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BSE: 500730 Sector: Industrials
NSE: NOCIL ISIN Code: INE163A01018
BSE 00:00 | 16 Aug 173.05 0.40






NSE 00:00 | 16 Aug 173.55 1.15






OPEN 173.00
VOLUME 120490
52-Week high 236.00
52-Week low 131.00
P/E 15.48
Mkt Cap.(Rs cr) 2,861
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 173.00
CLOSE 172.65
VOLUME 120490
52-Week high 236.00
52-Week low 131.00
P/E 15.48
Mkt Cap.(Rs cr) 2,861
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 2018.


(Rs. In Crores)

Particulars For the year 31 March 2018 For the year 31 March 2017
Gross Revenues 989.27 818.28
Profit before Tax 253.07 146.18
Profit after Tax 168.61 96.83
Earnings per share of Face
Value of Rs. 10/- each - Basic 10.27 5.98
- Diluted 10.15 5.89

Performance of the Company

Your Directors are pleased to inform you that the performance of your Company showed asubstantial improvement for the year under review as compared to the previous year2016-17. The performance is significant considering relatively low growth in global rubberconsumption for most part of the year. Demand for rubber chemicals is a derived demand andis directly a function of Rubber consumption which saw a growth of about 3%. Against thisbackdrop your company has posted Gross Revenues of Rs. 989 Crore as compared to Rs. 818Crore for the previous year. It may be noted that for the second consecutive year weachieved growth in sales volume of 12.5%.

Compliance audits and strict implementation of Pollution Control norms by Chinaresulted into closure of defaulting industries there and created a serious disruption insupply chain. Since over 70% of world's rubber chemical requirement is met by China thisdisturbance resulted into temporary shortage and price escalation. However your companycontinued its ethical business strategy and all regular customers were served in a timelymanner without abnormal price escalations. Chinese manufacturers have started correctiveactions and market is expected to stabilize in near future. However price bands of rubberchemicals could shift upward due to enhanced compliance costs.

Domestic Market

Your company has recorded a Net Domestic turnover of Rs.700 Crore as against Rs. 513Crore for the previous year. The Company's domestic sales volumes grew by 14% as comparedto the previous Financial Year 2016-17 despite rubber consumption increasing by 3.5%.During the year to meet sudden surge in requirement of rubber chemicals the Company hadto raise the production levels of all the products.

The Domestic tyre industry recorded a healthy growth occasioned by the growth inautomobile sector and imposition of anti-dumping duty on radial Tyres. Higher capacityutilization by tyre industry resulted into higher demand of rubber chemicals for domesticsector. Some of the domestic non- tyre companies faced subdued industrial activity due topaucity of some article inputs. As a result in certain segments of non-tyre industrieswe could not achieve double digit growth.

Though China accounts for 70% of world's rubber chemical production it only consumesabout 33-35% of the rubber consumption resulting in its exports surplus therebyoccasioning the likelihood of dumping into the neighborhood markets including India.


For the year under review Export showed a growth of 8% in volume and 17% in revenue.Your company on the back of positive indicators in global rubber consumption coupled withthe Company's strength in specific application areas recorded one of its best exportperformances over the years. The issues faced by the Chinese competitors because of thestricter Government measures have created tightness in supply aspects at the marketplace. Owing to this your Company could participate more aggressively in certain keycustomers accounts on a relatively level playing field. As a result we have recorded anExport Turnover of Rs. 255 Crore as compared to Rs. 218 Crore 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 focusing on long term business strategy as well as to ensure better capacityutilisation.


The production of all products was undertaken with higher operating rate keeping inmind the market needs. On the input price front crude Oil witnessed a volatile range ofUS $ 55 per barrel - US $ 70 per barrel for most part of the year. Benzene prices toowitnessed sharp movement between US $ 750- US $ 1050 per M.T. This coupled with supplyissues from China resulted in increased prices of all inputs. Most critical input costsincreased by 20% to 50% as compared to the prevailing levels at the beginning of the year.We have been procuring raw materials in a judicious manner and maintaining the inventoriesat appropriate levels. In few items we have maintained adequate levels of inventory so asto mitigate the rising cost of production. This fortunately benefitted the Company interms of higher EBIDTA margins for the 2nd half of the year.


It may be recalled that the Board of Directors of your company had approved a capitalexpenditure (capex) of Rs. 170 Crore in March 2017. In terms of the said plan capex whichwas to be incurred at Navi Mumbai shall be commissioned by the end of June 2018. Dahejexpansion plans are progressing as scheduled and expected to commission during the 3rdquarter of the Financial Year 2018-19.

