as a Director.

Mr. K. N. Suntook resigned from the Board w.e.f. 25th April, 2014. The Board places on record its appreciation for the valuable contribution made and services rendered by Mr. Suntook, towards the growth of the Company, during his long association with

the Company as a Director.

Mr. R. Batra, Mr. N. P. Ghanekar and Mr. S. Ragothaman, directors of the Company, are being appointed as independent directors for five consecutive years from the date of the ensuing Annual General Meeting as per provisions of Section 149 and other

applicable provisions of the Companies Act, 2013.

Necessary resolutions for the appointment/re-appointment of the aforesaid directors have been included in the notice convening the ensuing AGM and details of the proposal for appointment/re-appointment are mentioned in the explanatory statement of the notice. Your directors commend their appointment/re-appointment. All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 274(1)(g) of the Companies Act, 1956 and

Section 164(2) of the Companies Act, 2013.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 (''the Act''), the Directors, based on the representations received from

the Operating Management, confirm that -

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no

material departures; ii. they have, in selection of accounting policies, consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended 31st March, 2014; iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the Annual Accounts on a going concern basis.

10. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Clause 49 of the Listing Agreement, with BSE Ltd. (previous name - Bombay Stock Exchange Limited) have been complied with. A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, which is annexed to the Directors'' Report.

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

As required under 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure A.

12. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

The details on climate change and greenhouse gas emissions are annexed as Annexure B.

13. CORPORATE SOCIAL RESPONSIBILITY

The Company donated a sum of Rs. 1.30 crores to Sir Ness Wadia Foundation, during the year, towards its Corporate Social Responsibility initiative.

14. SUBSIDIARY COMPANY

As required under Section 212 of the Companies Act, 1956, the accounts of Naperol Investments Limited, wholly-owned subsidiary of the Company, are appended.

15. CONSOLIDATED FINANCIAL STATEMENTS

As required by Accounting Standard 21, ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements are annexed.

16. PARTICULARS OF EMPLOYEES

The information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, which forms part of this Report, is appended.

17. AUDITORS

Members are requested to appoint M/s. S. B. Billimoria & Co., Chartered Accountants, as Auditors for the current year, at remuneration to be fixed by the Board of Directors.

18. COST AUDITORS

The Company had appointed M/s. N. I. Mehta & Co., Cost Accountants, as the Cost Auditors to carry out the audit of the cost accounts of the Company relating to organic & inorganic chemicals and industrial gases for the financial year ended on 31st March, 2014. The Cost Audit Report for 2012-13 was filed on 26th September, 2013 before the due date of 27th September, 2013.

19. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation to the Customers, Vendors, Bankers, Shareholders, Central and State Governments and Regulatory Authorities for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the success achieved by the Company.

On behalf of the Board of Directors

NESS N. WADIA

Chairman Registered Office:

Neville House,

J. N. Heredia Marg,

Ballard Estate,

Mumbai - 400 001.

Mumbai, 29th May, 2014


Mar 31, 2013

The Directors take pleasure in presenting their Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March, 2013.

1. FINANCIAL RESULTS

For the year ended For the year ended 31st March, 2013 31st March, 2012 (Rs. in lac) (Rs. in lac)

Gross Turnover (net of excise) 21,201.42 15,330.96

Profit before Interest & Depreciation 7,178.95 4,931.28

Less: Interest 34.72 40.75

Profit before Depreciation 7,144.23 4,890.53

Less: Depreciation 1,100.23 1,002.19

Profit before Tax 6,044.00 3,888.34

Less: Provision For Tax:

- Current Tax 1,932.00 810.00

- Deferred Tax 131.35 336.85

- Excess provision of Taxes for prior years - (6.63)

Profit after Tax 3,980.65 2,748.12

Balance brought forward from previous year 11,753.64 10,077.79

AMOUNT AVAILABLE FOR APPROPRIATIONS 15,734.28 12,825.91

Appropriations:

Proposed Dividend 862.05 689.64

Corporate Dividend Tax 140.30 107.63

Transfer to General Reserve 399.00 275.00

Balance carried to Balance Sheet 14,332.93 11,753.64

15,734.28 12,825.91

YEAR IN RETROSPECT

The gross sales and other income for the year under review were Rs. 21,731 lac as against Rs. 15,617 lac for the previous year, registering an increase of 39%. The profit before tax was Rs. 6,044 lac (after interest and depreciation charges of Rs. 1,135 lac) and the profit after tax was Rs. 3,981 lac for the year under review as against Rs. 3,888 lac and Rs. 2,748 lac respectively, for the previous year, registering an increase of 55% and 45% respectively.

