N G Industries Ltd Directors Report.

TO

THE MEMBERS:

Your Directors have pleasure in submitting the 23rd Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2017.

FINANCIAL HIGHLIGHTS :

The financial results of the Company are summarised below:

Particulars Year ended 31st March, 2017 Year ended 31st March, 2016
(Rs. in lacs) (Rs. in lacs)
Income from Operations 1728.07 1693.02
Other Income (1.79) (6.80)
Total Income 1726.28 1686.22
Total Expenditure 1446.18 1385.68
Interest 0.76 0.84
Depreciation 57.22 58.09
Profit before Taxation 222.12 241.61
Provision for Taxation
Current l ax 74.45 81.90
Deferred Tax 5.82 4.75
Income Tax Adjustment for the earlier year (0.08) 1.83
Net Profit 141.93 153.13
Proposed Dividend 117.27 117.27
Tax on Dividend 23.87 23.87
Earnings per Share (Rs.) 4.24 4.57

OPERATIONS AND PROSPECTS :

The Company could muster modest growth in the increasingly competitive environment in this sector. Demonetization effected growth in our Diagnostics division during last two quarters for obvious reasons. State government commissioned several super speciality hospitals this year resulting in large recruitment of doctors, paramedical staff, technicians, nurses creating a challenge in terms of attrition for all healthcare units resulting in higher costs lor the Company towards manpower and employees. Towards the end of the year, certain incidents in large private corporate hospitals of the city drew considerable unfavorable media attention which has dented the trust between citizens, doctors and private healthcare establishments of the state. It has even lead to migration of patients to already burdened government run hospitals. This will be a challenge for the industry as a whole to quickly reverse the effects of this phase.

Despite these challenges, we consider your Companys performance as satisfactory. It gives us immense satisfaction to report that wc have remained throughout as an ethical, efficient and customer centric Company and have pursued our long term strategy to improve our long term competitiveness in the business through operational excellence. The outlook of the Company can be thus in line with its current performance.

There was no change in the nature of the business of the Company during the year.

DIVIDEND :

Your Directors recommend a Dividend of Rs. 3.50 per Equity Share (Previous Year Rs.3.50) for your consideration for the year ended 31 st March, 2017. The Dividend will be paid after it is approved at the forthcoming Annual General Meeting.

TRANSFER TO GENERAL RESERVE :

No sum has been transferred to the General Reserves of the Company at the end of the Year.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND :

In terms of section 125 of the Companies Act, 2013, dividends unpaid/unclaimed up to that for financial years 2008-2009, which remain unpaid or unclaimed for a period of 7 (Seven) years have been deposited in the Investor Education & Protection Fund (IEPF) established by the Central government. As per the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendments Rules, 2017 notified on 28lh February, 2017, the Company will transfer after 3Tl May 2017 shares held in names of those whose dividend has remained unpaid/unclaimed for past 7 seven consecutive years to IEPF as stipulated. List of such shareholders to whom individual notices have been sent as well as names with details have been put up on the Companys website.

TRIBUTE :

Your Directors join all employees, shareholders, friends, associates and citizens in paying our tribute to Late Shri Banwari Lai Goenka who passed away on 11th November 2016. He was a Director on our board for long years till 1st October, 2012. He has throughout been a source of inspiration to us in our Company in many ways than one can cite. An extraordinary man, a visionary and a good human being. He will be missed by many amongst us, his family as well as many friends and followers.

AUDITORS :

Your Directors recommend appointment of M/S Pushpendra Jain & Co., Chartered Accountants (Firm Registration no. 320233E) as Statutory Auditors of the Company, subject to approval by shareholders of the Company for a period of one year, from the conclusion of the forthcoming Annual General Meeting of the Company in place of M/s M.R. Singhwi & Co., Chartered Accountants (Firm Registration no. 312121E) the existing Statutory Auditors of the company whose term will come to end at the forthcoming Annual General Meeting. This is in Compliance with the requirements of section 139 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014.

DIRECTORS & KEY MANAGERIAL PERSONNEL :

Mr. Vinod Kumar Singhi has been one of the Independent Directors of the Company for long and has served and provided leadership and guidance to the board for past several years. He has informed the board about his decision to relinquish his position as Independent Director of the company due to personal reasons with effect from the date of the forthcoming Annual General Meeting of the Company. The board accepted to release him accordingly and wishes to place on record its sincere appreciation for such long and unstinted service with dedication that he has provided. The board has decided not to appoint anyone else in his place at present.

Ms. Neha Goenka, Director of the Company, retires by rotation and being eligible offers herself for re-appointment in the ensuing Annual General Body Meeting.

The Company has designated Mr. Rajesh Goenka, Whole-time-Director & Chairman, Mr. Santosh Kumar Thakur- Chief Financial Officer and Mr. Dipak Kumar Shaw - Company Secretary & Compliance Officer as Key Managerial Personnel. Mr. Dipak Kumar Shaw was appointed as Company Secretary & Compliance Officer with effect from 141 February, 2017.

SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES :

The Company does not have any Subsidiary/ Joint venture or Associate Company within the meaning of the Companies Act, 2013.

WHISTLE BLOWER MECHANISM :

The Company has put in place Whistle Blower Mechanism, details of which arc given in Corporate Governance Report forming part of this report.

LOANS, INVESTMENT AND GUARANTEES BY THE COMPANY :

There is no loan given, investment made, guarantee given or security provided by the Company to any entity under Section 186 of the Companies Act, 2013.

NUMBER OF MEETING OF BOARD OF DIRECTORS :

The Board of Directors have met 6 times and Independent Directors once during the year ended 3151 March, 2017.Details of the meetings and attendance of the Directors arc provided in the Corporate Governance Report.

DETAILS OF COMMITTEE OF DIRECTORS :

Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors and Stakeholders Relationship Committee of Directors, number of meetings held of each Committee during the financial year 2016-2017 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report and forming part of this Report.

The Recommendations by the Audit Committee as and when made to the Board have been accepted.

DIRECTOR REMUNERATION POLICY :

The Company has followed a Policy on Appointment and Remuneration of Directors and senior management employees. This policy is approved by the Nomination & Remuneration Committee and the Board. Details of the same are covered under Corporate Governance Report.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS :

Ihe Board of Directors of the Company has initiated and put in place a policy for evaluation of its own performance, its Committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company. Further details are outlined in the Corporate Governance Report forming a part of this report.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS :

Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the Compliance of the Conditions of the independence stipulated in the aforesaid section.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

Internal Audit has been conducted throughout the organization by qualified outside Internal Auditors. Findings of the Internal Audit Report are reviewed by the top management and by the Audit Committee of the Board and proper follow up action is ensured wherever required. The Statutory Auditors have evaluated the systems of internal controls of the Company and have reported that the same are adequate and commensurate with size of the Company and nature of its business.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)ACT, 2013 :

The Company has put in place an Internal Complaints committee to redress complaints received regarding sexual harassment from any employee of the Company. The committee comprising of majority of women employees is constituted for the purpose of ensuring Compliance towards the provisions of the above Act. During the year 2016-2017 no complaints were received by the said committee.

LISTING WITH STOCK EXCHANGES :

As per the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company hereby declares that the Listing of its Shares at The Calcutta Stock Exchange Ltd. as well as BSE Ltd continued throughout the year and the Listing Fee due till date stands paid.

DEMATERIALISATTON OF SHARES :

In order to facilitate dealing in shares in the electronic mode, your Company has entered into an arrangement with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). With this, the members have the option to trade their dematerialised shares in the Company through NSDL or CDSL. Securities and Exchange Board of India (SEBI) has made it mandatory for all investors to trade in the shares of the Company in dematerialised form. The Companys Shares have been allotted ISIN:1NE825C01018.

The Company has not issued any sweat equity shares, bonus, employee stock option and not called for buyback of shares during the current financial year. Directors also confirm that there are no shares under suspense status.

AUDITORS AND AUDITORS REPORT :

M/s. M. R. Singhwi & Co., Chartered Accountants, Kolkata, (Firm Registration No. 31212 IE) are Statutory Auditors of the Company, whose period comes to an end in the ensuing Annual General Meeting. The notes on account referred to, in the Auditors Report are sell- explanatory and therefore do not call for further explanation. There are no qualifications in their repoit requiring explanation from the board.

COST AUDIT :

Cost Audit is not applicable to the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

The particulars as prescribed under Section 134(3) (in) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 arc as follows

A. CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy;

The operations of the Company, being healthcare establishments, the Company is taking every necessary step to reduce the consumption of energy.

(ii) The steps taken by the Company for utilizing alternate source of energy7;

Your Company is exploring the possibility7 of utilizing alternate sources of energy7 which may be taken up for future Implementation when found to be credible and viable.

(iii) Thc capital investment on energy conservation equipment:

Though investments have been made in areas like change over to LED lights, Energy audits, Load balancing, replacement with energy saving air conditioners etc no specific budgets or heads of such are accounted for, in view of major energy specific project being yet to be taken up.

B. TECHNOLOGY ABSORPTION

The nature of the Companys operations being healthcare delivery, the required information in the prescribed manner is considered to be not applicable to the Company.

C. FOREIGN EXCHANGE EARNINGS & OUTGO

During the year under review, there were no inflow & outgo of Foreign Exchange.

RISK MANAGEMENT :

The provisions relating to composition of a Risk Management Committee are not applicable to the Company. CORPORATE SOCIAL RESPONSIBILITY :

Provisions relating to Corporate Social Responsibility are not applicable to the Company

PARTICULARS OF EMPLOYEES & MANAGERIAL REMUNERATION:

Disclosure pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees getting remuneration exceeding the limit..

