TO THE MEMBERS OF NATIONAL PEROXIDE LIMITED
The Directors take pleasure in presenting their Sixty-Seventh Annual Report on thebusiness and operations of the Company and the Audited Financial Statements for the yearended March 31 2021.
1. FINANCIAL RESULTS
(H in lakhs)
| || || |
Financial Year Ended
|Particulars || |
| ||31-03-2021 ||31/03/2020 ||31-03-2021 ||31/03/2020 |
|Total Income ||22725.31 ||20859.97 ||22778.77 ||20918.11 |
|Profit before tax and exceptional items ||2728.85 ||2899.58 ||2778.46 ||2955.90 |
|Exceptional Items ||1549.30 ||- ||1549.30 ||- |
|Profit before tax after exceptional items ||1179.55 ||2899.58 ||1229.16 ||2955.90 |
|Tax ||(901.53) ||1162.96 ||(888.49) ||1164.34 |
|Net Profit after Tax ||2081.08 ||1736.62 ||2117.65 ||1791.56 |
|Dividend paid on Equity Shares (H 12.50 Per Share for FY 2019-20 and H 65 Per Share for FY 2018-19) ||718.38 ||3735.55 ||718.38 ||3735.55 |
|Dividend Distribution Tax ||- ||768.03 ||- ||768.03 |
Your Directors have recommended a dividend of H 12.50/- per equity share havingface value of H 10/- each (i.e. 125%) for the Financial Year 2020-21 to be paid ifdeclared by the Members at the Annual General Meeting to be held on August 25 2021.
3. TRANSFER TO RESERVES
During the year under review no transfers were made to reserves.
4. STATE OF COMPANYS AFFAIRS
The gross sales and other income for the year under review were H 22725.31 lakhs asagainst H 20859.97 lakhs for the previous year. The profit before tax was H1179.55 lakhs and the profit after tax was H 2081.08 lakhs for the year under review asagainst H 2899.58 lakhs and H 1736.62 lakhs respectively for the previous year.
The Company achieved a capacity utilization of 65% of the installed capacity ofHydrogen Peroxide as compared to 74% during the previous year mainly on account of plantshutdown for two months and lower demand due to ongoing COVID-19 pandemic.
5. IMPACT OF COVID-19
The spread of COVID-19 disease has severely impacted economies businesses and socialset ups across the globe and in India. The number of new cases which had reached itslowest level in the first week of February 2021 has gone up dramatically in March 2021.Several restrictions had been imposed by various state governments and local bodies tocontrol this strong second wave of the pandemic but these were not as severe as thelockdown during the first wave. Your Directors have carried out a detailed assessment ofits liquidity position as at the Balance sheet date and has concluded that there are nomaterial adjustments required in the standalone financial statements. Based on theCompany's liquidity position as at March 31 2021 and review of cash flowprojections (after applying sensitivity analysis) over the next twelve months yourDirectors believes that the Company will have sufficient liquidity to operate itsbusinesses in the ordinary course. However the impact assessment of COVID-19 pandemic isa continuing process given the uncertainties associated with its nature and duration. TheCompany will continue to monitor material changes to future economic conditions.
6. COMPOSITE SCHEME OF ARRANGEMENT
The Board of Directors at its meeting held on March 9 2021 has approved the draftComposite Scheme of Arrangement amongst the Company (NPL) (theTransferee Company / Demerged Company) Naperol Investments Limited(NIL) (the Transferor Company) NPL Chemicals Limited(NPCL) (the Resulting Company) and their respective Shareholdersand Creditors under Sections 230-232 of the Companies Act 2013 (the Scheme).The Scheme inter alia provides for:
i. Demerger of chemical business of the Company (NPL) into the Resulting Company (NPCL)(as defined in the Scheme) on a going concern basis and in consideration thereofthe Resulting Company shall issue its equity shares to equity shareholders of the DemergedCompany in the same proportion as their holding and;
ii. Amalgamation of the Transferor Company (NIL) with the Transferee Company (NPL).
