MIRA INFORM REPORT

Report Date :

15.02.2007

IDENTIFICATION DETAILS

Name :	NATIONAL ORGANIC CHEMICAL INDUSTRIES LIMITED
Registered Office :	Mafatlal Chambers, "B", N. M. Joshi Marg, Lower Parel (East), Mumbai - 400 013, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	12.06.1978
Com. Reg. No.:	11-12003
CIN No.: [Company Identification No.]	L99999MH1978PLC012003
Legal Form :	Public limited liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturing of petrochemicals, high density polyethylene, special grade polypropylene & polymer alloys & blends, PE wax, ethylene vinyl acetate co-polymer, processed polyethylene / Eva products, ziegler catalyst, n-butene – 1, rubber chemicals & their intermediates, oxygen, steam, demineralised water, nitrogen and cooling water.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 13000000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having satisfactory track. Directors are reported as experience and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Mafatlal House H.T. Parekh Marg, Backbay Reclamation, Churchgate, Mumbai-400020
Tel No. :	91-22-27672735 / 89
Fax No. :	91-22-27671865
Email :	karnik.um@nocilindia.com
Website :	http://www.nocilindia.com
Factory 1 :	Ø Petrochemical Plant 5, Trans-Thane Creek Industrial Area, Thane Belapur Road, Ghansoli, Navi Mumbai – 400 701, Maharashtra Ø Rubber Chemicals Plant C-37, Trans-Thane Creek Industrial Area, Off Thane Belapur Road, Navi Mumbai – 400 705, Maharashtra Ø Plastic Products Plant C-1, MIDC Industrial Area, Post Shivani, District Akola - 444 104, Maharashtra

DIRECTORS

Name :	Mr. Arvind N. Mafatlal
Designation :	Chairman - Emeritus
Name :	Mr. Hrishikesh A. Mafatlal
Designation :	Chairman
Name :	Mr. Rohit Arora
Designation :	Director
Name :	Mr. T.D. Chaudhuri
Designation :	Director - (IIBI Nominee)
Date of Appointment :	02.02.2006
Name :	Mr. Berjis Desai
Designation :	Director
Name :	Mr. V. R. Gupte
Designation :	Director
Qualification :		B.Com., F.C.A.
Date of Appointment :		1^st April, 1993
Previous Employment		Polyolefins Industries Limited – Executive Director – Finance
Name :	Maj. Gen. (Retd) S.C.N. Jatar
Designation :	Director (ICICI Bank Nominee)
Date of Appointment :	05.10.2005
Name :	Mr. S. K. Mahapatra
Designation :	Director - GIC Nominee)
Name :	Mr. Vishad P. Mafatlal
Designation :	Director
Name :	Mr. N. Sankar
Designation :	Director
Name :	Mr. C.R. Gupte
Designation :	Managing Director
Date of Appointment :	01.08.2005
Name :	Mr. U.M. Karnik
Designation :	Director

KEY EXECUTIVES

Name :	Mr. S. R. Deo
Designation :	Vice President - Technical
Name :	Mr. R. M. Gadgil
Designation :	Vice President - Marketing
Name :	Mr. S. R. Iyer
Designation :	Vice President -Manufacturing
Name :	Mr. U. M. Karnik
Designation :	Vice President – Legal & Company Secretary
Name :	Mr. S. D. Ghate
Designation :	General Manager – Personnel & Administration
Name :	Mr. C. S. Inamdar
Designation :	General Manager- Marketing & Technical Services
Name :	Mr. A. Sivaraman
Designation :	General Manager- Purchase
Name :	Mr. P. Srinivasan
Designation :	General Manager - Finance

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Indian Promoters	47440100	29.50 %
Mutal Fund and UTI	44980	0.03 %
Banks, Financial Institutions, Insurance companies, (Central/State Govt. Institutions/Non-Government Institutions)	21461654	13.35 %
Fits	1089406	0.68 %
Private Corporate Bodies	19990287	12.43 %
Indian Public	69146084	43.00 %
NRI/OCBs	1569941	0.98 %
Foreign Banks	44528	0.03 %
Total	160786980	100.00 %

BUSINESS DETAILS

Line of Business :	Manufacturing of petrochemicals, high density polyethylene, special grade polypropylene & polymer alloys & blends, PE wax, ethylene vinyl acetate co-polymer, processed polyethylene / Eva products, ziegler catalyst, n-butene – 1, rubber chemicals & their intermediates, oxygen, steam, demineralised water, nitrogen and cooling water.
Products :	Item Code No. (ITC Code) 390120.00 Product Description High Density Polyethylene Item Code No. (ITC Code) 390130.00 Product Description EVA Copolymer Item Code No. (ITC Code) 390410.00 Product Description Poly Vinyl Chloride
Exports to :	Australia, EEC Countries, Far East Asia, Gulf Countries and U.S.A.
Imports from :	Japan, South Africa, U.K. and U.S.A

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Processed polyethylene/ EVA products	MT	NA	--	1452#
Rubber chemicals and their intermediates	MT	NA	33450@	30922*

Note:

@ Installed capacity is as certified by the management.

