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Directors Report of National Peroxide Ltd.

Mar 31, 2017

DIRECTORS’ REPORT TO THE MEMBERS

The Directors take pleasure in presenting their Sixty-Third Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended 31st March, 2017.

1. FINANCIAL RESULTS

('' in lacs)

Particulars

Financial Year Ended

Standalone

Consolidated

31/03/2017

31/03/2016

31/03/2017

31/03/2016

Revenue from Operations (Net of Excise) and Other Income

26,149.06

24,161.23

26,195.29

24,211.11

Exceptional Items

393.33

(91.53)

393.33

(91.53)

Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA)

7,660.61

4,304.15

7,705.98

4,353.28

Finance Charges

213.49

538.50

213.49

538.50

Depreciation

892.73

895.60

892.73

895.60

Provision for Tax (including for earlier years):

(Less) Current Tax

2,075.00

851.00

2,075.06

852.32

(Less) Deferred Tax

155.98

196.03

155.98

196.03

(Less) (Excess)/Short Provision for Tax relating to prior years

(461.43)

25.94

(462.26)

25.94

Net Profit After Tax

4,784.84

1,797.08

4,830.98

1,844.89

Profit brought forward from previous year

18,140.56

17,035.18

18,341.53

17,203.07

Surplus available for Appropriations

22,925.40

18,832.26

23,172.51

19,047.96

Appropriations to:

Proposed Dividend

—

574.70

—

574.70

Dividend Distribution Tax

—

117.00

—

117.00

Transferred to General Reserve

—

—

4.54

4.91

Transferred to Special Reserve u/s. 45IC of the RBI Act, 1934

—

9.07

9.82

Profit carried to Balance Sheet

22,925.40

18,140.56

23,158.90

18,341.53

2. DIVIDEND

Your Directors have recommended a dividend of Rs, 34/- per equity share of Rs, 10/- each for the Financial Year 2016-17, to be paid, if declared by the members at the Annual General Meeting to be held on 9th August, 2017.

3. TRANSFER TO RESERVES

During the current financial year, no transfers were made to reserves.

4. STATE OF COMPANY’S AFFAIRS

The gross sales and other income for the year under review were Rs, 26,149 lacs as against Rs, 24,161 lacs for the previous year, registering increase of 8.2%. The profit before tax was Rs, 6,554 lacs (after interest and depreciation charges of Rs, 1,106 lacs) and the profit after tax was Rs, 4,785 lacs for the year under review as against Rs, 2,870 lacs and Rs, 1,797 lacs respectively, for the previous year, registering increase of 128% and 166% respectively.

The Company produced 93,564 MT of Hydrogen Peroxide, during the year under review, as compared to 97,637 MT during the previous year. The production was lower during the year due to two shutdowns taken to effect technical changes and bringing the heat recovery system in line and also due to building of inventory as a result of demonetization. The heat recovery system is expected to result in significant savings in future and reduce Greenhouse Gas Emissions.

The Company sold 96,195 MT of Hydrogen Peroxide during the year under review, as against 96,846 MT during the previous year. The Company continues to maintain its prime position in the market and held 38% market share during the year as compared to 42% during the previous year due to large quantum of imports.

1.26 Million Cubic Meters (MCM) of Hydrogen Gas were also sold during the year as against 2.76 MCM during the previous year.

5. CHANGE(S) IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business carried on by the Company and of its subsidiary. The Company has not changed the class of business in which the Company has an interest.

6. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

7. AWARDS AND RECOGNITION

The Company received the following awards during 2016-17:

Name of Award

Award Received from

Certificate of Merit for Excellence of Management of Health, Safety & Environment, for the year 2015

Indian Chemical Council, Mumbai

Certificate of Appreciation in recognition of appreciable achievement in Occupational Safety and Health during Assessment Period of Three Years (2012-2014)

National Safety Council

8. SAFETY & ENVIRONMENT

The Company continues to maintain a good safety and environmental record. There was no lost time injury during the FY 2016-17. It has worked for 426 days without Lost Time Injury as on 31st March, 2017.

