national peroxide ltd Directors report

TO THE MEMBERS

The Directors take pleasure in presenting their Sixty-Eighth Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended March 31,2022.

1. FINANCIAL RESULTS

(Rs in lakhs)

Particulars	Financial Year Ended
	Standalone	Consolidated
	March 31, 2022	March 31, 2021	March 31, 2022	March 31, 2021
Total Income	23,562.00	22,725.31	23,615.33	22,778.77
Profit before tax and exceptional items	44.34	2,728.85	94.83	2,778.46
Exceptional Items	700.00	(1,549.30)	700.00	(1,549.30)
Profit before tax after exceptional items	744.34	1,179.55	794.83	1,229.16
Tax Expense	235.73	(901.53)	251.85	(888.49)
Net Profit after Tax	508.61	2,081.08	542.98	2,117.65
Dividend paid on Equity Shares*	718.38	718.38	718.38	718.38

* Rs 12.50 per Share for each of the financial years 2020-21 and 2019-20

2. DIVIDEND

Your Directors have recommended a dividend of Rs 5.00 (50%) per equity share of Rs 10.00 each for the financial year 2021-22, to be paid, if declared by the Members at the Annual General Meeting (AGM) to be held on Tuesday, September 13, 2022. The total dividend pay out amounts to Rs 287.35 lakhs.

3. TRANSFER TO RESERVES

During the year under review, no transfers were made to reserves.

4. STATE OF COMPANY?S AFFAIRS

The gross sales and other income for the year under review was Rs 23,562.00 lakhs as against Rs 22,725.31 lakhs for the previous year. The profit before tax was Rs 744.34 lakhs and the profit after tax was Rs 508.61 lakhs for the year under review as against Rs 1 179.55 lakhs and Rs 2081.08 lakhs respectively, for the previous year. During the year under review, the capacity utilization of the Company was 71% of the installed capacity of Hydrogen Peroxide.

During the year under review, the Company?s plant located at Kalyan was temporarily shut down for an aggregate period of 113 days from March 27, 2021 to May 29, 2021 and from January 30, 2022 to March 19, 2022 primarily due to repairs and maintenance activity undertaken to fix machine breakdown along with preventive maintenance activities and some modifications to improve machine efficiency in plant. The damaged equipment was cleaned, rectified and replaced.

5. COMPOSITE SCHEME OF ARRANGEMENT

The Board of Directors at its meeting held on March 9, 2021 approved the draft Composite Scheme of Arrangement amongst the Company (NPL) (the Transferee Company / Demerged Company?), Naperol Investments Limited (NIL) (the Transferor Company?), NPL Chemicals Limited (NPCL) (the Resulting Company?) and their respective Shareholders and 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 into NPCL (as defined in the Scheme), on a going concern basis, and in consideration thereof, NPCL shall issue its equity shares to Equity Shareholders of NPL in the same proportion as their holding and

ii. Amalgamation of NIL with NPL

During the year under review, the Company obtained No Adverse Observation? letter from BSE Limited dated November 18, 2021 on the aforesaid Scheme. Pursuant to the order of Hon?ble National Company Law Tribunal, Mumbai Bench (Hon?ble Tribunal) dated April 7, 2022, the Equity Shareholders considered and approved the Scheme at the meeting convened on June 2, 2022 by requisite majority.

The Scheme is further subject to the approval of Hon?ble Tribunal and such other statutory and regulatory authorities, as may be required.

6. CHANGE(S) IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business carried on by the Company and its subsidiaries. The Company has not changed the class of business in which the Company has an interest.

7. MATERIAL CHANGES AND COMMITMENTS

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

8. AWARDS AND RECOGNITION

Your Company has won the following prestigious award / certificate / appreciation:

- Award from Federation of Indian Chambers of Commerce & Industry (FICCI) for excellence in Management of Health, Safety & Environment under Chemicals Category.

- Certificate of Merit from National Safety Council, Maharashtra Chapter for achieving zero accident frequency rate during the period commencing from year 2018 to year 2020.

- Certificate of Appreciation from National Safety Council of India (NSCI) for the application made by the Company for NSCI Safety Awards, 2021 under Manufacturing Sector.

9. HEALTH, SAFETY & ENVIRONMENT

The Company continues to maintain a good safety and environmental record. There was no lost time injury during the financial year 2021-22. It has worked for 2,252 days without Lost Time Injury as on March 31,2022.

10. INSURANCE

All the properties of the Company, including Buildings, Plant and Machinery, Stocks and Materials have been adequately insured. The Company also has a Public Liability Insurance Policy as per the Public Liability Insurance Act, 1991.

11. PUBLIC DEPOSITS:

During the year under review, your Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

12. DETAILS OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATE AND HOLDING COMPANY

The Company has two subsidiaries namely, Naperol Investments Limited and NPL Chemicals Limited. There were no joint ventures and associate Company. Nowrosjee Wadia and Sons Limited (NWS) holds 30.78% shares in the Company and is the holding company of Macrofil Investments Limited (Macrofil) which also holds 33.31% shares in the Company. Hence, NWS holding through Macrofil and its other subsidiaries and associates stands at 55.30% shares 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 as provided by Section 45-IA of the Reserve Bank of India Act, 1934 and is engaged in the business of long-term investments. During the year under review, the Company earned a profit after tax of Rs 35.21 lakhs as against Rs 37.29 lakhs in the previous year.