@@ Installed capacity of 8,100 MT represents the installed capacity of Plastics Products division, used by the Company for manufacture on behalf of "Relpol", which division was completely demerged on 20th July, 2005 to Relpol.

Consequently, there is no installed capacity for Processed polyethylene/EVA products at the end of this year.

* Includes 2,736 MT (previous period 3,390 MT) converted for the Company by third parties.

# Includes 588 MT (previous period 2,976 MT) produced by the Company for third party.

GENERAL INFORMATION

Suppliers :

Ø Amit Plastics

Ø Ambika Fabricators

Ø Autogenous Welding & Repair Company Limited

Ø Altop Controls

Ø Bengal Industries

Ø Cintex Industrial Corporation

Ø Dembla Valves

Ø Durosharp Knives

Ø Gujarat Engineering Company

Ø Gauges Bourdon (I)

Ø Goma Engineers Private Limited

Ø Hind Hydraulic Systems Private Limited

Ø LPC

Ø Engineers Limited

Ø Jadhav Engineering Private Limited

Ø Lion Asbestos Packing Industries

Ø Monometer India Private Limited

Customers :

v Good Year

v Bridgestone

v Yokohama

v General Tyres

No. of Employees :

3364

Bankers :

Ø HDFC Bank Limited

Ø UTI Bank Limited

Facilities :

SECURED LOANS	31.03.2006 Rs in Millions
15% Non-convertible secured debentures Privately placed with: Industrial Development Bank of India. Series IV (1994-2001)	--
16% Non-convertible secured debentures Privately placed with: Industrial Credit and Investment Corporation of India	--
Term loans: From financial institutions Loan taken from Industrial Development Bank of India (IDBI)	--
Cash credit accounts etc. from Banks	--
Other loans and advances: From Surekha Holdings Private Limited From Infrastructure Leasing and Financial Services Limited (ILFS)	--
Vehicle loans from a Bank	2.567
The debenture series IV were secured by first mortgage / charge in favour of the debenture trustees on the immovable and movable properties (save and except book debts) of the Company's erstwhile Petrochemicals division (PCD), subject to charges created in favour of bankers/ IL & FS (Refer notes 4 and 5 below). Such division was demerged to Relene Petrochemicals Private Limited (REPPL) during the previous period. The debenture series X to XIII were secured by a charge in favour of the debenture trustees on the Company's fixed assets by a first mortgage and charge on the immovable and movable properties of the erstwhile PCD, which was demerged during the previous period, subject to charges created in favour of Company's bankers on current assets for securing borrowings for working capital requirements and ranked par! passu with the mortgage and charge created in favour of financial institutions. Term loans from financial institutions were secured by joint mortgage of all immovable properties by deposit of title deeds, and first charge by hypothecation of all movable properties (save and except book debts and excluding specific items of machinery - refer note 5 below) of the Company pertaining to erstwhile PCD, and creation of second charge on current assets of PCD, which was demerged during the previous period. Term loans from IDBI were secured by hypothecation of specific plant, machinery equipment and accessories of the Rubber Chemicals Plant. Loans from banks on cash credit accounts and loans assigned to Surekha Holdings Private Limited during the previous period were secured by joint hypothecation of stocks, book debts and other current assets by way of first charge and second charge over its fixed assets, located at plot nos 5/6, Trans Thane Creek Industrial area, Thane Belapur Road, Thane i.e. PCD, which was demerged during the previous period. Loan from IL & FS was secured by an exclusive charge on the Ethylene pipeline from Nagothane to the erstwhile PCD, which was demerged during the previous period. Vehicle loan is secured by charge on vehicles purchased. During the year, secured loans as stated in notes 1 to 5 above have been settled by payment of cash aggregating to Rs.190.921 Millions and by way of issue of 38,181,280 equity shares of Rs.10/- each aggregating to Rs.381.813 Millions and necessary forms towards release of charges have been filed with Registrar of Companies
UNSECURED LOANS
Loans and advances from subsidiary	4.775

