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NGL Fine Chem Ltd.

BSE: 524774 Sector: Health care
NSE: NGLFINE ISIN Code: INE887E01022
BSE 00:00 | 22 Mar 1245.10 -4.00
(-0.32%)
OPEN

1239.90

HIGH

1263.05

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1226.80

NSE 00:00 | 22 Mar 1243.40 -5.00
(-0.40%)
OPEN

1249.00

HIGH

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LOW

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OPEN 1239.90
PREVIOUS CLOSE 1249.10
VOLUME 485
52-Week high 2569.00
52-Week low 1210.00
P/E 39.62
Mkt Cap.(Rs cr) 769
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1239.90
CLOSE 1249.10
VOLUME 485
52-Week high 2569.00
52-Week low 1210.00
P/E 39.62
Mkt Cap.(Rs cr) 769
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NGL Fine Chem Ltd. (NGLFINE) - Director Report

Company director report

The Board of Directors are pleased to present the Company's Forty First Annual Reportand the Company's audited financial statements (consolidated and standalone) for thefinancial year ended 31st March 2022.

1. OPERATING RESULTS

The operating results of the Company for the year ended 31st March 2022 are asfollows:

(Rs in Lakhs)

Year ended 31st March 2022 Year ended 31st March 2021 Year ended 31st March 2022 Year ended 31st March 2021
(Standalone) (Standalone) (Consolidated) (Consolidated)
Revenue from Operations 31866.74 25818.15 31750.30 25797.48
Profit before tax from continuing operations 6897.40 7599.70 6659.65 7758.95
Tax Expenses (Including Deferred Tax) (1672.75) (2052.75) (1669.91) (2087.06)
Profit after Tax 5224.65 5546.95 4989.74 5671.90
Total Comprehensive Income for the year 5219.31 5532.87 4984.13 5657.81

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 Rs31866.74 Lakhs (previous year Rs 25818.15 Lakhs) resulting in increase of 23.42% overthe previous year. The profit after tax (including other comprehensive income) is at Rs5219.31 Lakhs (previous year Rs 5532.87 Lakhs resulting in decrease of 5.67%).

The current year the year of recovery from Covid has seen its highs and lows. Supplyand logistical bottlenecks resulted in higher prices of chemicals commodities and metals.The war in Ukraine since the beginning of this year has further exacerbated these issues.The resulting price increases have brought on a pressure on margins however it isexpected that these should be mitigated by mid FY 2022-23. Your Company has recorded asales increase of 23.4% over the previous year.

The Covid pandemic affected operations and the physical and emotional wellbeing of ourworkforce was a priority for your Company. Your Company initiated vaccinations for all itsworkforce and their families and has successfully completed the vaccination of all theemployees. Team NGL has responded well to the pandemic and ensured that the manufacturingfacilities are seamlessly operated.

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 Company has commenced construction at its new green field project in Tarapur. Theplant is estimated to be completed by mid FY 2023-24. The Company has also commissionedthe expansion at its subsidiary Macrotech Polychem Private Limited in December 2021. Thisis will bring in additional capacity to be utilised during the current year. The Companyhas three new products under development and pilot trials during the year and hopes toscale up production in the coming year.

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

Management Committee and the Board of Directors of the Company. The Company hasconstituted Risk Management Committee and its risk management policy is available on thewebsite of the Company: www.nglfinechem.com

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.

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 in terms 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 areprovided in the Company's financial statements (note 36) in accordance with the AccountingStandards.

All Related Party Transactions are presented to theAudit 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. Further the Company has also obtained the Shareholders approval for theRelated Party Transactions through Postal Ballot on 30th January 2022.

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

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 said policy. TheCompany has complied with provisions relating to the constitution of Internal ComplaintsCommittee under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 which redresses complaints received on sexual harassment. During thefinancial year under review the Company has not received any complaints of sexualharassment from any of the women employees of the Company.

16. ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of Companies Act 2013 following is thelink for Annual Return FY 2021-22. www.nglfinechem.com\investors\notices\MGT-7

2022

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

During the financial year the Board met five times on 1st June 2021 30th July 202110th November 2021 29th December 2021 and 7th February 2022.

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 31st March 2022 and that of the profit ofthe Company 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 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

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 theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

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

Annexure D to this report.

In terms of provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing the names and other particulars of employees drawingremuneration in excess of the limits set out in the said Rules if any forms part of theReport. The Nomination and Remuneration Committee of the Company has affirmed at itsmeeting held on 29th April 2022 that the remuneration is as per the remuneration policyof the Company. The policy is available on the Company's website: www.nglfinechem.com

21. DIRECTORS

Mr Rajesh Lawande is liable to retire by rotation in this ensuing Annual GeneralMeeting and being eligible he has offered himself for reappointment. Your Directorsrecommend his re-appointment.

Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet 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 thatcomposition and remuneration is reasonable and sufficient to attract retain and motivateDirectors KMP and senior management employees and the Directors appointed shall be ofhigh integrity 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.

23. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(7) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

24. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The familiarisation programme aims to provide

Independent Directors with the pharmaceutical industry scenario the socio-economicenvironment in which the Company operates the business model the operational andfinancial performance of the Company significant developments so as to enable them totake well informed decisions in a timely manner. The familiarisation programme also seeksto update the

Directors on the roles responsibilities rights and duties under the Act and otherstatutes. The policy on Company's familiarisation programme for Independent Directors isposted on Company's website at 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+ / Positive (Reaffirmed) andshort-term rating is Crisil A2 (Reaffirmed). The Company has also been rated by ICRA Ltdfor bank borrowing and long-term rating has been reaffirmed as BBB+/Stable and hasreaffirmed the short-term rating as A2.

26. STATUTORY AUDITORS

The Board of Directors of your Company at its meeting held on Friday 2nd May 2022appointed 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 2027based on the recommendation of the Audit Committee.

The Company has proposed an Ordinary Resolution for appointment of Statutory Auditor.

27. INTERNAL AUDITORS

M/s R. Devarajan & Co. Chartered Accountants Mumbai (ICAI firm registrationnumber 102415W) were appointed as internal auditors for FY 2021-22 and who have issuedthere reports on quarterly basis.

28. SECRETARIAL AUDITORS

The Company has appointed M/s. HSPN & Associates LLP Company Secretaries asSecretarial Auditors of the Company to carry out the Secretarial Audit for the FY 2022-23and 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 the FY2021-22 is annexed herewith and forms part of this report as Annexure E.

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

29. COST AUDITORS

For the FY 2022-23 cost audit is not applicable to the Company as the export turnoveris more than 75% of the total turnover. Hence the Company has not appointed Cost Auditor.

30. EXPLANATION OR COMMENTS ON QUALIFICATIONSRESERVATIONS 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 E which formspart of this report.

Further explanation/comments on the observation of Secretarial Auditors is as underObservation 1: During the year there was delay in appointment of Non-Executive WomenIndependent Director for which Company has received a Show Cause Notice from BSE.

Board's Reply: The said default was made good by appointing Non Executive WomenIndependent Director w.e.f 14th December 2021 and by payment of levied penalty.

Observation 2: During the quarter ended 30th June

2021 the maximum time gap between two Board Meetings and Two Audit Committee Meetingsexceeded beyond 120 (One Hundred and Twenty) days which is not in Compliance with theprovisions of Regulation 17(2) and 18(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015: Board's Reply: MCA vide its circular dated 3rd May 2021extended the period of Interval between two Board Meetings by an additional 60 days forthe first two quarter of the FY 2021-22. Further SEBI vide its circular dated 29th April2021 extended the period of deadline for approval of Audited Financial Results for thequarter and year ended 31st March 2021 from the due date of 30th May 2021 to 30th June2021. Due to the ambiguity between the two circulars there was a minor delay in holdingBoard Meeting and Audit Committee Meeting.

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 as Annexure G.

33. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES

Macrotech Polychem Private Limited is a wholly owned subsidiary of the Company. TheConsolidated Financial Statements of your Company form part of this Annual Report. AnnualReport of your Company does not contain the Financial Statements of its Subsidiary.

The Audited Annual Accounts and related information of the Company's Subsidiary will bemade available upon request. These documents will be available for inspection during alldays expect Saturdays Sundays and public holidays from 10.00 a.m. to 4 p.m. at theCompany's Registered Office. The Subsidiary Companies Audited Accounts are available onthe Company's Website: www.nglfinechem.com.

34. 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.

35. 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 Officers or Employees to the Audit Committee under section 143(12) ofthe Act details of which needs to be mentioned in this Report.

36. 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 out during the year under review. More details on the same aregiven in the Corporate Governance Report.

37. 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.

38. 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.

39. COMMITTEES OF THE BOARD

In accordance with the Companies Act 2013 the Board has formed a Risk ManagementCommittee. There are currently seven Committees of the Board as follows:

• 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.

40. 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 theCompany is initiated or pending under the Insolvency and Bankruptcy 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.

41. COST RECORDS AND COST AUDIT

Maintenance of cost records as prescribed under the provisions of Section 148(1) of theCompanies Act 2013 was not applicable for the business activities carried out by theCompany for the FY 2021-22. Accordingly such accounts and records are not made andmaintained by the Company for the said period. The requirement for cost audit was notapplicable for the said period as the export turnover was greater than 75% for the prioryear.

42. 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

43. 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.

44. 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 maximising long-term value for shareholders.

45. 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.

46. 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 2nd May 2022.

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