The increase in sales and profit was due to a significant increase in the sales volume of Hydrogen Peroxide and Hydrogen Gas.

2. DIVIDEND

Considering the Company''s performance, the Board of Directors recommends a dividend of Rs. 15/- per equity share of Rs. 10/- each for the year ended 31st March, 2013 to be paid, if declared by the members at the Annual General Meeting to be held on 14th August, 2013.

3. OPERATIONS

The Company produced 79,127 MT of Hydrogen Peroxide, during the year under review, as compared to 57,624 MT during the previous year.

The Company sold 80,334 MT of Hydrogen Peroxide during the year under review, as against 61,240 MT during the previous year. The increase in the sales volume during the year as compared to the previous year was due to the additional capacity which became operational during the year and the shutdown taken in the previous year to bring the additional capacity on stream. The Company continues to maintain its prime position in the market and held 43% market share during the year.

4.28 Million Cubic Meters (MCM) of Hydrogen Gas were also sold during the year as against 3.29 MCM during the previous year.

As per the contract with GAIL Ltd., price of Natural Gas continued to rise during the year, resulting in increased cost of production.

During the year, the Company received Rs. 38.25 lac by way of dividend from its wholly owned subsidiary, Naperol Investments Ltd. Since the Company became debt free, the cash surplus has been invested in financial instruments. The interest & dividend income on account of such investments amounts to Rs. 480 lac. As a result, the other income of the Company was Rs. 527 lac as against Rs. 286 lac in previous year.

During the year under review, your Company has commenced its expansion project which will increase the capacity of the Hydrogen Peroxide Plant from 84,000 MTPA to 95,000 MTPA. This project is expected be completed by May 2014.

4. AWARDS AND RECOGNITION

The Company received the following award during the year 2012-13:

''Maharashtra Safety Award - 2011''

Certificate of Merit awarded by National Safety Council - Maharashtra Chapter, for Meritorious Performance in Industrial Safety, during the year 2011 in Chemicals & Fertilizers Industry Group.

5. SAFETY & ENVIRONMENT

The Company continues to maintain a good safety and environmental record and has worked for 1,720 days without Lost Time Injury as on 31st March, 2013.

6. INSURANCE

All the properties of the Company, including buildings, plant and machinery, stocks and materials have been adequately insured. The Company also has a public liability insurance policy as per the Public Liability Insurance Act, 1991.

7. FIXED DEPOSITS

There are no outstanding or unclaimed deposits as on 31st March, 2013. The Company does not accept fresh deposits at present.

8. DIRECTORS

Mr. J. S. Bilimoria, who was associated with the Company since July 2009, passed away on 3rd May, 2013 after a brief illness. The Board places on record its deep appreciation for the invaluable contribution and guidance accorded by Mr. Bilimoria during his association with the Company as a Director and also the Chairman of the Audit Committee.

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. Ness N. Wadia and Mr. D. N. Mehta retire by rotation and both being eligible, offer themselves for re-appointment.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

ii. they have, in selection of accounting policies, consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended 31st March, 2013;

iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the Annual Accounts on a going concern basis.

10. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Clause 49 of the Listing Agreement, with BSE Ltd. (previous name - Bombay Stock Exchange Limited) have been complied with.

A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, which is annexed to the Directors'' Report.

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

As required under 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure A.

12. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

The details on climate change and greenhouse gas emissions are annexed as Annexure B.

13. CORPORATE SOCIAL RESPONSIBILITY

The Company along with Kalyan Ambernath Manufacturers'' Association (KAMA) distributed note books to Zilla Parishad Schools in Dombivali, Adivasi School students in Murbad and Ashram School in Mohone, Kalyan.

14. SUBSIDIARY COMPANY

As required under Section 212 of the Companies Act, 1956, the accounts of Naperol Investments Limited, wholly-owned subsidiary of the Company, are appended.