Banking Relations :	Moderate
Auditors :	C. C. Chokshi & Company Chartered Accountants
Subsidiaries :	v Ensen Holdings Limited v Urvija Investments Limited
Membership :	v Confederation of Indian Industries
Associates :	v Navin Fluorine International Limited v Mafatlal Industries Limited v Mafatlal Finance Company Limited v Eyeglobal Technologies Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1200000000	Equity Shares	Rs.10/-each	Rs.12000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
160786980	Equity Shares	Rs.10/-each	Rs.1607.870 millions

Notes: Of the above Equity shares :

(a) 97,302,850 shares were alloted as fully paid-up by way of bonus shares by capitalisation from the General Reserve and Share Premium Account and 13,302,850 vshares had been allotted to the shareholders of the erstwhile Polyolefins Industries Limited pursuant to the scheme of amalgamation without payment in cash.

(b) 38,181,280 shares have been alloted on 29th July, 2005, to the Secured Lenders without payment in cash (refer note 7 of Schedule 3) in terms of the scheme of arrangement as approved by the Bombay High Court.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006 (12 months)	31.03.2005 (18 months)	30.09.2003 (18 months)
SHAREHOLDERS FUNDS
1] Share Capital		1607.870	1226.057	1226.057
3] Reserves & Surplus		1643.961	377.421	800.621
4] (Accumulated Losses)		0.000	(267.065)	(2523.940)
NETWORTH		3251.831	1336.413	(497.262)
LOAN FUNDS
1] Secured Loans		2.567	572.734	3298.127
2] Unsecured Loans		4.775	4.775	86.917
TOTAL BORROWING		7.342	577.509	3385.044
DEFERRED TAX LIABILITIES
TOTAL		3259.173	1913.922	2887.782
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1663.434	673.662	2303.598
Capital work-in-progress		16.422	8.963	52.471
INVESTMENT		30.231	30.139	477.851
DEFERREX TAX ASSETS		15.787	86.871	--
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	603.737	582.910	1014.121
	Sundry Debtors	790.497	927.830	576.587
	Cash & Bank Balances	288.400	120.095	105.445
	Other Current Assets	0.040	0.040	0.372
	Loans & Advances	805.832	637.445	709.638
Total Current Assets		2488.506	2268.320	2406.163
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	546.075	952.748	2179.575
	Provisions	409.132	201.285	172.726
Total Current Liabilities		955.207	1154.033	2352.301
Net Current Assets		1533.299	1114.287	53.862
MISCELLANEOUS EXPENSES		--	--	--
TOTAL		3259.173	1913.922	2887.782

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006 (12 months)	31.03.2005 (18 months)	30.09.2003 (18 months)
Sales Turnover [including other income]	3952.892	4920.371	4490.931
Profit/(Loss) Before Tax	670.725	1747.204	(3552.868)
Provision for Taxation	73.787	(86.471)	(4.620)
Profit/(Loss) After Tax	596.938	1833.675	(3557.488)
Export Value	1428.997	1380.220	1007.785
Import Value	849.514	938.684	791.172
Total Expenditure	3377.200	4697.060	8043.799

QUARTERLY RESULTS

PARTICULARS	30.06.2006 [1^st Quarter]	30.09.2006 [2^nd Quarter]	31.12.2006 [3^rd Quarter]
Sales Turnover	783.600	794.100	719.900
Other Income	44.600	56.600	74.500
Total Income	828.200	850.700	794.400
Total Expenditure	686.600	732.200	713.900
Operating Profit	141.600	118.500	80.500
Interest	2.100	0.300	0.400
Gross Profit	139.500	118.200	80.100
Depreciation	15.200	15.300	15.900
Tax	04.600	15.600	18.800
Reported PAT	77.000	87.300	45.400

