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Directors Report of NOCIL Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their Report together with the Audited Accounts of the Company for the year ended 31 March 2015.

FINANCIAL RESULTS (Rs. in crore) Particulars For the year ended For the year ended 31 March 2015 31 March 2014

Gross Revenue 785.33 645.79

Less : Excise Duty 66.33 49.65

Net Revenue 719.00 596.14

Profit before Tax 85.65 34.70

Profit after Tax 56.75 23.62

Earnings per share of Face Value of Rs. 10/- each

- Basic. Rs. 3.53 1.47 Earnings per share

- Diluted. Rs. 3.50 Rs. 1.47

Proposed Dividend 16.08 9.65

Tax on Dividend 3.27 1.64

Performance of the Company

The year under review saw a significant improvement in the performance of your company with our Revenue touching Rs.785 crores as compared to Rs.646 crores in the previous year - an increase of 22%. The operating performance also showed similar improvement.This improvement was a result of improved volumes combined with better realizations and the continual streamlining of Dahej operations leading to better capacity utilization.

Supply-side tightness in case of various Rubber Chemicals was witnessed for some part of the year, mainly due to the long- overdue clamping down on polluting capacities in China, resulting in constrained supplies for a period, in certain product groups. As a result of this, there was some check on the extent of dumping being resorted to by the foreign producers. This enabled the company to implement some corrections in the selling prices in the early part of the financial year.

Raw material price levels ruled high in the first half of the year, but with crude oil prices easing subsequently, input prices started softening, albeit with the customary lag. The situation however continues to be volatile and some hardening trends in the input prices were visible in the last quarter of the year.

The overall situation in the consuming industry (mainly automotive industry related) however remained depressed during the year under review. Most major customers had to curtail capacity utilization due to the weak demand from original equipment and replacement segments. There were some signs of the automotive industry coming out of the last few years of slump, towards the end of the year.

Expectation for a better GDP growth in 2015-16 and ICRA''s forecast for a healthy demand for automobiles should give us an opportunity to improve business further in the domestic market. The major threat remains that of the continued dumping at unrealistic prices by producers mainly from China, Korea and the European Union. The continued slowdown in the Rubber Industry in China has further worsened the scenario of Rubber Chemical pricing with supply outstripping the demand by a big margin. Continued depressed market situation in the automobile industry has been increasing unfair competition in the market from a number of foreign suppliers, particularly from China, Korea and Europe. As a result, we are recently seeing considerable softening of prices in the domestic as well as international markets.

The production of rubber chemicals and their intermediates for 2014-15 was 46266 MT as against 37333 MT in the previous year. Antidumping Duties

In recognition of the company''s appeal for addressing the injury suffered due to continued dumping (from China & Korea in particular), the Government of India announced revised anti- dumping duties on some of the rubber chemicals towards the end of July 2014 which further supported our efforts at achieving reasonable realization for our products. On levying of this duty some of the affected parties have filed appeals against this order in the Delhi High Court as well as the Supreme Court. The Apex Court has given us / domestic industry an interim relief in the matter, we are hopeful that the final decision of the court will be in favour of the industry/company. However, in the meantime to negate the effect of the enhanced duties some of the Chinese/Korean competitors have started reducing their prices further, which has made it difficult for the company to realise the full benefit of this well deserved protection. The company is constantly monitoring the unfair and irrational pricing by the global competitors in order to safeguard its interests.

Exports

On account of the tough competition in the rubber chemicals business and the weak demand globally and more particularly in China, Export volumes remained subdued and the pricing too remained soft for most part of the year.Fortunately, with a significant proportion of specialty products in our export basket, your company managed to achieve a higher export turnover of Rs.234 crores as compared to Rs.225 crores in the previous year. It would be worthwhile mentioning that your company has over a period, successfully developed and markets a few specialty products, specifically tailored for some of its major international customers, which enable it to enjoy a niche position in these products. As far as the other generic products are concerned, as reported earlier, the company continues to participate in the export segment, only out of a compulsion to optimally utilise its own capacities in the absence of sufficient orders from the domestic customers and not out of choice, since the pricing in the exports markets is also vitiated by the aggressive dumping resorted to by the Chinese, Korean and other competitors

Dividend

Your Directors are pleased to recommend payment of dividend of Re.1 per share of Rs.10/- each (10%), on the equity share capital of the Company [previous year Re.0.60 per share of Rs. 10/- (6%)]. The dividend, together with the tax on Dividend, will absorb a sum of Rs. 19.35 crore (previous year Rs. 11.29 crore).

Transfer of Unpaid Dividend to the Investor Education and Protection Fund

In terms of the provisions of section 205C of the Companies Act, 1956, all unclaimed / unpaid dividend up to FY 2006-07 has been transferred to the Investor Education and Protection Fund and unclaimed / unencashed dividend for the FY 2007-08 paid on 28.07.2008 is due for transfer to IEPF on 28 August 2015. Those members who have not yet claimed / encashed the same, are requested to claim the same at the earliest before transfer to IEPF.

Fixed Deposits

All the unclaimed fixed deposits/ unclaimed fixed deposit warrants have been transferred to Investor Education & Protection Fund, as required under Section 125 of the Companies Act, 2013.Since, the Company no longer accepts deposits from public, there are no outstanding/unclaimed deposits as at 31 March 2015.

Insurance

The Company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments

Health, Safety and Environment

The company policy on health, safety and environment aims at healthy, safe and productive work environment, by providing continuous training and adopting the best of safety practices and monitoring the stated practices. All employees direct or indirect are trained in technical skills like, handling of chemicals, first aid, firefighting etc. Mock drills with an envisaged scenario are conducted every week at all sites to keep the work force alert, ready and trained to handle all emergencies.

The company''s occupational health centres carry out periodic medical check-ups for all employees at all locations. Proactive measures are taken to reduce the seasonal cases of malaria and water borne diseases. The occupational health centre also focuses on "life style diseases" and conducts training programmes and counselling sessions to minimise aliments like hypertension, diabetes and coronary diseases.

NOCIL R&D centre continues to focus on cleaner environment strategies and their implementation, to create a long term, sustainable manufacturing facility with a focus on green chemistry. Recycle, reuse and reduction at source through process improvement, is the theme which forms basis for environmental strategies of your company. Continued improvement in the effluent load, both solid and liquid, demonstrated the commitment of your company towards the environment.

Management is pleased to inform you that your company is now a member signatory of "Responsible Care" Initiative.

Total Quality Management

Total Quality Management is given utmost importance amongst the various targets set by the management from time to time. It continues to be an important pillar of your company''s successful business journey, in the highly competitive field of rubber chemicals and will always remain an important activity in the future scheme of things. All activities in the company are conducted as per the business processes stipulated by the Total Quality Management system.

The company continues to be certified for ISO 9001:2008 (Quality Management system), ISO 14001: 2004 (Environment Management System), OHSAS 18001: 2007(Occupational Health & Safety Standards) as well as TS 16949: 2009 (Quality system for Automotive Sector). The Quality Assurance Laboratory of the company is certified for ISO 17025.

As mentioned earlier, your company is also a Member signatory of "Responsible Care" Initiative.