9. 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.

10. FIXED DEPOSITS

The Company does not accept fresh deposits at present, and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

11. DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Naperol Investments Limited (Naperol) is the only subsidiary of the Company. There were no joint ventures and associate companies.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of Naperol (in Form AOC-1) forms part of the Consolidated Financial Statements. Pursuant to Section 136 of the Companies Act, 2013, the Company is exempted from attaching to its Annual Report, the Annual Report of Naperol.

The Audited Financial Statements of the subsidiary company are kept open for inspection by the Members at the Head Office of the Company. The Company shall provide free of cost, a copy of the financial statements of its subsidiary company to the Members upon their request. The statements are also available on the website of the Company at www.naperol.com.

12. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY COMPANY, NAPEROL INVESTMENTS LIMITED

Naperol Investments Limited was incorporated on 6th May, 1980 and is registered as a Non-Banking Financial Company as provided by Section 45-IA of the Reserve Bank of India Act, 1934. The Company is engaged in the business of long term investment. During the year under review, the Company earned a profit after tax of Rs, 46.14 Lacs as against Rs, 47.81 Lacs in 2015-16.

13. CONSOLIDATED FINANCIAL STATEMENTS

The Company has prepared Consolidated Financial Statements (CFS) in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules, 2014, of the Companies Act, 2013. The Consolidated Financial Results reflect the results of the Company and its subsidiary. As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the Audited CFS together with the Independent Auditors’ Report thereon are annexed and form part of this Report. The summarized Consolidated Financial Results are provided above at point no. 1 of this Report.

14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is appended as Annexure I.

15. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been complied with.

A separate report on Corporate Governance along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, is appended as Annexure II.

16. CORPORATE SOCIAL RESPONSIBILITY

The Company had spent Rs, 74,04,588/- towards its Corporate Social Responsibility (CSR) activities during the Financial Year 2016-17 as per the provisions of the Companies Act, 2013.

The CSR Policy of the Company and the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure III.

17. DETAILS OF BOARD MEETINGS

During the year, five Board Meetings were held, details of which are provided in the Corporate Governance Report.

18. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Control Systems. The Internal Control Systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company’s assets. The details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

19. SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2017 was Rs, 574.70 Lacs. During the year under review, there has been no change in the paid-up Equity Share Capital of the Company.

However, Solvay S. A., one of the promoters of the Company had transferred its entire holding of 14,42,500 (25.10%) shares by inter-se promoter transfer to other promoters, viz. Nowrosjee Wadia & Sons Limited and Mr. Nusli N. Wadia. Accordingly, Solvay S. A. has ceased to be a promoter of the Company as on 31st March, 2017.

20. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 is appended as Annexure IV.

21. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that:

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

2. they 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 the end of the financial year and of the profit of the Company for that period;

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

4. they have prepared the Annual Accounts on a ‘going concern’ basis;

5. they have laid down internal financial controls to be followed by the Company and that such internal controls are adequate and were operating effectively; and

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2016-17.

22. STATUTORY AUDITORS

M/s. S. B. Billimoria & Co., Chartered Accountants (ICAI Registration No. 101496W), Statutory Auditors of the Company, will cease to hold office on the conclusion of the ensuing Annual General Meeting (AGM) as required by mandatory rotation of the Auditors under the Companies Act, 2013.

The Audit Committee recommended to the Board for approval, the appointment of M/s. Price Waterhouse Chartered Accountants LLP (PW) (FRN. 012754N/N500016) as Statutory Auditors. The Board has approved the appointment of PW for a period of 5 (five) years, subject to the approval of the shareholders at the ensuing AGM.

