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Bodal Chemicals Ltd.

BSE: 524370 Sector: Industrials
NSE: BODALCHEM ISIN Code: INE338D01028
BSE 09:53 | 21 Jun 105.95 -1.10
(-1.03%)
OPEN

106.80

HIGH

106.80

LOW

104.70

NSE 09:44 | 21 Jun 105.75 -1.60
(-1.49%)
OPEN

106.00

HIGH

106.50

LOW

104.40

OPEN 106.80
PREVIOUS CLOSE 107.05
VOLUME 19814
52-Week high 115.35
52-Week low 50.75
P/E 25.84
Mkt Cap.(Rs cr) 1,296
Buy Price 105.80
Buy Qty 37.00
Sell Price 106.05
Sell Qty 499.00
OPEN 106.80
CLOSE 107.05
VOLUME 19814
52-Week high 115.35
52-Week low 50.75
P/E 25.84
Mkt Cap.(Rs cr) 1,296
Buy Price 105.80
Buy Qty 37.00
Sell Price 106.05
Sell Qty 499.00

Bodal Chemicals Ltd. (BODALCHEM) - Director Report

Company director report

To

The Members of Bodal Chemicals Ltd.

The Directors hereby present their "34th ANNUAL REPORT" on theperformance of the Company together with the audited financial statements for thefinancial year ("FY") ended 31st March 2020

Financial Results

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

(Rs. in Million)
Year Ended Standalone Consolidated
Year Ended 31st March 2020 Year Ended 31st March 2019 Growth % Year Ended 31st March 2020 Year Ended 31st March 2019 Growth %
Total Revenue 12318 13940 (11.64) 13852 14369 (3.60)
Earnings before Interest 1580 2477 (36.21) 1481 2495 (40.64)
Depreciation and Tax (EBIDTA)
Profit after Tax 1022 1441 (29.08) 867 1413 (38.64)
Total comprehensive income 1037 1436 (27.79) 864 1409 (38.68)
Earnings Per Share (EPS) (Basic) 8.35 11.78 (29.12) 7.16 11.56 (38.08)

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

IMPACT OF THE COVID-19 ON BUSINESS OF THE COMPANY

The operations of the Company were affected due to the lockdown announced by theGovernment of India to control the spread of Corona virus. The Company's manufacturingoperations have been partially functional since 11th May 2020 with the permissions of theState Government well with the functioning guidelines issued by Ministry of Home Affaire(MHA). The Company has adhered to the guidelines as specified by the Government of Indiaand complying with all safety measures to safeguard its employees from COVID-19 disease.The Company has formulated policy for work from home for all employees except employeesassociated with manufacturing activity. Plant operations have been partially functionalthroughout the lockdown period initially with residual staff all housed within ourpremises.

THE FINANCIAL YEAR UNDER REVIEW 2019-2020

PERFORMANCE DISCUSSSION

The Financial Year 2019-20 is a year where your company has sustained well and as agroup performed satisfactory. Though the challenges related to the reduction in prices offinished goods and lesser demand etc. were there but your company has done well and thathave been reflected in the top line and bottom line for current financial year. Yourcompany has achieved productivity gains volume growth and sustainable margins. During theyear under review group has achieved Total Revenue of Rs. 13852 Million and revenue hasdeclined 3.60% compared to previous year. During the year under review EBIDTA and Profitafter Tax of the Group were stand lesser by 40.64% and 38.64% respectively compared toearlier 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 41%is exported to over 45 countries across the world.

