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BSE: 500730 Sector: Industrials
NSE: NOCIL ISIN Code: INE163A01018
BSE 00:00 | 25 May 196.85 2.30






NSE 00:00 | 25 May 197.40 2.65






OPEN 195.00
VOLUME 67225
52-Week high 236.00
52-Week low 91.90
P/E 19.20
Mkt Cap.(Rs cr) 3,239
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 195.00
CLOSE 194.55
VOLUME 67225
52-Week high 236.00
52-Week low 91.90
P/E 19.20
Mkt Cap.(Rs cr) 3,239
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NOCIL Ltd. (NOCIL) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their Report together with the Audited Accountsof the Company for the year ended 31 March 2017.

Particulars For the year 31 March 2017 For the year 31 March 2016
Gross Revenue 818.28 788.61
Less : Excise Duty 76.06 73.40
Net Revenue 742.22 715.21
Profit before Tax 170.47 118.13
Profit after Tax 120.09 77.74
Earnings per share of Face Value of Rs 10/- each - Basic. 7.42 4.83
- Diluted 7.31 4.78

Performance of the Company

A significant improvement in the operating performance of your company was witnessedduring the financial year 2016-17 inspite of the challenges of low growth in global rubberconsumption and a sudden increase in input costs during the last quarter of the financialyear. Demand for rubber chemicals is a derived demand and is directly a function of globalrubber consumption which for the year saw a modest growth of 1.60%. Against this backdropyour company has posted a gross revenue of Rs 818 crores as compared to Rs 789 crores forthe previous year. The growth in sales volume for the year also was very good at 12.5%.The performance also reflects relatively stable input prices (for the first half of theyear) and commensurate lower selling prices. The lower selling prices also reflect thestiff competitive pressures in the market.

Domestic Market

Your company achieved domestic sales of Rs589 crores against the previous year'sfigures Rs580 crores. The value increaseof appears to be modest due to lower prices formajor part of the year. However growth in volumes has been creditable and we haveoutperformed the market growth significantly. To put this in the right perspectivedomestic rubber consumption recorded an estimated growth of 5.8% whereas our local salesvolumes grew by 10%. During the year we had to trim production levels of some products inorder to manage inventories in a situation of weak demand. Our major customers too had tooperate at lower than optimum levels due to large imports of low-price tyres mainly fromChina. With our customers improving capacity utilisation towards the last quarter of theyear we are confident of improving volumes going forward.

For most of the year our competitors from China Korea and EU posted low C.I.F pricesto India to counter anti-dumping duties and in an attempt to place larger volumes as theywere faced with weak demand in their domestic markets. Also some of our local competitorsalso adopted a low price approach to gain volumes. This continued even in the second halfof the year although raw material prices by then had started climbing towards end 2016.

It was only towards the end of the financial year 2016-17 that we saw some efforts bythe international rubber chemical manufacturers to improve pricing in response to thesharply increased raw materials and pollution abatement costs.

On our part the attempt was to try and strike a balance between volumes andrealisations in a prudent fashion by making small price corrections as and when possiblewithout much sacrifice in volumes.

As mentioned the sharp increases in raw material prices (particularly in second halfof the Financial Year 2016-17) had already resulted in higher rubber chemicals prices.These increases will largely be effective for the first quarter of 2017-18.

Your company will judiciously adapt to this change in the market place keeping in mindour objective of long term sustainable growth. Some corrections were effected inJanuary-March 2017 and some more could be made effective from April 2017.

The domestic sales volumes have to be seen from the perspective of total rubberconsumption in the Indian market along with the automobile production. The automobileproduction for the year under review too recorded a growth of 5.44%.


On the back of small but positive indicators in the global rubber consumption and ourstrength in some specific markets/ application areas your company managed to record oneof its best export performances in volume terms in recent years. The recent problems facedby some of our Chinese competitors whose operations were severely constrained by stricterenvironmental and pollution control enforcement by the authorities there have created acertain tightness in the supply of products in the market place. Owing to this yourCompany could participate more aggressively in certain international key accounts on arelatively better level playing field. We have recorded an Export

Turnover of Rs 218 Crores as compared to Rs 200 Crores in the previous Year. Yourcompany strategically continues to promote some high quality and high value specialityproducts in the export market which contribute significantly to our export turnover. Incase of other products where competition is acute from China/Korea/EU and pricingunattractive your company continues to maintain a limited presence in certain select keyaccounts keeping long term goals and strategy in mind as well as to ensure betterutilisation of our own capacity.


