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Bodal Chemicals Ltd.

BSE: 524370 Sector: Industrials
NSE: BODALCHEM ISIN Code: INE338D01028
BSE 00:00 | 19 Aug 92.15 0.05
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OPEN 92.90
PREVIOUS CLOSE 92.10
VOLUME 36472
52-Week high 150.00
52-Week low 76.00
P/E 8.77
Mkt Cap.(Rs cr) 1,129
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 92.90
CLOSE 92.10
VOLUME 36472
52-Week high 150.00
52-Week low 76.00
P/E 8.77
Mkt Cap.(Rs cr) 1,129
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bodal Chemicals Ltd. (BODALCHEM) - Director Report

Company director report

To

THE MEMBERS OF BODAL CHEMICALS LTD.

The Directors hereby present their "35th ANNUAL REPORT" on theperformance of the Company together with the audited financial statements for thefinancial year (‘FY") ended 31st March 2021

Financial Results:

Financial Results of the Company for the year under review along with figures of theprevious year are as follows:

Consolidated Standalone
Particulars (Rs. In Million) FY21 FY20 Y-o-Y FY21 FY20 Y-o-Y
Revenue 12264.33 13748.19 -10.79% 11297.31 12235.96 -7.67%
Other Income 158.36 103.98 179.05 141.03
Total Revenue from Operation 12422.69 13852.17 11476.36 12376.99
Cost of Material Consumed 7637.59 8078.77 7685.39 7606.36
Purchase of Stock In Trade 644.29 712.02 2.9 2.64
Changes in Inventories -332.31 41.91 -293.51 129.24
Total Cost 7949.57 8832.70 -10.00% 7394.78 7738.24 -4.44%
Gross Profit 4473.12 5019.47 -10.88% 4081.58 4638.75 -12.01%
Gross Profit (%) 36.01% 36.24% 35.57% 37.48%
Employee Expenses 777.48 871.27 706.34 798.3
Other Expenses 2670.47 2667.55 2366.52 2377.42
EBITDA 1025.17 1480.65 -30.76% 1008.72 1463.03 -31.05%
EBITDA (%) 8.36% 10.77% 8.93% 11.96%
Depreciation 304.85 284.03 279.9 262.11
EBIT 720.32 1196.62 -39.80% 728.82 1200.92 -39.31%
EBIT (%) 5.87% 8.70% 6.45% 9.81%
Finance Cost 166.48 190.26 92.21 141.1
Profit Before Tax 553.84 1006.36 -44.97% 636.61 1059.82 -39.93%
Profit Before Tax (%) 4.52% 7.32% 5.64% 8.66%
Tax 156.17 146.02 153.46 158.84
Profit After Tax 397.67 860.34 -53.78% 483.15 900.98 -46.38%
Profit After Tax (%) 3.24% 6.26% 4.28% 7.36%
EPS 3.25 7.13 3.95 7.37

Note: previous year's figures have been recast wherever necessary.

The Financial year under review 2020-2021

PERFORMANCE DISCUSSION

Impact of COVID-19 - The COVID pandemic is unprecedented and has affected theoperations as well as results of the Company. The manufacturing facility of the Companywhich was shut down in the last week of March 2020 due to countrywide lockdown resumedoperations in a phased manner from 11th May 2020. The Company has taken adequateprecautions for safety and well-being of its employees on resumption of its plantoperations.

During the year under review-

Your Company has suffered significant loss of business in the Q1FY21 due to countrywidelockdown. Despite pandemic hit quarter in H1 your Company was able to recover andregistered healthy business for the full financial year. For FY21 Total income onconsolidated basis stood at ` 12423 Million whereas on standalone basis total incomestood at ` 11476 Million Your Company has written off bad debts of ` 130.75 Million in Q4FY21 and ` 173.25 Million for FY21. This is one off case in the history of the Company andsame has impacted Company's profitability.

In Q4FY21 depreciation of Turkish Lira V/S USD has impacted Company's subsidiary SENERBoya-Turkey and book MTM foreign exchange loss of ` 50.14 Million. The same has impactedConsolidated Financials of the Company.

Standalone

The Standalone revenue from operations for the year 2020-21 is ` 11297.3 Million asagainst ` 12236.0 Million of previous year. Earnings before interest tax depreciationand amortisation (‘EBITDA') for the 2020-21 is ` 1008.7 Million compared to ` 1463.0Million of previous year 2019-20. During year 2020- 21 Profit before tax stood at ` 636.6Million compared to ` 1059.8 Million previous year. However during the year over allfinance cost has reduced to ` 92.2 Million as against ` 141.1 Million of previous year.

Net profit for the year 2020-21 has decreased by 46.4% to ` 483.2 Million asagainst ` 901.0 Million of previous year. Total comprehensive income stood at ` 485.28Million for 2020-21 as compared to ` 916.35 Million during the previous year 2019-20.

Consolidated-

The consolidated revenue from operations for the financial year 2020-21 is ` 12264.3Million compared to ` 13748.2 Million of previous year. Earnings before interest taxdepreciation and amortisation (‘EBITDA') is at ` 1025.2 Million during the yearcompared to ` 1480.7 Million for previous year 2019-20.