In view of the overall market conditions significant expansion plans of the tyrecustomers and the environmental measures affecting the production capabilities of Chinesecompetitors the Board of Directors after careful evaluation in December 2017/ January2018 has approved further expansion of Rs. 255 Crore at the Company's plants at NaviMumbai & Dahej. The said expansion is expected to be commissioned during the firsthalf of FY 2019-20. This will enhance the capacities of accelerators and anti-oxidants. Inview of the company's current liquidity position and the likely business scenario in theupcoming financial year the board is confident that the said Capital Expenditure can belargely financed through internal accruals.

Finance and Rating

During the year under review in view of optimum utilization of resources the companygenerated cash profits and did not utilize any working capital facilities for the wholeyear. The Company as a result incurred lower Finance cost for the year under review.

The Credit Ratings Agency CARE has reaffirmed ratings as CARE AA (Double A) (Stable)for long term Bank Facilities (Terms loan as well as Fund Based facilities) and CARE A1+(A One plus) rating for short term Non-Fund Bank facilities. Further CARE has alsoreaffirmed CARE A1+ rating for issue of Commercial Paper which has been carved out of theworking capital facilities.

In addition to the above the Company had also approached CRISIL Limited for creditratings for the banking facilities. The said Agency has also assigned CRISIL AA for itsFund-based Bank Facilities and CRISIL A1+ (stable) for its Non - Fund-based BankFacilities


Your Directors are pleased to recommend payment of dividend of Rs. 2.50 per share ofRs.10/- each (25%) on the equity share capital of the Company [previous year Rs.1.80/-per share of Rs.10/- (18%)]. The dividend together with the tax on Dividend will absorba sum of Rs. 49.15 crore (previous year Rs. 35.16 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 2009-10 has been transferred to the Investor Education and ProtectionFund and unclaimed / un-encashed dividend for the FY 2010-11 paid on 27 July 2011 is duefor transfer to IEPF on 2 September 2018.

The Ministry of Corporate Affairs (MCA) had vide its Notification dated 5thSeptember 2016 notified the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 (the Rules). In terms of the Rules the EquityShares in respect of which the Dividend has not been claimed for seven consecutive yearsor more are also required to be transferred to the IEPF in the prescribed manner.

The said Rules were amended from time to time. As per the latest Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Second Amendment Rules2017 notified by MCA vide its Notification dated 13th October 2017 the duedate for transfer of Equity Shares in respect of Dividend pertaining to the Financial Year2009-10 was 31st October 2017. The Company had intimated individually toconcerned shareholders and published necessary notice in the newspapers intimating theshareholders about the impending transfer and the modus operandi for the same.

In compliance with the Amended Rules the Company has transferred 1202824 Equityshares to the designated demat account opened by IEPF Authority with NSDL through PunjabNational Bank i.e. account no. IN300708 10656671 belonging to those shareholders holdingshares both in dematerialized form as well as physical form who had not encashed theirDividend for a period of 7 years or more beginning from the Financial Year 2009-10. Theshares held in demat mode were transferred in November 2017 and those held in physicalmode were transferred in December 2017.

The Company has also uploaded the details of the shareholders whose shares were liableto be transferred to IEPF on its website viz.

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 2018.


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

Health Safety and Environment

Highest HSE standard is a competency parameter for your company and all policies andactivities are directed towards setting up benchmarks in safety and environment standards.Safety standards of the company at all locations ensures safety of the employeesvisitors contractors and community around the locations. A dedicated cell in our researchCentre directs its efforts to develop new environmental strategies to achieve highestsustainability in the business.

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 safetyawareness and training to maintain the workplace free of any significant incidents andrisk to safety and health of all stakeholders.

The Company has in place a very effective Emergency Handling Procedure to provide veryprompt and effective response to any emergency situations arising within its premises aswell as in the neighborhood.

The Company is very pleased to inform you that we are now certified for ‘RESPONSIBLECARE' with effect from 1st December 2017. Responsible Care evaluates safetyand environmental impact of products from inception through manufacture and distributionto ultimate reuse recycle and disposal and involves all the stakeholders in thedecision-making process. Various programs and studies have been undertaken related toSafety Health and Environment and are being implemented as a part of this journey.

Your Company actively participates in the Mutual Aid Group CETP and solid wastedisposal management in the Thane Belapur Industrial Area and has earned the reputationamongst the industry members and statutory authorities for prompt technical support andhelp during any emergency situations.

Health of employees is of utmost importance. Regular check-up of all employees is doneto monitor their health. Work area monitoring to check concentration of chemicals noiselevel Illumination levels and quality of ambient air is regularly done to ensure safe andhealthy work environment.

HSE performance of the Company is reviewed by your Board every quarter and guidance andvaluable suggestions made by the Board are incorporated to further strengthen HSE practiceof the Company.

Total Quality Management

Total quality management in your company is an integrated effort by all functions fromsupply chain to application support at customer end to improve quality performance ateach level with a focus on continuous improvement. TQM is a focused objective for yourcompany and management commitment is demonstrated through continuous participation in TQMinitiatives.