Rationale for the Scheme:
i. The Transferee / Demerged Company is engaged in business of manufacturing of anddealing in peroxygen chemicals and also owns certain strategic investments as well asengaged in the business of making long term investments and corporate lending directly andalso through its wholly owned subsidiary viz. the Transferor Company.
ii. The nature and competition involved in each of the aforementioned businesses isdistinct and it is capable of attracting a different set of investors strategic partnerslenders and other stakeholders.
iii. Further for growth and expansion of the said chemical business and the investmentand corporate lending business differentiated strategy is required to be aligned to theindustry specific risks market dynamics and growth trajectory.
iv. With a view to reorganise the businesses of the Transferee / Demerged Company itis proposed to bring the said chemical business of the Demerged / Transferee Company underthe aegis of the Resulting Company and amalgamate the Transferor Company engaged in thebusiness of long term investment and corporate lending with the Transferee Company.
This inter-alia would result in the following benefits:
a. unlocking the value of each of the businesses for the shareholders of the Transferee/ Demerged Company attracting investors and providing better flexibility in accessingcapital;
b. segregating different businesses having different risk and return profiles andproviding investors with better flexibility to select investments which best suit theirinvestment strategies and risk profile; and c. enabling focused growth strategy for eachof the businesses for exploiting opportunities specific to each business.
Your Directors consider the Scheme to be in the best interests of the ShareholdersEmployees and the Creditors of each of the parties thereon.
Consideration for the Scheme:
Amalgamation / Merger
The Transferor Company (NIL) is a wholly owned subsidiary of the Transferee Company(NPL) and therefore for the amalgamation of the Transferor Company with the TransfereeCompany there shall be no issue of shares by the Transferor Company.
Upon the Scheme becoming effective the Resulting Company (NPCL) shall issue and allotto each Member of the Demerged Company (NPL) whose names appear in the Register of Membersof the Demerged Company as on the Record Date as under: One fully paid-up equityshare of H 10/- each (Rupees ten each) of the Resulting Company for every One equityshare of H 10/- each (Rupees ten each) held in the
Subject to necessary approvals the equity shares allotted by the Resulting Companypursuant to the Scheme to Shareholders of the Demerged Company shall be listed on BSELimited.
The Scheme if approved shall be effective from the Appointed Date and operative fromthe Effective Date (as defined in the Scheme) and the Scheme is subject to necessarystatutory and regulatory approvals including approval of BSE Limited and HonbleNational Company Law Tribunal (NCLT) Mumbai Bench.
The Company has filed the Scheme with BSE Limited on March 27 2021 for obtaining itsobservation / no-objection letter required towards filing of the Scheme with theNCLT and the same is awaited.
7. CHANGE(S) IN THE NATURE OF BUSINESS IF ANY
There is no change in the nature of business carried on by the Company and itssubsidiaries. The Company has not changed the class of business in which the Company hasan interest.
8. MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
9. SAFETY & ENVIRONMENT
The Company continues to maintain a good safety and environmental record. There was nolost time injury during the Financial Year 2020-21 and as on March 31 2021 it has workedfor 1887 days without Lost Time Injury.
All the properties of the Company including Buildings Plant and Machinery Stocks andMaterials have been adequately insured. The Company also has a public liability insurancepolicy as per the Public Liability Insurance Act 1991.
11. FIXED DEPOSITS
The Company does not accept fresh deposits at present and as such no amount onaccount of principal or interest on public deposits was outstanding as on the date of thebalance sheet.
12. DETAILS OF SUBSIDIARIES JOINT VENTURES ASSOCIATE AND HOLDING COMPANY
During the year under review NPL Chemicals Limited was incorporated as wholly ownedsubsidiary on July 29 2020 as part of the draft Composite Scheme of Arrangement andaccordingly as on March 31 2021 the Company has two subsidiaries namely NaperolInvestments Limited and NPL Chemicals Limited. There were no joint ventures and associateCompany.