During year 2020-21 Profit before tax stood at ` 553.8 Million compared to ` 1006.4Million of previous year. However finance cost has reduced to ` 166.5 Million as comparedto ` 190.3 Million of previous year.

Net profit for the 2020-21 has decreased by 53.8% to ` 397.7 Million compared to` 860.3 Million during 2019-20. Total comprehensive income is ` 409.5 Million for year2020-21 as against ` 857.7 Million of previous year

Bodal Chemicals Ltd. (BCL)

Bodal Chemicals Ltd. is the most integrated Dyestuffs Company in India and also thebiggest manufacturer of Dye Intermediates in India. The Company's product range coversDyestuffs Dye Intermediates and Basic Chemicals broadly classified under SpecialtyChemicals. It has a unique and integrated product line covering forward and backwardintegration to dye intermediates. It contributes about 20% of India's capacity and about5% of the world's capacity for Dye Intermediates. Out of the total production about 33%is exported to over 45 countries across the world.

Further During the year Company acquired the Chemical Unit known as ‘SielChemical Complex (SCC)' of Mawana Sugars Ltd. located at Rajpura Punjab on a goingconcern basis. Siel Chemical Complex (SCC) is built on a fully developed land area of 124acres (of which 60 acres is surplus). Further SCC is one of the largest players in ChlorAlkali segment in north india having Caustic soda capacity 82500 MTPA with welldiversified client base capturing major companies in paper Soap/Detergent Textiles etc.and supplying to leading Companies. Considered material event as per Regulation 30 of SEBI(LODR) Regulation Company had intimated same to the Stock Exchanges (BSE and NSE). TheCompany is listed on BSE Ltd. (Bombay Stock Exchange) and National Stock Exchange of IndiaLtd. (NSE).

The broad areas of operations of the Company are as under:

Dyes

Your Company is a leading manufacturer of Reactive Acid and Direct Dyes. BodalChemicals has capacity of manufacturing more than 150 variants of Dyestuff which areprincipally used as raw materials in Textiles Leather Paper & other Dyestuffconsuming industries

Dye Intermediates

Bodal is the largest manufacturer of Dye Intermediates in India and among the leadingmanufacturers of Dye Intermediates in the world. Bodal Chemicals has capacity ofmanufacturing up to 25 Dyes Intermediates products. These Dye Intermediates are directlysold as well as consumed captively for manufacturing different kinds of Dyes.

Other/Basic Chemicals

Bodal is also a manufacturer of other Chemicals like Sulphuric Acid CSA Oleums BetaNapthol and Acetanilide. These Chemicals are used as key raw materials for production ofDye Intermediates which is highly beneficial in terms of improving profitability of theCompany.

SUBSIDIARIES AND ASSOCIATES:

- Subsidiaries in India:

1. SPS Processors Pvt. Ltd.- Subsidiary Company

2. Bodal Chemicals Trading Pvt. Ltd.- Wholly Owned Subsidiary Company

- Subsidiaries Outside India:

1. Bodal Chemicals Trading (Shijiazhuang) Co. Ltd.- Wholly Owned Subsidiary Company

2. SENER BOYA KIMYA TEKSTIL SANAYI VE TICARETANONIM SIRKETI- Subsidiary Company

3. Bodal Bangla Ltd.- Wholly Owned Subsidiary Company

4. PT Bodal Chemicals INDONESIA - Wholly Owned Subsidiary Company (w.e.f.18th May 2021)

-Step-down subsidiaries:

1. SENPA DIS TICARET ANONIM SIRKETI

Associate Company

1. Plutoeco Enviro Association- Associate Company

Financial Performance of major Subsidiaries:

FY21 Performance

(Rs. In Million)

Particulars (Rs. In Million) SPS BCTPL Sener Bodal (China)
Total Income 993.0 142.0 792.0 161.0
EBITDA 59.0 1.0 31.0 13.0
PAT -30.0 0.1 -69.0 12.0

S P S PROCESSORS PVT. LTD. (SPS)

S P S Processors Pvt. Ltd. is a company engaged in manufacturing of dye intermediates.Your Company is holding 70% equity stake in S P S Processors Pvt. Ltd.

SPS has a manufacturing plant located at Kosi Uttar Pradesh India having runningoperational capacity to produce 3000 tons per annum (TPA) of H-Acid a key DyeIntermediate. The manufacturing plant is a "zero discharge" unit and about Fiveyears old. S P S Processors Pvt. Ltd. also has all necessary permissions to manufactureVinyl Sulphone another key Dye Intermediate as well as Dyestuff at the same plant. Withthe available permissions the Company is building a 6000 TPA Vinyl Sulphone plant. Theproject is expected to start and stabilise production during 2022.

This investment will help the Company to increase its manufacturing capacity of DyeIntermediates and consolidate its position in the local and global markets of DyeIntermediates and Dyestuff. Further Financial Result of the Company for 2020-21 is alsoavailable on website of the Company at www.Bodal. com

Bodal Chemicals Trading Pvt. Ltd.