15. CONSOLIDATED FINANCIAL STATEMENTS

As required by Accounting Standard 21, ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements are annexed.

16. PARTICULARS OF EMPLOYEES

The information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, which forms part of this Report, is appended.

17. AUDITORS

Members are requested to appoint M/s. S. B. Billimoria & Co., Chartered Accountants, as Auditors for the current year, at remuneration to be fixed by the Board of Directors.

18. COST AUDITORS

The Company had appointed M/s. N. I. Mehta & Co., Cost Accountants, as the Cost Auditors to carry out the audit of the cost accounts of the Company relating to organic & inorganic chemicals and industrial gases for the financial year ended on 31st March, 2013. The Cost Audit Report for 2011-12 was filed on 27th December, 2012, before the due date of 31st December, 2012.

19. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation to the Customers, Vendors, Bankers, Shareholders, Central and State Governments and Regulatory Authorities for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the success achieved by the Company.

On behalf of the Board of Directors

NESS N. WADIA

Chairman

Registered Office:

Neville House,

J. N. Heredia Marg,

Ballard Estate,

Mumbai - 400 001.

Mumbai, 20th May, 2013


Mar 31, 2012

The Directors take pleasure in presenting their Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March, 2012.

1. FINANCIAL RESULTS

For the year ended For the year ended 31st March, 2012 31st March, 2011 (Rs in lac) (Rs in lac)

Gross Turnover (net of excise) 15,330.96 18,163.11

Profit before Interest & Depreciation 4,931.28 9,511.06

Less: Interest 40.75 75.84

Profit before Depreciation 4,890.53 9,435.22

Less: Depreciation 1,002.19 840.96

Profit before Tax 3,888.34 8,594.26

Less: Provision For Tax:

- Current Tax 810.00 2,872.00

- Deferred Tax 336.85 (66.00)

- Excess provision of Taxes for prior years (6.63) (4.01)

Profit after Tax 2,748.12 5,792.27

Balance brought forward from previous year 10,077.79 5,646.45

AMOUNT AVAILABLE FOR APPROPRIATIONS 12,825.91 11,438.72

Appropriations:

Proposed Dividend 689.64 689.64

Corporate Dividend Tax 107.63 91.79

Transfer to General Reserve 275.00 579.50

Balance carried to Balance Sheet 11,753.64 10,077.79

12,825.91 11,438.72

YEAR IN RETROSPECT

The gross sales and other income for the year under review were Rs 15,617 lac as against Rs 18,488 lac for the previous year registering a decrease of 16%. The profit before tax was Rs 3,888 lac (after interest and depreciation charges of Rs 1,043 lac) and the profit after tax was Rs 2,748 lac for the year under review as against Rs 8,594 lac and Rs 5,792 lac respectively, for the previous year, both down by 55% and 53% respectively.

An inventory of 5,422 MT of Hydrogen Peroxide (H2O2) was available for the Plant shutdown taken from 11th April to 21st June, 2011 to implement the 84,000 MTPA Expansion Project. However, due to the extension of shutdown and the prevailing market conditions, there was a loss of 1,500 MT of H2O2 by way of sales. The plant started commercial production from 1st September, 2011.

The decline in the sales volume during the year was partially due to the shutdown and sluggish market conditions. The decline in profit was due to lower sales realization arising from higher imports at lower prices.

2. DIVIDEND

Considering the Company's performance, the Board of Directors recommends a dividend of Rs 12/- per equity share of Rs 10/- each for the year ended 31st March, 2012 to be paid, if declared by the members at the Annual General Meeting to be held on 9th August, 2012.

3. OPERATIONS

During the year under review, your Company successfully implemented the expansion project which has increased the capacity of the Hydrogen Peroxide (H2O2) Plant from 68,000 MTPA to 84,000 MTPA.

During the year under review, the Company produced 57,624 MT of H2O2, as compared to 71,826 MT during the previous year.

The Company sold 61,240 MT of H2O2 during the year under review, as against 66,806 MT during the previous year. The lower demand in the market led to a decrease in prices of H2O2, resulting in lower profit for the year. The Company, however, continues to maintain its prime position in the market and held 40% market share during the year.