The Company is listed on BSE Ltd. (Bombay Stock Exchange) and National Stock Exchangeof India Ltd. (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 ASSOCIATES AND JOINT VENTURES:

- Subsidiaries:

1. SPS Processors Private Ltd.- Subsidiary Company

2. Trion Chemicals Private Ltd.- Wholly Owned Subsidiary Company

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

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

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

6. Bodal Bangla Ltd.- Wholly Owned Subsidiary Company

- Step-down subsidiaries:

1. SENPA DIS TICARET ANONIM SIRKETI

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 a subsidiarycompany of Bodal Chemicals 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 only aboutfour and half year old. S P S Processors Pvt. Ltd. also has all necessary permissions tomanufacture Vinyl Sulphone another key Dye Intermediate as well as Dyestuff at the sameplant. With the available permissions the Company is building a 6000 TPA Vinyl Sulphoneplant. The project is expected to start and stabilise production during 2020-21.

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 Results of the Company for 2019-20 is available on website of theCompany at www.Bodal.com

TRION CHEMICALS PVT. LTD. (TCPL)

During the current financial 2019-20 your Company has made further investment in TCPLof Rs. 58.71 Million during the month of March 2020 and after the said acquisition thestake of Bodal Chemicals Ltd in TCPL is 100% and TCPL has become a Wholly Owned Subsidiarycompany of Bodal Chemicals Ltd.

TCPL had commissioned a plant to manufacture

Trichloroisocyanuric Acid (TCCA) falling under specialty chemicals at Neja NearKhambhat Gujarat. TCCA is a disinfectant - an algaecide and bactericide used mainly byswimming pools and water treatment plants. It is also used as a bleaching agent by thetextiles industry.

TCPL's TCCA plant is the first plant of this specialty chemical in India. TCPL'sbusiness plan is focused on the US market. Company is targeting mainly USA market. It hasalready secured EPA licence in USA for environment protection.

Further Financial Results of the Company for 2019-20 is available on website of theCompany at www.Bodal.com Further After Completion of Financial year Board of Directorsof Trion Chemicals Pvt Ltd and Board of Directors of Bodal Chemicals Ltd at their meetingHeld on 26th May 2020 and 27th May 2020 respectively Considered and approvedAmalgamation of Trion Chemicals Pvt Ltd (Transferor Company) a Wholly Owned Subsidiary ofthe Company with Bodal Chemicals Ltd (Transferee Company).

Bodal Chemicals Trading Pvt Ltd

Bodal Chemicals Trading Pvt Ltd a Wholly Owned Subsidiary Company was incorporated inIndia on 07th December 2018. It was incorporated with object of trading in chemicalproducts. The Company has Commenced commercial operations. It is not material subsidiaryas per the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015Further Financial Results of the Company for 2019-20 is available on website of theCompany at www.Bodal.com

Bodal Chemicals trading Shijiazhuang Ltd (China)

Bodal Chemicals trading Shijiazhuang Ltda Foreign Wholly Owned Subsidiary of theCompany incorporated in China in 2018-19 for trading activities in Chemicals Product.

Apart from the trading activity within chinathis 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. TheCompany has started commercial operations. It is not material subsidiary as per the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015

Further Financial Results of the Company for 2019-20 is available on website of theCompany at www.Bodal.com

Sener Boya Kimya Tekstil Sanayi Ve Ticaretanonim Sirketi Sener Boya Kimya TekstilSanayi Ve Ticaretanonim Sirketi a Foreign Subsidiary of the Company having acquired stakeof 80% for trading activities in Chemicals products at Turkey.

Apart from the trading activity within Turkey this company will become an importantarm for bodal chemicals Ltd to distribute its final product i.e. dyestuffs in domesticmarket of Turkey and reach out to other Local Areas. The Company has started commercialoperations. It is not material subsidiary as per the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015.

Further Financial Results of the Company for 2019-20 is available on website of theCompany at www.Bodal.com

Bodal Bangla Ltd

Bodal Bangla Ltd a Foreign Wholly Owned Subsidiary of the Company incorporated 22thSeptember 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 FinancialResults of the Company is available on website of the Company at www.bodal.com

SENPA DIS TICARET ANONIM SIRKETI- Step Down Subsidiary company of the Company

SENPA DIS TICARET ANONIM SIRKETI is Wholly Owned Subsidiary of SENER BOYA KIMYATEKSTIL SANAYI VE TICARETANONIM SIRKETI which is subsidiary company of Bodal ChemicalsLtd incorporated in 2018-19 in Turkey.