Bodal Chemicals Trading Pvt. Ltd. a Wholly Owned Subsidiary Company was incorporatedin India on 07th December 2018. It was incorporated with object of trading in chemicalproducts. It is not material subsidiary as per the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 Further Financial Result of the Company for2020-21 is also available on website of the Company at www.bodal. com

Bodal Chemicals trading Shijiazhuang Ltd. (China)

Bodal Chemicals trading Shijiazhuang Ltd. a Foreign Wholly Owned Subsidiary of theCompany incorporated in China in 2018-19 for trading activities in Chemicals Product.Apart from the trading activity within China this company will become an important armfor bodal chemicals Ltd. to distribute its final product i.e. dyestuffs in domestic marketof China. This will also help sourcing of some raw materials from China to India. It isnot material subsidiary as per the SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 Further Financial Result of the Company for 2020-21 is also available onwebsite of the Company at www.bodal. com.

SENER BOYA KIMYA TEKSTIL SANAYI VE TICARETANONIM SIRKETI

A Foreign Subsidiary of the Company having acquired stake of 80% for tradingactivities in Chemicals products at Turkey.

Apart from the trading activity within Turkey this company is an important arm forbodal chemicals Ltd. to distribute its final product i.e. dyestuffs in domestic market ofTurkey and reach out to other nearby countries. It is not material subsidiary as per theSEBI (Listing Obligations and Disclosures Requirements) Regulations 2015. FurtherFinancial Result of the Company for 2020-21 is also available on website of the Company atwww.bodal. com.

Bodal Bangla Ltd.

Bodal Bangla Ltd. a Foreign Wholly Owned Subsidiary of the Company incorporated 22ndSeptember 2019 in Bangladesh for trading activities in Chemicals Products. The Companyhas started Commercial Operations. Further It is not Material Subsidiary as per the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 Further FinancialResult of the Company for 2020-21 is also available on website of the Company atwww.bodal. com.

SENPA DIS TICARET ANONIM SIRKETI- Step Down Subsidiary company of the Company SENPADIS TICARET ANONIM SIRKETI is Wholly Owned Subsidiary of SENER BOYA KIMYA TEKSTIL SANAYIVE TICARETANONIM SIRKETI which is subsidiary company of Bodal Chemicals Ltd. in Turkey.

Plutoeco Enviro Association

Plutoeco Enviro Association a Associate Company of the Company incorporated on 27thOctober 2020 as Section 8 Company as Non-Profit Organisation. Further Financial Resultof the Company for 2020-21 is also available on website of the Company at www.bodal. com.Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 readwith rules framed there under and Regulation 33 of the SEBI Listing Regulations theCompany has prepared consolidated financial statements of the Company and its subsidiariesand a separate statement containing the salient features of financial statement ofsubsidiaries joint ventures and associates in Form AOC-1 which forms part of this AnnualReport. Further Company shall place separate audited accounts of the subsidiary Companieson the website of the Company at www. Bodal.com Pursuant to Section 134 of the Act readwith Rule 8(1) of the Companies (Accounts) Rules 2014 the details of developments ofsubsidiaries of the Company are covered in the Managements' Discussion and Analysis Reportwhich forms part of this Report.

SCHEME OF AMALGAMATION

During the year under review Scheme of Amalgamation of Trion Chemicals Pvt. Ltd. (awholly owned subsidiary company) with your Company had been approved by the Board ofDirectors of both Companies at their meeting held on 27th May 2020 (the"Scheme") with effect from appointed date of 1st April 2019 (Appointed date).The Scheme has been approved by Hon'ble NCLTAhmedabad Bench vide its order dated 31stDecember 2020 and a copy of the said order was filed with the Registrar of the Companies(ROC) on 9th January 2021 (Effective Date).

CAPITAL STRUCTURE & LIQUIDITY

Authorised Share Capital

During the year 2020-21 after Considering approval of Amalgamation revised Authorisedcapital of your Company is ` 695000000/- (Sixty-Nine Crore Fifty Lacs Only) Comprisingof Equity Shares Capital of ` 420000000 (Forty-Two Crores) divided into 210000000Equity Shares of ` 2/- (Rupees Two) each and Preference Share Capital of ` 275000000(Twenty-Seven Crore Fifty Lacs) divided into 27500000 (Two Crore Seventy-Five Lacs)Preference Shares of ` 10/- (Rupees Ten) each.

Issued and paid-up Share Capital

The Issued Subscribed & Paid-up Equity Share Capital of the Company as on 31stMarch 2021 was ` 244.66 Million divided into 122330165 Equity Shares having face value of` 2 each.

After completion of financial year 2020-21 your Company has issued and allotted151500 Equity shares under ESOP 2017 scheme on 24th June 2021 and due to said allotmentnew capital stood at ` 244.96 Million divided into 122481665 Equity shares of face valueof ` 2/- each.

Employees Stock Option (ESOP/ESOS)

During the year under reviews No Options were granted and exercise by the Nominationand Remuneration Committee of the Company. Details and summary of Employee Stock Optionsgranted/vested/exercised during the year 2020-21 are given in "Annexure 3"to this report.