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details are as detailed below

Remuneration etc Pursuant to Section 197(12) and Rules made there under are as below.

The ratio of the remuneration of Director to the median employee remuneration for the year

i) Name: Mr. Rajesh Goenka (Chairman & Whole time Director)- Ratio 9.66:1

ii) The percentage increase in remuneration of Directors, Chief Financial Officer, Company Secretary

1. Rajesh Goenka (Chairman & Whole time Director): NIL

2. Santosh Kumar Thakur (CFO): 13.37%

3. Dipak Kumar Shaw (Company Secretary): First year in appointment.

iii) The percentage increase in the median remuneration of employees in the financial year :12.48%

iv) There were 76 permanent employees on the rolls of the Company as on March 31,2017.

v) It is hereby affirmed that the remuneration paid during the year ended 3 lsl March, 2017 is as per the Remuneration policy of the Company.

DIRECTORS RESPONSIBILITY STATEMENT :

Your Directors state that:

• In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

• The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that arc reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

• The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

• The Directors have prepared the annual accounts on a going concern basis.

• The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively, and

• The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems arc adequate and operating effectively.

MANAGEMENT DISCUSSION & ANALYSIS

A) INDUSTRY STRUCTURE & DEVELOPMENT :

Rising incomes in the hands of our citizens, increasing health awareness in society at large, increasing population of older citizens, new technologies in the sector, longer life expectancy, health insurance penetration and medical tourism arc contributing to the growth in healthcare sector.

B) OPPORTUNITIES,THREATS,RISKS AND CONCERNS :

The business runs the risk of unfavorable publicity in ease of unsuccessful treatment translating into reduction of patient flow, risk of good professionals leaving the Company and it stands to lose years of on job training and risk of Independent Doctors beginning to refer patients elsewhere. With several Medical Centers coming up in the city, competitive threats cannot be ignored. Unfavorable publicity resulting out of few cases in private healthcare hospitals of Kolkata has lead to migration of cases from private to government hospitals towards end of 2016-2017. The trust between citizens and Doctors as well as establishments has weakened affecting the whole sector. This challenge will have to be met by all with more transparent and diligent sendees.

The Company mitigates these risks through adopting ethical practices, transparent dealings with patients and explaining to them in plain layman language the pros and cons of the treatment with realistic assessments of recovery. Quality Surveillance and adherence to strict protocols also mitigates risks. The Company provides professionals a very good and challenging environment with continuous growth and also looks out to induct new and good professionals to keep strengthening its team. To face competition the Company keeps close interaction with Doctors and strives to keep services at levels meeting their standards. Company is also continuously investing in newer Technologies and equipments to stay ahead in offering value added and superior quality of tests at affordable tariffs.

C) OUTLOOK:

Although the Company operates in an industry that is increasingly getting more competitive, the outlook of your Company looks good on account of our adherence to quality of services, affordable tariffs and trust earned through over two decades of diligent service to citizens. The Company on its pan is facing the challenges to entire private sector healthcare and its image and credibility through consistent credible and transparent dealings and greater communication with patient families on all aspects of treatment.

D) INTERNAL CONTROL :

Your Company has adequate internal control systems, commensurate with its size of operations. Please see paragraph with heading internal control systems and their adequacy in this report.

E) HUMAN RESOURCES/INDUSTRTAL RELATIONS :

Your Company has during the previous year continued to have cordial industrial relations with its employees. The number of employees of the Company at the end of the year was 76

F) FINANCIAL AND OPERATIONAL PERFORMANCE :

Has been detailed already in this report.

CORPORATE GOVERNANCE :

The Corporate Governance Report forms an integral part of this Report and arc set. out as separate annexure to this Report. The certificate from the Auditors of the company certifying compliance of conditions of Corporate Governance stipulated in the Listing Agreement with the Stock Exchanges is also annexed to Report on Corporate governance.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY :

All contracts / arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contracts/ arrangements/ transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to notes to the financial statement which sets out related party disclosures. SECRETARIAL AUDITOR :

The Board has appointed S. Rath & Co., Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2016-2017. The Secretarial Audit Report for the financial year ended 3 March, 2017 is annexed herewith to this report. There are no qualifications in their report requiring explanation from the board.

EXTRACT OF ANNUAL RETURN :

Extract of Annual Return of the Company is annexed herewith to this report.

DEPOSITS :

The Company has not accepted any deposits from public during the period under review and accordingly no amount was outstanding as on the date of the Balance Sheet.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS.

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of the report.

ACKNOWLEDG EM ENTS:

Your Directors acknowledge the co-operation and assistance received from the Shareholders, Doctors, Banks and various Government Agencies. Your Directors wish to place on record their sincere appreciation for the contribution made by the employees.

For and on behalf of Board of Directors
Place : : Kolkata Rajesh Gocnka
Date :29th day of May, 2017 Chairman