TQM implementation has strengthened your company's competitive position. It hasimproved your company's adaptability to emerging market conditions particularly in theareas of environmental impact and national and international regulations.

Your company is certified for ISO 9001:2015 IS0 14001:2015 OHSAS 18001:2007 and IATF16949: 2016 which has a positive impact in terms of customer satisfaction and long-termcustomer retention. Quality Assurance laboratory of your company is accredited inaccordance with ISO 17025:2005 standard.

Dahej location has adopted 5S culture to create an international operating standard.

TQM will continue to contribute in organizational development resulting into enhancedshareholder and stakeholder value.

Research & Development

The research team of your company continues to focus innovative initiatives which willyield long term benefits to the Rubber Chemical business and society at large.

Research & Development is at the core of our continuous improvement Strategy. It isthe major enabling factor to fulfil our vision to be a World Class Customer focusedInnovative organization in the field of rubber chemicals. In view of strengtheningR&D your Board has regularly encouraged investments in R&D and substantialefforts are consistently on to increase talented Manpower pool & to provide necessaryResources & infrastructure for modernization.

The Company's R & D team have made significant contribution in development ofseveral indigenous Process technologies and new products & one of the major beingsuccessful commercialization of novel & greener intermediate technology & furtherimprovement at Dahej. These efforts culminated in growth of the company and improving thebottom line.

The Company's Research center focuses on the following key areas:

• Enhancement of plant capacities by employing different strategies and continuousimprovement in process efficiency and Product quality to satisfy the needs of the National& International customers.

• Development of Niche products using innovative technologies & Greenchemistry concepts.

• Adopting various innovative environmental technologies for sustainability.

• Development of new generation environmentally sustainable processes for growth.

These initiatives resulted in de-bottlenecking of plant capacities to cater to thegrowing market requirements and environmental needs. Research initiatives of your companyare recognised by national and international customers and the company enjoys a privilegedstatus as a technology-oriented organization. Novel green initiatives of the company inthe field of environmental strategies are appreciated by authorities setting a benchmarkas an environmentally friendly chemical business.

Your board is pleased to inform that your company has also received approval ofextension of the Company's in –house R & D facility from the Ministry of Scienceand Technology New Delhi.

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 formitigation plans and review of these risks from time to time. The risks are identified atvarious departmental levels and suitable mitigation measures are thereafter adopted. Theseare further subjected to a quarterly review by the Risk Co-ordination Committee as well asthe Board. The Business plans are devised and approved by the Board keeping in mind riskfactors which can significantly impact the performance of the business. All major capitalexpenditure commitments are subjected to thorough scrutiny by the Board and investmentsare permitted only on being satisfied about their return or utility to the Company.Expansion projects are subject to detailed risk assessment and sensitivity tests andapproved 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 theAudit 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 theInternal 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 toensure that adequate

financial controls and systems are in place. At the end of a period the CEO/CFO givesa declaration in the prescribed format to certify that the financial statements preparedare accurate and complete in all aspects and that there are no significant issues that canimpair the financial performance of the Company.

Vigil Mechanism / Whistle Blower Policy

The company has a Vigil Mechanism Policy to deal with an instance of fraud 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 oflabour laws and regulations. During the year under review no complaints were received.Wide publicity continues to be given with respect to the policy to all employees and thepolicy is also displayed on the company's website.


- Number of Board Meetings

During the year the Board of Directors met eight 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 evaluation of WholeTime / Executive Directors included qualification experience knowledge commitmentintegrity leadership engagement transparency analysis decision making governanceetc. The Board commended the valuable contributions and the guidance provided by eachDirector in achieving the desired levels of growth.

- Declaration of Independent Directors

As required under Section 149(7) of the Companies Act 2013 the IndependentDirectors have placed the necessary declaration in terms of the conditions laid down underSection 149(6) of the Companies Act 2013 in the Board Meeting held on 4th May2018.

- Familiarization Programme to Independent Directors

The company provides suitable familiarization programme to Independent Directors tofamiliarize themselves with the nature of the industry in which the company operates andbusiness model of the company in addition to regular presentation on Expansion plans andtheir updates technical operations marketing and exports and financial statements. Inaddition to the above Directors are periodically advised about the changes effected inthe Corporate Law Listing Regulations about their roles rights and responsibilities asDirectors of the company. The details of the familiarization programme have been disclosedand updated from time to time on 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 31stMarch 2018 the Indian Accounting Standards (Ind AS) the provisions of the Companies Act2013 as applicable and guidelines issued by the Securities and Exchange Board of India(SEBI) have been followed along with proper explanations relating to material departuresif 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 to give a true and fair view of the of theCompany as at 31 March 2018.

(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 going concern basis;

(e) That proper internal financial controls were in place and that the financialcontrols 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 and criteria for remuneration toindependent directors / non-executive directors is also available on the Company'swebsite.