Research & Development

Research & Technology continues to be a strong backbone for the continuous innovation and business growth of your company. It focuses on the key areas of a) new process development

b) continuous improvement in the existing processes for value creation c) environmental strategies to move towards "green chemistry" for sustainable growth d) continuous improvement in the product quality as perceived by the customer e) new field of technologies. .

Dahej Project was based on in-house technology, in-house engineering and was implemented by the NOCIL research and technology team. Your company''s Research and technology team has also implemented innovative concepts in effluent treatment at Dahej which are unique.

Technology development is protected by creating National and International Patents.

Your Board would like to make a special mention about the excellent work that has been done by the Research and the Technology group of the company over the last decade in the field of rubber chemicals.

Risk Assessment and Management

Your Company has a well defined Risk Management System in place, as a part of its good Corporate Governance practices. Your Company has assigned the ownership of key risks to various Risk Owners and has made the concerned departments and officials responsible for mitigation plans and review of these risks from time to time. All the risks are identified at various departmental levels and suitable mitigation measures are thereafter adopted. These are subjected to a quarterly review by the Risk Co-ordination Committee as well as the Board.

Internal Control System and their Adequacy Adequate internal controls, systems, and checks are in place, commensurate with the size of the Company and the nature of its business. The management exercises financial control on the operations through a well defined budget monitoring process and other standard operating procedures. Your Company has appointed an external professional agency M/s. Aneja Associates, Chartered Accountants, to conduct the internal audit, and the findings and recommendations of the Internal Auditors are placed before the Audit Committee of your Board regularly.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control in the company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal auditors, the managementundertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

In addition to the above, the Audit Committee and the Board specifically review the Internal Control and Financial Reporting process prevalent in the Company. On a periodical basis, the Board also engages the services of professional experts in the said field in order to ensure that the financial controls and systems are in place. At the end of a period, the CEO/CFO gives a declaration in the appropriate format to certify that the financial statements prepared are accurate and complete in all aspects and that there are no significant issues that can impair the financial performance of the Company.

Vigil Mechanism / Whistle Blower Policy

The company has a Vigil Mechanism Policy to deal with an instance of fraud or mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and are also postedon the website of the Company.

Policy on Sexual Harassment of Women at Workplace

As per the requirement under the provisions made under section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), 2012, an appropriate Committee has been formed to attend to the complaints of the sexual harassment at workplace, if any, made by female employees.The committee of 4 members consists of two female employees, Vice President- Human Resource and a practising Advocate in the field labour laws and regulations. During the year under review, no complaints were received.

Number of Board Meetings

During the year the Board of Directors met six times as per details stated in the report on Corporate Governance.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, of individual Directors as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

Directors:

(a) Independent Directors:

In accordance with the criteria suggested by the Nomination and Remuneration Committee, the performance of each independent director was evaluated by the entire Board of Directors (in the absence of the director getting evaluated) on various parameters like engagement, leadership, analysis, decision making, communication, governance, interest of stakeholders etc. The Board was of the unanimous view that every independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also appreciated the contribution made by all independent directors in guiding the management to achieving higher growth and continuance of each independent director on the Board will be in the interest of the Company.

(b) Non-Independent Directors:

The performance of all the non-independent directors was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance, stakeholders etc. The Board was of the unanimous view that all the non-independent directors were providing good business and people leadership

(c) Declaration of Independent Directors

As required under section 149(7) of the Companies act, 2013, the Independent Directors have placed the necessary declaration in terms of the conditions laid down under Section 149(6) of the Companies Act, 2013 in the Board Meeting held on 30 April 2015.

(d) Familiarization Programme to Independent Directors

The company provides suitable familiarization programme to Independent Directors so as to associate themselves with the nature of the industry in which the company operates and business model of the company in addition to regular presentation on technical operations, marketing and exports and financial statements. In addition to the above, Directors are periodically advised about the changes effected in the Corporate Law, Listing Agreement with regard to their roles, rights and responsibilities as Directors of the company. The details of the familiarization programme have been disclosed on the company''s website and its weblink is http://www.nocil.com/images/fckeditor/file/Familia rization-Programme-for-IDS.pdf Remuneration policy

The Board on the recommendation of the Nomination & Remuneration committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Salient features of Remuneration Policy are given in the Corporate Governance Report.

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. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval on quarterly basis. Particulars of contracts or arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 in the prescribed form for FY 2015-16 are furnished below :-

Name of the Related Party Particulars Amount (Rs. in lakhs)

Mafatlal Industries Ltd. Reimbursement of 16.38 Misc. Expenses

Navin Fluorine Purchase of material 2.34 International Ltd. Payment of rent 163.80

PIL Chemicals Ltd. Processing charges 1037.88 (Wholly owned subsidiary)

Shri Sadguru Seva Sangh Trust Donations under CSR 20.00

Chaitanya Seva Trust Donations under CSR 20.00

The policy on Related Party Transactions as recommended by Audit Committee and as approved by the Board is uploaded on the Company''s website and its weblink is http://www.nocil.com/images/fckeditor/ file/Policy-on-Related-Party-Transaction.pdf Loans, Guarantees or Investments

Particulars of loans, guarantees or investments under section 186, are given in the Notes forming part of Financial Statements for the year ended 31st March, 2015.

Extract of Annual Return

Extract of Annual Return for the Financial Year ended on 31 March 2015 as required by Section 92 (3) of the Companies Act 2013, is annexed as Annexure "E"

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statementsin terms of Section 134 (3) (c) of the Companies Act, 2013:

(a) That in the preparation of the annual financial statements for the year ended 31 March, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

(b) That such accounting policies as mentioned in Note 1 forming part of the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2015.

(c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) That the annual financial statements have been prepared on a going concern basis;

(e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

(f) That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

The above assessment of the Board was further strengthened by periodic review of internal controls by both internal as well as external auditors.

Subsidiary Company

A wholly owned subsidiary viz. PIL Chemicals Pvt. Limited, (PIL) was converted as Public Limited Company w. e. f. 30 June 2014 after completing requisite legal formalities. PIL has recorded a Profit before Tax of Rs.59 lakhs, for the year under review.

The Company does not have any material subsidiary, however, the company has formulated a policy for determining material subsidiary(ies) and such policy has been disclosed on the company''s website and its weblink is http://www.nocil.com/images/fckeditor/file/Policy-on-Material- Subsidiaries.pdf

Pursuant to the requirements of Clause 32 of the Listing Agreement, the details of Loans/Advances made to and investments made in the subsidiary have been furnished in Notes forming part of the Accounts.

A statement containing the salient features of the financial statement of the Company''s subsidiary under the provisions of section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 has been annexed in prescribed form AOC -1

The audited accounts of the subsidairy company is placed on the Company''s website and the members interested in obtaining copy of annual report of the subsidiary company are requested to get in touch with the Offi ce of the Company Secretary.

Consolidated Financial Statements

Consolidated Financial Statements are prepared by your Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report. The financial statements have been prepared as per Schedule III issued by the Ministry of Corporate Affairs.

Personnel

The relations, during the year, between the employees and the management of your Company continued to be cordial.