The production of all products was as planned with a higher level of activity incertain key products to align with the market trends. On the Input prices front Crude oilprices witnessed a sudden surge during the second half of the year. With Benzene pricegoing up sharply from US$ 600 to about US$ 1000 most of our critical inputs alsoincreased in tandem in the range of 30% to 80% compared to the price levels at thebeginning of the year.

We have been procuring our raw materials in a judicious manner and also maintainingworking inventories of both raw materials as well as finished products at appropriatelevels. This has helped us to maintain our margins without getting adversely impacted bythese sudden increases in input costs.

Most other costs did not show any significant increase.


After a careful evaluation of the overall market conditions and factoring theexpansion plans of various major rubber industry players the management of the companyfelt the need to expand our existing production capacities to fulfill the increasingdemand for our productions. The Board of Directors has approved the same at the Company'splants situated at Navi Mumbai and Dahej. The total Capital Expenditure envisaged isapprox. Rs170 Crore. The expansion project is expected to be commissioned by the end ofsecond Quarter of the Financial Year 2018-19. In view of the company's current liquidityposition and the likely business scenario in the upcoming financial year the board isconfident that the said Capital Expenditure can be largely financed through internalaccruals.

Finance & Rating

During the year under review your Company generated cash profits at adequate levelswhich did not necessitate additional / fresh working capital borrowings from Banks/Financial Institutions.

Hence the Company has incurred finance costs only towards the

Term Loan.

The Credit Rating Agency CARE in their recent evaluation have enhanced your company'sLong Term Credit Rating from AA- to

AA and reaffirmed the Short term borrowings rating at the highest grade of A1+. Duringthe year your Company repaid the term loan of Rs10 crore to its lender as per the termsof the agreement.


Your Directors are pleased to recommend payment of dividend of Rs1.80 per share ofRs10/- each ( 18 %) on the equity share capital of the Company [previous year Rs1.20/-per share of Rs10/- (12%)]. The dividend together with the tax on Dividend will absorb asum of Rs35.16 crore (previous year Rs23.22 crore).

Transfer of Unpaid Dividend and corresponding Equity Shares to the Investor Educationand Protection Fund (IEPF)

In terms of the provisions of Section 125 of the Companies Act 2013 read with theCompanies (Declaration and Payment of Dividend) Rules 2014 all unclaimed / unpaiddividend up to FY 2008-09 has been transferred to the Investor Education and ProtectionFund and unclaimed / un-encashed dividend for the FY 2009-10 paid on 30 July 2010 is duefor transfer to IEPF on 5 September 2017.

The Ministry of Corporate Affairs (MCA) vide its Notification dated 5th September 2016notified the Investor Education and Protection

Fund Authority ( Accounting Audit Transfer and Refund) Rules

2016 (the Rules) followed by an amendment notified on 28th February 2017 . In terms ofthe said Rules the Equity Shares in respect of which the Dividend has not been claimedfor seven consecutive years or more are also required to be transferred to the IEPF inthe prescribed manner. Necessary communication to shareholders and newspaper notices havebeen issued in terms of the rules. The members are requested to claim / encash the unpaid/ unclaimed Dividend for FY 2009-10 onwards so that the shares are not transferred to theIEPF. Further notification from MCA regarding the modus operandi / procedure for suchtransfer of equity shares to IEPF is awaited subsequent to which appropriate actions willbe taken by the Company.

The list of shareholders who have not claimed / encashed Dividend Warrants for previousseven years is available on the website of the Company.

Registrar and Share Transfer Agents (RTA)

As you are aware Securities & Exchange Board of India (SEBI) had vide its orderdated 22 March 2016 banned Sharepro Services (India) Pvt Ltd (‘Sharepro') theCompany's erstwhile Registrar and Transfer Agent (RTA) from performing theresponsibilities as RTA with immediate effect. In compliance with the SEBI's Order witheffect from 23 May 2016 the Company has appointed Karvy Computershare Private Limited(‘Karvy') as the Company's RTA.