NPL Chemicals Limited, is incorporated as part of the draft Composite Scheme of Arrangement to carry on the business of manufacturing, distributing and selling of peroxygen chemicals on demerger. Since, demerger has not been effective and no operations were carried out, the Company reported a loss of Rs 0.84 lakhs as against Rs 0.72 lakhs in the previous year.

Pursuant to Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 forms part of the Consolidated Financial Statements (CFS). Pursuant to Section 136 of the Companies Act, 2013, the Company is exempted from attaching to its Annual Report, the Annual Reports of the subsidiary companies.

The Audited Financial Statements of the subsidiary companies are kept open for inspection by the Members at the Head Office of the Company. The Company shall provide a copy of the financial statements of its subsidiary companies to the Members upon their request. The statements are also available on the website of the Company at www.naperol.com.

14. CONSOLIDATED FINANCIAL STATEMENTS (CFS)

The Company has prepared CFS in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013.

The Consolidated Financial Results reflect the results of the Company and its subsidiaries. As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations?) the Audited CFS together with the Independent Auditors? Report thereon are annexed and form part of this Annual Report. The summarized Consolidated Financial Results are provided above at point no. 1 of this Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of Listing Regulations, the Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming part of the Annual Report.

16. CORPORATE GOVERNANCE

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Regulation 34 of Listing Regulations have been complied with.

A separate report on Corporate Governance along with a Certificate from a Practicing Company Secretary, regarding compliance of the conditions of Corporate Governance, is appended as Annexure I?.

17. BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report, detailing the various initiatives taken by the Company on the environmental, social and governance perspective, is appended as Annexure II? in compliance with the above requirement.

18. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has undertaken projects in accordance with the CSR Policy. The details of the CSR projects, unspent CSR amount and reason for the amount being unspent are given in Annexure III?.

19. DIVIDEND DISTRIBUTION POLICY

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy which endeavors dual objective of appropriate reward to shareholders through dividends and ploughing back earnings to support sustained growth. The policy is available on the website of the Company at http://naperol.com/BoardPolicies.

20. RELATED PARTY TRANSACTIONS

The framework for dealing with related party transactions is given in Clause No. 7(a) of the Corporate Governance Report. During the year under review, your Company did not enter into any contracts / arrangements / transactions with related parties referred in Section 188(1) of the Companies Act, 2013 read with the rules made thereunder. All the related party transactions were in the ordinary course of business and on an arm?s length basis. There were no material related party transactions and therefore, disclosure in Form AOC-2 is not applicable to the Company. In accordance with Ind AS-24, the Related Party Transactions are disclosed under Note No. 42 of the Notes to Standalone Financial Statements for the financial year 2021-22.

21. VIGIL MECHANISM

The details of Vigil Mechanism are given in Clause No. 7(b) of the Corporate Governance Report.

22. RISK MANAGEMENT

The Company has in place a mechanism to inform the Board about the risk assessment and minimization procedures and undertakes periodical review of the same to ensure that the risks are indentified and controlled by means of properly defined framework. In the opinion of the Board, there are no material risks, which may threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis Report.

The details of the Risk Management Committee and policy are given in Clause No. 3(e) of the Corporate Governance Report.

23. DETAILS OF BOARD MEETINGS

During the year, six (6) Board Meetings were held through video-conference. The details of the meetings are provided in Clause No. 2(b) of the Corporate Governance Report.

24. BOARD COMMITTEES

The Board currently has six (6) committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders? Relationship Committee, Risk Management Committee and Strategy Advisory Committee.

All the recommendations made by the Committees were accepted by the Board.

A detailed update on the committees, its composition, number of Committee meetings held and attendance of the directors at each meeting is provided in Clause No. 3 of the Corporate Governance Report.

25. DIRECTORS AND KEY MANAGERIAL PERSONNEL

25.1 Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Dr. (Mrs.) Minnie Bodhanwala, Director, retires by rotation at the ensuing AGM and being eligible, offers herself for re-appointment.

Necessary resolution for the re-appointment of Director has been included in the Notice convening the AGM and requisite details have been provided in the explanatory statement to the Notice.

Mr. S. Ragothaman who was re-appointed as an Independent Director of the Company to hold office for the second term of three consecutive years, commencing from August 11, 2019 to August 10, 2022, will cease to hold office with effect from close of business hours of August 10, 2022. The Board places on record its appreciation for the invaluable contribution and guidance rendered by Mr. S. Ragothaman during his tenure as an Independent Director of the Company.

The Independent Directors of the Company have given the declaration to the Company that they meet the criteria of independence as required under Section 149(6) of the Companies Act, 2013 and Listing Regulations.

25.2 Key Managerial Personnel

I n terms of the provisions of Section 2(51) and Section 203 of the Companies Act, 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 (upto close of business hours of January 14, 2022)

- CS Heena Shah, Company Secretary & Compliance Officer (w.e.f. April 19, 2022).