Your Directors wish to thank all the employees for their continued support and co-operation during the year under review.

Stock Options

In terms of your approval, read with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the details required to be provided under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, are set out in Annexure"C" to this Report.

Particulars of Employees

The information required under section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of managerial Personnel) Rules, 2014 in respect of employees of the Company, are provided in Annexure "F" Appointment/Reappointment of Directors The Board of Directors on recommendation of Nomination and Remuneration Committee in their meeting held on 30 April 2015 re-appointed Mr. C.R. Gupte as Managing Director effective from 1 August 2015 for a period of two years and Mr. S.R. Deo as Deputy Managing Director for four years effective from 1 April 2015 subject to the approval of Members of the Company pursuant to the provisions of the Companies Act, 2013.

Pursuant to Section 152(6) of the Companies Act, 2013, Mr. Vishad P. Mafatlal retires by rotation at the forthcoming Annual General Meeting. Being eligible, he offers himself for re-appointment. Pursuant to Sections 149, 150 and 152 and any other applicable provisions of the Companies Act, 2013, Ms. Dharmishta N. Raval who was appointed as Additional Director by the Board of Directors in their meeting held on 31 July 2014,is being appointed as Director and is being appointed as Independent Directors to hold office for five consecutive years.

Auditors

Pursuant to the new requirement of Section 139(1) of the Companies Act, 2013, M/s Deloitte Haskins and Sells LLP, Chartered Accountants, Mumbai were appointed as Statutory Auditors, for financial years 2014-15, 2015-16 and 2016-17. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for re-appointment as Auditors of the Company. 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. As required by Section 139(1) of the Companies Act, 2013, the appointment of Statutory Auditors is placed before the Members for ratification.

Cost Auditors

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 is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs Kishore Bhatia& Associates to audit the cost accounts of the Company for the financial year 2015-16 on a remuneration of Rs.3.00 lakhs.

The Cost Auditors have given a Certificate to the effect that the appointment, if made, will be within the prescribed limits specified under section 141 of the Companies Act, 2013.

The Audit Committee has obtained a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company. The Cost Audit Report in respect of F.Y. 2014- 15 will be filed on or before the due date i.e. 27 September 2015. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is placed before the Members for their ratification.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed Messrs Hemanshu Kapadia & Associates, a firm of Company Secretaries in Practice to carry out the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure "B"

Report on Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Report on corporate governance practices followed by the Company, together with a certificate from the Company''s Auditors confirming compliance is attached.

Report on Management Discussion and Analysis

As required under the Listing Agreement, report on "Management Discussion and Analysis" is attached and forms a part of this Report. Corporate Social Responsibility In line with the new provisions of the Companies Act, 2013 and the rules framed there under with respect to the Corporate Social Responsibility (CSR), your company has formulated a Policy on CSR and has also constituted a CSR Committee to recommend and monitor expenditure on CSR. The details of CSR Expenditure are given in the prescribed format and forms part of this Report. The same is annexed as Annexure "A"

Other Particulars

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules 2014 is set out in Annexure "D" and forms a part of this Report.

Green Initiative

Your Directors would like to draw your attention to the recent Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 issued by the Ministry of Corporate Affairs allowing paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, we hereby once again appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holdings with their concerned depositary participants and / or with the Company.

Acknowledgements

Your Directors would like to acknowledge the continued support and co-operation from its Bankers, Government Bodies, and Business Associates which has helped the company to sustain its growth even during these challenging times.

For and on behalf of the Board of Directors

Place : Mumbai Hrishikesh A. Mafatlal Date : 30 April 2015 Chairman


Mar 31, 2014

Dear Members,

The Directors are pleased to present their Report together with the Audited Accounts of the Company for the year ended 31 March 2014.

FINANCIAL RESULTS (RS in crore)

Particulars For the year ended For the year ended 31 March 2014 31 March 2013

Net Revenue 596.14 488.18

Other Income 10.76 13.87

Total Income 606.90 502.05

Profit before Tax 34.70 44.13

Profit after Tax 23.62 42.49

Earnings per share (of Rs 10/- each) Rs.1.47 Rs. 2.64

Proposed Dividend 9.65 9.65

Tax on Dividend 1.64 1.64

PERFORMANCE OF THE COMPANY

The year under review continued to experience challenging business conditions with the slowing down of GDP growth in India and increased competition from foreign suppliers. Our operating performance consequently, got impacted particularly in the first half of financial year 2013-14.

In line with the depressed automobile sector demand, majority of your company''s customers both in the domestic as well as in the international market, undertook production cuts at periodical intervals to align their production with demand. As a result there was negligible growth in demand for Rubber Chemicals in the country. The silver lining is that, at least some of the large economies like the US in the western world are now showing healthy trends. The Indian economy too is expected to do better in the coming year in the hope of a stable government at the centre, which should augur well for our business.

On the backdrop of these challenges, we are happy to inform you that your company achieved a growth of 6.5% in its sales volumes as compared to the previous year through sustained marketing efforts and also due to some exits/closures of a few local and international Rubber Chemical players.

The gross turnover of your Company, for the year under review, touched Rs. 643 crores as compared to Rs. 527 crores in the previous year, representing an increase of about 22%. This increase was possible due to a combination of Rupee depreciation, a change in the product mix along with some price corrections which were done to offset some rising input costs. While our efforts to improve our realisations continue, we are severely constrained in this regard on account of the aggressive dumping resorted to by our competitors, especially from China and Korea. This in turn has also forced the European competitors to offer similar aggressive pricing.

The production of rubber chemicals and their intermediates, for the year under review was 37,333 MT as against 33,341 MT, representing an increase of about 12% as compared to the previous year. Unfortunately, our main product (Px-13) continues to suffer due to the unrealistically low prices offered by international competitors. On the whole, our selling prices continue to be unfavorably influenced and impacted by the artificially low pricing adopted by competitors.

Our Input costs, in sync with the high crude oil and benzene prices, continued to show rising trend. While we did manage to pass on some of these increases to our customers, they were not commensurate with the increases we had to absorb.

ANTIDUMPING AND SAFEGUARD PETITION STATUS

As reported in the previous year, your company had filed the Sunset Review petition before the Directorate of Anti Dumping, Ministry of Commerce, Government of India, for reviewing the existing duties on six of its major products. In view of the continued intensified dumping, we had sought enhancement in the quantum of anti dumping duties. We are pleased to inform you that the authorities have now concluded their findings and have recommended enhancement of duties on all the products under review. Your company had also approached the Safeguards Directorate, Ministry of Finance, Government of India for the extension of safeguard duty on one of its major products. We regret to inform you that the Directorate of Safeguards have declined to extend the safeguard duty on that product.

EXPORTS

With some of our important international markets showing some signs of improvement in the second half of the current year, we registered a marginal growth in export volumes by 3%. Due to a significant proportion of high value/specialty products in our export basket as well as due to the weaker Rupee, your company managed to achieve a substantially higher export turnover of Rs. 225 crores as compared to Rs. 188 crores in the previous year. It would be worthwhile mentioning that your company has over a period successfully developed and markets a few specialty products, specifically tailored for its major international customers, due to which it enjoys a niche position. As far as the other generic products are concerned, the company enters the export segment, only out of a compulsion to optimally utilise its own capacities in the absence of sufficient orders from the domestic customers and not out of choice, since pricing in the exports market is also vitiated by the aggressive dumping resorted by the Chinese, Korean and other competitors.