3.29 Million Cubic Meters (MCM) of Hydrogen Gas (H2) were also sold during the year, as against 3.92 MCM during the previous year. Sales of H2 were lower as compared to the previous year, due to the shutdown for expansion.

The price of crude oil and consequently Natural Gas had risen significantly by the end of the year thereby impacting the cost of production.

During the year, the Company received Rs 25.50 lac by way of dividend from its wholly owned subsidiary, Naperol Investments Ltd. Since the Company became debt free, the cash surplus was invested in financial instruments. The interest & dividend income on account of such investments amounts to Rs 109 lac. As a result, the other income of the Company was Rs 286 lac as against Rs 325 lac in previous year.

The timing of the next stage of expansion to 95,000 MTPA is under review.

4. AWARDS AND RECOGNITION

The Company received the following awards during the year 2011-12:

(a) 'National Safety Award - 2009'

Awarded by Government of India, Ministry of Labour and Employment, Directorate General Factory Advice Service & Labour Institutes, for outstanding performance in Industrial Safety as Winner, during the performance year 2009 based on ACCIDENT FREE YEAR, under scheme - VIII, Schedule - 02 (Manufacture of Chemicals & Chemical Products).

(b) 'Forbes List of Asia's 200 Best Under A Billion'

National Peroxide Limited was featured in Forbes List of Asia's 200 Best Under A Billion for the year 2011. These are essentially Forbes' picks of the companies (from an initial field of over 15,000 in 2011) that have best managed through the economic volatility that began in 2008.

These awards are in recognition of serious efforts made by the Company in various aspects of its business.

5. SAFETY & ENVIRONMENT

The Company continues to maintain a good safety and environmental record and has worked for 1,355 days without Lost Time Injury as on 31st March, 2012.

6. INSURANCE

All the properties of the Company, including buildings, plant and machinery, stocks and materials have been adequately insured. The Company also has a public liability insurance policy as per the Public Liability Insurance Act, 1991.

7. FIXED DEPOSITS

There are no outstanding or unclaimed deposits as on 31st March, 2012. The Company does not accept fresh deposits at present.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. K. N. Suntook and Mr. Rajesh Batra retire by rotation and both being eligible, offer themselves for re-appointment.

9. DIRECTORS' RESPONSIBILITY STATEMENT

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

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

(ii) they have, in selection of accounting policies, consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended 31st March, 2012;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

10. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Clause 49 of the Listing Agreement, with BSE Ltd. (previous name - Bombay Stock Exchange Limited) have been complied with.

A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, which is annexed to the Directors' Report.

11. WADIA BRAND EQUITY & BUSINESS Promotion AND SHARED SERVICES AGREEMENT

The Wadia Group has several companies in diverse sectors like the airlines, food, textiles, chemicals etc. and employs various subject matter experts in areas such as Legal, Finance, Information Technology, Treasury, Taxation, Human Resources, Procurement, Risk Management etc. With a view to maximizing the efficiency and effectiveness of these specialized resources, a formal structure has been created under Nowrosjee Wadia & Sons Limited (NWS) to serve the common interests of all the Group Companies. The combined skills, knowledge and expertise of this structure will benefit all the Group Companies availing of this arrangement.

In order to formalize this structure of common services and avail of the standing of the Wadia Group Brand, the Board of your Company, during the year, approved an Agreement between NWS and your Company to enter into the 'WADIA Brand Equity & Business Promotion and Shared Services Scheme.'

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

As required under 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure A.

13. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

The details on climate change and greenhouse gas emissions are annexed as Annexure B.

14. CORPORATE SOCIAL RESPONSIBILITY

The Company along with Rotary Club of Mumbai Shivaji Park and Larsen & Toubro Limited's Medical Centre conducted a Medical Check-up Camp for 550 children and a Health Education Camp at Bhanuben Pravin Shah Secondary & Higher Secondary School of Yusuf Meherally Centre, Tara Village, Taluka Panvel, District Raighad, under Rotary International's Global Grant Project 25116.

The Company also conducted a Career Guidance Vocational Training Programme for Tribal Children for students preparing for Standard X and XII Board Examinations.

15. SUBSIDIARY COMPANY

As required under Section 212 of the Companies Act, 1956, the accounts of Naperol Investments Limited, wholly-owned subsidiary of the Company, are appended.