Notes

200606 Quarter 1 –

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs 3.80 million Consumption of Raw Materials Rs 413.10 million Staff Cost Rs 52.60 million Other Expenditure Rs 217.10 million Tax Includes Provision for Current Tax Rs 14.00 million Deferred Tax Rs 42.70 million Fringe Benefit Tax Rs 0.60 million MAT Credit Extitlement Rs (10.00) million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 78 Complaints disposed off during the quarter 78 Complaints unresolved at the end of the quarter Nil 1. Pursuant to the adoption of Accounting Standard (AS) 15 (Revised 2005) Employees Benefits' issued by the Institute of Chartered Accountants of India (ICAI), the Company has adjusted Rs 14.30 million (Net of deferred tax of Rs 7.20 million) towards the additional liability up to March 31, 2006 on account of leave encashment against the opening balance of revenue reserves and the quarterly financial results has a charge of Rs 0.60 million on account of additional liability in accordance with the said Accounting Standard. 2. The Company had revalued plant and machinery, leasehold land and buildings located at its factory as on March 31, 2006. Consequent to the revaluation, there is an additional charge for depreciation of Rs 19 million for the quarter. Therefore an equivalent amount has been withdrawn from the Revaluation Reserve. This has no impact on the Profit for the period. 3. The company has acquired land at Dahej on lease by Gujarat Industrial Development Corporation. The company proposes to use this for its expansion programme. 4. The Company has only one reportable segment i.e. Rubber Chemicals considering the requirements of Accounting Standard on 'Segment Reporting' (AS - 17) issued by the Institute of Chartered Accountants of India. 5. The above results have been reviewed by the Audit Committee and approved by the Board at its meeting held on July 31, 2006.

200609 Quarter 2 –

EPS is Basic & Diluted 1. The company had revalued its leasehold land, buildings and plant and machinery located at its factory as on 31st March 2006. Consequent to the revaluation, there is an additional charge for depreciation of Rs.41.700 Millions for the half year. An equivalent amount has been withdrawn from the Revaluation Reserve towards this charge. Therefore there is no impact on the profit for the period. 2. The company has decided to acquire a manufacturing facility at a cost not exceeding Rs.195.000 Millions from a processor of some of its finished products. 3. The Company is engaged in the primary business activity of manufacture of Rubber Chemicals which in the context of Accounting Standard (AS17) on 'Segment Reporting' constitutes a single reportable segment. 4. There were no pending investor complaints at the beginning of the quarter and 263 complaints (mostly of routine nature such as change in address etc) were received during the quarter, which have been attended and there was no complaint pending at the end of the quarter. 5. The above results have been reviewed by the Audit Committee of the board and approved by the Board at its meeting held on 30th October 2006.

200612 Quarter 3 –

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs 33.50 million Consumption of Raw Materials Rs 433.50 million Staff Cost - net of recovery Rs 48.40 million Other Expenditure Rs 198.50 million Tax Indicates Provision for Taxation EPS is Basic and Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 136 Complaints disposed off during the quarter 136 Complaints unresolved at the end of the quarter Nil 1. The Company, had revalued its leasehold land, buildings and plant and machinery located at its factory as on March 31, 2006. Consequent to the revaluation, there is an additional charge for depredation of Rs 25.10 million for the quarter and Rs 66.70 million for the nine months ended December 31, 2006. An equivalent amount has been withdrawn from the Revaluation Reserve towards this charge. Therefore there is no impact on the Profit for the period. 2. The Company is engaged in the primary business activity of manufacture of Rubber Chemicals which in the context of Accounting Standard (AS 17) on Segment Reporting constitutes a single reportable segment. 3. The above results have been reviewed by the Audit Committee of the board and approved by the Board at its meeting held on January 23, 2007.

KEY RATIOS

PARTICULARS	31.03.2006 (12 months)	31.03.2005 (18 months)	30.09.2003 (18 months)
Debt-Equity Ratio	0.16	4.73	2.61
Long Term Debt-Equity Ratio	0.03	1.09	0.71
Current Ratio	1.75	0.76	0.63
TURNOVER RATIOS
Fixed Assets	2.64	1.01	0.61
Inventory	6.81	3.83	2.74
Debtors	4.70	4.07	4.65
Interest Cover Ratio	82.59	11.29	-11.28
Operating Profit Margin(%)	15.62	11.76	-66.26
Profit Before Interest And Tax Margin(%)	14.11	9.82	-72.30
Cash Profit Margin(%)	14.13	12.78	-72.67
Adjusted Net Profit Margin(%)	12.63	10.84	-78.71
Return On Capital Employed(%)	25.76	11.83	0.00
Return On Net Worth(%)	26.56	59.94	0.00

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 24.95/-
Low	Rs. 23.55/-

LOCAL AGENCY FURTHER INFORMATION

History

National Organic Chemical Industries (NOCIL), a part of Arvind Mafatlal Group is promoted in collaboration with Royal Dutch of Netherlands and Shell of UK in 1961. The company manufactures a wide range of petrochemicals -- ethylene, propylene, butadiene, benzene and their derivatives, polymers, rubber, chemicals and plastic products .