PW are eligible for appointment as Statutory Auditors, under Section 141 of the Companies Act, 2013 and the rules framed there under. Members are requested to consider their appointment from the conclusion of the ensuing AGM up to the conclusion of the AGM to be held in the financial year 2022-23, subject to ratification by the Members at every AGM as per the provisions of the Companies Act, 2013.

There are no qualifications, reservations or adverse remarks made in the Statutory Auditors’ Report.

23. COST AUDIT

As per the Cost Audit Orders, Cost Audit is applicable to the Company’s organic & inorganic chemicals and industrial gases products/ business of the Company for the financial year 2017-18.

In view of the same and in terms of the provisions of Section 148 and other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. D. C. Dave & Co., Cost Accountants (ICWA Registration No. 000023), have been appointed as Cost Auditors to conduct the audit of cost records of the Company for the financial year 2017-18. The remuneration of '' 4,00,000/- plus applicable service tax and re-imbursement of travelling and out-of-pocket expenses incurred by them, which is proposed to be paid to them, requires ratification of the Members at the ensuing Annual General Meeting.

The Company has submitted its Cost Audit Report for the financial year 2015-16 to the Ministry of Corporate Affairs within the stipulated time period.

There are no qualifications, reservations or adverse remarks made in the Cost Auditors’ Report.

24. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Parikh & Associates, Practicing Company Secretaries, have been appointed as Secretarial Auditors of the Company to carry out Secretarial Audit. The Report of the Secretarial Auditors is appended as Annexure V.

There are no qualifications, reservations or adverse remarks made in the Secretarial Auditors’ Report.

25. LISTING OF SHARES

The equity shares of the Company are listed on BSE Limited, situated at Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001.

The Company has paid necessary listing fees to BSE Limited as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

26. RELATED PARTY TRANSACTIONS

The Company’s policy on dealing with Related Party Transactions is disclosed on the Company’s website (we blink: http://www.naperol.com/pdf/boardpolicies/RPT_Policy.pdf). All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm’s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013.

During the year, the Company had not entered into any contract/arrangement/transactions with related parties which could be considered as material. The related party transactions are disclosed under Note No. 30 of the Notes to Financial Statements for the year 2016-17.

27. AUDIT COMMITTEE

The Audit Committee of the Company comprises of 3 Independent Directors. The details are provided in the Corporate Governance Report.

Pursuant to the requirements of the Companies Act, 2013, the Company has established vigil mechanism through the Audit Committee for directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy.

The vigil mechanism provides for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases.

The details of establishment of such mechanism is also disclosed on the Company’s website (we blink: http://naperol.com/pdf/ board policies/Whistle-Blower-policy.pdf).

28. RISK MANAGEMENT POLICY

The Company has formulated a Risk Assessment & Management Policy. The details of the Risk Management are covered in the Corporate Governance Report.

29. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ness N. Wadia, Director, retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment.

Mr. S. R. Lohokare has been re-appointed as Managing Director of the Company for a term of three years with effect from 1st May, 2018 by the Board of Directors subject to the approval of the Members, which is being sought at the ensuing AGM.

Necessary resolutions for the re-appointment of Mr. Ness N. Wadia and Mr. S. R. Lohokare have been included in the Notice convening the ensuing AGM and requisite details have been provided in the explanatory statement to the Notice. Your Directors commend their re-appointment.

All the Independent Directors have given a declaration under Section 149(7) of the Companies Act, 2013 (“Act”) that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Key Managerial Personnel

Mr. Sunil Londhe resigned as Chief Financial Officer w.e.f. 31st August, 2016.

The Board of Directors had, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. Shailesh Chauhan as Chief Financial Officer w.e.f. 11th November, 2016.

30. NOMINATION AND REMUNERATION POLICY

The Board has adopted, on the recommendation of the Nomination & Remuneration Committee, a policy for selection and appointment of Directors, Senior Management and their remuneration. A brief detail of the policy is given in the Corporate Governance Report and also posted on the Company’s website (we blink: http://www.naperol.com/pdf/boardpolicies/Nomination_ Policy.pdf).

31. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders’ Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

32. PARTICULARS OF EMPLOYEES

The information in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which forms part of this Report, is appended as Annexure VI.

However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the Members at the Head Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

33. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note No. 18 of the Notes to the Financial Statements.

34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There have been no significant and material orders passed by the regulators, courts and tribunals impacting the going concern status and the Company’s operations in future.

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

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

36. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

The details on climate change and greenhouse gas emissions are appended as Annexure VIII.

37. DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy is currently not applicable to the Company, since the Company does not fall under the top five hundred listed entities as on 31st March, 2017. However, this Policy has been adopted on a voluntary basis, as recommended under Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is posted on the Company’s website (we blink: http://naperol.com/pdf/boardpolicies/Dividend_Distribution_Policy.pdf).

38. 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

Mumbai, 23rd May, 2017


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, 2011

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, 2011.

1. FINANCIAL RESULTS

For the year ended For the year ended 31st March, 2011 31st March, 2010 (Rs. in lacs) (Rs. in lacs)

Gross Turnover (net of excise) 18,163.11 12,190.56

Profit before Interest & Depreciation 9,511.06 3,364.04

Less: Interest 75.84 127.40

Profit before Depreciation 9,435.22 3,236.64

Less: Depreciation 840.96 830.83

Profit before Tax 8,594.26 2,405.81

Less: Provision for Tax:

– Current Tax 2,872.00 825.00

– Deferred Tax (66.00) (39.29)

– Excess provision of Taxes for prior years (4.01) —

Profit after Tax 5,792.27 1,620.10

Balance brought forward from previous year 5,646.45 4,861.22

AMOUNT AVAILABLE FOR APPROPRIATIONS 11,438.72 6,481.32

Appropriations:

Proposed Dividend 689.64 574.70

Corporate Dividend Tax 91.79 97.67

Transfer to General Reserve 579.50 162.50

Balance carried to Balance Sheet 10,077.79 5,646.45

11,438.72 6,481.32

YEAR IN RETROSPECT

The gross sales and other income for the year under review were Rs. 18,488 lacs as against Rs. 12,251 lacs for the previous year registering an increase of 51%. The profit before tax was Rs. 8,594 lacs (after interest and depreciation charges of Rs. 917 lacs) and the profit after tax was Rs. 5,792 lacs for the year under review as against Rs. 2,406 lacs and Rs. 1,620 lacs respectively, for the previous year, both up by 257%.

The Company deferred the annual shutdown to April 2011 to coincide with the shutdown required for expansion. This along with a buoyant market enabled the Company to achieve a record profit during the year.

2. DIVIDEND

Considering the Companys performance, the Board of Directors recommends a dividend of Rs. 12/- per equity share of Rs. 10/- each for the year ended 31st March, 2011 to be paid, if declared by the members at the Annual General Meeting to be held on 8th August, 2011.

3. OPERATIONS

During the year under review, the Company produced 71,826 MT of Hydrogen Peroxide (H2O2), as compared to 64,451 MT during the previous year. This is the highest ever production in the history of the Company.

The Companys record sales of 66,806 MT of H2O2, during the year under review, show an improvement over the 65,662 MT sold during the previous year. The higher demand in the market enabled better prices for H2O2, resulting in increased profits for the year. The Company continues to maintain its prime position in the market and held 36% market share during the year. 3.92 Million Cubic Meters (MCM) of Hydrogen Gas (H2) were also sold during the year, as against 4.04 MCM during the previous year. Sales of H2 were marginally lower as compared to the previous year, due to higher captive consumption. During the year, the Company received Rs. 133.88 lacs by way of dividend from its wholly owned subsidiary, Naperol Investments Ltd., which is of non-recurring nature. Since the Company became debt free, a large quantum of cash surplus was available and the same was invested in Fixed Deposit, ICD and Debt-linked Mutual Funds. The interest & dividend income on account of such investments amounts to Rs. 127 lacs. As a result the other income of the Company was Rs. 325 lacs as against Rs. 60 lacs in previous year. The Profit After Tax increased from Rs. 1,620 lacs to Rs. 5,792 lacs.

