navin fluorine international limited Directors report


Your Directors are pleased to present the 25th Annual Report and the Annual Audited Financial Statements of the Company for the financial year ended March 31, 2023 along with the notes forming part thereof.

1. FINANCIAL AND OPERATIONAL HIGHLIGTS Amount Rs. in crores unless otherwise stated

Particulars

Consolidated

Standalone

FY 2022-23 FY 2021-22 FY 2022-23 FY 2021-22
Revenue from Operations 2,077.40 1,453.36 1,628.14 1,403.61
Other income 35.73 39.22 41.00 37.47
Profit before Depreciation, Finance Costs, 586.04 394.03 462.89 392.89
Exceptional items and Taxation
Less: Depreciation and amortization expenses 62.64 47.90 42.60 44.25
Less: Finance Costs 27.52 1.90 2.05 1.66
Profit before Taxation 495.88 344.23 418.24 346.98
Less: Tax Expense 120.69 81.15 105.75 80.55
Less: Share of (loss) from joint ventures (net) 0.01 0.01 - -
Profit after Taxation 375.18 263.07 312.49 266.43
Add: Surplus brought forward from the previous year 1,579.62 1,371.39 1,603.16 1,391.51
Amount available for appropriation 1,954.80 1,634.46 1,915.65 1,657.94
Appropriation:
Other Comprehensive Income/(Loss)* 0.77 (0.83) 0.78 (0.78)
Payment of dividends (54.52) (54.48) (54.52) (54.48)
Reversal of excess provision of Dividend Distribution - 0.48 - 0.48
Tax
Surplus carried to Balance Sheet 1,901.05 1,579.62 1,861.91 1,603.16

*Remeasurement of (loss)/gain (net) on defined benefit plans, recognized as part of retained earnings. Note: Figures are regrouped wherever necessary to make the information comparable.

2. DIVIDEND

The Company has declared and paid an Interim Dividend of 5/- per equity share (i.e. 250% of the face value) during the Financial Year 2022-2023, which was paid in November 2022. The Board of Directors is pleased to recommend a Final Dividend of 7/- per equity share (i.e. 350% of the face value) for the Financial Year 2022-2023 which shall be paid on or after Friday, August 4, 2023 if declared by the Members of the Company at the forthcoming 25th Annual General Meeting (‘AGM).

The paid Interim Dividend and the recommended Final Dividend are in accordance with the provisions of the

Companies Act, 2013 (‘the Act) and the Dividend Distribution Policy of the Company which is available on the Companys website at https://www.nfil.in/investor/policies/ddp.pdf.

3. YEAR IN RETROSPECT

Your Company has had yet another successful year – consolidated revenues crossed 2,000 crore demonstrating success of the Companys strategy supported by disciplined delivery of capital projects and excellence in execution. For the year ended March 31, 2023, your Company achieved a consolidated revenue from operations of 2,077.40 cr., a growth of 43% as compared to 1,453.36 cr. during the

previous year. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items, increased from 394.03 cr. in the previous year to 586.04 cr. during the year ended March 31, 2023. Consolidated Profit before Tax (PBT), before exceptional items, was 495.88 cr in the current year as compared to 344.23 cr. in the previous year.

The Consolidated Operating EBITDA, before Other Income and Exceptional items, touched 550.31 cr., up from 354.81 cr during the previous year, a growth of 55%. Operating EBITDA Margin for the year was at 26% against 24% in the previous year. The Companys strong financial performance reflects the successful execution of its business strategy and continued focus on high-growth segments. The Company continues to invest in manufacturing capabilities and expanding its product portfolio to deliver innovative and value-added solutions to customers.

All business verticals secured strong growth underpinned by the Companys strategic and innovative initiatives. Strong growth momentum was seen across businesses. Specialty Chemicals and CDMO (Contract Development and Manufacturing Organisation), businesses saw 31% & 29% growth respectively over previous year. PP (igh Performance Products) business witnessed a growth of 64%, mainly, on account of better price realization and sales of FOs to oneywell International Inc.