16. CONSOLIDATED FINANCIAL STATEMENTS

As required by Accounting Standard 21, 'Consolidated Financial Statements' issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements are annexed.

17. PARTICULARS OF EMPLOYEES

The information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, which forms part of this Report, is appended.

18. AUDITORS

Members are requested to appoint M/s. S. B. Billimoria & Co., Chartered Accountants, as Auditors for the current year at remuneration to be fixed by the Board of Directors.

19. COST AUDITORS

The Company had appointed Mr. Hemant Shah, Cost Accountant, as the Cost Auditors to carry out the audit of the cost accounts of the Company relating to industrial gases for the financial year ended on 31st March, 2012. The Cost Audit Report for 2010-11 was filed on 30th August, 2011, before the due date of 27th September, 2011.

20. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation to the Customers, Vendors, Bankers, Shareholders, Central and State Governments and Regulatory Authorities for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the success achieved by the Company.

On behalf of the Board of Directors

NESS N. WADIA

Chairman

Registered Office:

Neville House,

J. N. Heredia Marg,

Ballard Estate,

Mumbai - 400 001.

Mumbai, 14th May, 2012


Mar 31, 2010

The Directors take pleasure in presenting their Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March, 2010.

1. FINANCIAL RESULTS

For the year ended For the year ended

31st March, 2010 31st March, 2009

Rs. in lacs Rs. in lacs

Gross Turnover (net of excise) 12,190.56 13,499.80

Profit before Interest & Depreciation 3,364.04 4,236.50

Less: Interest 127.40 300.22

Profit before Depreciation 3,236.64 3,936.28

Less: Depreciation 830.83 820.73

2,405.81 3,115.55

Less: Provision For Tax: Current Tax 825.00 1,036.00

-Deferred Tax (39.29) 28.63

-Fringe Benefit Tax -- 7.00

Add: Excess Provision of Taxes of Prior Years -- 20.66

Profit after Tax 1,620.10 2,064.58

Balance brought forward from previous year 4,861.22 3,676.01

AMOUNT AVAILABLE FOR APPROPRIATIONS 6,481.32 5,740.59

Appropriations:

Proposed Dividend 574.70 574.70

Corporate Dividend Tax 97.67 97.67

Transfer to General Reserve162.50 207.00

Balance carried to Balance Sheet 5,646.45 4,861.22

6,481.32 5,740.59

YEAR IN RETROSPECT

The gross sales and other income for the year under review were Rs. 12,251 lacs as against Rs. 13,603 lacs for the previous year registering a decrease of 10%. The profit before tax was Rs. 2,406 lacs (after interest and depreciation charges of Rs. 958 lacs) and the profit after tax was Rs. 1,620 lacs for the year under review as against Rs. 3,115 lacs and Rs. 2,065 lacs respectively, for the previous year, down by 23% and 22% respectively.

During the year, the Company prepaid the balance Term Loans amounting to Rs. 975.50 lacs, and therefore the Company does not have any long term borrowing as on 31st March, 2010.

2. DIVIDEND

Considering the Companys performance, the Board of Directors recommends a dividend of Rs. 10/- per equity share of Rs. 10/- each for the year ended 31st March, 2010 to be paid, if declared by the members at the Annual General Meeting to be held on 30th July, 2010.

3. OPERATIONS

During the year under review, the Company de-bottlenecked its Kalyan plant and increased its installed capacity from 54,000 MTRA to 65,000 MTPA of Hydrogen Peroxide (H202). Due to this the Company was able to produce 64,451 MT of H202, as compared to 55,168 MT during the previous year. This is the highest ever production in the history of the Company. The Companys sales of 65,662 MT of H202, during the year under review, was a significant improvement over the 54,344 MT sold during the previous year. This is the highest ever quantity sold in the Companys history. Although the sales volume showed a robust increase of 21%, the sales value decreased by 10%. This was mainly on account of decline in sales realization of H202, due to intense domestic competition and pricing pressure on the customers, particularly in the Newsprint Industry. Despite stiff competition, the Company continues to maintain its prime position in the market and held 38% market share during the year.