DAHEJ OPERATIONS

The new plant commissioned at Dahej in Gujarat, during the end of previous year, initially witnessed certain teething problems as is expected in any chemical plant of this nature. You are aware that this plant has been built using solely in house technology and its performance started improving from the second half of the year under review. However the capacity utilisation of this plant was largely impacted by the very high imports of this product into the country due to the aggressive dumping resorted by the competitors. In the absence of timely imposition of suitable anti-dumping and safeguard duties by the authorities, these imports continued for the remaining part of the year as well. We are hopeful that with the recent enhancement of duties by both the above authorities, the capacity utilisation will improve and will have a significant positive impact on the performance of your company.

FINANCE & RATING

In view of high cost of inputs and the anticipated surge in its operations, your Company has sought enhancement of its working capital facilities. We are happy to inform you that all our bankers have agreed to participate with additional share of lending.

Credit Rating Agency CARE, in their recent evaluation, have re-affirmed our Long Term Credit Rating at AA- and short term borrowings rating at A1 .

DIVIDEND

Your Directors are pleased to recommend payment of dividend of Re.0.60 per share of Rs. 10/- each (6%), on the equity share capital of the Company (previous year Re.0.60 per share ofRs. 10/- (6%). The dividend, together with the tax on Dividend, will absorb a sum of Rs. 11.29 crore (previous year Rs. 11.29 crore).

TRANSFER OF UNPAID DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of the provisions of section 205C of the Companies Act, 1956, all unclaimed / unpaid dividend up to FY 2005-06 have been transferred to Investor Education and Protection Fund and unclaimed / unencashed dividend for the FY 2006-07 paid on 31 August 2007 is due for transfer to IEPF on 3 October 2014. Those members who have not yet claimed / encased are requested to claim the same at the earliest before transfer to IEPF.

FIXED DEPOSITS

All the unclaimed fixed deposits/ unclaimed Fixed deposit warrants have been transferred to Investor Education & Protection Fund, as required under Section 205C of the Companies Act, 1956. Since, the Company no longer accepts deposits from public, there are no outstanding/unclaimed deposits as at 31 March 2014.

INSURANCE

The Company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments.

HEALTH, SAFETY AND ENVIRONMENT

The Company follows a well established and responsible policy on health, safety and environment, which every employee is expected to follow and also carefully monitor various practices and procedures which are adopted. The sustainability of the business itself reflects the sincere commitment of the management to implement the health, safety and environment policy in its totality. Direct and indirect employees are trained in technical skills required to handle various hazardous chemicals, fire fighting jobs and first aid cases. The Company conducts pre-employment as well as regular periodic medical checkups across all employees including contractors'' employees to monitor their health on a regular basis. The Company''s management wishes to reiterate its deep and abiding commitment to this cause.

TOTAL QUALITY MANAGEMENT

The company continues to be certified for ISO 9000 (Quality Management Systems), ISO 14001 (Environment Management Systems), OHSAS-18001 (Occupational Health & Safety System Standards) as well as for TS 16949 (Quality System for Automotive Sector). We are happy to mention that the company enjoys an exemplary track record in all these four systems. The Quality Control Laboratory of the Company is certified for ISO 17025.

RESEARCH & DEVELOPMENT

Research & Development and implementation of Technology continue to be one of the key focus areas and business strategy for NOCIL, to ensure continuous and sustainable growth in its business. Dahej plant as you already know is based entirely on in-house Research and was translated into a commercial venture, by NOCIL Technical and Engineering Teams.

Your Board would like to make a special mention about the excellent work that is being done by the R&D and Technology groups of the Company. Some of the initiatives taken in this connection by the Company are expected to yield excellent short as well as long term benefits for the organization, which in financial terms would be significant.

RISK ASSESSMENT AND MANAGEMENT

Your Company has a well defined Risk Management System in place, as a part of its good Corporate Governance practices. Your Company has assigned the ownership of key risks to various Risk Owners and has made the concerned departments and officials responsible for mitigation plans and review of these risks from time to time. All the risks are identified at various departmental levels and suitable mitigation measures are thereafter adopted. These are subjected to a quarterly review by the Risk Co-ordination Committee as well as the Board.

Adequate internal controls, systems, and checks are in place, commensurate with the size of the Company and the nature of its business. The management exercises financial control on the operations through a well defined budget monitoring process and other standard operating procedures. Your Company has appointed an external professional agency i.e. M/s. Aneja Associates, Chartered Accountants, to conduct the internal audit, and the findings and recommendations of the Internal Auditors are placed before the Audit Committee of your Board regularly.

SUBSIDIARY COMPANY

We wish to inform you that PIL Chemicals Private Limited, a wholly owned subsidiary of the company, recorded a Profit before Tax of Rs. 34.47 lakhs, for the year under review.

Consequent to passing of Companies Act, 2013, this wholly owned subsidiary will be converted into a public limited company. All the necessary formalities have been completed and an application has been filed with the authorities in this regard.

Pursuant to the requirements of Clause 32 of the Listing Agreement, the details of Loans/Advances made to and investments made in the subsidiary have been furnished in Notes forming part of the Accounts.

A statement (as required pursuant to Section 212 of the Companies Act, 1956) relating to the Company''s interest in the Subsidiary Company is provided separately.

The Ministry of Corporate Affairs, Government of India, has granted a general exemption from attaching Balance Sheet, Profit and Loss Statement and Schedules thereto and Reports of Board of Directors and Auditors vide its General Circular no. 2/2011 dated 8 February 2011. In view of this circular your Company has not annexed Audited Annual Accounts of its subsidiary viz. PIL Chemicals Pvt. Ltd. for the year ended 31 March 2014. Your Board of Directors in their meeting held on 30 May 2012 has by resolution also given consent for not attaching the Balance Sheet of the subsidiary Company for financial year 2011 -12 and subsequent financial years. Shareholders interested in obtaining copies of annual reports of subsidiary company are requested to get in touch with the Office of the Company Secretary.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared by your Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report. The financial statements have been prepared as per revised Schedule VI issued by the Ministry of Corporate Affairs.

PERSONNEL

The relations, during the year, between the employees and the management of your Company continued to be cordial.

Your Directors wish to thank all the employees for their continued support and co-operation during the year under review.

STOCK OPTIONS

In terms of your approval, read with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the details required to be provided under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, are set out in Annexure-1 to this Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 (Section 134 of the Companies Act, 2013), forms a part of this Report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

DIRECTORS

The Board of Directors in their meeting held on 18 December 2013 decided to appoint Mr S.R. Deo, Sr. Vice President (Technical) as additional director designated as Executive Director and President (Technical) from 1 January 2014 for a period of five years subject tothe applicable provisions of the Companies Act, 1956.

Pursuant to Section 152(6) of the Companies Act, 2013, Mr. H.A. Mafatlal retires by rotation at the forthcoming Annual General Meeting. Being eligible, he offers himself for reappointment.