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 subsidiaries Companyon 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 Management's Discussion and Analysis Reportwhich forms part of this Report.

Scheme of Amalgamation

During the year under review your company has prepared the draft Scheme foramalgamation of Trion Chemicals Pvt. Ltd with Bodal Chemicals Ltd and for that purposeRegistered Valuer was appointed to get Valuation Report in the month of March 2020 on thebasis of the latest audited financial statements as on 31st March 2019 with appointeddate 01st April 2019. Relevant consultants were also appointed for the said work inMarch 2020. Further company has also planned Board meeting to considered scheme in monthof March 2020 however due to wide spread of COVID-19 in India Global Pandemicsituation and starting of complete lock down throughout the country for a long timeduring the month of March 2020 the Company was unable to complete the requisiteformalities like passing the Board Resolutions submission of the Scheme to the concernedStock Exchanges and to file the proceedings with the Tribunal.

Later Board of Directors of your company and also of TCPL-Wholly Owned Subsidiary ofthe Company at their Board meetings held on 27th May 2020 and 26th May 2020 respectivelyhas considered and approved Draft Scheme of Amalgamation of Trion Chemicals Ltd-WhollyOwned Subsidiary with the Bodal Chemicals Ltd-Parent Company. Further Company has maderequired disclosures in pursuant to applicable regulation of SEBI (LODR) to StockExchanges (BSE and NSE) and filling necessary forms and documents to RoC. Presentlyprocess is going on to implement Scheme of Amalgamation. The Appointed Date ofAmalgamation is 01st April 2019.

Rationale of the Scheme:

The Transferee Company is the sole shareholder in the Transferor Company holding 100%shares along with a nominee. It has been realised by the Board of Directors of both thecompanies that the amalgamation of both these companies shall be helpful to achieve thefollowing objectives-

(a) The commercial activities of both the companies are of similar nature andamalgamation will result in business and operational synergies in terms of completeintegration of facilitates which would result in optimum utilisation of capital andresources and reduction in overall operating and maintenance cost and benefits ofeconomies of scale.

(b) simplify management structure leading to better administration and a reduction incosts from more focused operational efforts rationalisation standardisation andsimplification of business processes and the elimination of duplication andrationalization of administrative expenses;

(c) The amalgamation will result in reduction in the multiplicity of legal andregulatory compliances and reduced costs.

(d) Simplify shareholding structure and reduce shareholding tiers; In view of theaforesaid the Board of Directors of both the companies have considered and proposed theamalgamation of the entire undertaking and business of the Transferor Company with theTransferee Company pursuant to the provisions of Sections 230 to 232 of the Act and otherrelevant provisions of the Act and other Applicable Laws.

In Terms of the Scheme and Upon coming into effect of this Scheme the Equity andPreference shares held by the Transferee Company in the Transferor Company shall standautomatically cancelled with effect from the Effective Date without any furtherapplication act or deed and no consideration shall be issued against the same.

Further full details of approved Scheme of amalgamation and related disclosures andupdating/Status of Amalgamation is also placed on the website of the Company atwww.bodal.com

CAPITAL STRUCTURE & LIQUIDITY Authorised Share Capital

During the 2019-2020 Company has reclassified its Authrorised Share capital betweenEquity shares and preference shares. Total authorized capital of the company is Rs.520000000/- (Rupees Fifty-Two Crore Only) divided into 160000000 (Sixteen Croreonly) Equity Shares of Rs. 2/- (Rupees Two) each and 20000000 (Two Crore only)Preference Shares of Rs. 10/- (Rupees Ten) each.

Issued and paid up Share Capital

The Issued Subscribed & Paid-up Equity Share Capital of the Company as at 31stMarch 2020 was Rs. 244.66 Million divided into 122330165 Equity Shares having face valueof Rs. 2 each.

