MIRA INFORM REPORT

Report Date :

08.09.2008

IDENTIFICATION DETAILS

Name :	NOCIL LIMITED (w.e.f 14.09.2007)
Formerly Known As :	NATIONAL ORGANIC CHEMICAL INDUSTRIES LIMITED
Registered Office :	Mafatlal House, H T Parekh Marg, Backbay Reclamation, Churchgate, Mumbai - 400020, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	11.05.1961
Com. Reg. No.:	11 - 12003
CIN No.: [Company Identification No.]	L99999MH1961PLC012003
TAN No:	MUMN00133A / mumn10739b
PAN No.: [Permanent Account No.]	AAACN4912E
Legal Form :	Public Limited Liability Company. The company's shares are listed on Stock Exchange
Line of Business :	Manufacturing of petrochemicals, high density polyethylene, special grade polypropylene and polymer alloys and blends, PE wax, ethylene vinyl acetate co-polymer, processed polyethylene / Eva products, Ziegler catalyst, n-butene – 1, rubber chemicals and their intermediates, oxygen, steam, demineralised water, nitrogen and cooling water.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 17000000
Status :	Very Good
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. It can be regarded as a Promising business Partner in a medium to long-run.

LOCATIONS

Registered Office/ Head Office :	Mafatlal House, H T Parekh Marg, Backbay Reclamation, Churchgate, Mumbai - 400020, Maharashtra, India
Tel. No.:	91-22-66364062
Fax No.:	91-22-66364060
E-Mail :	investorcare@nocilindia.com karnik.um@nocilindia.com
Website :	www.natocil.com
Factory :	v Petrochemical Plant C-37, Trans Thane Creek Industrial Area, Off. Thane Belapur Road, Pawne Village, Post Turbhe, Navi Mumbai 400 701, Maharashtra, India Tel : 91-22-27672735 / 66364062 Fax : 91-22-27671865 / 66364060 E-mail: investorcare@nocilindia.com Websites: www.natocil.com v Rubber Chemicals Plant C-37, Trans-Thane Creek Industrial Area, Off Thane Belapur Road, Navi Mumbai 400 705, Maharashtra, India. v Plastic Products Plant C-1, MIDC Industrial Area, Post Shivani, District Akola - 444 104, Maharashtra, India.