General Reserve

During the year under review your directors do not propose to transfer any amount tothe General Reserve.

Term Loan and Working Capital

As on 31st March 2021 the Total Debt was ` 4355.45 Million cash and Cash Equivalentswere ` 60.58 Million resulting in Net Debt of ` 4294.87 Million (` 2259.08 Million as on31st March 2020) Total Debt consisted of ` 3291.45 Millions of working capitalloans and ` 1064.00 Million long-term loans including long term loans maturing within 12months of the balance sheet date.

RATINGS

The credit rating for the Company for last two years are as below: -

Type of Credit Rating Ratings for 2019-20 Ratings for 2020-21
India Ratings CARE Rating India Ratings
Long Term Bank Facilities IND A+ CRISIL A+ IND A+
Short Term Bank Facilities IND A1+ CRISIL A1+ IND A1+

DIVIDEND

Board of Directors at their meeting held on 24th June 2021 has recommended Dividend of` 0.80 (i.e. 40%) per equity share on the equity share of 2.00/- each for the financialyear 2020-21 amounting to ` 97.99 Million The dividend pay-out is subject to the approvalof the shareholders at ensuing 35th Annual General meeting. The dividend will be paid tothe members whose names appear in register of members as on record date 17th September2021

TRANSFER OF UNCLAIMED SHARES & DIVIDEND AMOUNT TO INVESTOR EDUCATION AND PROTECTIONFUND

Section 124 of the Companies Act 2013 mandates that companies shall transfer dividendthat remain unclaimed for a period of seven years from the unpaid dividend account to theInvestor Education and Protection Fund (IEPF).

During the year under review Your Company has not transferred any Unclaimed amount andShares to IEPF Authority.

Further The Company has uploaded complete details of such Shares which were alreadytransferred to DEMAT Account of IEPF Authority on its website:- www.bodal. com

Furthermore Shareholders may claim back the shares which were already credited alongwith the unclaimed dividend amount from IEPF Authority after following the proceduresprescribed under IEPF Rules. The procedures for claiming the same is available at www.mca.gov.inand www.iepf.gov.in.

Further Details of IEPF Claim during the 2020-21 is stated in the Corporate Governancereport of the Company.

PUBLIC /FIXED DEPOSITS

During the year under review The Company has not accepted any deposit during thefinancial year under review. There were no deposits remaining unpaid/ unclaimed as at theend of the financial year 2020-21 and as such no amount of principal or interest wasoutstanding as on the date of the balance sheet.

LISTING OF SECURITIES

As on 31st March 2021 Bodal Chemicals' 122330165 Equity Shares of ` 2 each fully paidwere listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). TheCompany confirms that it has paid annual listing fees for the financial year 2021-22 toboth the Exchanges (BSE & NSE) where the Company's equity shares are listed. Duringthe current year on 24th June 2021 Company has Issued and allotted 151500 equityshares of ` 2/- each under the ESOP 2017 Scheme. Your company had got approval of listingof new allotted equity shares on 1st July 2021. hence total shares listed on the NationalStock Exchange (NSE) and Bombay Stock Exchange (BSE) are 122481665 Equity Shares of ` 2each fully paid

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors' Appointment Retirement and Resignation Bodal Chemicals ltd has 8 (Eight)Directors including 4 (Four) Executive Directors and 4 (Four) Independent Directors(non-executive) including a woman director at the end of financial year 31st March 2021

APPOINTMENT OF DIRECTORS

On the recommendation of Nomination and Remuneration Committee Board of Directors hadappointed Mr. Mayank K Mehta having DIN: 03554733 and his IICA registration isIDDB-DI-202001-005010 as an Additional cum Independent Director on the Board of theCompany for the first term of 5 years starting from 9th February 2021 The stipulateddetails are mentioned in the Notice of Annual General Meeting and corporate governancereport forming part of Directors' report. His appointment is subject to your approval atthe ensuing Annual General Meeting. The Board recommends his appointment.

On the recommendation of Nomination and Remuneration Committee Board of Directors hadappointed Mr. Nalin Kumar having DIN: 03060741 IICA registration is IDDB-DI-202002-017455and Mrs. Neha Huddar having DIN: 00092245 IICA registration is IDDB-DI-201912-002979 forhis/her 2nd Term for period of 5 (Five) year at Board Meeting held on 14th August 2021.The Other stipulated details are mentioned in the Notice of Annual General Meeting andgovernance report forming part of Directors' report. Their appointment is subject to yourapproval at the ensuing Annual General Meeting. The Board recommends their appointments.Mr. Bhavin S Patel (having DIN:0030464) Executive Director retire by rotation at theensuring Annual General Meeting. He is being eligible offers himself for re-appointment.The stipulated details are mentioned in the Notice of Annual General Meeting and corporategovernance report forming part of Directors' report None of the Directors of the Companyare disqualified from being appointed as Directors as specified under Section 164 of theCompanies Act 2013.