Fixed Deposits

All the unclaimed fixed deposits/ unclaimed fixed deposit warrants have beentransferred to Investor Education & Protection Fund as required under Section 125 ofthe Companies Act 2013. Since the Company no longer accepts deposits from public thereare no outstanding/unclaimed deposits as at 31 March 2017.


The Company has taken all the necessary steps to insure its properties and insurableinterests as deemed appropriate and also as required under the various legislativeenactments.

Health Safety and Environment

Your company is committed to highest level of HSE standards and integrating the sameinto business objectives to protect the environment and ensure the safety of employeescontractors visitors and the communities around including suppliers and customers.

Your Company operates its facilities in a manner consistent with all the applicable HSElaws and regulations adheres to well laid down policies systems and procedures and hasin place emergency handling procedures to provide very prompt and effective response toany emergency situation in the neighbourhood or society around the premises. Company hasOccupational Health Centres (OHC) at all its locations manned by a team of experienceddoctors and male nurses. Regular health checks of all employees including contractemployees is carried out every year which also meets statutory compliance requirement.Individual need based counselling of employees is done and health awareness programmes areheld regularly.

A dedicated cell of Research & Technology is relentlessly working towardsimprovements in Environmental standards. Key objectives of the cell are:

Source reduction by recovery and reuse of useful and valuable molecules fromindividual plant discharge streams.

Natural resource and energy conservation measures by employing new and noveltechnologies.

Dahej plant has successfully implemented this environment strategy and deliverscontinuous compliance through real time on line data transmission. HSE performance of theCompany is reviewed by your Board every quarter and guidance and valuable suggestions madeby the Board are incorporated to further strengthen HSE practice of the Company.

Total Quality Management

Total quality management of your company focuses on improvement in quality andperformance in all business processes and functions. TQM facilitates a disciplinedapproach and provides quality services internally and to all customers to achievesustainable growth and healthy relationship with all employees customers & suppliers.Continuous improvement continues to be a key feature of your company's TQM initiative.Audits by external agencies and customers and their valuable inputs results intostrengthening of TQM culture across the organisation. Planned annual targets forimprovement and its review by the top management team demonstrates commitment of themanagement to enhance business value through TQM. Your company has also ensured that itssubsidiary and ancillary units are also certified for ISO 9001: 2008.

Dahej location is adopting 5S culture to create an international operating standard.TQM will continue to be a focused objective for value enhancement of the rubber chemicalsbusiness.

Research & Development

In pursuit of your company's vision to become a World class customer focusedInnovative organization in the field of Rubber

Chemicals Research & Development function has been playing a pivotal role bydeveloping novel and innovative process technologies in the following areas to accelerategrowth strategies:

Continuous improvement in process efficiency & Product quality to satisfycustomer needs by employing advanced technologies & Process Intensificationapproaches;

Sustainable environmental measures and Greening of existing processes throughadoption of Green chemistry principles;

Development of Niche Products & exploring innovative and novel technologies;

Strong R&D initiatives have led to de-bottlenecking of plant capacities costreduction through lower raw material consumption and increased participation in nicheproducts market resulting in better realization. Research initiatives of your company arerecognised by national and international customers and the company enjoys a privilegedstatus as a technology oriented organisation. Novel green initiatives of the company inthe field of environmental strategies are appreciated by authorities setting a benchmarkas environmental friendly chemical business. The research team of your company willcontinue the innovative initiatives which will yield long term benefits to the businessand society.

Risk Assessment and Management

Your Company has a well-defined Risk Management System in place as a part of its goodCorporate Governance practices. Your Company has assigned the ownership of key risks tovarious Risk

Owners and has made the concerned departments and officials responsible for mitigationplans and review of these risks from time to time. The risks are identified at variousdepartmental levels and suitable mitigation measures are thereafter adopted. These arefurther subjected to a quarterly review by the Risk Co-ordination Committee as well as theBoard. The Business plans for the future are devised and approved by the Board keeping inmind risk factors which can significantly impact the performance of the particularbusiness. All major capital expenditure commitments are subjected to thorough scrutiny bythe Board and investments are permitted only on being satisfied about their return orutility to the Company. Expansion projects are subject to detailed risk assessment andsensitivity tests and approved only after found to pass eligibility criteria.