Nowrosjee Wadia and Sons Limited (NWS) holds 30.79% shares in the Company and is theholding company of Macrofil Investments Limited (Macrofil) which also holds 33.31% sharesin the Company. Hence NWS holding through Macrofil and its other subsidiaries andassociates stands at 55.30% shared which makes NWS the holding company of the Company.
13. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY COMPANIES
Naperol Investments Limited is registered as a Non-Banking Financial Company asprovided by Section 45-IA of the Reserve Bank of India Act 1934 and is engaged in thebusiness of long-term investment. During the year under review the company earned aprofit after tax of H 37.29 lakhs as against H 54.94 lakhs in the previous year.
NPL Chemicals limited was incorporated on July 29 2020 as part of the draftComposite Scheme of Arrangement to carry on the business of manufacturing distributingand selling of peroxygen chemicals and has not commenced operations.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of theCompanies (Accounts) Rules 2014 the statement containing salient features of thefinancial statements of the subsidiary companies in Form AOC-1 forms part of theConsolidated Financial Statements. Pursuant to Section 136 of the Companies Act 2013 theCompany is exempted from attaching to its Annual Report the Annual Reports of thesubsidiary companies.
The Audited Financial Statements of the subsidiary companies are kept open forinspection by the Members at the Head Office of the Company. The Company shall provide acopy of the financial statements of its subsidiary companies to the Members upon theirrequest. The statements are also available on the website of the Company atwww.naperol.com.
14. CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements (CFS) in accordance with theapplicable Accounting Standards as prescribed under the Companies (Accounts) Rules 2014of the Companies Act 2013.
The Consolidated Financial Results reflect the results of the Company and itssubsidiaries. As required under Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Audited CFS together with the IndependentAuditors Report thereon are annexed and form part of this Annual Report. Thesummarized Consolidated Financial Results are provided above at point no. 1 of thisReport.
15. DIVIDEND DISTRIBUTION POLICY
The Securities and Exchange Board of India (SEBI) vide its amendments inSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has extended therequirement of formulation of Dividend Distribution Policy to top 1000 listed entitiesbased on Market Captalization. Accordingly in compliance with the said requirement theCompany has formulated a Dividend Distribution Policy and the same is available on theits website at http://naperol.com/BoardPolicies.
16. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report for theyear under review is presented in a separate section and forms part of this AnnualReport.
17. CORPORATE GOVERNANCE
Your Company has taken adequate steps to ensure that all mandatory provisions ofCorporate Governance in terms of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 have been complied with.
A separate Report on Corporate Governance along with a Certificate from a PracticingCompany Secretary regarding compliance of the conditions of Corporate Governance formspart of this Annual Report.
18. BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report pursuant to Regulation 34(2)(f) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 detailing the variousinitiatives taken by the Company on the environmental social and governance perspectivein prescribed format forms part of this Annual Report.
19. CORPORATE SOCIAL RESPONSIBILITY
During the Financial Year ended March 31 2021 the Company has spent H 280 lakhs(Rupees Two Hundred Eighty lakhs) towards its Corporate Social Responsibility (CSR)activities as per the provisions of the Companies Act 2013. The CSR initiatives of theCompany were under the thrust area of health & hygiene rural development andeducation. The CSR Policy of the Company is available on the website of the Company athttps://www. naperol.com/BoardPolicies
The Ministry of Corporate Affairs (MCA) vide its notification dated January 22 2021notified the Companies (Corporate Social Responsibility) Amendment Rules 2021 which inter-aliaprovides for the revised format of annual report for publishing the CSR Activitiesundertaken during the Financial Year ended March 31 2021.
A brief outline of the Companys CSR policy statement and annual report on the CSRactivities undertaken by the Company during the Financial Year ended March 312021 in accordance with Section 135 of the Act and Companies (Corporate SocialResponsibility Policy) Rules 2014 is appended as Annexure I.
20. DETAILS OF BOARD MEETINGS
During the year seven Board Meetings were held through video-conferencing mode due tothe ongoing threat of COVID-19 pandemic as well as exemptions given by Ministry ofCorporate Affairs and Securities & Exchange Board of India. The details of themeetings are provided in the Report on Corporate Governance which forms part of thisAnnual Report.
21. BOARD COMMITTEES
As on March 31 2021 the Board has six committees: Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee Risk Management Committee and Strategy Advisory Committee.
During the year under review the Board of Directors had constituted Risk ManagementCommittee and Strategy Advisory Committee. The composition and terms of reference of allthe Committees of the Board of Directors of the Company is in line with the provisions ofthe Companies Act 2013 and SEBI (Listing Obligations and Disclosire Requirements)Regulations 2015.
During the year all the recommendations made by the Committees were approved by theBoard. A detailed note on the Committees its composition number of Committee meetingsheld and attendance of the Committee Members at each meeting is provided in the Report onCorporate Governance.
22. ANNUAL RETURN
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 a copy ofthe Annual Return of the Company is uploaded on the website of the Company atwww.naperol.com.
23. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
1. in the preparation of the annual accounts the applicable accountingstandards have been followed and that there are no material departures;
2. they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at the end of the financial year and of theprofit of the Company for that period;
3. they 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;
4. they have prepared the Annual Accounts on a going concern basis;
5. they have laid down internal financial controls to be followed by the Company andthat such internal controls are adequate and were operating effectively; and
6. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and were operating effectively.
24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Internal Audit plays a key role in providing an assurance to the Board of Directorswith respect to the Company having adequate Internal Control Systems.
The Internal Control Systems provide among other things reasonable assurance ofrecording the transactions of its operations in all material respects and of providingprotection against significant misuse or loss of Companys assets. The details aboutthe adequacy of Internal Financial Controls are provided in the Management Discussion andAnalysis Report.
25. SHARE CAPITAL
The authorised share capital as on March 31 2021 was H 2500 lakhs. The paid-up sharecapital as on March 31 2021 was H 574.70 lakhs. During the year under review there hasbeen no change in the authorised and paid-up share capital of the Company.
26. AUDITORS AND AUDIT REPORTS
M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N /N500016) had been appointed as the Statutory Auditors of the Company from the conclusionof the Annual General Meeting (AGM) held on August 9 2017 upto the conclusion of the AGMto be held in the financial year 2022-23 subject to ratification of their appointment atevery AGM. However pursuant to the Companies (Amendment) Act 2017 which was notified onMay 7 2018 the provision related to ratification of appointment of auditors by Membersat every AGM has been done away with.
There are no qualifications reservations or adverse remarks made in the StatutoryAuditors Report.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 and the Companies (Cost Records and Audit) Rules 2014 the costrecords of the Company are required to be audited. The Board of Directors on therecommendation of the Audit Committee appointed M/s. D. C. Dave & Co. CostAccountants (Firm Registration No. 000611) to audit the cost records of the Company forthe financial year ending March 31 2022 on a remuneration of H 450000/- plusapplicable taxes and reimbursement of travelling and out-of-pocket expenses as incurred bythem for the purpose of Audit. The remuneration payable to the Cost Auditor is required tobe ratified by the Members at this AGM.
There are no qualifications reservations or adverse remarks made in the CostAuditors Report.
In terms of Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
M/s. Parikh & Associates Practicing Company Secretaries have been appointed asSecretarial Auditors of the Company to carry out Secretarial Audit.
The Report of the Secretarial Auditors is appended as
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board and General Meetings.
There are no qualifications reservations or adverse remarks made in the SecretarialAuditors Report.
27. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 during the financial year were in the ordinary course of business and onan arms length basis and do not attract the provisions of Section 188 of theCompanies Act 2013.
During the year the Company had not entered into any contract / arrangement /transactions with related parties which could be considered as material.
The Companys policy on dealing with Related Party Transactions as approved by theBoard is available on the Companys website at https://naperol.com/ BoardPolicies.
The related party transactions are disclosed under Note No. 42 of the Notes toStandalone Financial Statements for the Financial Year 2020-21.
28. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to the provision of Section 177(10) of the Companies Act 2013 and Regulation22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended from time to time the Company has established vigil mechanism through the AuditCommittee for Directors and Employees to report genuine concerns about unethicalbehaviour actual or suspected fraud or violation of the Companys Code of Conduct.The vigil mechanism provides for adequate safeguards against victimisation of persons whouse such mechanism and make provision for direct access to the Chairman of the AuditCommittee in appropriate or exceptional cases.
The details of establishment of such mechanism is also available on the Companyswebsite at https://naperol. com/BoardPolicies.
29. RISK MANAGEMENT
The Company has in place a mechanism to inform the Board about the risk assessment andminimization procedures and undertakes periodical review of the same to ensure that therisk are indentified and controlled by means of properly defined framework. In theopinion of the Board there are no material risks which may threaten the existence of theCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis Report which forms part of this Annual Report.
30. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has an Internal Complaints Committee for providing a redressal mechanismpertaining to sexual harassment of women employees at workplace. No complaints werereceived during the year under review.
31. REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Companies Act 2013 and the Rules framed thereunder to either the Companyor the Central Government.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mr. Ness N. Wadia Director retires by rotationat the ensuing Annual General Meeting (AGM) and being eligible offers himself forre-appointment.
Necessary resolution for the re-appointment of Mr. Ness N. Wadia Director hasbeen included in the Notice convening the AGM and requisite details have been provided inthe explanatory statement to the Notice.
The Independent Directors of the Company have given the certificate of independence tothe Company stating that they meet the criteria of independence as required under Section149(6) of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. They have registered their names in the IndependentDirectors data-base as maintained by Indian Institute of Corporate Affairs (IICA).
None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164(2) of the Companies Act 2013 and Rule 14(1) of the Companies(Appointment and Qualification of Directors) Rules 2014.
Key Managerial Personnel
In terms of the provisions of Section 2(51) and Section 203 of the CompaniesAct 2013 the following are the Key Managerial Personnel of the Company:
- Mr. Rajiv Arora Chief Executive Officer & Director
- Mr. Conrad Fernandes Chief Financial Officer
- Mr. Chandukumar Parmar Company Secretary & Compliance Officer
33. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried outannual performance evaluation of its own performance the Directors individually and allCommittees of the Board. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
34. NOMINATION AND REMUNERATION POLICY
The Board has adopted on the recommendation of the Nomination & RemunerationCommittee a policy for selection and appointment of Directors Senior Management andtheir remuneration. A brief detail of the policy is given in the Report on CorporateGovernance and is also available on the Companys website athttps://naperol.com/BoardPolicies.
35. PARTICULARS OF EMPLOYEES
The information in terms of provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 which forms part of this Report is appended as AnnexureIII.
However as per the provisions of Section 136 of the Companies Act 2013 the reportand accounts are being sent to the Members and others entitled thereto excluding theinformation on employees particulars as required under Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 which isavailable for inspection by the Members at the Head Office of the Company during businesshours on working days of the Company upto the date of the ensuing Annual General Meeting.
If any Member is interested in obtaining a copy thereof such Member may write to theCompany Secretary in this regard.
36. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in Note No. 14 of the Notes to the StandaloneFinancial Statements.
37. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There have been no significant and material orders passed by the regulators courts andtribunals impacting the going concern status and the Companys operations in future.
38. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is appended as AnnexureIV.
Your Directors would like to express their sincere appreciation to the CustomersVendors Bankers Members Central and State Governments and Regulatory Authorities fortheir continued co-operation and support. Your Directors also take this opportunity toacknowledge the dedicated efforts made by Employees for their contribution to theachievements of the Company.
| ||On behalf of the Board of Directors |
| ||Ness N. Wadia |
| ||Chairman |
|Mumbai June 29 2021 ||DIN: 00036049 |