Its clients include Good Year, Bridgestone, Yokohama , General Tyres, etc. It has also tied-up with Dowelanco, US, to establish a joint venture called De-NOCIL Crop Protection, a deemed public company, to manufacture and market crop protection products in India. It has got two investment subsidiaries of namely Ensen Holdings and Urvija Investments. 

The company has signed a Memorandum of Understanding (MOU) with Shell Chemicals and Montell Polyolefins for implementing the modernization project for which it has received the environment clearance from the central government. It was also agreed by them to acquire 49% stake in de-merged NOCIL. Recently Montell merged along with Elenac & Targor to form a new entity known as Basell Polyolefins which is 50:50 partnership between the Royal Dutch Shell Group and BASF. As a result of this restructuring of the operations of Shell, Montell and BASF internationally, Basell has expressed its inability to participate in this modernization project.  

The company which in in the process of restructuring its business has signed an agreement with Reliance Industries Limited in Jan 2004 to sell its Petrochemicals and Plastic Products Division. Under this proposal the assets of NOCIL's Petrochemical Division, certain liabilities of the company and the business and undertaking of Plastic Products division as a going concern will be demerged from the company and will vested in Nocil Petrochemicals Limited(NPL), a wholly owned subisidiary of the company. Subsequent to this demerger RIL will invest in the equity of the resultant company i.e. NPL.

Particulars	Hrishikesh A. Mafatlal	Vishad P. Mafatlal
Qualifications	Mr. Hrishikesh A. Mafatlal holds a Honours Degree in Commerce from the Sydenham College, Mumbai. In 1993, he attended the Advanced Management Programme (AMP) at the Harvard Business School, United States	Mr. Vishad P. Mafatlal is a B. Sc. (Economics) University of Pennsylvania, Wharton School, United States.
Expertise in Specific Functional Areas	Mr. Hrishikesh A. Mafatlal is the Vice Chairman of Mafatlal Industries Limited and Chairman & Managing Director of Navin Fluorine International Limited Mr. Hrishikesh A. Mafatlal is major interest in Petrochemicals, Chlorofluorocarbansy Cextiles, Garments, Financial Services, Specialty Chemicals, Fine Chemicals etc	Mr. Vishad P. Mafatlal, has business experience of more than eight years in Textiles and Chemicals.
Directorships held in other Companies	Ø Cebon Apparels Private Limited Ø Eyeindia.com Private Limited Mafatlal Asset Management Ø Mafatlal Burlington Industries Limited Ø Mafatlal Industries Limited Ø Mafatlal Limited, UK Ø Mafatlal Securities Limited Ø . Mafatlal Services Limited Ø Marigold International Private Limited Ml PA Investments (Private) Limited Ø Molex Mafatlal Micron Limited Ø PAMIL Investments Private Limited Ø Navin Fluorine International Limited Ø Romaga(UK) Limited Ø RomagaAG, Zurich Ø 'SilviaApparel Limited Ø Sunanda Industries Limited Ø Sushripada Investments Private Limited Ø Suvin Technologies Limited Ø Suvin Technologies Pte. Limited, Singapore Ø Vibhadeep Investments & Trading Limited	Ø Cebon Apparels Private Limited Ø Eyeindia.com Private Limited Ø Mafatlal Asset Management Ø Mafatlal Burlington Industries Limited Ø Mafatlal Industries Limited Ø Mafatlal Limited, UK Ø Mafatlal Securities Limited Ø Mafatlal Services Limited Ø Marigold International Private Limited Limited Ø Ml PA Investments (Private) Limited Ø Molex Mafatlal Micron Limited Ø PAMIL Investments Private Limited Ø Navin Fluorine International Limited Ø Romaga(UK) Limited Ø Romaga AG, Zurich Ø 'SilviaApparel Limited Ø Sunanda Industries Limited Ø Sushripada Investments Private Limited Ø Suvin Technologies Limited Ø Suvin Technologies Pte. Limited, Singapore Ø Vibhadeep Investments & Trading Limited Ø Mafatial Services Limited Ø Mafatlal Burlington Industries Limited Ø Sunanda Industries Limited Ø •Tropical Clothing Company Private Limited Ø Cebon Apparels Private Limited Ø Eyeindia.com Private Limited Ø Suvin Technologies Limited: Ø Suvin Technologies Pte. Limited, Singapore, Ø Intouch Communications Pte. Limited Ø Mafatlal Fabrics Private Limited Ø Silvia Apparel Limited Ø Sarvamangala Holdings Private Limited Ø Eyeglobal Technologies Private Limited Ø Marigold International Private Limited Ø Myrtle Chemtex Trading Private Limited Ø Mayflower Chemtex Trading Private Limited Ø Navin Fluorine International Limited
Memberships/ Chairmanships of Committees across Public Companies	Mr. Hrishikesh A. Mafatlal is on the Managing Committee of the Indian Institute of Management, Ahmedabad (IIMA) The Mill Owners Association, Mumbai (MOA) The Indian Cotton Mills Federation (ICMF) and The Cotton Textiles Export Promotion Counci I (TEXPROCIL)	NIL