Internal Control Systems and their Adequacy

Adequate internal controls systems and checks are in place commensurate with thesize of the company and the nature of its business. The management exercises financialcontrol on the company's operations through a well-defined budget monitoring process andspecifying standard operating procedures. Your Company has appointed an externalprofessional agency M/s. Aneja Associates Chartered Accountants to conduct the internalaudit 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 internalcontrols in the company its compliance with operating systems accounting procedures andpolicies at all locations of the Company. Based on the report of internal auditors themanagement undertakes corrective action in the respective areas and thereby furtherstrengthens the controls. Significant audit observations and corrective actions thereonare presented to the Audit Committee of the Board. The Audit committee of the Boardensures that necessary corrective actions suggested are put in place. In addition duringthe year under report the Audit

Committee and the Board have specifically reviewed the Internal

Control and Financial Reporting process prevalent in the Company. On a periodicalbasis the Board also engages the services of professional experts in the said field inorder to ensure that adequate financial controls and systems are in place. At the end of aperiod the CEO/CFO gives a declaration in the appropriate format to certify that thefinancial statements prepared are accurate and complete in all aspects and that there areno significant issues that can impairthefinancial .Company performance ofthe

Vigil Mechanism / Whistle Blower Policy

The company has a Vigil Mechanism Policy to deal with an instance of fraud ormismanagement if any. The details of the Policy are explained in the Corporate GovernanceReport and are also posted on 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 SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 anappropriate Committee has been formed to attend to the complaints of the sexual harassmentat workplace if any made by female employees. The committee of 4 members consists of twofemale employees Vice

President-Human Resource and a practicing Advocate in the field of labour laws andregulations. During the year under review no complaints were received. Wide publicitycontinues to be given with respect to the policy to all employees and the policy is alsodisplayed on the company's website.


- Number of Board Meetings

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

- Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulations 17 and 25 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance of individualDirectors as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees. The various criteria considered for the purpose ofevaluation of Whole Time / Executive Directors included qualification experienceknowledge commitment integrity leadership engagement transparency analysis decisionmaking governance etc. The Board commended the valuable contributions and the guidanceprovided by each Director in achieving the desired levels of growth.

- Declaration of Independent Directors

As required under Section 149(7) of the Companies Act 2013 the Independent Directorshave placed the necessary declaration in terms of the conditions laid down under Section149(6) of the Companies Act 2013 in the Board Meeting held on 8 May 2017.

- Familiarization Programme to Independent Directors

The company provides suitable familiarization programme to Independent Directors so asto familarise themselves with the nature of the industry in which the company operates andbusiness model of the company in addition to regular presentation on technical operationsmarketing and exports and financial statements. In addition to the above Directors areperiodically advised about the changes effected in the Corporate Law Listing Regulationswith regard to their roles rights and responsibilities as Directors of the company. Thedetails of the familiarization programme have been disclosed and updated from time to timeon the company's website and its web link is:


Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 (3)(c) of the Companies Act 2013:

(a) That in the preparation of the annual financial statements for the year ended 31March 2017 the applicable accounting standards have been followed along with properexplanations relating to material departures if any;

(b) That such accounting policies as mentioned in Note 1 forming part of the FinancialStatements have been selected and applied consistently and judgment and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31 March 2017.

(c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; (d) That the annual financial statements have been prepared on a goingconcern basis; (e) That proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

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

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

Remuneration policy

During the Financial Year 2014-15 based on the recommendations of the Nomination &Remuneration Committee the Board of Directors approved a Policy for selection andappointment of Directors Senior Management and their remuneration. There has been nochange in the said Policy for the year under review. The Salient features of RemunerationPolicy are given in the Corporate Governance Report.

Restructuring of Promoters' shareholding

During the year under review an Agreement was executed between the promoters and thelisted companies of the Arvind Mafatlal Group. The details of this arrangement areuploaded on the company's website. Pursuant to the Agreement Mafatlal Industries Limited(MIL) the Company and Navin Fluorine International Limited (NFIL) realigned theirinter-se shareholding and consequently the Company undertook purchase and saletransactions of Equity Shares which it held in MIL and NFIL respectively with a cashneutral position. All the transactions were conducted as per the prevalent rules of SEBIand the gain on sale of shares of NFIL is shown as an exceptional item in the statement ofprofit and loss.