DIRECTORS

Name :	Mr. Arvind N. Mafatlal
Designation :	Chairman - Emeritus
Address :	Mafatlal House, Back bay Reclamation, Mumbai 400 020, Maharashtra, India
Tel No.:	91-22-2202 4887 / 6635 7611/17 / 6635 7633
Name :	Mr. Hrishikesh A. Mafatlal
Designation :	Chairman
Address :	Mafatlal House, Backbay Reclamation, Mumbai 400 020, Maharashtra, India
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
Expertise in Specific Functional Areas :	Mr. Hrishikesh A. Mafatlal is the Vice Chairman of Mafatlal Industries Limited and Chairman and Managing Director of Navin Fluorine International Limited Mr. Hrishikesh A. Mafatlal is major interest in Petrochemicals, Chlorofluorocarbons Cextiles, Garments, Financial Services, Specialty Chemicals, Fine Chemicals etc
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 and Trading 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 Council I (TEXPROCIL)
Tel No.:	91-22-2202 4887 / 6635 7611/17 / 6635 7633
Name :	Mr. Rohit Arora
Designation :	Director
Address :	A.R. Credit Services Private Limited 103, Elite House, 36, Kailash Colony Extension, Community Centre, New Delhi 110 048, India
Tel No.:	91-124-2398393 / 393 Extn. 306
Name :	Mr. T.D. Chaudhuri
Designation :	Director - (IIBI Nominee)
Date of Appointment :	02.02.2006
Name :	Mr. Berjis Desai
Designation :	Director
Address :	J. Sagar Associates, Vakil House, 18, Sprott Road, Ballard Estate, Mumbai 400 001, Maharashtra, India
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 and 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 Stud farm Private Limited, Capricorn Agrifarms and 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.
Tel No.:	91-22-5656 1500
Name :	Mr. V. R. Gupte
Designation :	Director
Address :	2003/2004, Chaitanya Apartments, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, Maharashtra, India
Qualification :	B.Com., F.C.A.
Date of Appointment :	01.04.1993
Previous Employment	Polyolefins Industries Limited – Executive Director – Finance
Tel No.:	91-22-24371736
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
Address :	Mafatlal House, Backbay Reclamation, Mumbai 400 020, Maharashtra, India
Qualifications :	Mr. Vishad P. Mafatlal is a B. Sc. (Economics) University of Pennsylvania, Wharton School, United States.
Expertise in Specific Functional Areas :	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 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 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 and Trading Limited Ø Mafatlal 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
Tel No.:	91-22-6635 7628
Name :	Mr. N. Sankar
Designation :	Director
Address :	The Sanmar Group, 9, Cathedral Road, Chennai 600 086, Tamil Nadu, India
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 and Research Academy for Management Excellence (ACME)
Tel No.:	91-44-2811 8000
Name :	Mr. C.R. Gupte
Designation :	Managing Director
Address :	Mafatlal House, Backbay Reclamation, Mumbai 400 020, Maharashtra, India
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.
Date of Appointment :	01.08.2005
Tel No.:	91-22-6636 4062
Name :	Mr. U.M. Karnik
Designation :	Director
Name :	Mr. C. L. Jain
Designation :	Director - (GIC Nominee)
Address :	13-B/2, Woodlands, 67, Pedder Road, Mumbai 400 026, Maharashtra, India
Name :	Mr. D N Mungale
Designation :	Director
Address ;	10A, Ameya Apartments, Near Kirti College, Prabhadevi, Mumbai 400 028, Maharashtra, India
Tel No.:	91-22-22026076

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 and Company Secretary
Name :	Mr. S. D. Ghate
Designation :	General Manager – Personnel and Administration
Name :	Mr. C. S. Inamdar
Designation :	General Manager- Marketing and Technical Services
Name :	Mr. A. Sivaraman
Designation :	General Manager- Purchase
Name :	Mr. P. Srinivasan
Designation :	General Manager - Finance
Name :	Mr. C Nandi
Designation :	Assistant Vice President – Research and Development

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (As on 31.03.2008)	No. of Shares
Indian Promoters	51069239
Mutual Funds	10970
Banks, Financial Institutions, Insurance companies, etc	11560028
NRI / OCBs / FIIs	4265796
Private Corporate Bodies	18932434
Indian Public	74948513
Total	160786980

BUSINESS DETAILS

Line of Business :

Manufacturing of petrochemicals, high density polyethylene, special grade polypropylene and polymer alloys and blends, PE wax, ethylene vinyl acetate co-polymer, processed polyethylene / Eva products, Ziegler catalyst, n-butene – 1, rubber chemicals and their intermediates, oxygen, steam, demineralised water, nitrogen and cooling water.

Products :

Items Code No. (ITC Code)	Product Description
29215190	Amine Function Compounds
29350090	Sulphonamides
29334900	Heterocyclic Compounds with Nitrogen Heteroatom(s)

· Ethylene

· Propylene

· Butadiene

· Benzene and their derivatives

· Polymers

· Rubber

· Chemicals and Plastic products.

Exports :

Countries :

v Australia

v EEC Countries

v Far East Asia

v Gulf Countries

v U.S.A.

Imports :

Countries :

v Japan

v South Africa

v U.K.

v U.S.A

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Rubber Chemicals and their Intermediaries	MT	N.A.	N.A.	N.A.
Proceed Polyethylene/EVA Products	MT	34,870	NIL @@	33.450
Rubber Chemicals and their Intermediaries	MT	29,839 *	1,452 #	30,922 *

Notes:

@ Installed capacity is as certified by the management.