Annual Report 2009-2010

4.04 Million Cubic Meters (MCM) of Hydrogen Gas (H2) was also sold during the year, as against 4.79 MCM during the previous year. Sales of H2 were affected due to emergence of local competition. As a result of lower sales value of H202 and H2, the bottom-line of the Company was affected. Profit After Tax reduced from Rs. 2,065 Lacs to Rs. 1,620 lacs.

During the second half of the year there was some improvement in the economy as a result of which there was increased consumption particularly in the paper and textile sector. The Countrys exports after declining at the beginning of the year once again started growing at the end of the year.

The exchange rate of the Rupee vis-a-vis US $ fluctuated widely during the year. At the end of the year the Rupee appreciated significantly.

This is expected to have some impact on the sales realization of H202, during the coming year.

Free Trade Agreement with ASEAN countries mainly Thailand, Malaysia and Singapore came into effect from 1st January, 2010.

As a result, the customs duty on imports of H202 from these countries was reduced from 7.5% to 5% which is applicable to imports from other countries. This is also likely to have some impact on sales realization, during the coming year.

The Company used Natural Gas as feed stock, throughout the year. The gas was purchased on a spot basis upto December 2009.

The gas is now being purchased as per a long term Gas Sale Agreement entered into with GAIL (India) Ltd. This will ensure a steady supply as per a defined price structure. Hence the volatility in price of Natural Gas will be significantly reduced. The price will, however, be linked to Crude Oil prices i.e. Japanese Crude Cocktail (JCC) as well as Exchange Rates.

As a result of the growing demand and the ability of the Company to market its extra production as a result of de-bottlenecking, the Company decided to increase its production capacity to 84,000 MTPA. The increased capacity is expected to be available by April 2011.

The settlement with the Union expired on 30th September, 2009. Negotiations are in progress and are expected to conclude shortly.

Industrial relations continued to be cordial during the year.

4. INSURANCE

All the properties of the Company, including buildings, plant and machinery, stocks and materials have been adequately insured. The Company also has a public liability insurance policy as per the Public Liability Insurance Act, 1991.

5. FIXED DEPOSITS

There are no outstanding or unclaimed deposits as on 31st March, 2010. The Company does not accept fresh deposits at present.

6. DIRECTORS

Mr. Jimmy S. Bilimoria and Mr. Durgesh N. Mehta were appointed as Additional Directors, both w.e.f. 22nd July, 2009. They hold offices upto the date of the ensuing Annual General Meeting. Notices have been received in writing from members proposing their appointment as Directors. Mr. Bilimoria and Mr. Mehta with their experience and knowledge would be an advantage to the Company.

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Rajesh Batra and Mr. R V. Kuppuswamy retire by rotation and being eligible, offer themselves for re-appointment.

7. DIRECTORS RESPONSIBILITY STATEMENT

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

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

ii. they have, in selection of accounting policies, consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended 31st March, 2010;

iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the Annual Accounts on a going concern basis.

8. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Clause 49 of the Listing Agreement, with the Bombay Stock Exchange Limited have been complied with.

A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, which is annexed to the Directors Report.

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

As required under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure A.

10. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

The details on climate change and greenhouse gas emissions are annexed as Annexure B.

11. CORPORATE SOCIAL RESPONSIBILITY

The Company along with Rotary Club of Mumbai, Shivaji Park and Larsen & Toubro Medical Centre, carried out three camps at Wada, Dist. Thane, Maharashtra for providing medical help to pregnant women and children suffering from malnutrition.

12. SUBSIDIARY COMPANY

As required under Section 212 of the Companies Act, 1956, the accounts of Naperol Investments Limited, wholly-owned subsidiary of the Company, are appended.

13. CONSOLIDATED FINANCIAL STATEMENTS

As required by Accounting Standard 21, Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements are annexed.

14. PARTICULARS OF EMPLOYEES

The information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, which forms part of this Report, is appended.

15. AUDITORS

Members are requested to appoint M/s. S. B. Billimoria & Co., Chartered Accountants, as Auditors for the current year at a remuneration to be fixed by the Board of Directors.

16. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation to the Customers, Vendors, Bankers, Shareholders, Central and State Governments and Regulatory Authorities for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the success achieved by the Company.

On behalf of the Board of Directors

S. R. LOHOKARE K. N. SUNTOOK

Managing Director

Registered Office:

Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai - 400 001.

Mumbai, 5th May, 2010

 
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