The Board places on record its appreciation for Mr. Chandukumar Parmar for his contribution during his tenure as Company Secretary and Compliance Officer of the Company.

26. BOARD EVALUATION

The details of evaluation of Directors, Committees and Board as a whole are given in Clause No. 3(b) of the Corporate Governance Report.

27. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

2. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 and that such internal controls are adequate and were operating effectively; and

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

28. ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, a copy of the Annual Return of the Company is uploaded on the website of the Company at www.naperol.com.

29. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The details of adequacy of Internal Financial Controls are given in the Management Discussion and Analysis Report.

30. SHARE CAPITAL

During the year under review, there has been no change in the authorised and paid-up share capital of the Company.

31. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in Note No. 15 of the Notes to the Standalone Financial Statements.

32. 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 and tribunals impacting the going concern status and the Company?s operations in future.

33. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016, DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF FINANCIAL YEAR

There are no applications made or any proceeding pending during the year under review under the Insolvency and Bankruptcy Code, 2016.

34. DIFFERENCE BETWEEN AMOUNT OF VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONGWITH THE REASONS THEREOF

During the year under review, there was no instance of one-time settlement with banks or financial institutions.

35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is appended as Annexure IV?.

36. AUDITORS AND AUDIT REPORTS 36.1 Statutory Auditors

The Members of the Company at the Sixty-Third (63^rd) AGM held on August 9, 2017, appointed M/s. Price Waterhouse Chartered Accountants LLP (FRN. 012754N/N500016) as Statutory Auditors of the Company for a period of five (5) years to hold office from the conclusion of the 63^rd AGM held in the financial year 2016-17 till the conclusion of the Sixty-Eighth (68^th) AGM to be held in the financial year 2022-23.

The Board has recommended the appointment of M/s. Kalyaniwalla and Mistry LLP, Chartered

Accountants, (FRN 104607W/W100166) as the Statutory Auditors of the Company, for the first term of five (5) consecutive years, from the conclusion of the Sixty-Eighth (68^th) AGM scheduled to be held in the financial year 2022-23 till the conclusion of the Seventy-Third (73^rd) AGM to be held in the financial year 2027-28, for approval of shareholders of the Company, based on the recommendation of the Audit Committee. The Statutory Auditors have confirmed that they are not disqualified to act as Auditors of the Company.

There are no qualifications, reservations or adverse remarks made in the Statutory Auditors? Report for the financial year 2021-22.

36.2 Internal Auditors:

M/s. PKF Sridhar, LLP have carried out Internal Audit of the Company for financial year 2021-22. The Board of Directors at their Meeting held on November 1 1,2021 have re-appointed them as Internal Auditors of the Company for the financial year 2022-23.

36.3 Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013, read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company are required to be audited. Based on the recommendation of Audit Committee, the Board of Directors at their meeting held on August 9, 2022, appointed M/s. Diwanji & Co., Cost Accountants (FRN. 000339), to audit the cost records of the Company for the financial year ending on March 31, 2023, on a remuneration of Rs 5 lakhs plus applicable taxes and reimbursement of travelling and out-of-pocket expenses as incurred by them for the purpose of Audit. The remuneration payable to the Cost Auditor is required to be ratified by the Shareholders at this AGM.

There are no qualifications, reservations or adverse remarks made in the Cost Auditors? Report for the financial year 2021-22.

36.4 Secretarial Auditors and Secretarial Audit Report

I n terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Parikh & Associates, Practicing Company Secretaries, have been appointed as Secretarial Auditors of the Company to carry out Secretarial Audit. The Report of the Secretarial Auditors is appended as Annexure V?.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.

There are no qualifications, reservations or adverse remarks made in the Secretarial Auditors? Report for the financial year 2021-22.

37. REPORTING OF FRAUDS

During the year under review, the Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013.

38. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has constituted an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at workplace. No complaints were received during the year under review.

39. NOMINATION AND REMUNERATION POLICY

The details of the Company?s Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees are given in Clause No. 3(b) of the Corporate Governance Report and is disclosed on the website of the Company (https://naperol.com/BoardPolicies.php)

40. PARTICULARS OF EMPLOYEES

The information in terms of provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which forms part of this Report, is appended as Annexure VI?.

However, as per the provisions of Section 136 of the Companies Act, 2013, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees? particulars as required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014, which is available for inspection by the Members at the Head Office during business hours on working days of the Company upto the date of the ensuing AGM. Any Member interested in obtaining a copy thereof, may write an email to secretarial@naperol.com.

41. CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER CERTIFICATION

I n terms of Regulation 17(8) of the Listing Regulations, the Company has obtained Compliance Certificate from the Chief Executive Officer and the Chief Financial Officer.

42. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation to the Customers, Vendors, Bankers, Shareholders, Central and State Governments and Regulatory Authorities for their continued co-operation and support. Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the achievements of the Company.

On behalf of the Board of Directors

NESS N. WADIA

Chairman

(DIN: 00036049)

Mumbai, August 9, 2022