Pursuant to Sections 149, 152 and any other applicable provisions of the Companies Act, 2013, Mr. C.L. Jain, Mr. N. Sankar, Mr. Rohit Arora, Mr. D.N. Mungale, and Mr. PV. Bhide, have been appointed as Independent Directors to hold office for five consecutive years.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under section 134(5) of the Companies Act, 2013, (erstwhile Section 217 (2AA) of the Companies Act, 1956) we hereby state that:-

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

2. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2014 and of the profit for the year ended on that date.

3. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. We have prepared the annual accounts on a going concern basis.

REPORTON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

As required under the Listing Agreement with Stock Exchanges, reports on "Corporate Governance" and "Management Discussion and Analysis" are attached and form a part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

It may be noted that, your Company has always been in the forefront in discharging its social responsibilities. Accordingly, your Board sanctioned a sum of Rs. 15 lakhs by way of a donation to Shri Sadguru Seva Sangh Trust, which has been conducting over 140,000 eye operations annually in the rural areas. The Trust is also involved in providing quality and affordable education to the children of the economically weaker sections of the society, support in the field of women empowerment, dairy farming and has also provided relief to those affected by natural calamities and disasters.

Your company, in addition to its continued endeavors in greening it''s surrounding areas, it also provides Medical Aid to the nearby villages on various occasions. It also organises Disaster Management / Safety Training Programmes for its neighboring industries.

In line with the new provisions of the Companies Act, 2013 and the rules framed there under with respect to the Corporate Social Responsibility (CSR) which has become mandatory from financial year 2014-15. Your company has formulated a Policy on CSR and has also constituted a CSR Committee to recommend and monitor expenditure on CSR.

OTHER PARTICULARS

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is set out in Annexure - II and forms a part of this Report.

AUDITORS

The term of M/s Deloitte Haskins and Sells LLP, Chartered Accountants, Mumbai as Statutory Auditors, expires at the conclusion of this Annual General Meeting and being eligible, they offer themselves for re-appointment. Pursuant to the new requirement of Section 139(1)of the Companies Act, 2013,theAudit Committee has recommended to the Board the re-appointment of M/s. Deloitte Haskins and Sells LLP, Chartered Accountants as Statutory Auditors of the Company for the further period of 3 years. The Auditors have given a Certificate to the effect that the re- appointment, if made, will be within the prescribed limits specified under section 141 of the Companies Act, 2013 (erstwhile Section 224(1 B) of the Companies Act,1956).

COST AUDITOR

In terms of the MCA Circular No. 52/26/CAB-2010 dated 24 January 2012 and 6 November 2012, the Company is now required to carry out Cost Audit effective from 1 April 2012 and to comply the requirements, the Audit Committee has appointed M/s. Kishore Bhatia and Associates, Cost Auditors, holding Firm Registration No. 00294 to carry out Cost Audit of the Company for the financial year 2014-15 and their appointment is subject to approval of the Central Government, Ministry of Corporate Affairs, New Delhi.

The Cost Auditors have given a Certificate to the effect that the appointment, if made, will be within the prescribed limits specified under section 141 of the Companies Act, 2013.

The Audit Committee has obtained a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the Company. The Cost Audit Report in respect of FY 2013-14 will be filed on or before the due date i.e. 27 September 2014.

GREEN INITIATIVE

Your Directors would like to draw your attention to the recent Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 issued by the Ministry of Corporate Affairs allowing paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, we hereby once again appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holdings with their concerned depositary participants and / or with the Company.

ACKNOWLEDGEMENTS

Your Directors would like to acknowledge the continued support and co-operation from its Bankers, Government Bodies, and Business Associates which has helped the company to sustain its growth even during these challenging times..



For and on behalf of the Board of Directors

Place : Mumbai Hrishikesh A. Mafatlal

Date : 30 April 2014 Chairman


Mar 31, 2013

Dear Members,

The Directors are pleased to present their Report together with the Audited Accounts of the Company for the year ended 31 March 2013.

FINANCIAL RESULTS

(Rs.Incrore)

For the year ended For the year ended KaraCUlare 31 March 2013 31 March 2012

Net Revenue 488.18 481.49

Other Income 13.87 23.25

Total Income 502.05 504.74

Profit before Tax 44.13 46.91

Profit after Tax 42.49 33.99

Earnings per share ( of Rs.10/-each)

Proposed Dividend 9.65 9.65

Tax on Dividend 1.64 1.57

PERFORMANCE OF THE COMPANY

The year experienced one of the most challenging business environments which the rubber chemicals industry has ever faced. Most major customers of your Company undertook significant production cuts to align their production with the decline in the demand from the automobile sector. This in turn, resulted in lower demand for Rubber Chemicals.

Despite this, the turnover of your Company, for the year under review, touched Rs. 527 crore as compared to Rs.511 crore in the previous year, representing an increase of about 3%. The production of rubber chemicals and their intermediates, for the year under review was 33341 MT as against 37173 MT, representing a decrease of about 10% as compared to the previous year.

On the back of high crude oil and benzene prices, the prices of practically all our major inputs rose to levels seldom witnessed over the last 5-7 years. Unfortunately, we could not pass commensurate price increases to our customers, in view of the aggressive dumping of rubber chemicals into the country by the Chinese/Korean/ European suppliers. Your Company, therefore, on occasion had to curtail the production of certain key products, in line with the reduced residual demand post this dumping.

Efforts however were made from the fourth quarter of this year, to pass on some increases to customers to mitigate, at least partially, the impact of some of the cost increases.

As reported last year, one of the major initiatives undertaken by your Company''s management, was to set-up a new manufacturing facility at Dahej in Gujarat, with a much improved process technology, to produce a key intermediate for an important product in our range of rubber chemicals. We are happy to inform you that the said facility commenced commercial production from early March 2013.

Although, the overall business conditions at this critical juncture do not look very healthy, your Company''s management is confident that your Company will tide over this situation soon, as some more realignment in the global rubber chemicals industry is expected, which should improve the market conditions.

We are also hopeful that, pursuant to our petition to the GOI authorities against the dumping, we will receive suitable relief by way of imposition of antidumping duties. Consequently, our operational performance should improve from the current levels.

EXPORTS

The slowdown in the European and Japanese economies affected our export volumes, as the demand for rubber chemicals in these markets got adversely impacted. Your Company recorded an export sales turnover of Rs.188 crore, for the year under review as against Rs.193 crore in the previous year.

PROJECT

Our Project at Dahej in Gujarat was commissioned for trial runs, from the second half of the year. Commercial Production at Dahej Site commenced on successful completion of a sustained and stable production run, and on receiving product approvals from all our major customers. It is noteworthy that the entire project was completed and commissioned by a dedicated in-house technical and engineering team. We are proud to mention that this was a project where no external technical collaboration was sought, particularly when such a complex and intricate chemical process was involved. Only a couple of producers in the world, have succeeded in using this chemical process.

The Project could have been commissioned a few months earlier, had timely and adequate power supply been made available by the Electricity Board. Production at the plant is expected to be optimized during the first half of the coming year. This project will enable the Company to improve its operational performance, through the technological innovations/improvements made in the new manufacturing process.