Mr. Berjis Desai:

Qualification:

Mr. Berjis Desai has done his graduation from the Elphinstone College. He is a Law Graduate and stood first in the Solicitor's Exams held by the Mumbai Incorporated Law Society.

Expertise in Specific Functional Areas

Mr. Desai is an eminent Lawyer and is the Managing Partner of). Sagar Associates, Advocates & Solicitors.

Directorships held in other Companies

Sterlite Industries (India) Limited, Praj Industries Limited, Onward Technologies Limited, Adlabs Films Limited, Piramyd Retail Limited, Emcure Pharmaceuticals Limited, Bp Ergo Limited, Watson Wyatt India Private Limited, 3d PIm Software Solutions Limited, Isagro (Asia) Agrochemicals Private Limited, Cashtech Solutions India Private Limited, Vadhvan Port Private Limited, Business Asia Consulting Private Limited, Centrum Fiscal Private Limited, Seafreight Private Limited, Ferrari Express (1) Private Limited Agribuys.Com. (India) Private Limited, Capricorn Studfarm Private Limited, Capricorn Agrifarms & Developers Private Limited, Jakari Express Private Limited, Jakari Holdings Private Limited, Capricorn Plaza Private Limited, Capricorn Group Private Limited, Capricorn Castle Private Limited, Cap/icorn Residency Private Limited, Centrum Finance Limited

Memberships / Chairmanships of Committees across Public Companies

Member of the American Arbitration, London Court of International Arbitration, ICC-lndia, Indian Council of Arbitration.

Mr. C. R. Gupte:

Qualification:

Mr. C.R. Gupte is a B. Sc. and a Fellow Member of the Institute of Chartered Accountants of India, New Delhi.

Expertise in Specific Functional Areas

Mr. Gupte is having experience of about 30 years in dealing with the Financial, Marketing and Commercial matters of the Rubber Chemicals Division of the Company including as Head of this business for the last 10 years.

Mr. N. Sankar:

Qualification:

Mr. N. Sankar holds a Masters Degree in Chemical Engineering from the Illinois Institute of Technology, Chicago, United States.

Expertise in Specific Functional Areas

Mr. N. Sankar has interest in the fields of Chlorochemcials, Speciality Chemicals, Shipping, Engineering, Insurance and Cement.

Directorships held in other Companies

F. L. Smidth Limited, SHL Research Foundation, N. Shankar Properties and Holdings Private Limited, Chennai Willingdon Corporate Foundation, Chennai Heritage, Bata India Limited, Sanmar Engineering Corpration Limited, AMP Sanmar Life Insurance Company Limited, Sanmar Holdings Limited, SHL Securities (Alpha) Limited, NS Family Consolidations Private Limited, The India Cement Limited

Memberships/ Chairmanships of Committees across Public Companies

Institute of financial Management & Research Academy for Management Excellence (ACME)

FINANCIAL RESULTS

During the current year as per the terms of the Scheme of Arrangement approved by the Bombay High Court by its order dated 8th June 2005, the specified net current assets of the Plastic Products Division have been transferred to RELPOL Plastics Products Limited (formerly known as NOCIL Petrochemicals Limited, a business associate of Reliance Industries Limited) with effect from 20th July 2005 which was the 'Effective Date' in terms of the said Scheme of Arrangement. Consequently as mentioned in the previous Annual Report the Rubber Chemicals business remains with the Company and accordingly the core business of the Company will be manufacture and sale of rubber chemicals. 

The net worth of the Company which was completely eroded as on 30^th September 2003 due to the accumulated losses of the Petrochemicals Division, has become positive on account of the transfer of certain liabilities of the Petrochemicals Division to Relene Petrochemicals Private Limited under the Scheme of Arrangement and the Company has ceased to be a sick company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. BIFR has by its order dated 30th November 2005 declared that the Company is no longer a sick company. 