Investments in Navin Fluorine International Limited and Mafatlal Industries Limited

Your Company in terms of the Board approval undertook sale and purchase transactionsof Equity Shares in Navin Fluorine International Limited (NFIL) and Mafatlal IndustriesLimited (MIL) respectively in the previous year. These transactions were from time to timedisclosed to the Stock Exchanges as per the SEBI Regulations.

The Company has disposed of its entire balance shareholding in NFIL. The cash surplusgenerated by the Company on sale of shares of NFIL (net of acquisition costs of MIL'sshares) aggregating Rs. 115 Crore has been re-invested by the Company in suitableshort-term investments. This income has been routed through the Other Comprehensive Income(OCI) as per the Indian Accounting Standards (Ind AS).

Related Party Transactions

All related party transactions that were entered into during the financial year were atan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors andKey Managerial Personnel subsidiary company or other designated persons which may have apotential conflict with the interest of the company at large except as stated in theFinancial Statements / Directors' Report.

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 in Section188(1) of the Companies Act 2013 in the prescribed form for FY 2017-18 are given in Annexure"G".

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany'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 31stMarch 2018.

Extract of Annual Return

Extract of Annual Return for the Financial Year ended on 31 March 2018 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 Rs. 14.63 Crores and Profitbefore Tax of Rs. 1.96 Crores for the year under review. The Board of Directors of PILrecommended a Dividend of Re.0.60/-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 -1.

The audited accounts of the subsidiary company are placed on the Company's website andthe members 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 Indian Accounting Standards (Ind AS) issued by the Ministry of CorporateAffairs and the same together with Auditors' Report thereon form part of the AnnualReport. The financial statements have been prepared as per Division II of Schedule IIIissued by the Ministry of Corporate Affairs vide its Notification dated 6thApril 2016.


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 their continued support andco-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 as amended the details required to beprovided under the SEBI (Employees Stock Option Scheme and Employees Stock PurchaseScheme) 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 is provided in Annexure "F".

Appointment/Reappointment of Directors and Key Managerial Personnel

During the year under review Mr. C. R. Gupte superannuated as Managing Director w.e.f.31st July 2017. He was associated with the Company for 41 years and has beeninstrumental in achieving substantial growth for the company both domestic as welloverseas. The Board takes the opportunity to sincerely thank Mr. C. R. Gupte for theexcellent contribution made as Managing Director and wish him very healthy and peacefulretired life.

Mr. S.R. Deo who was Deputy Managing Director took over as Managing Director of theCompany effective from 1st August 2017. Mr. Deo earlier served as the DeputyManaging Director and Executive Director & President (Operations). Mr. Deo is M. Techin Chemical Engineering from the Indian Institute of Technology

Kanpur. He has contributed significantly to improve the plant efficiencies productquality Health Safety and Environment (HSE) standards in the company Human Resourcesstrategy to meet the future business challenges creating strong technical team ofResearch and Technology for indigenous development of technologies and its implementation.The Board takes the opportunity to wish him success in all his future endeavors.

Pursuant to Section 152(6) of the Companies Act 2013 and the Articles of Associationof the Company Mr. Priyavrata H. Mafatlal Director retires by rotation at theforthcoming Annual General Meeting. Being eligible he offers himself for re-appointment.


Pursuant to the requirement of Section 139(1) of the Companies Act 2013 at the AnnualGeneral Meeting held on 27th July 2017 the Members had accorded their approvalfor the appointment of M/s. Kalyaniwalla & Mistry LLP Chartered Accountants Mumbaias the Statutory Auditors of the Company to examine and audit the accounts of the Companyfor the Financial Years 2017-18 to 2021-22. They have confirmed their eligibility underSection 141 of the Companies Act 2013 and the Rules framed there under for re-appointmentas Auditors of the Company. As required under Regulation 33(1) (d) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India. As required by Section 139(1) of theCompanies Act 2013 the appointment of Statutory Auditors is placed before the Membersfor ratification.

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 Companyare 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 2018-19 on a remuneration of Rs. 6.50 lakhs. The CostAuditors have given a Certificate to the effect that the appointment if made will bewithin the prescribed limits specified under section 141 of the Companies Act 2013.

The Audit Committee has obtained a certificate from the Cost Auditor certifying theirindependence and arm's length relationship with the Company. The Cost Audit Report inrespect of F.Y. 2016-17 was filed on 17th August 2017 and the Report for theFinancial Year 2017-18 will be filed on or before the due date i.e. 27thSeptember 2018.

As required under the Companies Act 2013 the remuneration payable to the cost auditoris 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 2017-18.The Report of the Secretarial Audit is annexed herewith 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 during the year.

For and on behalf of the Board of Directors
Place : Mumbai Hrishikesh A. Mafatlal
Date : 4 May 2018 Chairman