The total expenditure incurred for this project is well within the original sanctioned amount of Rs.250 crore, and the debt component of the project will be less than the originally estimated amount.

FINANCE & RATING

Your Company has enhanced its working capital facilities, to cover Dahej operations as well. Besides the existing banks, IDBI Bank has also been inducted for the Working Capital Facilities,

Credit Rating Agency, CARE, in their recent evaluation, has upgraded our Long Term Credit Rating from CARE "A " to CARE "AA-" and reaffirmed their rating of "CARE A1 " for short term borrowings. The improvement in ratings, is an acknowledgement from CARE towards the consistent performance of your Company, in spite of the prevailing difficult market conditions.

DIVIDEND

Your Directors are pleased to recommend payment of dividend of Re.0.60 per share of Rs.10/- each (6%), on the equity share capital of the Company [previous year Re.0.60 per share of Rs.10/- (6%)]. The dividend, together with the tax on Dividend, will absorb a sum of Rs.11.29 crore (previous year Rs.11.22 crore).

TRANSFER OF UNPAID DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of the provisions of section 205C of the Companies Act, 1956, all unpaid dividends including and up to final dividend for the F.Y 1997-98 have been deposited with the Investor Education and Protection Fund in FY 2005-06. There was no unpaid dividend which was lying unclaimed with the Company up to 31 March 2006, hence during the year amount transferred to the Investor Education and Protection Fund was Nil. Unclaimed Dividend for the financial year 2005-06 declared on 31 July 2006 and paid on 7August 2006 is due for transfer to Investor Education and Protection Fund on 7 August 2013.

FIXED DEPOSITS

All the fixed deposits which have matured on or before 31 March 2005 and remained unclaimed, the entire unclaimed amount of fixed deposits has been transferred to Investor Education & Protection Fund, as required under Section 205C of the Companies Act, 1956. Since, the Company no longer accepts deposits from public, there are no outstanding/unclaimed deposits as at 31 March 2013.

INSURANCE

The Company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments.

HEALTH SAFETY AND ENVIRONMENT

The Company follows a well established and responsible policy on health, safety and environment, which every employee is expected to follow and also carefully monitor various practices and procedures which are adopted. The sustainability of the business itself reflects the sincere commitment of the management to implement the health, safety and environment policy in totality. Direct and indirect employees are trained in technical skills required to handle various hazardous chemicals, fire fighting jobs and first aid cases. The Company conducts pre-employment as well as regular periodic medical checkups across all employees including contractors'' employees to monitor their health on a regular basis. The Company''s management wishes to reiterate its deep and abiding commitment to this cause.

TOTAL QUALITY MANAGEMENT

The Company continues to be certified for ISO 9000 (Quality Management Systems) and ISO 14001 (Environment Management Systems) as well as for OHSAS-18001 (Occupational Health & Safety System Standards). We are happy to mention that the Company enjoys an exemplary track record in all these three systems. The Quality Control Laboratory of the Company is certified for ISO 17025 In addition to ail these, the Company is also certified for TS 16949 (Quality System for Automotive Sector)

RESEARCH & DEVELOPMENT

Research, Development and implementation of Technology, continue to be one of the key focus areas and business strategy for NOCIL, to ensure continuous and sustainable growth in its business. Dahej project is based entirely on in-house Research and was translated into a commercial venture, by NOCIL Technical and Engineering Team.

Your Board would like to make a special mention about the excellent work done by the R&D and Technology groups of the Company. Some of the initiatives taken in this connection by the Company are expected to yield excellent long term benefits for the organization.

RISK ASSESSMENT AND MANAGEMENT

Your Company has a well defined Risk Management System in place, as a part of its good Corporate Governance practices. Your Company has assigned the ownership of key risks to various Risk Owners and has made the concerned departments and officials responsible for mitigation plans and review of these risks from time to time. All the risks are identified at various departmental levels and suitable mitigation measures are thereafter adopted. These are subjected to a quarterly review by the Risk Co-ordination Committee as well as the Board.

Adequate internal controls, systems, and checks are in place, commensurate with the size of the Company and the nature of

its business. The management exercises financial control on the operations through a well defined budget monitoring process and other standard operating procedures. Your Company has appointed an external professional agency i.e. M/s. N. Aneja Assurance Pvt. Ltd., Chartered Accountants to conduct the internal audit, and the findings and recommendations of the Internal Auditors are placed before the Audit Committee of your Board regularly.

SUBSIDIARY & AMG GROUP COMPANIES

We wish to inform you that PIL Chemicals Pvt Ltd, a wholly owned subsidiary of the Company, recorded a Profit before Tax of Rs.26.81 lakhs, for the year under review.

Pursuant to the requirements of Clause 32 of the Listing Agreement, the details of Loans/Advances made to and investments made in the subsidiaries have been furnished in Schedules forming part of the Accounts.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to the Company''s interest in the Subsidiary Companies is provided separately.

The Ministry of Corporate Affairs, Government of India, has granted a general exemption from attaching Balance Sheet, Profit and Loss Statement and Schedules thereto and Reports of Board of Directors and Auditors vide its General Circular no. 2/2011 dated 8 February 2011 In view of this circular your Company has not annexed Audited Annual Accounts of its subsidiary viz. PIL Chemicals Pvt. Ltd. for the year ended 31 March 2013. Your Board of Directors in their meeting held on 30 May 2013 has by resolution also given consent for not attaching the Balance Sheet of the subsidiary Company for financial year 2012-13. Shareholders interested in obtaining copies of annual reports of subsidiary companies are requested to get in touch with the Office of the Company Secretary.

The Board is also pleased to inform that post successful restructuring of Mafatlal Industries Ltd (MIL) from BIFR, and on receipt of repayment of loan advanced by your Company to MIL, the dimunition in the value of investments amounting to Rs.22.25 crores made in the earlier years is now reversed and shown as an exceptional item in the Statement of Profit and Loss.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared by your Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report. The financial statements have been prepared as per revised Schedule VI issued by the Ministry of Corporate Affairs. The previous year figures have been recast in accordance with the revised Schedule VI of the Companies Act, 1956.

PERSONNEL

The relations, during the year, between the employees and the management of your Company continued to be cordial.

Your Directors wish to thank all the employees for their continued support and co-operation during the year under review.

STOCK OPTIONS

In terms of your approval, read with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the details required to be provided under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, are set out in Annexure - I to this Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this Report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

DIRECTORS

At the forthcoming Annual General Meeting, Mr. C.L. Jain, Mr. D.N. Mungale and Mr. P.V.Bhide retire by rotation, pursuant to Article 145 of the Articles of Association of the Company. Being eligible, they offer themselves for reappointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, we hereby state that:-

1. In the preparation of the annual accounts, all the applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

2. The Directors 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 as at 31 March 2013 and of the profit for the year ended on that date.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

As required under the Listing Agreement with Stock Exchanges, reports on "Corporate Governance" and "Management Discussion and Analysis" are attached and form a part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has always been in the forefront in discharging its social responsibilities. Accordingly, your Board sanctioned a sum of Rs.15 lakhs by way of a donation to Shri Sadguru Seva Sangh Trust, which has been conducting over 140,000 eye operations in the rural areas. The Trust is also involved in providing quality and affordable education to the children of the economically weaker sections of the society, support in the field of dairy farming, women empowerment and has provided relief to those affected by natural calamities and disasters.