During the year under review Company has allotted 141400 equity Shares to theemployees against the Option granted under Employee Stock Option Scheme i.e. ESOP-2017 andafter that paid up share capital stood at Rs. 244.66 Million divided into 122330165 EquityShares having face value of Rs. 2 each.

Employees Stock Option (ESOP/ESOS)

Exercise of Options granted (Grant-01) under Bodal ESOP- 2017

During the year under review The Nomination and Remuneration Committee at its meetingheld on 21st May 2019 has allotted 141400 Number of Options granted (Grant-01) at anExercise price of Rs. 50.00/- per share.

Grant of Options (Grant-02) under Bodal ESOP-2017

During the year under review The Nomination and Remuneration Committee at its meetingheld on 21st May 2019 has further granted Options of 162900 to eligible employees inSecond tranche under Bodal ESOP Scheme-2017 at an exercise price of Rs. 50.00/- per share.These Options is vested for 1 year and are exercisable within a period of One year fromthe date of grant upon satisfaction of Vesting Condition.

Grant of Options (Grant-03) under Bodal ESOP -2017

During the year under review The Nomination and Remuneration Committee at its meetingheld on 12.02.2020 has further granted options of 163900 to eligible employees in Thirdtranche under Bodal ESOP Scheme-2017 at an exercise price of Rs. 10.00/- per share. TheOptions shall vest after 1 year of Vesting Period and are exercisable within a period ofOne year from the date of grant upon satisfaction of Vesting Condition.

Details and Summery of Employee Stock Options granted/vested/exercised during the year2019-20 are given in "Annexure 2" to this report.

Further Disclosures of the same for above events were filled to BSE and NSE and alsoplaced on Company's website at www.bodal.com.

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 2020 the total Debt was Rs. 2383.31 Million cash and CashEquivalents were Rs. 122.64 Million resulting in Net Debt of Rs. 2260.67 Million (Rs.1295.22 Million as on 31st March 2019) total Debt consisted of Rs. 2383.31 Millions ofworking capital loans. Further there are no long-term loans including long term loansmaturing within 12 months 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 2018-19 Ratings for 2019-20
India Ratings CARE Rating India Ratings CRISIL Rating
Long Term IND A+ CRISIL IND A+ CRISIL A+
Bank A+
Facilities
Short IND A1+ CRISIL IND A1+ CRISIL
Term Bank A1+ A1+
Facilities

DIVIDEND

During the year 2019-20 the Board of Directors at their meeting held on 12th February2020 has Considered and approved Interim Dividend of Rs. 0.80 (40% of Face Value of Rs. 2)per share which had absorbed Rs. 117.98 Million including dividend distribution tax ofRs. 20.12 Million.

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. FurthermoreShareholders may claim back the shares which were already credited along with theunclaimed dividend amount from IEPF Authority after following the procedures prescribedunder IEPF Rules. The procedures for claiming the same is available at www.mca.gov.in andwww.iepf.gov.in.

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 2019-20 and as such no amount of principal or interest wasoutstanding as on the date of the balance sheet.

LISTING OF SECURITIES

Bodal Chemicals has 122330165 Equity Shares of Rs. 2 each fully paid listed on theNational Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company confirms thatit has paid annual listing fees for the financial year 2020-21 to both the Exchanges (BSE& NSE) where the Company's equity shares are listed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors' Appointment Retirement and Resignation Bodal Chemicals has 7 (Seven)Directors including 3 (Three) Executives Director and 4 (Four) Independent Directorsincluding a woman Director at the end of financial year 31st March 2020.

APPOINTMENT OF DIRECTORS

On the recommendation of Nomination and Remuneration Committee Board of Directors hasappointed Mr. Ram Parasad Srivastava (DIN: 02227457) as an Independent Director of theCompany for the term of 5 years (1st Term) w.e.f. 13th August 2019 and subsequentlyapproved by Members of the Company by way of passing special resolution at Annual GeneralMeeting held on 20th September 2019.

On the recommendation of the Nomination and Remuneration Committee Board hasre-appointed Mr. Suresh J Patel (DIN: 00007400) as Chairman and Managing Director for aperiod of 3(Three) years with effect from 13th May 2020. His appointment is subject toapproval of Members of the Company and your approval has been sought for the same in theNotice Convening the forthcoming AGM of the Company.

On the recommendation of the Nomination and Remuneration Committee Board has appointedMr. Rajarshi Ghosh (DIN: 08715159) as Director-HSE for a period of 5(Five) years witheffect from 27th May 2020. His appointment is subject to approval of Members of theCompany and your approval has been sought for the same in the notice convening forthcomingAnnual General meeting of the Company.

Mr. Ankit S Patel Executive Director retire by rotation at the ensuring AnnualGeneral Meeting. He being eligible offers himself for re-appointment. None of theDirectors of the Company are disqualified from being appointed as Directors as specifiedunder Section 164 of the Companies Act 2013.

Details of all the Directors have been covered in the Corporate Governance Report whichforms a part of the Annual Report.

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 a part of the Director'sReport in the Annual Report.

RESIGNATION OF DIRECTOR

During the year under review Dr. Parin D. Shah. (having DIN: 08313035) IndependentDirector of the company resigned from the post of Director (Independent) of the Companywith effect from 05th July 2019 and the Board of Directors took note of the same at theBoard Meeting held on 12th July 2019. The Board of Directors places on record theirappreciation of the valuable guidance and contribution made by Dr. Parin D. Shah duringhis tenure as Independent Director of the Company.

Further Dr. Parin D. Shah. (DIN: 08313035) Independent Director resigned asIndependent Director and member/ chairman from all committees due to coming across theopportunity(job) in government sector and as per terms and Conditions related to serviceof Government he is restricted to continue as independent Director or associate with anyorganisation/Companies (either in Executive or Non-Executive basis). Further Dr. Parin D.Shah has provided confirmation that there are no such material reasons other than thoseprovided in his resignation letter.

During the year under review Mr. Kishorkumar P Radadia (DIN: 08532580) resigned fromthe post of Director-HSE of the Company w.e.f. 29th February 2020 and the Board ofDirectors took note of the same at the Board Meeting held on 12th February 2020.

Further Mr. Kishorkumar P Radadia (DIN: 08532580) Director-HSE resigned asDirector-HSE of the Company due to his health issue. Further Mr. Kishorkumar P Radadia hasprovided confirmation that there are no such material reasons other than those provided inhis resignation letter.

KEY MANAGERIAL PERSONNEL

Followings are the Key managerial personal of the company as on date of this report

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

- Mr. Bhavin S PatelExecutive Director (DIN:0030464)

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

- Mr. Mayur B Padhya Chief Financial Officer

- Mr. Ashutosh B Bhatt Company Secretary

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 inexcess of the limits set out in the said rules is attached as Annexure 3 whichforms part of this Report.

Company received Confirmation form Chairman of NRC Committee of the Company thatAppointment term and Remuneration decide by the NRC Committee based on NRC Policy of theCompany.

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.

FAMILIARISATION 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 (LODR) regulations 2015 (hereinreferred to as "Listing Agreement") Prohibition & Insider tradingregulations and SAST Regulations so as to enable them to effectively discharge theirroles rights 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 and its weblinkhttps://bodal.com/live.php?data=6_l2

BOARD MEETINGS

During the year under review 5(Five) meetings of the Board of Directors were held.Details of the Composition of the Board and its committees and meetings held andattendance of the Directors at such Meetings and other relevant details are provided inthe Corporate Governance Report.

Further During the year Company has passed Board Members and NRC CommitteeResolutions through Circulation dated 09th October 2019.

MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company met separately on 12th February 2020 withoutthe presence of Non-Independent Directors and the members of management. In accordancewith the 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 intoaccount the views of Executive Directors and Non-executive Director Assess the qualityquantity and timelines of flow of information between the Company management and the Boardthat is necessary for the Board Members to effectively and 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

Your Directors recommend as identified and suggested by the Audit Committee of theCompany to continue with M/s Deloitte Haskins & Sells LLP (FRN No. 117366W/W-100018)as statutory Auditor of the Company for 2020-2021 and 2021-2022 subject to approval ofthe Members of the Company to hold office from the conclusion of the Thirty Four (34th)Annual General Meeting until the conclusion of the Thirty Sixth (36th ) Annual GeneralMeeting of the Company.

The Company has received a certificate from the Auditors stating that theirappointment if made will be within the limit specified under Sections 139 and 141 of theCompanies Act 2013.

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 31st March 2020 are self-explanatory in nature and do not require any explanation asper provisions 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 2019-20 (Period from 1st April 2019 to 31st March2020).

The Report of Secretarial Auditor for the financial year 2019-20 is set out asAnnexure 4 and it forms a part of this Report.

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 2020-21. 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 financial year 2018-19 has been filed within the prescribed time limits.The Cost Auditor's Report does not contain any qualification reservation or adverseremark. Further remuneration payable to them is required to be ratified by theShareholders at the ensuing Annual General Meeting and accordingly a resolution seekingratification has been included 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 a 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

Grow Together

Year 2019-20 has been a milestone year from "People Front" in many ways.During the year we designed and announced different operational committees. Our teamsuccessfully managed audit of Blue Sign and we became "Blue Sign BusinessPartner" and this has added one more feather in our basket.

In line with our restructuring process our Cross Functional Teams (CFT) workedtogether for improving our existing operational processes which resulted in increasing inour throughput time. In the journey of designing "Next Phase" this is onemilestone that all CFTs are working well.

We at Bodal strongly believe that Human Asset is most precious and invaluable ASSET ofthe company. In the current scenario of globalisation and cutthroat competition it isvery much important to maintain and sustain global presence and your company is able toprove that during the year 2019-20. In future also to maintain that agility in peoplepractices it is very much important. We do have that framework in place for peoplepractices and procedures.

To keep momentum rolling we have continuous practices and belief in philosophy toTrain Coach and Mentor our employees at all level. In some areas we have also adopted"Reverse mentoring" model so long associated employees can learn and understand"Next Practices" of Business which is need of time. In Learning &Development front we have structured model where Annual Calendar has been designed basedon the organisational requirements which is monitored based on Unit and DepartmentalTraining Matrix which will help us to monitor coverage of team members in mandatory andrequired training programs. This is also helping us to develop future human asset.

During the year we have organised our flagship program of "Independence DayCelebration" and "Safety Week Celebration" with more value additions. Thisyear we have also organised special program for our Female Team members"International Women's Day" celebration which symbolised one of ourorganisational Value of Equality.

In the year 2019-20 we have taken up the challenge of "Digital HR" bykeeping future in mind. During this year we have converted few HR processes whereEmployee dependency on HR has reduced. We have created Mobile Platform of My Payrollwhere they can view company news leave details salary details and other individualinformation on real time also they can download required documents on their fingertips.Along with this we are also focusing on building up of our digital capabilities byaligning our learning and development with new initiatives to minimise impact oftechnology on work processes.