The Independent Directors of the Company got included their names in the data bank ofIndependent Directors maintained with the Indian Institute of Corporate Affairs in termsof Section 150 of the Companies Act 2013 read with Rule 6 of the Companies (Appointment& Qualification of Directors) Rules 2014.

For the perusal of Shareholders a brief resume of all the above Directors nature oftheir expertise their shareholding in the Company and other required details are given inthe section of the Corporate Governance Report which forms part of the Director's Reportin the Annual Report for 2020-21.

DEMISE OF DIRECTOR

During the Financial Year 2020-21 Late. Ram Prasad Srivastava (DIN: 02227457)Independent Director on the Board has passed away on 24th January 2021. Your Companyappreciate contribution made by Late Ram Prasad Srivastava during his tenure asIndependent Director of Company. Further as the information is Material Event underRegulations 30 of SEBI (LODR) Regulations 2015 Company had immediately intimated to theBSE and NSE vide letter no. Sec/20-21/123.

KEY MANAGERIAL PERSONNEL

- Mr. Suresh J Patel Chairman and Managing Director (DIN: 00007400)

- Mr.BhavinSPatelExecutiveDirector(DIN:00030464)

- Mr. Ankit S Patel Executive Director (DIN: 02173231)

- Mr. Mayur B Padhya Chief Financial Officer

- Mr. Ashutosh B Bhatt Company Secretary

Are the key managerial Personnel of the Company as on the date of this Report.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from all Independent Directors that they meet theCriteria of Independence as laid down in Section 149 (6) of the Companies Act 2013 andregulations 27 (2) of the SEBI (LODR) regulations 2015 (Listing regulations). There wereno pecuniary transactions entered into with the Independent Directors apart from sittingfees.

REMUNERATION OF DIRECTORS AND KMP

Pursuant to the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerialpersonnel) Rules 2014 disclosures pertaining to remuneration of Managerial employees aStatement showing the names and other particulars of the employees drawing remuneration asset out in the said rules is attached to this Report.

Company has received Confirmation from Chairman of NRC Committee of the Company thatAppointment term and Remuneration are decided by the NRC Committee based on NRC Policy ofthe Company.

REMUNERATION POLICY

The Company has in place a Remuneration policy for the Directors KMP and Otheremployees pursuant to the provisions of the Act and the Listing Regulations which isexplained in Corporate Governance Report and which forms a part of the Board's Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Company has an ongoing Programme where Directors in the course of meetings of theBoard of Directors give information about Chemical Business developments Expansion of theCompany and various amendments in legal and regulatory areas which include mandatorydisclosures and fair disclosures stated under SEBI (Listing Obligation and DisclosuresRequirement) regulations 2015 (herein referred to as "Listing Agreement")Prohibition & Insider trading regulations and SAST Regulations so as to enable themto effectively discharge their roles and responsibilities in the Company.

Details of the Familiarisation Programme for Independent Directors are available on thewebsite of the Company at www.bodal.com

DIVERSITY OF THE BOARD

The Company recognises and embraces the benefit of having a diverse Board of Directorsand views increasing diversity at the Board level as an essential element in maintainingcompetitive advantage in the Business in which it operates. This Policy can be accessedfrom the Company's website-www.bodal.com

BOARD MEETINGS

During the year under review 5(Five) Board Meetings of Board of Directors were held.Details of the Composition of Board and its Committees and meetings held and Attendance ofDirectors at such Meetings and other relevant details are provide in the CorporateGovernance report

MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company met separately on 19th March 2021 without thepresence of Non-Independent Directors and the members of management. In accordance withthe provisions of the Companies Act 2013 and SEBI (Listing Obligation and DisclosureRequirement) Regulation 2015 the following matters were inter-alia discussed in themeeting: Review the performance of Non-Independent Directors and the Board as awhole Review the performance of the Chairperson of the Company taking into accountthe views of Executive Directors and Non-executive Directors.

Assess the quality quantity and timelines of flow of information between theCompany management and the Board that is necessary for the Board Members to effectivelyand reasonably perform their duties

BOARD'S ANNUAL EVALUATION

In terms of the requirements of the Companies Act 2013 and the Listing Regulationsthe Board carried out the annual performance evaluation of the Board as a whole BoardCommittees and the Directors. The Evaluation framework adopted by the Board is set out inthe Corporate Governance Report.

AUDITORS

STATUTORY AUDITORS

Members at its 34th Annual General Meeting held on 20th August 2020 appointed M/sDeloitte Haskins & Sells LLP (FRN No. 117366W/W-100018) as statutory Auditor of theCompany) to hold office from conclusion of 34th Annual General Meeting of the Companyuntil the conclusion of the Thirty Sixth (36th) Annual General Meeting of the Company. TheStatutory Auditors have confirmed that they satisfy the Independence criteria requiredunder Companies Act 2013 Code of Ethics issued by institute of Chartered Accounts ofIndia.

The report of the Statutory Auditors along with Notes to Schedules is enclosed withthis Report. The Auditor's Comments on the Company's Accounts for the financial year endedon 31 March 2021 are self-explanatory in nature and do not require any explanation as perprovisions of Section 134 of the Companies Act 2013. The Auditor's Report does notcontain any qualification reservation or adverse remark.

INTERNAL AUDITORS

M/s. Rashmin R. Patel & Co. Chartered Accountants (FRN: 132265W) Ahmedabad areInternal Auditors of the Company. Internal Auditors are appointed by the Board ofDirectors of the Company on a yearly basis based on the recommendation of the AuditCommittee. The Internal Auditors report their findings on the internal audit of theCompany to the Audit Committee on a quarterly basis. The scope of internal audit isapproved by the Audit Committee.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Mr. TapanShah Practicing Company Secretary as a Secretarial Auditor to conduct Secretarial Auditof the Company for the financial year 2020-21 (Period from 1st April 2020 to 31st March2021). The Report of Secretarial Auditor for the financial year 2020-21 is set out as Annexure4 and it forms a part of this Report. Further under regulation 24A of SEBI (LODR)Regulations Company has received Secretarial Compliance Report for the 2020-21 from TapanShah Practicing Company Secretary and same has filed with the Stock Exchanges (BSE &NSE).

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 the Central Government hasprescribed cost audit related to the Company's product Dye Intermediates and Dyes. Basedon this requirement and the recommendation made by the Audit Committee the Board ofDirectors has appointed M/s. Kiran J. Mehta & Co. Cost Accountants Ahmedabad as theCost Auditor for the Financial Year 2021-22. The Company has received a writtencertificate from the Cost Auditor stating that their re-appointment if made would bewithin the prescribed limits under sections 141 of the Companies Act 2013. The Cost Auditreport for the 2020 has been filed within the prescribed time limits. The Cost Auditor'sReport does not contain any qualification reservation or adverse remark. Furtherremuneration payable to them is required to be ratified by the Shareholders at the ensuingAnnual General Meeting and accordingly a resolution seeking ratification has beenincluded in the Notice convening the Annual General Meeting.

During the year under review the statutory auditors secretarial auditors and costauditors have not reported any instances of fraud committed in the Company by its officersor employees to the Audit Committee under section143(12) of the Companies Act 2013details of which needs to be mentioned in this Report.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the financial year under review is presented in Separate Sectionforming part of the Annual Report.

CORPORATE GOVERNANCE

Bodal Chemicals Ltd. is committed to ensuring the highest levels of ethical standardsprofessional integrity corporate governance and regulatory compliance. The Companyunderstands and respects its fiduciary duty to all stakeholders and strives to meet theirexpectations. The core principles of independence accountability responsibilitytransparency fair and timely disclosures serve as the basis of the Company's approach toCorporate Governance.

Report on Corporate Governance is annexed and forms an integral part of this AnnualReport. Certificate from Mr. Tapan Shah Company Secretary in practice regardingcompliance of conditions of Report on Corporate Governance as stipulated in the ListingRegulations is also appended to the Report on Corporate Governance.

SECRETARIAL STANDARDS

Secretarial Standards for the Board and General Meetings (SS-1 & SS-2) areapplicable to the Company. The Company has complied with the provisions of both theseSecretarial Standards.

INDUSTRIAL RELATIONS & HUMAN RESOURCES

Industrial relations at all divisions of your Company have always been cordial andcontinue to be so. Your directors wish to place on record their appreciation for thecooperation received from employees at all levels.

HUMAN RESOURCES

The way we are growing and excelling our Human Asset is also increasing Bodal familybecome 1700+ numbers of permeant employees. We believe it is our prime responsibility thatthis family members work with full of energy and enthusiasm and for that we are providingthem at most attention by way of our Human Resource Policies and Practices. We always tryto build open and respectful culture by maintaining ethical and moral standard. We alsotry to increase the inclusiveness among the team members by arranging different programslike 15th August Celebration is our flagship event. Also we believe in sustainable growthalong with Environmental protections to promote this thinking we organize Safety WeekCelebration and Environment Day Celebration. We believe in best and that's whycontinuously we create best practices in all areas of work where all stake holders are inwin-win situation. We also believing in Skill Development which we are doing byorganizing continues training programs with the help of our internal experts as well aswith the help of external trainers. In the year 2020 we are recognized as the TrainingInstitute by the State Director of Industrial Safety and Health department. Being ChemicalManufacturing Company our major focus is on the operational "On-the-Job"training. In pandemic situation also we ensure our team members will get regular learningso we have created "Training via Web" where our internal resources have beencreated training content on different topics and circulate it to employees also it isquestion & answer base so employee can evaluate their knowledge also. Supporting toemployees during the pandemic situation many companies had to take decision of pay cutrationalization in the manpower etc. but at Bodal we ensure all our team members kepttheir jobs. We encouraged employees to work as per their comfort also at manufacturingsites we allow flexibility so employee will be able to balance their personal andprofessional life. During this period our senior management team has been play great roleby keeping themselves in constant touch of employees and boost their moral and extendingall their support. We have also extend all livelihood support to our Migrant workers ofpermanent and contractual.

HEALTH SAFETY AND ENVIRONMENT

Bodal Group is committed towards creating a safe healthy and ecofriendly workenvironment providing the leadership and management support which is key to sustainablebusiness growth. We are adopting Beyond the Compliance approach towards adopting andimplementing EHS practices across the manufacturing process and the business. EHSprinciple is integrated into the manufacturing business process to have a sustainableincident free process outcome. Risk based thinking is being developed and adopted as partof the broader loss prevention strategy. Overall a holistic approach is being adopted tomanage EHS risks to an acceptable level and as part of the broader Risk managementstrategy. Continuous training and sensitisation are part of the EHS function to enhanceawareness adopting EHS at task level with proper supervision and management leadershipoversight. EHS is being driven in a more agile manner with top management intervention tocreate a safer workplace based on the core belief that "Good Safety means goodbusiness". PPE's are being provided to employees including the workforce. Data ofincidents are being collated and RCA (Root Cause Analysis) done and learning's sharedwidely to prevent further recurrence. Regular practices of scenario based mock exerciseare conducted across the plants to check the efficacy of emergency planning andmanagement. Further the improvement areas are noted and are adopted to enhance efficiencyand effectiveness. We have fully equipped in-house occupational health center manned roundthe clock with full time well experienced doctors and nursing assistants. In houseambulance for emergency is also available. Premedical check-up annual medical check-upand special health awareness camps are conducted for employees. Medical

Team has also initiated "Health Gallery" and company doctor conductscounselling sessions and health talks for employees.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of this Report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31st March 2021 is available on the Company's website at www.bodal.com. and can beaccessed at www.bodal.com

ENVIRONMENT PROTECTION

The Company has undertaken various environment friendly measures in its different Unitsfor promoting a better environment. The Company has in place adequate pollution controlequipment and all the equipment's are in operation.

GREEN INITIATIVE

The Ministry of Corporate Affairs had taken the Green Initiative in Report on CorporateGovernance by allowing paperless compliances by Companies through electronic mode. YourCompany supports the Green Initiative and has accordingly decided to send necessarycommunications to its Shareholders to their respective registered E-mail addresses.

SAFETY & WELLBEING OF WOMEN AT THE WORKPLACE

Bodal Chemicals Ltd. has taken various initiatives to ensure safe and healthy workplacefor its women employees. The Company has zero tolerance of sexual harassment at the workplace and is fully compliant with the prevailing laws on the prevention of sexualharassment of women at the workplace. As per the provisions of Sections 21 and 22 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013the Report on the details of the number of cases filed under sexual harassment and theirdisposal is as under:

SR. NO. COMPLAINTS UNDER SEXUAL HARASSMENT (FROM 1st April 2020 TO 31st March 2021) STATUS
1 Number of Complaints/Cases pending as at the beginning of 2020-21 i.e. 1st April 2020 NIL
2 Number of Complaints/ Cases filed during the year (from 1st April 2020 to 31st March 2021) NIL
3 Number of Complaints/ Cases as at the end of 2020-21 i.e. 31st March 2021 NIL

VIGIL MECHANISM AND WHISTLEBLOWER POLICY

The provisions of Section 177(9) and (10) of the Companies Act 2013 mandates everylisted company to establish vigil mechanism for Directors and employees. Bodal ChemicalsLtd. has adopted a Whistle Blower Policy as part of vigil mechanism to provideappropriate avenues to all the employees of the Company to raise their concerns relatingto fraud malpractice or any other activity or event which is against the interest of theCompany or society as a whole. Details of complaints received and the action taken arereviewed by the Audit Committee. No concerns or irregularities have been reported byemployees/directors till date.

The functioning of the Whistle Blower mechanism is reviewed by the Audit Committee fromtime to time. None of the Company's personnel have been denied access to the AuditCommittee. The Whistle Blower policy is available on the Company's website https://bodal.com

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANIES

The Accounts of the Subsidiary Companies for the financial year ended on 31st March2021 will be made available to any shareholder of the Company on request and will also beavailable for inspection at the registered office of the Company during working hours tillthe date of the Annual General Meeting.

Statement containing salient features of financial statements of subsidiaries andAssociates pursuant to section 129 of the Companies Act 2013 read with Rule 5 of theCompanies (Accounts) Rules 2014 is annexed to this Report in the prescribed Form AOC-1as "Annexure 1" The Audited Financial Statements of Company'ssubsidiaries for financial year 2021 are available on the Company's website atwww.bodal.com and the same are also available for inspection at the Registered Office ofthe Company. Your Company will also make available these documents upon request by anyMember of the Company interested in obtaining the same.

The Company has laid down policy on material subsidiaries and none of the subsidiary ismaterial subsidiary as per the Policy. The policy is placed on the website of the Company https://bodal.com

CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT (R&D) TECHNOLOGY ABSORPTION& FOREIGN EXCHANGE EARNINGS & OUTGO

The details of energy conservation technology absorption and foreign exchange earningsand outgo as required under section 134(3) of the Companies Act 2013 read with Rule 8 ofCompanies (Accounts of Companies) Rules 2014 is annexed as Annexure 6 to thisReport.