@@ Installed capacity of 8,100 MT of Plastics Products division, used by the Company for manufacture on behalf of “Relpol”, which division was completely demerged on 20 July 2005 to Relpol. Consequently, there is no installed capacity for Processed polyethylene/EVA products at the end of previous year.(Refer note no.7 of this Schedule).

* Includes 3,284 MT (previous period 2,736 MT) converted for the Company by third parties.

# Includes nil (previous year 588 MT) produced by the Company for third party.

N.A. – not applicable

GENERAL INFORMATION

Suppliers :

v Dipti Corrugating Industries Limited

v Daman Metalic Oxides

v Goma Engineering Private Limited

v IGP Engineers Limited

v KTES

v Kusum Enterprises

v Laxmi Polyplast Industries

v MAS Engineers

v Paramount Forge

v R. S. V. Agencies

v Shree Shakti Containers

v SVAR Associates

v Sohan Engineering Enterprises

v Sigma Chemical Industries

v Sharpenn Technologies Private Limited

v Sharp Batteries and Allied Industries Limited

v Thermal Instruments (India) Private Limited

v Vijoy Power Transmissions Private Limited

v Western Rubbers India Limited

v Amit Plastics

v Ambika Fabricators

v Autogenous Welding & Repair Company Limited

v Altop Controls

v Bengal Industries

v Cintex Industrial Corporation

v Dembla Valves

v Durosharp Knives

v Gujarat Engineering Company

v Gauges Bourdon (I)

v Goma Engineers Private Limited

v Hind Hydraulic Systems Private Limited

v LPC

v Engineers Limited

v Jadhav Engineering Private Limited

v Lion Asbestos Packing Industries

v Monometer India Private Limited

Customers :

v Good Year

v Bridgestone

v Yokohama

v General Tyres

No. of Employees :

445 (205 Management and 240 Non-Management employees)

Bankers :

v HDFC Bank Limited

v Axis Bank Limited

Facilities :

SECURED LOANS	31.03.2008 Rs. in Millions
From Banks
Working Capital Demand Loan	80.000
Packing Credit Loan	99.760
Vehicle loan from a Bank	1.421

Notes:

Loans from banks – working capital demand loan and packing credit loan are secured by hypothecation of stocks of raw materials, stock in process, finished stocks, stores, and spares, book debts and other current assets by way of first charge

Secured by way of charge on the vehicles purchased.

UNSECURED LOANS	31.03.2008 Rs. in Millions
Term Loan from a financial Institutions	228.541

Banking Relations :

Good

Auditors :

Name 1 :

C.C. Chokshi and Company

Chartered Accountants

Name 2:

Deloitte Haskins and Sells

Chartered Accountants

Memberships :

v Confederation of Indian Industries

Subsidiaries :

v Ensen Holdings Limited

v Urvija Investments Limited

v PIL: Chemicals Private Limited

Associates :

v Navin Fluorine International Limited

v Mafatlal Industries Limited

v Mafatlal Finance Company Limited

v Eyeglobal Technologies Private Limited

CAPITAL STRUCTURE

(As on 31.03.2008)

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:

(a) 97302850 shares alloted as fully paid-up by way of bonus shares by capitalisation of General Reserve and Share Premium Account

(b) 13302850 shares allotted to the shareholders of the Polyolefins Industries Limited pursuant to the scheme of amalgamation without payment in cash.