During the year, the Companys expansion project from 68 KTPA to 84 KTPA made great strides. The Company has undertaken the shutdown of the plant on 11th April, 2011 to integrate the additional capacity. The shutdown is expected to be for a period of 50 days and the plant is expected to come back on stream by 1st June, 2011. The stock of Hydrogen Peroxide increased by 5,020 MT during the year, to meet the requirements of the customers during this shutdown period.

As a result of growing demand, the Company decided to further increase its production capacity to 95 KTPA. The increased capacity is expected to be available by April 2013.

The price of crude oil had risen significantly by the end of the year. However, since your Company has a long term Gas Sale Agreement entered with GAIL (India) Ltd., it had a marginal impact on the cost of production.

The Company entered into a long term settlement with the Workmens Union on 3rd November, 2010 which will expire on 31st March, 2013. Industrial relations continued to be cordial during the year.

4. AWARDS AND RECOGNITION

The Company received the following awards during the year 2010-11:

(a) National Energy Conservation Award

First Prize in Energy Conservation in the Chemical Sector for the year 2010 awarded by Government of India, Ministry of Power.

(b) Excellence in Energy Conservation and Management

Certificate of Merit conferred by Indian Chemical Council towards excellence in energy conservation and management for the year 2009.

(c) Certificate of Excellence

Certificate of Excellence awarded by Inc. India 500, a 9.9 Media Initiative, during their Second Annual Inc. India 500 Awards, in recognition of exemplary growth and sustainable success.

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

5. 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.

6. FIXED DEPOSITS

There are no outstanding or unclaimed deposits as on 31st March, 2011. The Company does not accept fresh deposits at present.

7. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Ness N. Wadia retires by rotation and being eligible, offers himself for re-appointment.

Mr. R. N. Sethna, who has been associated with the Company since 2003, retires by rotation at the forthcoming Annual General Meeting. However, he has intimated to the Company that he does not seek re-appointment. The Directors place on record their appreciation of the valuable contribution made by Mr. Sethna during his long association with the Company. The Directors are of the view that the vacancy on the Board of Directors of the Company, so created, be not filled at present.

Mr. Nityanath Ghanekar was appointed as Additional Director, w.e.f. 27th April, 2011. He holds office upto the date of the ensuing Annual General Meeting. A Notice has been received in writing from a member proposing his appointment as Director.

Mr. Ghanekar, with his experience and knowledge, would be an advantage to the Company.

Mr. P. V. Kuppuswamy vacated the post of Chairman of the Board of Directors of the Company w.e.f. 27th April, 2011. He,

however, continues to be a Director of the Company. The Directors wish to place on record their appreciation of the valuable

service rendered by him to the Company, as Chairman. Mr. Ness N. Wadia has been elected as the Chairman of the Board, w.e.f.27th April, 2011.

8. Directors responsiblity statements

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, 2011 and of the profit of the Company for the year ended 31st March, 2011; 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.

9. 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.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSOTPTION 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.

11. CLIMATE CHANGE AND GREENHOUSE GAS EMISSIONS

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

12. CORPORATE SOCIAL RESPONSIBILITY

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

13. 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.

14 CONSOLIDATE 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.

15. 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.

16. 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.

17. 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 industrial gases for the financial year ended on 31st March, 2011. The Cost Audit Report for 2009-10 was filed on 16th September, 2010, before the due date of 27th September, 2010.

18. 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 P. V. KUPPUSWAMY Chairman Registered Office: Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai - 400 001.

Mumbai, 27th April, 2011


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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