Consequent to the demerger of the divisions, the Company during the year made provisions and has written back liabilities pertaining to such divisions as per the understanding and the terms of the demerger. 

PERFORMANCE OF THE COMPANY

The turnover of the Company for the period under review was Rs.3980 Millions as compared to Rs.4400 Millions during the 18 month period ended 31st March 2005. The production of rubber chemicals and their intermediates was 30922 MT for the year under review. The production of finished products during the year was higher by 5% than that of the corresponding previous period. 

During the year under review the Rubber Chemicals business witnessed relatively stable market conditions as compared to the previous year and showed a growth in both domestic as well as export market. Despite stiff competition the Company was in a position to record a positive growth in its volumes both in the domestic as well as international market. The high prices of natural rubber resulted in slowing down of production of some of the non tyre customers and the continued import of low priced rubber chemicals from China remained a major cause for concern. During the year under review the Company was able to secure a favourable decision from the appropriate authorities in the anti - dumping proceedings. However, some of the products were not included by the authorities and hence these products continue to be imported in large volumes at low prices. Even though the decision is inadequate in its scope and coverage, it will to some extent help in curtailing the rampant dumping of low priced rubber chemicals in the country. 

There was some relief on the raw material front as the volatility in the price of raw material abated for some time which resulted in favourable input cost than what was anticipated at the beginning of the year. A fairly exhaustive shut down of the Plant was carried out after a gap of nearly two years. 

During the year under review a number of process improvements were completed resulting in further improvement in cost and quality of the products. As a result of extensive development work, new products were introduced and commercial production was started in these products. 

The Company has undertaken various energy conservation and other efficiency measures due to which there was an improvement in the consumption norms of utilities and raw materials. 

During the year under review there was temporary disruption of work due to unprecedented rains on 26th July 2005 but all the plants were put back in operation within a short time by taking prompt corrective and preventive actions. 

EXPORTS

The Company has been successful in achieving export of rubber chemicals of a total value of Rs. 1460 Millions during the year under review signifying a growth of about 44% as compared to the previous period. The increased volumes and better pricing in the international market contributed largely to this better performance. The Company was able to finalise contracts with major international buyers for their annual requirement of rubber chemicals. The Company was successful in obtaining the approvals from some of the customers for newly developed products which are expected to start contributing to the business very soon. The Company continues to maintain very strong long term relationship with all its domestic as well as international 'customers who have accepted the status of the Company as one of the leading manufacturers of rubber chemicals. 

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS 

The Company is engaged in the business of manufacture and sale of Rubber Chemicals. It has manufacturing facilities at TTC Industrial Area in Thane and Regional sales offices at Mumbai, Delhi, Chennai and Kolkatta. 

The rubber chemicals manufactured by the Company are mainly used by the tyre industry and also by various other industries manufacturing rubber products. These chemicals not only facilitate the vulcanization process of rubber they also improve and enhance the life of rubber products. The Company is constantly working towards achieving further improvement in technological and operational efficiency of the existing products in their application. It also strives to develop new products to increase its participation in the market and to enlarge its product range. 

OPPORTUNITIES AND THREATS 

The overall increase in the worldwide demand for tyres and rubber based products has presented a golden opportunity to the Company to embark upon developing of new products and on expanding of the volume of its existing products. The Company is in the process of acquiring a plot of land in a suitable industrial area for augmenting the manufacturing capacities of some of its key products. During the year the Company has been able to achieve substantial growth in its business and is confident that this trend will continue in future so that its position as a leader in the business of rubber chemicals both within and outside the country is maintained in the future. 

High crude prices are certainly a matter of concern since these not only drive their energy costs very high but also push prices of their raw materials up. This trend is already being felt. Last couple of quarters, they have been witnessing certain amount of erosion in Rubber Chemicals prices mainly caused by a temporary slowdown in the Rubber Industry due to very high natural rubber and synthetic rubber prices. However a correction is expected in a reasonable period. 

PRODUCTWISE PERFORMANCE 

The rubber chemicals business was able to improve its performance during the year due to relatively stable market conditions. There was a growth in the volume of tyre business but the volumes in the non tyre business declined due to large imports of Rubber Chemicals particularly from China, at unrealistically low prices. However, due to reasonable market corrections in the selling prices of the finished products, the Company was able to show good results during the year. The increase in the sales volumes of rubber chemicals and better pricing in the international market contributed to a better performance in exports by the Company. The business has been able to prove its intrinsic robustness and strengths as the quality of its finished products is well accepted by all its domestic as well as foreign customers. The Company expects that the demand for rubber products is likely to continue to increase due to relatively strong global economy and substantial investments in infrastructure projects in the country and both are driving forces for Rubber Chemicals. 