(c) 38181280 shares alloted, to erstwhile Secured Lenders without payment in cash 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		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		1607.870	1607.870	1607.870
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1641.767	1703.168	1643.961
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3249.637	3311.038	3251.831
LOAN FUNDS
1] Secured Loans		181.181	1.994	2.567
2] Unsecured Loans		228.541	0.000	4.775
TOTAL BORROWING		409.722	1.994	7.342
DEFERRED TAX LIABILITIES		144.469	91.213	0.000
TOTAL		3803.828	3404.245	3259.173
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1619.930	1586.121	1663.434
Capital work-in-progress		124.987	190.207	16.422
INVESTMENT		144.431	150.331	30.231
DEFERREX TAX ASSETS		0.000	0.000	15.787
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	746.329	717.109	603.737
	Sundry Debtors	816.897	681.315	790.497
	Cash & Bank Balances	81.133	187.175	290.398
	Other Current Assets	0.000	0.040	0.040
	Loans & Advances	1172.310	990.227	796.432
Total Current Assets		2816.669	2575.866	2481.104
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	661.080	644.899	538.673
	Provisions	241.109	453.381	409.132
Total Current Liabilities		902.189	1098.280	947.805
Net Current Assets		1914.480	1477.586	1533.299
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3803.828	3404.245	3259.173

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		3592.619	3043.052	3630.269
Other Income		306.230	222.442	285.277
Total Income		3898.849	3265.494	3915.546
Profit/(Loss) Before Tax		166.057	352.544	670.725
Provision for Taxation		53.982	109.010	61.394
Profit/(Loss) After Tax		112.075	243.534	609.331
Export Value		1693.437	1299.155	1443.569
Imports :
	Raw Materials	1147.435	935.120	842.669
	Stores & Spares	1.188	1.58	1.950
	Capital Goods	4.601	8.338	4.895
Total Imports		1153.224	945.038	849.514
Expenditures :
	Manufacturing Expenses	3582.967	2893.413	3164.151
	Purchases made for re-sale	38.609	28.240	28.153
	Interest	10.999	3.141	6.888
	Depreciation & Amortization	76.101	65.405	63.766
	Other Expenses	NA	NA	0.968
	Stock in Process	24.116	(77.249)	(19.105)
Total Expenditure		3732.792	2912.950	3244.821

KEY RATIOS

Year	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	0.09	0.00	0.16
Long Term Debt-Equity Ratio	0.00	0.00	0.03
Current Ratio	2.04	2.29	1.75
TURNOVER RATIOS
Fixed Assets	1.85	1.73	2.64
Inventory	5.44	5.13	6.81
Debtors	5.32	4.61	4.70
Interest Cover Ratio	10.76	114.68	82.59
Operating Profit Margin(%)	4.88	12.42	15.69
Profit Before Interest And Tax Margin(%)	2.97	10.49	14.11
Cash Profit Margin(%)	3.89	9.11	14.51
Adjusted Net Profit Margin(%)	1.98	7.18	12.93
Return On Capital Employed(%)	4.55	15.35	25.76
Return On Net Worth(%)	3.29	10.54	27.20

LOCAL AGENCY FURTHER INFORMATION

History

The company is 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 and Targor to form a new entity known as Basell Polyolefins which is 50:50 partnerships 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 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 subsidiary of the company. Subsequent to this demerger RIL will invest in the equity of the resultant company i.e. NPL.

Performance of the Company 

The turnover of the Company for the year under review was Rs.3980 millions as compared to Rs.3390 millions during the previous year ended 31 March 2007. The production of rubber chemicals and their intermediates was 36302 MT for the year under review, as against 29839 MT for the previous year. 

During the year under review, the Company encountered adverse conditions in both its raw material prices and selling prices of its finished products.

The operating margins therefore were under constant pressure throughout the year, more particularly due to the continued rampant dumping of products by Chinese and Korean competitors of the Company at the unrealistic lower prices in the domestic market of the Company. The appreciation of rupee by about 12% during the year also affected their net realisations on the exports front. 

Further, due to steep increase in the international prices of crude oil, the prices of most of the major raw materials of the Company rose considerably, which resulted in very high input costs. The Company managed to mitigate some of these adverse factors by: * Increasing production volumes by more than 20% ensuring better distribution of the fixed costs. It is pertinent to mention that over the past decade, the Company managed a double digit compounded annual growth in production of rubber chemicals. 