Your Company, in addition to its continued endeavours in greening its surrounding areas, also provides Medical Aid to the nearby villages on various occasions. It also organises Disaster Management / Safety Training Programmes for its neighbouring industries.

OTHER PARTICULARS

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is set out in Annexure - II and forms a part of this Report.

AUDITORS

The term of Messrs. Deloitte Haskins and Sells, Chartered Accountants, Mumbai as Statutory Auditors, expires at the conclusion of this Annual General Meeting and being eligible, they offer themselves for reappointment. The Audit Committee has recommended to the Board the reappointment of M/s. Deloitte Haskins and Sells, Chartered Accountants as Statutory Auditors of the Company. The Auditors have given a Certificate to the effect that the reappointment, if made, will be within the prescribed limits specified under section 224(1 B) of the Companies Act, 1956.

COST AUDITOR

In terms of the MCA Circular No. 52/26/CAB-2010 dated 24 January 2012 the Company is now required to carry out Cost Audit effective from 1 April 2012 and to comply with the requirements, the Audit Committee has appointed Kishore Bhatia and Associates, Cost Auditors holding Firm Registration No. 00294 to carry out Cost Audit of the Company for the financial year 2013- 14 and their appointment is subject to approval of the Central Government, Ministry of Corporate Affairs, New Delhi.

The Cost Auditor has given a Certificate to the effect that the appointment, if made, will be within the prescribed limits specified under section 224(1 B) of the Companies Act, 1956.

The Audit Committee has obtained a certificate from the Cost Auditor certifying his independence and arm''s length relationship with the Company. The Cost Audit Report in respect of FY. 2012-13 will be filed on or before the due date i.e. 27 September 2013.

GREEN INITIATIVE

Your Directors would like to draw your attention to the recent Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 issued by the Ministry of Corporate Affairs allowing paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, we hereby once again appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holdings with their concerned depositary participants and / or with the Company.

ACKNOWLEDGEMENTS

Your Directors would like to acknowledge the continued support and co-operation from its Bankers, Government Bodies, and Business Associates which has helped the Company to sustain its growth even during these challenging times.

For and on behalf of the Board of Directors

Place : Mumbai Hrishikesh A. Mafatlal

Dated: 30 May 2013 Chairman


Mar 31, 2010

The Directors present their Report together with the Audited Accounts of the Company for the year ended 31 March 2010.



Particulars For the year ended For the year ended 31 March 2010 31 March 2009

Profit before Depreciation, Interest and Taxation 57,91 65.74

Less:Depreciation 7,63 7.61

Less: Interest 0,15 3.98

Profit before Tax 50,13 54.15

Provision for Taxation (including wealth tax and fringe benefit tax) 16.10 17.99

Profit after Tax 34.03 36.16

(Deficit)/Surplus brought from previous period 21.12 (3.76)

Proposed Dividend 9.65 9.65

Tax on Dividend 1.64 1.64

Balance carried to Balance Sheet 43.86 21.12

PERFORMANCE OF THE COMPANY

The turnover of the Company for the year under review was Rs.460 crore as compared to Rs.499 crore representing a decrease of 7.87% over the previous year. The production of rubber chemicals and their intermediates was 36697 MTfor the year under review as against 33573 MT representing an increase of 9.30 % as compared to the previous year.

The year 2009-10 started with an unprecedented negative outlook due to the global financial meltdown. Fortunately, the situation in India had started turning positive as compared to the Western world. As a result, the domestic Tyre industry got back to normal production levels and consequently demand for our rubber chemicals showed a healthy trend in the domestic market.

We are therefore happy to inform you that the Company experienced positive volume growth during the year under review and this growth as mentioned earlier was driven mainly by Domestic Sales. However on the export front, after a very sudden drop in volumes, your Company managed to substantially recover its volumes in the Second Half.

The selling prices remained more or less flat for the most part of the year in the domestic market although costs kept going up. During the last quarter of the year, an attempt was made to increase the selling prices of select products to recover some of the cost increases witnessed during the period.

Raw material prices started hardening from the beginning of the 2nd half of the year consequent to crude prices surging to

US$ 80 per barrel. We are happy to inform you that despite the cost increases, through a combination of timely bookings of raw materials at best possible prices, better management of various operational parameters coupled with some increases in selling prices, the actual profits for the year remained more or less at the same level as that of the previous year.

During the year, the Company managed to pay off all its secured loans in the first quarter of the year itself. Even the unsecured loan taken from SICOM has been paid during May 2010. We are happy to inform you that as of date, the Company is completely debt free and this is particularly significant since we are in the process of raising funds for the proposed expansion Project in Dahej, Gujarat.

EXPORTS

During the year under review, the Company was able to achieve exports of Rs. 181 crore as against Rs. 231 crore in the previous year. The export volumes also, were lower by about 8% as compared to the previous year due to reduced demand in the international market. Rupee appreciation also adversely affected our exports realizations. Export volumes did however improve substantially in the 2nd half of the year under review over the 1 st half consequent to partial recovery in the overseas markets. Given this background, we are hopeful of further recovery in volumes in the FY 2010-11 as compared with the FY 2009-10.

BUSINESS SCENARIO

Although the global economic scenario has shown some signs of improvement, we need to carefully watch the developments in the coming year.

The Rubber Chemicals market, remained competitive and the dumping by international exporters into India continues to be a concern.

Chinas export subsidies arid undervalued currency continues to keep our product pricing depressed, although input costs have risen significantly over the year putting pressure on margins. Due to weak demand in their own domestic markets, competition from developed countries in the European Union region as well as South Korea continues to be intense in the Indian market. The Company is responding to this with concerted efforts to improve its share with existing customers as well as trying to create new opportunities in untapped markets.

Despite these problems, your Board is pleased to convey that most of the major international tyre customers continue to rely on and do healthy business with the company for their regular requirements of rubber chemicals. The Company continues to maintain a very strong and long term relationship with all its domestic and international customers and they in turn have accepted the status of the Company as one of the leading global manufacturers of rubber chemicals with very high technological capabilities.

PROJECT

As informed to you last year, the Company had decided to go slow on the proposed expansion Project in Dahej, Gujarat, due to the global recessionary conditions. Given the present automobile sector growth in India and also the major expansion plans being implemented by the Domestic Tyre Companies coupled with the fact that the Global Tyre industry is also operating close to their normal levels, we are confident that the Company can now go ahead and implement the first phase of the Project and we see more than adequate demand for the additional capacities that will come up with this Project. A suitably modified plan for the said project has been finalized and we are happy to inform you that the overall Engineering Package is in the advanced stages of completion. The Company now plans to implement this phase of the project at a cost of approximately Rs. 250 crore. Discussion for financing the project are at an advanced stage with prospective lenders.

The project is expected to be commissioned during the Second half of FY 2011-12. On its successful implementation, your Companys position in the market place will strengthen not only in terms of higher market share but also in terms of more cost effective and cleaner processes.

As already stated in the previous reports, all the necessary

Clearances from the Central and the State Government authorities have also been obtained. Most of the infrastructural work too has been completed. The Company has so far spent a sum of Rs.24 crore on the project.

DIVIDEND

Your directors are pleased to recommend payment of dividend of Re. 0.60 per share of Rs.10/- each (6%), on the equity share capital of the Company. The dividend, together with the tax on Dividend, will absorb a sum of Rs. 11.29 crore.

TRANSFER OF UNPAID DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

As per the provisions of section 205C of the Companies Act, 1956, all unpaid dividends including and up to final dividend for the year 1997-98 and the Fixed Deposits lying unclaimed with the Company up to 31 March 2003 have been transferred to the Investor Education and Protection Fund.

FIXED DEPOSITS

As on 31 March 2010, fixed deposits amounting to Rs. 0.20 crore have not been claimed by the depositors from the Company. The fixed deposits which have matured on or before 31 March 2003 but remained unclaimed since then, have been transferred to Investor Education & Protection Fund, as required under Section 205C of the Companies Act, 1956.

INSURANCE

The Company has taken all the necessary steps to insure its properties and insurable interests, as deemed appropriate and also as required under the various legislative enactments.

HEALTH, SAFETY AND ENVIRONMENT

The Company is certified for ISO 14001:2004 (Environment Management Systems) and BS OHSAS18001:2007 (Occupational Health & Safety System Standards), and ensures continuous improvements in the area of Health, Safety and Environment.

The Company follows a well established and responsible policy on health, safety and environment, which every employee is expected to follow and also carefully monitor various practices and procedures which are adopted. The sustainability of the business itself reflects the sincere commitment of the management to implement the health, safety and environment policy in totality. Direct and indirect employees are trained in technical skills required to handle various hazardous chemicals, fire fighting jobs and first aid cases. The Company conducts pre-employment as well as regular periodic medical checkups across all employees including contractors employees to monitor their health on a regular basis. The Companys management wishes to reiterate its deep and abiding commitment to this cause. I am happy to inform you that your Company has been regularly extending support on Safety & Medical front to those affected in the vicinity of our plant including the fire department of Navi Mumbai Municipal Corporation as part of our continued Corporate Social responsibility.

TOTAL QUALITY MANAGEMENT

As mentioned above, the Company continues to be certified for "Total Quality Management System" which comprises of ISO 9001:2008 (Quality Management Systems), ISO 14001:2004 (Environment Management Systems) and BS OHSAS 18001:2007 (Occupational Health & Safety System Standards). We are happy to mention that the Company enjoys an exemplary track record in Total Quality Management System in view of continual improvements in this area. The Quality Control Laboratory of the Company has also been certified for ISO 17025 (Quality Assurance System) which is a unique feature in this field and assures highest quality standards to all its internal and external customers.

RESEARCH & DEVELOPMENT

Your Board would like to make a special mention about the excellent work done by the R&D and Technology groups of the Company. Some of the initiatives taken in this connection by the Company are expected to yield excellent long term benefits for the organization. The expansion project in Dahej which is now under implementation is based on the processes developed in house by these groups. The Company has also patented some of the work by its R&D.

RISK ASSESSMENT AND MANAGEMENT

The Company has a well defined Risk Management System in place as a part of its good Corporate Governance practices. All the risks are identified at various departmental levels and suitable mitigation measures are adopted. These are subjected to a quarterly review by the Risk Co-ordination Committee as well as the Audit Committee of your Board. The Company has assigned the key risks to various Risk Owners and has made them responsible for mitigation plans and review of these risks from time to time.

There are adequate internal controls, systems, and checks in place, commensurate with the size of the Company and the nature of its business. The management exercises financial control on the operations through a well defined budget monitoring process and other standard operating procedures. The Company has appointed an external professional agency to conduct the internal audit and the findings and recommendations of the Internal Auditors are placed before the Audit Committee of your Board regularly for further corrective actions.

SUBSIDIARY COMPANIES

The Annual Reports of its three subsidiaries viz. Ensen Holdings Limited, Urvija Investments Limited and PIL Chemicals Private Limited for the year ended 31 March 2010 are enclosed separately and form an integral part of the Annual Report of NOCIL Limited.

We are pleased to inform you that PIL Chemicals Pvt Ltd, a Company which was acquired by your Company has not only started making profits but also managed to wipe out its accumulated losses in its 3rd year of operation under the NOCIL Management.

In view of insignificant operations of both Ensen Holdings Ltd and Urvija Investments Ltd and to consolidate the operations of subsidiary companies, the Board of Directors of the respective subsidiary Companies approved in principle the merger of M/s. Ensen Holdings Ltd. and M/s. Urvija Investments Ltd., with M/s PIL Chemicals Pvt. Ltd. which is operating company and doing processing work for your Company with effect from 1 April 2010.

The subsidiary companies are in the process of filing necessary Petition with Honble Bombay High Court for approval of Scheme of Merger.

Pursuant to the requirements of Clause 32 of the Listing Agreement, the details of Loans / Advances made to and investments made in the subsidiaries have been furnished in Schedules forming part of the Accounts.

A statement pursuant to Section 212 of the Companies Act, 1956, relating to the Companys interest in the Subsidiary Companies is provided separately.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared by your Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors Report thereon form part of the Annual Report.

PERSONNEL

The relations between the employees and the management, during the year, have been cordial. The Directors wish to thank all the employees for their continued support and co-operation during the year under review.

STOCK OPTIONS

In terms of your approval read with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the details required to be provided under the Securities and Exchange Board of

India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, are set out in Annexure -1 to this Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this Report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

DIRECTORS

At the forthcoming Annual General Meeting, Mr. C. L. Jain, Mr. D.N. Mungale and Mr. N. Sankar will retire by rotation pursuant to Article 145 of the Articles of Association of the Company. Being eligible, they offer themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, we hereby state that:-

1. In the preparation of the annual accounts, all the applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

2. The Directors 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 as at 31 March 2010 and of the profit for the year ended on that date.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

As required under the Listing Agreement with Stock Exchanges, reports on "Corporate Governance" and "Management Discussion and Analysis" are attached and forms a part of this Report.

OTHER PARTICULARS

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is set out in Annexure - II and forms a part of this Report.

AUDITORS

The term of M/s. Deloitte Haskins and Sells, Chartered Accountants, Mumbai as Statutory Auditors, expires at the conclusion of this Annual General Meeting and are eligible for re-appointment. The Audit Committee has recommended to the Board the re-appointment of M/s. Deloitte Haskins and Sells, Chartered Accountants as Statutory Auditors of the Company. The Auditors have given a Certificate to the effect that the re-appointment, if made, will be within the prescribed limits specified under section 224 (1B) of the Companies Act,1956.

ACKNOWLEDGEMENTS

Your Directors would like to acknowledge the continued support and co-operation from the Bankers, Government Bodies, Business Associates which helped the company to sustain its growth even during these challenging times.

For and on behalf of the Board of Directors

Hrishikesh A. Mafatlal

Chairman Mumbai Dated:25 May2010.

 
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