BUSINESS OUTLOOK 

The rubber chemicals business is expected to show a decent growth in the near future which should increase the demand for the Company's products. The well established and wide marketing network which the Company has created which is in turn fully supported by operations of the manufacturing facilities should enable the Company to meet this growing demand of rubber chemicals both within and outside the country. The quality of the rubber chemicals manufactured by the Company is very well accepted by both domestic and international customers. 

The Company is in the process of increasing the capacity of some of its key products by debottlenecking and also through technical developments based on ongoing Research & Development efforts. It also intends to take up the manufacture of some critical new products which will not only help in the overall growth of the Company but will also help in achieving special status in the Rubber Industry. The Company also proposes to set up additional manufacturing facilities for some of its key products at a suitable alternate site. 

During the year under review the Company was able to secure a favourable decision from the appropriate authority in the anti-dumping proceedings in some of the products. While the decision is inadequate in its scope and coverage, it will to some extent help in curtailing the rampant dumping of low priced rubber chemicals in the country. 

FIXED ASSETS

Ø Land Leasehold and Freehold

Ø Building

Ø Plant and

Ø Machinery

Ø Furniture

Ø Fixture and

Ø Equipments

Ø Vehicles

The company’s products range include:-

· Ethylene

· Propylene

· Butadiene

· Benzene and their derivatives

· Polymers

· Rubber

· Chemicals and Plastic products.

It exports its products like Rubber Chemicals, Ethylene, MIBK, DAA, PEG's and EHA.

It imports its requirements of Naphtha, Acetone and EDC

AS PER WEBSITE

Profile

National Organic Chemicals Industries Limited manufactures and supplies rubber chemicals. Their product range includes accelerators, anti-degradants, antioxidants, sulfur donor, post vulcanization stabilizer and pre vulcanization inhibitors used in the rubber Industry. They offer delayed action type sulfenamide accelerators for sulfur vulcanization of elastomers. They are an ISO 9001:2000 certified company.

Business Summary

Incorporated in 1961, National Organic Chemical Industries (NOCIL) is a part of the Arvind Mafatlal group in collaboration with Royal Dutch (Netherlands)/Shell (UK).The company manufactures a wide range of petrochemicals -- ethylene, propylene, butadiene, benzene and their derivatives, polymers, rubber, chemicals and plastic products . Its clients include Good Year, Bridgestone, Yokohama , General Tyres, etc. It has also tied-up with Dowelanco, US, to establish a joint venture called De-NOCIL Crop Protection, a deemed public company, to manufacture and market crop protection products in India. It has got two investment subsidiaries of namely Ensen Holdings and Urvija Investments. The company has signed a Memorandum of Understanding (MOU) with Shell Chemicals and Montell Polyolefins for implementing the modernization project for which it has received the environment clearance from the central government. It was also agreed by them to acquire 49% stake in de-merged NOCIL. Recently Montell merged along with Elenac & Targor to form a new entity known as Basell Polyolefins which is 50:50 partnership between the Royal Dutch Shell Group and BASF. As a result of this restructuring of the operations of Shell, Montell and BASF internationally, Basell has expressed its inability to participate in this modernization project.

Further the company has decided to restructure the business by splitting into three new companies viz.

NOCIL Petrochemicals, NOCIL Rubber and NOCILPlactics. As per the plan NOCIL shareholders will get in exchange of every 100 shares held, 70 shares in NOCIL Petrochemicals, 16 shares in NOCIL Rubber Chemicals and 14 shares in NOCIL Plastics. This ratio is roughly in the same ratio in which the businesses of the new companies contribute to NOCIL's turnover. Due to unprecedented losses by the Petrochemcials Division, the management of the company has decided to restructure the operations. Under this, the assets from the division will be separated and disposed off to clear the liabilities of the Petrochemcials Division and the remaining if any will be taken over by the Rubber Chemicals Division.

The Modernisation Project which was flagged off earlier, was put on hold due to ever increasing prices of inputs.

Industry: Petrochemicals

House: Mafatlal Arvind

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.09
UK Pound	1	Rs.80.46
Euro	1	Rs.54.82

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions