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NGL Fine Chem Ltd.

BSE: 524774 Sector: Health care
NSE: N.A. ISIN Code: INE887E01022
BSE 00:00 | 22 Oct 2447.10 -42.00
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NSE 05:30 | 01 Jan NGL Fine Chem Ltd
OPEN 2543.00
PREVIOUS CLOSE 2489.10
VOLUME 2218
52-Week high 3789.45
52-Week low 780.50
P/E 22.93
Mkt Cap.(Rs cr) 1,512
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2543.00
CLOSE 2489.10
VOLUME 2218
52-Week high 3789.45
52-Week low 780.50
P/E 22.93
Mkt Cap.(Rs cr) 1,512
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NGL Fine Chem Ltd. (NGLFINECHEM) - Director Report

Company director report

The Board of Directors are pleased to present the Company's Fortieth Annual Report andthe Company's audited financial statements (consolidated and standalone) for the financialyear ended 31st March 2021.

1. OPERATING RESULTS

The operating results of the Company for the year ended 31st March 2021 are asfollows:

(Rs in Lakhs)
Year ended 31st March 2021 Year ended 31st March 2020 Year ended 31st March 2021 Year ended 31st March 2020
(Standalone) (Standalone) (Consolidated) (Consolidated)
Revenue from Operations 25818.15 15218.09 25797.48 15168.64
Profit before tax from continuing operations 7599.71 1435.31 7758.95 1207.23
Tax Expenses (Including Deferred Tax) -2052.75 -374.95 -2087.06 -373.70
Profit after Tax 5546.96 1060.36 5671.90 833.52
Total Comprehensive Income for the year 5532.88 1038.53 5657.81 811.69

2. TRANSFER TO RESERVES

There are no transfers to any specific reserves during the year.

3. THE STATE OF THE COMPANY'S AFFAIRS

During the year under review your company achieved total revenue from operations of Rs25818.15 Lakhs (previous year Rs 15218.09 Lakhs) resulting in increase of 69.65% overthe previous year. The profit after tax (including other comprehensive income) is at Rs5532.88 Lakhs (previous year Rs 1038.53 Lakhs resulting in increase of 432.76%).

The current year has been unprecedented with the Covid pandemic affecting the entireworld. Its impact has been on every aspect of our life which has been constrained in termsof movement social interaction mobility of work and numerous other aspects. Globalsolutions were required to ensure return to efficient management of business. The companyimplemented borderless workspaces ensuring ease of work from home for office staff whilemobility of personnel at factories was organised in such manner to ensure their health andsafety through distancing and minimizing contact.

The physical and emotional wellbeing of our workforce continues to be the priority forthe company. Safety and wellbeing measures initiated during the early days of the pandemichave been improved upon and continued during the current year. The NGL team responded welland ensured that the manufacturing facilities operated seamlessly and the additionalcapacity created during the past two years was effortlessly filled in.

4. DIVIDEND

Your directors recommend dividend of Rs 1.75 per fully paid-up equity share of Rs 5/-each per fully paid-up equity share aggregating to Rs 108.12 Lakhs.

5. CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

As required under Regulation 34 of the Listing Regulations a Cash Flow Statement andconsolidated Financial Statement is part of the Annual Report.

6. FUTURE PROSPECTS

The covid pandemic is far from over and India has seen a second wave emerging fromearly 2021. In view of the alarming situation and deteriorating health scenario thegovernment re-imposed a lockdown from 15th April 2021. This has once again disruptedsupply chain logistics and movement of personnel. The company has continued measuresadopted and implemented to ensure wellbeing health and safety of its personnel and thishas resulted in minimal impact on manufacturing operations. However the length of thelockdown the measures taken to control the pandemic may have an impact on the company'sworking and operations. In view of the uncertainty it is difficult to visualise theimpact it may have on the current year operations.

7. THE CHANGE IN THE NATURE OF BUSINESS IF ANY;

There is no change in the nature of business of the Company.

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND.

There was no transfer during the year to the Investor Education and Protection Fund interms of Section 125 of the Companies Act 2013.

9. CONSERVATION OF ENERGY-TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE ETC.

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished as AnnexureA to Director's Report.

10. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OFTHE COMPANY

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed also discussed at the meetings of the Risk ManagementCommittee and the Board of Directors of the Company. The Company has voluntarilyconstituted Risk Management Committee and its risk management policy is available on thewebsite of the company: www.nglfinechem.com. The Company has amended risk managementpolicy in line with the latest amendments in the Policy in its Board Meeting held on01stJune 2021 and also reconstituted it Risk Management Committee.

The company has implemented special Covid-19 sanitisation and decontamination measuresat all its locations to ensure safety of personnel operating on premises. Socialdistancing to mitigate and reduce contact between personnel has also been implemented.Safety at work is the motto that is being followed at all times.

11. INTERNAL CONTROL SYSTEM

The Company's internal controls system has been established on values of integrity andoperational excellence and it supports the vision of the Company “To be the mostsustainable and competitive Company in our industry”. The Company's internal controlsystems are commensurate with the nature of its business and the size and complexity ofits operations. These are routinely tested and certified by Statutory as well as InternalAuditors and their significant audit observations and follow up actions thereon arereported to the Audit Committee.

12. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES

The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Companies Act 2013 read with Companies CorporateSocial Responsibility (Policy) Rules 2014. As per provision of Section 135 of theCompanies Act 2013 read with Rule 8 of Companies Corporate Social Responsibility (Policy)Rules 2014 the Board has approved CSR Policy and the Company has spent towards CSRactivities details of which are provided in attached Annexure B to Director'sReport. The Company has amended CSR policy in line with the latest amendments inthe CSR Policy in its Board Meeting held on June 1 2021.

13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

The particulars of investments made and loans given to subsidiaries has been disclosedin the financial statements in notes 5 and 6 of the standalone financial statements.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. There are no materially significant related party transactions made by the Companywith Promoters Directors or Key Managerial Personnel etc. which may have potentialconflict with the interest of the Company at large or which warrants the approval of theshareholders. The transactions are being reported in Form AOC-2 i.e. Annexure C interms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules 2014.However the details of the transactions with Related Party are provided in the Company'sfinancial statements (note 36) in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board.Omnibus approval is obtained for the transactions which are foreseen and repetitive innature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.

The Related Party Transactions Policy as approved by the Board is uploaded on theCompany's website at www.nglfinechem.

15. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has zero tolerance towards sexual harassment at the workplace and towardsthis end has adopted a policy in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.All employees (permanent contractual temporary trainees) are covered under the saidpolicy. The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 which redresses complaints received on sexualharassment. During the financial year under review the Company has not received anycomplaints of sexual harassment from any of the women employees of the Company.

16. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished as AnnexureD to Director's Report. The annual Return is also available on the website of com theCompany www.nglfinechem.

17. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

During the financial year the Board met five times on 22nd May 2020 29th June 202012th August 2020 6th November 2020 and 28th January 2021.

18. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 The Board of Directors of theCompany hereby confirm:

That in the preparation of the annual accounts the applicable accounting standardshave been followed and there has been no material departure.

That the selected accounting policies were applied consistently and the directors madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on March 31 2021 and that of the profit of theCompany for the year ended on that date.

That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the

Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

That the annual accounts have been prepared on a going concern basis.

The Board has laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.

The directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

19. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

20. PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as AnnexureE to this report.

In terms of provisions of Section 197(12) of the

Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 a statement showing the names and otherparticulars of employees drawing remuneration in excess of the limits set out in the saidRules if any forms part of the Report.

The Nomination and Remuneration Committee of the Company has affirmed at its meetingheld on 01st June 2021 that the remuneration is as per the remuneration policy of theCompany. The policy is available on the company's website: www.nglfinechem.com.

21. DIRECTORS

Mrs. Ajita Nachane is liable to retire by rotation in this ensuing Annual GeneralMeeting and being eligible she has offered herself for reappointment. Your Directorsrecommend her re-appointment.

Mr. Rajesh Lawande Whole-Time Director of the Company holds office up to 31st May2021 as Whole-Time Director being eligible offers himself for reappointment. YourDirectors recommend his re-appointment as a Whole-Time Director w.e.f. 01st June 2021.

Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meets the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe SEBI Listing Regulations. There has been no change in the circumstances affectingtheir status as Independent Directors of the Company.

22. ATTRIBUTES QUALIFICATIONS & INDEPENDENCE OF DIRECTORS THEIR APPOINTMENT ANDREMUNERATION

The Nomination & Remuneration Committee of Directors have approved a Policy forSelection

Appointment and Remuneration of Directors which inter-alia requires that compositionand remuneration is reasonable and sufficient to attract retain and motivate DirectorsKMP and senior management employees and the Directors appointed shall be of highintegrity with relevant expertise and experience so as to have diverse Board and thePolicy also lays down the positive attributes/criteria while recommending the candidaturefor the appointment as Director. The board has on the recommendation of Nomination

& Remuneration Committee approved the re-appointment of Mr. Rajesh Lawande asWhole-Time Director for 5 consecutive years in the ensuing Annual General Meeting.

23. DECLARATION OF INDEPENDENT DIRECTORS

The Independent ratification Directors have submitted their disclosures to the Boardthat they fulfill all the requirements as stipulated in Section 149(7) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.

24. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The familiarisation program aims to provide Independent Directors with thepharmaceutical industry scenario the socio-economic environment in which the Companyoperates the business model the operational and financial performance of the Companysignificant developments so as to enable them to take well informed decisions in a timelymanner. The familiarisation program also seeks to update the Directors on the rolesresponsibilities rights and duties under the Act and other statutes. The policy onCompany's familiarisation program for Independent Directors is posted on Company's websiteat www. nglfinechem.com.

25. RATING

The company has been rated by Crisil Ltd for SME and bank rating. The SME rating hasbeen awarded “SME 1” indicating highest level of credit worthiness adjudged inrelation to other SMEs. The long-term rating is Crisil BBB+ / Stable and short-term ratingis Crisil A2. The company has also been rated by ICRA Ltd for bank borrowing and long-termrating has been reaffirmed is BBB+ (Outlook Long Term rating is Stable) and has reaffirmedthe short-term rating is A2.

26. STATUTORY AUDITORS

The Board of Directors of your Company at its meeting held on Friday 05th May 2017appointed M/s. Manek & Associates Chartered Accountants (FRN: 126679W) as StatutoryAuditors of your Company for a period of 5 years from the conclusion of the Annual GeneralMeeting till the conclusion of the Annual General Meeting to be held in the year 2022based on the recommendation of the Audit Committee.

Manek & Associates Auditors of the Company have informed the Company vide letterdated 27th April 2021 about the change in constitution of their firm from Proprietorshipto Partnership Firm. The Name of the firm and Registration No. remains the same.

The company has proposed an Ordinary Resolution for of Statutory Auditor for theFinancial Year 2021-2022 pursuant to change in constitution.

27. INTERNAL AUDITORS

The company has appointed M/s R. Devarajan & Co. Chartered Accountants Mumbai(ICAI firm registration number 102415W) as internal auditors for financial year 2021-22.

28. SECRETARIAL AUDITORS

The Company has appointed M/s. HS Associates Company Secretaries as SecretarialAuditors of the Company to carry out the Secretarial Audit for the Financial Year 2021-22and to issue Secretarial Audit Report as per the prescribed format under rules in terms ofSection 204(1) of the Companies Act 2013 and Rule 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The Secretarial Audit Report for thefinancial year 2020-2021 is annexed herewith and forms part of this report as Annexure F.

Secretarial Audit is not applicable to the Subsidiary not being a material subsidiary.

29. COST AUDITORS

For the financial year 2021-22 cost audit is not applicable to the Company as theexport turnover is more than 75% of the total turnover. Hence the Company has notappointed Cost Auditor.

30. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

The Auditors' Report does not contain any qualifications reservations or adverseremarks. Report of the secretarial auditor is given as an Annexure F which formspart of this report.

31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year under review asstipulated under regulation 34 (3) and Part B of schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed to this AnnualReport.

32. CORPORATE GOVERNANCE

The Company is committed towards maintaining the highest standards of CorporateGovernance and adhering to the Corporate Governance requirements as set out by Securitiesand Exchange Board of India. The Report on Corporate Governance as stipulated underregulation 34 (3) and Part C of schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report. The Certificate from thepracticing Company Secretary confirming compliance with the conditions of CorporateGovernance as stipulated under regulation 34 (3) and Part E of schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is also published inthis Annual Report.

33. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES

Macrotech Polychem Private Limited is a wholly owned subsidiary of the Company. TheConsolidated Financial Statement of your Company form part of this Annual Report. AnnualReport of your Company does not contain the Financial Statements of its Subsidiary. TheAudited Annual Accounts and related information of the Company's Subsidiary will be madeavailable upon request. These documents will be available for inspection during all daysexpect Saturdays Sundays and public holidays from 10.00 a.m. to 4 p.m. at the Company'sRegistered Office. The Subsidiary Companies Audited Accounts are available on theCompany's Website: www.nglfinechem.com.

34. REPORT ON CORPORATE GOVERNANCE

In terms of Listing Regulations a report on Corporate Governance along with thecertificate from M/s. HS Associates Company Secretaries confirming compliance of theconditions of Corporate Governance is annexed hereto and forms part of this Annual Reportas Annexure H.

35. VIGIL MECHANISM

The Company has established a vigil mechanism policy to oversee the genuine concernsexpressed by the employees and other Directors. The Company has also provided adequatesafeguards against victimisation of employees and Directors who express their concerns.The Company has also provided direct access to Mr. Rahul Nachane Chief Ethics Counselloron reporting issues concerning the interests of co-employees and the Company. The VigilMechanism Policy is available at the website of the company: www.nglfinechem.com.

36. REPORTING OF FRAUD BY AUDITORS

During the year under review the Internal Auditors Statutory Auditors and SecretarialAuditor have not reported any instances of frauds committed in the Company by its Officersor Employees to the Audit Committee under section 143(12) of the Act details of whichneeds to be mentioned in this Report.

37. ANNUAL EVALUATION BY THE BOARD

In compliance with the Companies Act 2013 and Regulation 17 of the ListingRegulations the performance evaluation of the Board and its Committees were carried outduring the year under review. More details on the same are given in the

Corporate Governance Report.

38. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There are no material changes and commitments affecting the financial position of theCompany occurred during the financial year other than the impact of the resurge of Covid-19 pandemic which has been covered in this report.

39. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the year there has been no significant material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and company's operations infuture.

40. COMMITTEES OF THE BOARD

In accordance with the Companies Act 2013 the Board has also formed a Risk ManagementCommittee on voluntary basis. There are currently seven Committees of the Board asfollows:

Audit Committee

Corporate Social Responsibility Committee

Nomination and Remuneration Committee

Stakeholders' Relationship Committee

Risk Management Committee

Administrative Committee

Internal Complaint Committee

Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the “Report on Corporate Governance” a part ofthis Annual Report.

41. OTHER DISCLOSURES

The company does not have any Employees Stock Option Scheme in force and henceparticulars are not furnished as the same are not applicable.

No proceedings against the Company is initiated or pending under the Insolvency andBankruptcy Code 2016.

The details of difference between amount of the valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof Not Applicable.

42. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section

148(1) of the Companies Act 2013 was applicable for the business activities carriedout by the Company for the financial 2020-21. Accordingly such accounts and records aremade and maintained by the Company for the said period.

43. POLICIES

The Company seeks to promote highest levels of ethical standards in the normal businesstransactions guided by the value system. The SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates formulation of certain policies for listedcompanies. The Policies are reviewed periodically by the Board and are updated based onthe need and compliance as per the applicable laws and rules and as amended from time totime. The policies are available on the website of the Company at www.nglfinechem.com

44. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that the Company has complied with the necessaryprovisions of the revised Secretarial Standard 1 and Secretarial Standard 2 to the extentapplicable to the Company.

45. ENHANCING SHAREHOLDER VALUE

Your company firmly believes that its success the marketplace and a good reputationare among the primary determinants of value to the shareholder. The organisational visionis founded on the principles of good governance and delivering leading-edge productsbacked with dependable after sales services. Following the vision your Company iscommitted to creating and maximizing long-term value for shareholders.

46. CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operation include global and domestic demand and supply conditionsaffecting selling prices of raw materials finished goods input availability and priceschanges in government regulations tax laws economic developments within and outside thecountry and various other factors. The current resurgence of Covid 19 pandemic has alsoaffected the operations of the company.

47. ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their sincere appreciation andgratitude for the continued co-operation extended by shareholders employees customersbanks suppliers and other business associates.

For and on behalf of the Board of Directors

Sd/- Sd/-
Rahul Nachane Rajesh Lawande
Managing Director Whole-Time Director & CFO
DIN : 00223346 DIN : 00327301
Mumbai 01st June 2021

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