RISK MANAGEMENT & INTERNAL CONTROL

The Company has a Risk Management framework to identify evaluate business risks andopportunities. This framework seeks to create transparency minimise adverse impact on thebusiness objectives and enhance the Company's competitive advantage. The business riskframework defines the risk management approach across the enterprise at various levelsincluding documentation and reporting. Further details are set out in the ManagementDiscussion and Analysis Report forming part of the Directors' Report.

The Company deploys robust system of internal controls commensurate to the size of theCompany and the complexities of its operations. These systems facilitate fair presentationof its financial results in a manner that is complete and reliable ensure adherence toregulatory and statutory compliances and safeguards investor interest by ensuring thehighest level of governance and consistent communication with investors.

The Internal Auditors of the Company conduct financial compliance and processimprovement audits each year. The Audit Committee oversees the scope and evaluates theoverall results of these audits and members of that Committee regularly attend meetingsof Board of Directors. The Audit Committee also reviews the adequacy and effectiveness ofthe internal control system and invites functional Directors and senior managementpersonnel to provide updates on operating effectiveness and controls from time to time. ACEO and CFO

Certificate forming part of the Corporate Governance Report confirm the existence andeffectiveness of internal controls and reiterate their responsibilities to reportdeficiencies if any to the Audit Committee and rectify the same.

RISK MANAGEMENT COMMITTEE

As per Regulation 21 of (Listing Obligation and Disclosure Requirements) Regulation2015 the provisions of Risk Management Committee are not applicable for your Company for2020-21. However the management of the Company is determining various aspects so as to beable to minimise the risk in all spheres of the Company's business from finance humanresources to business strategy growth and stability. From 2021-22 it is mandatory toappoint a Risk Management Committee and therefore your Company has prepared RiskManagement Policy and Formulated Risk Management Committee and define Role andResponsibilities as per SEBI (Listing Obligation and Disclosures Requirement) Regulations.You can access from Website of the Company at www.bodal.com.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the year the Company had not provided any corporate guarantee or provide anysecurities on behalf of others.

Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial statements.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's CSR Policy primarily rests on three broad tenets viz. HealthcareEducation & Community welfare and the same is within the ambit of Schedule VII of theAct. Your Company has a strong focus on making company's CSR efforts more systematic andstrategic. Company has established procedures for planning and implementation of major CSRactivities in the areas surrounding the Company's plants. Your Company is presentlyfocused on the following key areas of CSR:

1. Promoting education including projects for developing educational infrastructure.

a. Build Platform and Shade for the school children so they can play and take lunch. b.Sanitary blocks for Boys and Girls and educate them by the Company representatives ongood hygiene practices c. Build Computer Labs to promote digital awareness at the schoollevel.

2. Provide funds to the sports academy for promoting sports and supporting younggrowing sports persons.

3. Run different projects for the rural development by interacting and participatingwith the local village people for better implementation. a. To deepen Village Lake so inmonsoon water harvesting will be possible. Also installed water harvestinginfrastructure. b. Construct roads and other required infrastructure at village level.Further Company continued several other initiatives under the CSR program directly aswell as through agency namely YUVA Unstoppable permitted under the Act. Detail of CSRPolicy and Annual Report on CSR for 2020-21 is annexed to this report as "Annexure7" and forms part of this Report

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report for the year ended 31st March 2021 as per clause (f)of sub regulation (2) of regulation 34 of Listing Regulations is annexed and forms part ofthis Annual Report.

RELATED PARTY TRANSACTIONS

All the related party transactions that were entered into during the financial yearwere on an arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with the PromotersDirectors Key Managerial Personnel or other designated persons which may have potentialconflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee as also the Boardfor approval. The Company has developed a Related Party Transaction Policy for the purposeof identification and monitoring of such transaction. The Related Party Transaction policyis placed on the Company's website www.bodal.com and its web link- https://bodal.com/live.php?data=6_l2

Particulars of Contracts or arrangements with Related Parties referred to in section188 (1) of the Companies Act 2013 are disclosed in Form AOC-2 as Annexure 8.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY

During the year under review Hon'ble NCLT Bench Ahmedabad approved and passed ordereddated 31st December 2020 of Amalgamation of Trion Chemicals Pvt. Ltd. ("TransferorCompany") with Bodal Chemicals Ltd. ("Transferee Company) with effective date ofscheme of Amalgamation is 1st April 2019.

Apart from above there is no significant and material order passed by the Regulatorsor Courts or Tribunals which would impact the going concern status and Company's futureoperations.

INSURANCE

The Company's assets are adequately insured.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act 2013 the Directors to the best of theirknowledge and belief confirm that:

(a) in the preparation of the annual accounts for the financial year ended on 31stMarch 2021 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this

Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;

(d) the Directors have prepared the annual accounts for the financial year ended on31st March 2021 on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with provisions ofall the applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the steadfast commitmentand highly motivated performance by employees at all levels which was instrumental insustained performance of the Company. Your directors also sincerely thank all thestakeholders professionals business partners government & other statutory bodiesbanks financial institutions analysts and shareholders for their continued assistancecooperation and support.

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