Improvements in the manufacturing processes of some of the key products, resulting in reduced usages of raw materials. 

Undertaking of various energy conservation and other efficiency measures, resulting in improvement in the consumption of utilities and other inputs. 

Initiation of anti-dumping proceedings against Chinese and Korean competitors. The anti-dumping authorities in their preliminary findings have notified anti-dumping duties on some of the products for which the Company had sought relief.

They are confident that with the above measures, the profitability of the Company should show improvement in the coming years. 

Change of name 

Pursuant to the shareholders' approval obtained at the last Annual General Meeting, the name of the Company was changed from 'National Organic Chemical Industries Limited.' to 'NOCIL Limited ' with effect from 14 September 2007. 

Transfer of unpaid dividend to the Investor Education and Protection Fund 

As per the provisions of Section 205C of the Companies Act, 1956, all unpaid dividends including and up to final dividend for the year 1997-98, and the fixed deposits lying unclaimed with the Company up to 31 March 2001, have been transferred to the Investor Education and Protection Fund. 

Total Quality Management 

The Company continues to be certified for 150 9000 (quality management systems) and ISO 14001 (environment management systems) as well as for OHSAS - 18001 (Occupational Health and Safety System Standards). They are happy to mention that the Company enjoys an exemplary track record in all these three systems. 

MANAGEMENT DISCUSSION AND ANALYSIS 

Industry structure and developments 

The Company is engaged in the manufacture and sale of rubber chemicals and has its manufacturing facilities in the TTC industrial area (Thane) and dedicated ancillary manufacturing facilities in the GIDC industrial area (Vapi), including one such facility through its wholly owned subsidiary PIL Chemicals Private Limited. The Company's regional sales offices are located in Mumbai, Delhi, Chennai and Kolkata. 

The products manufactured by the Company are used by the tyre industry and other segments of the rubber industry. These chemicals not only accelerate the vulcanisation of rubber, but also extend the life of rubber products.

The Company is constantly working towards achieving further improvement in the 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 enlarge its product range. 

Opportunities and threats 

The global demand for tyres and rubber based products is growing at a healthy rate. A number of tyre manufacturers are concentrating their manufacturing locations in Asia (predominantly China, South East Asia and India) on account of the growing automobile markets in these countries. As a result, the Company is favourably positioned to address the potential demand, focusing on capacity expansion and new product development.

Moreover, the Company has been leveraging alternative technologies to improve its operational efficiencies even further. 

In addition to the above, the Company acquired a 60-acre plot of land at Dahej near Bharuch in the designated chemical zone of the Gujarat Industrial Development Corporation, in view of its future expansion plans.

This location is ideal from the Company's point of view in many respects, among which the most important is the proximity to major raw material suppliers. The presence of multiple input sources around Dahej will enable the Company to mitigate the risk arising out of single-source dependence. Cost optimisation across a larger volume will also enhance competitiveness.

Most of the infrastructural jobs such as land filling, roads, etc. are underway. The entire basic engineering package is finalised and the contract for plant erection is expected to be awarded shortly. All the necessary clearances from the Central and the State Government authorities have been obtained. The first phase of this project is expected to involve a capital expenditure of Rs.1500 millions. 

The hardening of input prices as well as indiscriminate dumping by various suppliers, during the year particularly from China and South Korea caused considerable rise in rubber chemical imports and also affected the margins in 2007-08. Rupee appreciation has affected their exports margins. 

Product-wise performance 

During the year, the total sales volume increased by 23% to that of the previous year. On the exports front, the sales volume registered positive growth of 33% as compared to the previous year. The Company initiated anti-dumping proceedings against its Chinese/Korean competitors in connection with their rampant dumping into India, The Government authorities, after conducting due verifications have levied certain anti-dumping duties as per their preliminary findings. The steep increase in their cost, coupled with stricter enforcement of environmental issues by the Chinese Government and appreciation of the Chinese currency will also put considerable pressure on the Chinese competition to bring about the much needed correction in their pricing of rubber chemicals in the coming year. 

Business outlook 

The Company is optimistic of capitalising on a significant growth in the global demand for rubber chemicals through its wide marketing network, multiple manufacturing locations and strong brand. It has already embarked on capacity expansion and is engaged in the manufacture of key products for the Company's major customers. The expansion undertaken at the new site in Dahej in Gujarat is in progress, enabling the Company to enhance its current global market share substantially. This is therefore being pursued vigorously by the Company. 

The Company has also significantly strengthened its field of Research and Development and Technology. It therefore is very well poised to leverage this significant advantage in its growth plans. 

Financial performance - operational performance 

During the year under review, the Company reported a profit before tax of Rs.166.100 millions compared with Rs.352.500 millions in 2006-07. Although production volume increased by 22% and sales volume by 23%, realisations declined mainly due to rampant dumping by their competitors. Due to increase in the level of overall operations, the Company availed a portion of its fund-based working capital facilities out of the sanctioned limits by its, bankers. The interest costs as a whole for the year remained at about Rs.1100 millions, which constitutes about 0.28% of the gross turnover. In view of the attractive debt/ equity ratio coupled with no encumbrances on the fixed assets, the management is confident of mobilising necessary term loans to commission its greenfield Dahej project. 

Internal control systems 

The Company has in. place adequate internal control systems and procedures covering all the financial and operating functions. These have been designed to provide adequate assurance to the management regarding compliance with the accounting standards by maintenance of appropriate accounting records, monitoring the economy and efficiency of operations, protecting the assets of the Company from losses and ensuring the reliability of financial and operational information through proper compliance with the statutory enactments and its rules and regulations.

Some of the significant features of the internal control systems and procedures are as follows: 

Appropriate delegation of authority limits with responsibility for incurring capital and revenue expenditures. 

Approval and monitoring of annual revenue budget for all operating and service functions. 

Procedure for approval of capital budget proposals and monitoring the expenditure on such acquisitions. 

Formulating and reviewing the annual and long-term business plans. 

A comprehensive code of conduct for ensuring the integrity of financial reporting, ethical conduct, regulatory compliances and conflict of interest, if any. 

Review of the operations and financial plans in key business areas through monthly management meetings. 

Appointment of an independent consultant for conducting internal audit for reporting to the management and the Audit Committee, the adequacy and compliance with the internal controls and the efficiency and effectiveness of operations. ' 

The Audit Committee of the Board of Directors which is functional since 1987 regularly reviews the findings of the internal auditors, adequacy of internal controls, compliance with the accounting standards, as well as recommends to the Board the adoption of the quarterly and annual results of the Company and appointment of auditors. The Audit Committee also reviews the related party transactions, entered into by the Company during each quarter.

other details:-

On 31.03.2006, the company revalued leasehold land, building, and plant and machinery based on a valuation report of Telos consultancy services private Limited, an approved valuer. The valuation was made on the basis of current replacement values of the assets. The net block art 31.03.2006 was increased by Rs. 1015.943 millions the year on account of revaluation has been charged to profit and Loss Account and a similar amount has been withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

Fixed Assets

Ø Land Leasehold and Freehold

Ø Building

Ø Plant and Machinery

Ø Furniture

Ø Fixture and

Ø Equipments

Ø Vehicles

AS PER WEBSITE

Company Profile

Subject 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 and Targor to form a new entity known as Basell Polyolefins which is 50:50 partnerships 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 NOCIL Plastics. As per the plan the company 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 the company's turnover. Due to unprecedented losses by the Petrochemicals 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 Petrochemicals Division and the remaining if any will be taken over by the Rubber Chemicals Division.

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

National Organic Chemical Industries Limited, popularly known as NOCIL, commenced manufacture of Rubber Chemicals in the year 1976. Today, the company is the largest manufacturer of Rubber Chemicals in India with Annual Sales close to Rs.3250 million (USD 75 million) and a Customer Profile that spans most of the global market.

The Manufacturing plant, located in an industrial zone designated for the Chemical Industry, about 40 kms away from Mumbai, employs 'State of the Art' Technology for the manufacture of PILFLex® - Antidegradants, PILnox® - Antioxidants, PILCure® - Accelerators, Sulfur Donor, Post Vulcanization Stabilizer and PILGarD® - Pre Vulcanization Inhibitor extensively used in the Rubber Industry world over.

The company has committed itself to World Class Product Quality, Customer Service and Environmental Care Standards. In fact, this has been a 'Way of Life' for everyone employed in the company.

The challenges are defined by the drive to understand the Customer's current and emerging needs and meet these expectations on a continuous basis.

The company is a part of Arvind Mafatlal Group of Industries, a well-known Business House in India with diversified business interests.

Subject commenced its Rubber chemicals manufacturing operations in the year 1976. Situated in a designated Chemicals Zone, about 40 km away from Mumbai. Subject is the largest Rubber chemicals manufacturer in India.

The company offers a wide range of Rubber chemicals viz.

· PILFLex® - Rubber Antidegradants,

· PILnox®  - Rubber Antioxidants,

· PILcure® - Rubber Accelerators

· PILGarD® - Rubber Prevulcanisation inhibitor

Philosophy

As a part of its business philosophy, subject has laid very high emphasis on Quality Assurance, Customer focus, and Health-Safety and Environmental Control.

The ISO 9001, ISO 14001 and OHSAS 18001 Certification of the company and the acknowledgement of their excellence in Customer Service Standards by their esteemed Customers are only a few steps towards their Company's commitment to 'Total Customer Satisfaction'.

Product Forms

The Sulfenamide Accelerators - PILCURE CBS, PILCURE NS, PILCURE MOR, are offered in Pellet Form for improved shop-floor environment, excellent handling characteristics, precise weighing accuracy and enhanced storage stability. Other accelerators are supplied as dust suppressed Powders for achieving optimized rubber processing and vulcanizate properties.

PILFLEX IP, PILFLEX 13 - Paraphenylenediamine Antidegradants and PILNOX TDQ Antioxidant are supplied in free-flowing, dust-free Pastille Form which also ensure weighing accuracy considerably as compared to the flaked products. PILNOX SP and PILCURE SDBC are supplied in the traditional Liquid Form.

Manufacturing Process

The Rubber Chemicals Manufacturing Processes originate from the Chemistry of Nitrogen and Sulfur compounds. The Processes involved are extremely complex and hazardous. Thus, the manufacturing process demands extremely sophisticated Plant and Equipments, Process Controls and Constant Monitoring.

All the manufacturing plants of the company are fully automated through Programmable Logic Controllers and are supported by sophisticated Electronic Instrumentation.

Entire Plant Operations are managed by highly qualified and experienced staff who ensure strict Process Control and smooth round the clock plant operations.

Research and Development

The emphasis of their Research Activities is on the development of new understanding that can lead to Process/ Product improvements and innovations.

A team of highly qualified Organic Chemists, Chemical technologists and Chemical Engineers supported by an Ultra-Modern laboratory setup and a Pilot-Plant facility is constantly engaged in achieving their Technology - based Business Objectives.

The team performs with responsibility and accountability and has been a prime source of 'Value Addition' to their Processes and Products.

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 :

The 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.

The 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. 44.37
UK Pound	1	Rs. 78.41
Euro	1	Rs. 78.09

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		74

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 EXPLANATIONS

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.	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
NR		In view of the lack of information, they have no basis upon which to recommend credit dealings	No Rating

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