Related Party Transactions

With the requisite approval of Audit Committee and Board of Directors and as a part ofthe Family settlement and Succession Planning amongst Mr. H.A. Mafatlal Mr. V.P.Mafatlal their family members and family companies your Company purchased 703375equity shares of MIL from NFIL and sold 95325 equity shares held by the Company in NFILto group companies owned by Mr. V. P. Mafatlal. The transaction was completed as blockdeal at market price on National Stock Exchange. All other related party transactions thatwere entered into during the financial year were at an arm's length basis and were in theordinary course of business. There are no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnelsubsidiary company or other designated persons which may have a potential conflict withthe interest of the company at large except as stated above.

As per the Related Party Transactions Policy approved by the Board of Directors of theCompany during the year under review the Company has entered into related partytransactions based upon the omnibus approval granted by the Audit Committee. On quarterlybasis the Audit Committee reviewed such transactions for which omnibus approval wasgiven. Particulars of contracts or arrangements with related parties as referred to inSection 188(1) of the Companies Act 2013 in the prescribed form for FY 2016-17 are givenin Annexure "G". The policy on Related Party Transactions as approved bythe Board is uploaded on the Company's website and its weblink is

Loans Guarantees or Investments

Particulars of loans guarantees or investments under Section 186 of the Companies Act2013 are given in the Notes forming part of Financial Statements for the year ended 31March 2017.

Extract of Annual Return

Extract of Annual Return for the Financial Year ended on 31 March 2017 as required bySection 92 (3) of the Companies Act 2013 is annexed as Annexure "E".

Subsidiary Company

PIL Chemicals Limited (PIL) has recorded a Turnover of Rs12.56

Crores and Profit before Tax of Rs1.04 Crores for the year under review. The Board ofDirectors of PIL recommended a Dividend of Re.0.40 per share.

The Company does not have any material subsidiary however the company has formulateda policy for determining material subsidiary(ies) and such policy has been disclosed onthe company's website and its weblink is

Pursuant to the requirements of Regulation 34 (3) read with Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the details of Loans/Advances made to and investments made in the subsidiary have been furnished in Notesforming part of the Accounts.

A statement containing the salient features of the financial statement of the Company'ssubsidiary under the provisions of section 129(3) of the Companies Act 2013 read withRule 5 of the Companies (Accounts) Rules 2014 has been annexed in prescribed form AOC -1The audited accounts of the subsidiary company are placed on the Company's website and themembers interested in obtaining copy of annual report of the subsidiary company arerequested to get in touch with the Office of the Company Secretary.

Consolidated Financial Statements

Consolidated Financial Statements are prepared by your Company in accordance with theapplicable Accounting Standards issued by the Institute of Chartered Accountants of Indiaand 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.


The relations during the year between the employees and the management of yourCompany continued to be cordial. Your Directors wish to thank all the employees for theircontinued support and co-operation during the year under review.

Stock Options

In terms of your approval read with the SEBI (Employees Stock Option Scheme andEmployees Stock Purchase Scheme) Guidelines 1999 the details required to be providedunder the SEBI (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 5of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 in respect of employees of the Company are provided in Annexure "F".

Appointment/Reappointment of Directors and Key Managerial


Considering current business needs and future business expansion plans of the Companythe Board of Directors thought appropriate in the interest of the Company to appoint Mr.Hrishikesh A. Mafatlal as Executive Chairman effective 19 August 2016 for a period of 5

(five) years. Prior to that Mr. Mafatlal was Non-Executive Chairman of the companyrepresenting the Promoter Group. The Company has secured the approval of the shareholdersfor his appointment by way of passing a special Resolution through the mechanism of thePostal Ballot. The details of the Postal Ballot are given under the Corporate GovernanceSection of the Annual Report. In view of amicable restructuring and family settlement andsuccession between Mr. Hrishikesh A. Mafatlal and Mr. Vishad P. Mafatlal the Board ofDirectors at its meeting held on 8 May 2017 had appointed Mr. Priyavrata H. Mafatlal asan Additional Director (Promoter Group) pursuant to Section 161 of the Companies Act

2013. As per the provisions of said section Mr. Mafatlal holds office as an AdditionalDirector up to the date of the forthcoming Annual General Meeting and is eligible to beappointed as a Director liable to retire by rotation. Mr. Vishad P. Mafatlal stepped downas Non-Executive Director- Promoter Group of the Company from 19 August 2016. The Boardwishes to place on record the valuable contributions made by him during his tenure as adirector of the company. Pursuant to Section 152(6) of the Companies Act 2013 and theArticles of Association of the Company Mr. Vilas R. Gupte Director retires by rotationat the forthcoming Annual General Meeting. Being eligible he offers himself forre-appointment. During the Financial Year under review there has been no change in officeof Key Managerial Personnel of the Company


Pursuant to the requirement of Section 139(1) of the Companies Act 2013 M/s DeloitteHaskins and Sells LLP Chartered Accountants

Mumbai were appointed as Statutory Auditors for financial years 2014-15 2015-16 and2016-17 and will hold the office up to ensuing Annual General Meeting (AGM) of theCompany. In line with the applicable provisions of the Companies Act 2013 M/s DeloitteHaskins and Sells LLP are required to demit from the office of the Statutory Auditors atthe conclusion of ensuing AGM on 27 July 2017.

Based on the recommendations of the Audit Committee the Board of Directors has at itsmeeting held on 8 May 2017 recommended the appointment of M/s. Kalyaniwalla & MistryLLP Chartered Accountants Mumbai to be the Statutory Auditors of the Company to hold theoffice from conclusion of ensuing AGM until the conclusion of AGM to be held in the year2022.

M/s. Kalyaniwalla & Mistry LLP Chartered Accountants have confirmed theireligibility under Section 141 of the Companies

Act 2013 and the Rules framed there under for appointment as Auditors of the Company.As required under Regulation 33 (1)(d) of the SEBI (Listing Obligations and DisclosureRequirements)

Regulations 2015 the Auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India. Asrequired by Section 139(1) of the Companies Act 2013 the appointment of StatutoryAuditors is placed before the Members for approval. The appointment of the said firm shallbe subject to ratification at every subsequent

Annual General Meeting until the conclusion of AGM to be held in the year 2022.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyis required to be audited. Your Directors had on the recommendation of the AuditCommittee appointed M/s Kishore Bhatia & Associates to audit the cost accounts of theCompany for the financial year 2017-18 on a remuneration of Rs5 lakhs.

The Cost Auditors have given a Certificate to the effect that the appointment if madewill be within the prescribed limits specified under section 141 of the Companies Act2013.

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. 2015-16 was filed on 4 August 2016 and the Reportfor the Financial Year 2016-17 will be filed on or before the due date i.e. 30 September


As. required under the Companies Act 2013 the remuneration payable to the costauditor 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 Directorshas appointed M/s. Makarand M. Joshi & Co. Company Secretaries a firm of CompanySecretaries in Practice to carry out the Secretarial

Audit of the Company for FY 2016-17. The Report of the Secretarial Audit is annexedherewith as Annexure "B".

Report on Corporate Governance

As per Regulation 34 read with Schedule V (C) of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 a separate section on Report on CorporateGovernance practices followed by the Company together with a certificate from theCompany's Auditors confirming compliance is attached.

Report on Management Discussion and Analysis

As required under Regulation 34 read with Schedule V (B) of SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 report on "Management Discussion andAnalysis" is attached and forms a part of this Report.

Corporate Social Responsibility

In line with the provisions of the Companies Act 2013 and the rules framed there underwith respect to the Corporate Social Responsibility (CSR) your company has formulated aPolicy on CSR and has also constituted a CSR Committee to recommend and monitorexpenditure on CSR. The details of CSR Expenditure are given in the prescribed format andforms part of this Report. The same is annexed as Annexure "A".

The company continues to actively support deserving social causes for improvement andupliftment of various sections of the society as has been its practice for past severalyears.

Other Particulars

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

Green Initiative

Your Directors would like to draw your attention to Section 20 of the Companies Act2013 read with the Companies (Management and Administration) Rules 2014 as may beamended from time which permits paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To supportthis green initiative of the Central Government in full measure we hereby once againappeal to all those members who have not registered their e-mail addresses so far arerequested to register their e-mail address in respect of electronic holdings with theirconcerned depositary participants and / or with the Company.


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

For and on behalf of the Board of Directors
Place : Mumbai Hrishikesh A. Mafatlal
Date : 8 May 2017 Chairman