HEALTH SAFETY AND ENVIRONMENT (EHS)

Bodal Group is committed towards creating a safe healthy and eco-friendly 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". "Personal Protective Equipment's (PPE)" are being provided toemployees including the workforce. Data of incidents are being collated and RCA (RootCause Analysis) done and learning's shared widely to prevent further recurrence. Regularpractices of scenario based mock exercise are conducted across the plants to check theefficacy of emergency planning and management. Further the improvement areas are noted andare adopted to enhance efficiency and effectiveness. We have fully equipped in-houseoccupational health center manned round the clock with full time well experienced doctorsand nursing assistants. In house ambulance for emergency is also available. Pre medicalcheck-up annual medical check-up and special health awareness camps are conducted foremployees. Medical Team has also initiated "Health Gallery" and company doctorconducts counselling 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. You company hasissued postal ballot notice for approval of the members of the company for Preferentialissue to the Promoters/Promoters Group and to the non-promoters and result has declared bycompany on 28th June 2019 and allotted Equity Warrants to the proposed allottees in BoardMeeting held on 12th July 2019 and has received 25% amount of total price of Equitywarrant amounting Rs. 431.25 Million.

EXTRACT OF THE ANNUAL REPORT

In terms of provisions of Section 92 134(3)(a) of the Companies Act 2013 read withRule 12 of Companies (Management and Administration) Rules 2014 the extracts of theAnnual Return of the Company in Form MGT-9 is annexed herewith as Annexure 5 tothis Annual Report.

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 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 a safe and healthyworkplace for its women employees. The Company has zero tolerance of sexual harassment atthe work place 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 01St April 2019 To 31St March 2020) Status
1 Number of Complaints/Cases pending as at the beginning of 2019-20 i.e. 1st April 2019 NIL
2 Number of Complaints/ Cases filed during the year (from 1st April 2019 to 31st March 2020) NIL
3 Number of Complaints/ Cases as at the end of 2019-20 i.e. 31st March 2020 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 and its weblink https://bodal.com/live.php?data=6_l2

ANNUAL ACCOUNTS OF SUBSIDIARIES COMPANIES

The Accounts of the Subsidiary Companies for the financial year ended on 31st March2020 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 2020 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 Companyand its weblink is https://bodal. com/live.php?data=6_l2

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 investor The InternalAuditors of the Company conduct financial compliance and process improvement audits eachyear. The Audit Committee oversees the scope and evaluates the overall results of theseaudits and members of that Committee regularly attend meetings of Board of Directors. TheAudit Committee also reviews the adequacy and effectiveness of the internal controlsystem and invites functional Directors and senior management personnel to provideupdates on operating effectiveness and controls from time to time. A CEO and CFOCertificate 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.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the year the Company had not provided any corporate guarantee on behalf ofothers.

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

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 have established procedures for planning and implementation of majorCSR activities 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 the Boys and Girls and educate them by the companyrepresentatives on good hygiene practices c. Build Computer Labs to promote digitalawareness at the school level.

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.

4. In the year 2019-20 we focused more on the key future challenge related to Wateraim to create necessary infrastructure for the water reservoir and bring about attitudechange among communities towards the appropriate use of water.

Further Company continued several other initiatives under the CSR program directly aswell as through agency namely YUVA Unstoppable permitted under the Act. Details of CSRpolicy and CSR activities undertaken during the year is annexed to this report as"Annexure 7" and forms part of this Report

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report for the year ended 31st March 2020 as stipulatedunder Regulation 34 of the SEBI Listing Regulations is annexed and forms part of thisAnnual 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 RelatedParties referred to in section 188 (1) of the Companies Act 2013 are disclosed in FormAOC-2 as Annexure 8.

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

There are no Significant and Material Orders passed by the Regulators or Courts orTribunals which would impact the going Concern status and Company's Future Operations.

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 thefinancial year ended on 31st March 2020the applicable accounting standards had beenfollowed along with proper explanation relating to material departures; (b) the Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit andloss 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 theassets of the Company and for preventing and detecting fraud and other irregularities; (d)the Directors have prepared the annual accounts for the financial year ended on 31st March2020 on a going concern basis; (e) the Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively; and (f) the Directors have devised proper systemsto ensure compliance with provisions of all the applicable laws and that such systems wereadequate 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.

For and on behalf of the Board of Directors of Bodal Chemicals Ltd.
SURESH J. PATEL
Date: 6th July 2020 Chairman & Managing Director
Place: Ahmedabad DIN : 00007400