CDMO business remains a key growth driver, witnessing a revenue growth of 29% to reach 448 crores. The growth was driven by a continued demand for custom manufacturing services, as well as an increase in business from new and existing clients. It contributed 21% of overall turnover for the year. Strong opening order pipeline sustained the sales through the year with addition of new customers and projects. The businesss increasing presence in commercial stage molecules secures sustainability of this business. The Company aims to further strengthen its position in the CDMO space by expanding its capacities and capabilities. Specialty Chemicals business recorded a turnover of 743 cr. vis-?-vis 566 cr. in the previous year, showing a robust growth of 31%. It contributed around 36% of the overall turnover. The growth was driven by a mix of new customers, new products and market share gain. This business witnessed strong new project flows from life science and crop science segments and optimal utilisation of the Companys facility. The Business aims to further its product portfolio by introducing newer and di_erentiated products.

During the year, PP Business recorded sales of 886 cr. compared to 540 cr. in the previous year, contributing around 43% of the overall turnover. Refrigerant gases business achieved robust growth due to better price realization (both in domestic and export markets) coupled with growth in non-emissive segment. PP Business remains focussed on developing eco-friendly refrigerants, which are gaining popularity in the market. The Business aims to continue investing in this ecofriendly refrigerants space, ramping up capabilities further. Low growth in Inorganic Fluorides reflects conscious management decision to optimize available F capacities towards high margin and value added products. With new capacity envisioned following the execution of the recently announced F Capex, the business aims to leverage its position and expand by introducing newer high margin products and harnessing new opportunities. During the year, PP business commenced operations of its plant at Dahej that supplies FOs to oneywell which also contributed significantly to its growth.

Key raw material costs moved in a mixed trend through the year with prices of Fluorspar declining over a period of time while Boric Acid went up significantly. Prices of almost all other critical raw materials increased significantly, more particularly, sulphur, caustic soda & chloroform were higher by 11%, 31% and 10% respectively Y-o-Y. On the energy cost front, average power cost was higher than previous year. Average natural gas price was higher by about 35% in the current fiscal compared to that of the previous year. The Companys strategy on building a resilient supply chain continues in action with increasingly diverse sources for key imported raw materials and securing of majority of other raw materials within close proximity to its sites.

During the year, the Specialty Chemicals business also commenced operations at Dahej of plants to supply fluorine based agri intermediates. These investments lay the foundation for the next phase of growth of Specialty Chemical business. It will help enhance product o_erings and strengthen customer relationships along with providing building blocks for future growth. Timely capex execution and delivery of quality product has further strengthened the Companys reputation and trust with the customers. Further, during the year the Company announced a capital expenditure of 450/- cr., to manufacture and supply F. When commissioned, the plant will secure backward integration at Dahej and also cater to the growing market for F driven by demand growth for fluorochemicals in pharmaceutical, agro-chemical and emerging renewables sector. In Bhestan, during the year, the Board approved capital expenditure of 80/- cr. for manufacturing R32 gas. Further, the Company invested significantly for debottlenecking of cGMP3 at Dewas and for development of the Companys R&D capability at Bhestan. The investments will help access new business opportunities while enhancing operational safety and reliability, and securing cost e_ciencies.

During the year, Indian rupee depreciated against all major global currencies. Rupee depreciation supported higher realizations as the contribution of exports within the overall sales increased from 52% to 66%. The exchange gain of 3.10 cr. as seen in the financials is on account of timing

di_erence of foreign exchange transactions and their realisation and / or restatement.

During the year, the Company continued to invest in strengthening capability across strategic functions like Technology and Development, Research and Development and Business Development. Improvement in operational e_ciencies, new product development, working on novel chemistries and developing long-term partnerships continued to remain a core ingredient of the Companys strategy. Through the year, cross functional teams continued to work on successful scaleup, improving productivity, quality and costs of various products to enable businesses gain competitive advantage in the market.

On a standalone basis, for the year ended March 31, 2023, the Company achieved total revenue from operations of 1,628.14 cr., Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items of 462.89 cr. and Profit before Tax (PBT), before exceptional items, of 418.24 cr.

The Company maintained ‘CARE AA rating, indicating high degree of safety with respect to timely servicing of financial obligations and very low credit risk, for borrowings with a tenure of more than one year. The rating for short-term facilities of tenure less than one year, remains at ‘CARE A1+, indicating very strong degree of safety with respect to timely servicing of short-term financial obligations and lowest credit risk.

During the year, the Company continued to enjoy ‘Responsible Care accreditation.

The Company remains committed to driving strong financial performance, investing in R&D pursuing innovation-driven growth, and building long-term value for all stakeholders. Further details are provided under various other heads of this Report and in the Management Discussion and Analysis Report annexed to this Report.

4. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has six subsidiaries and one joint venture: (i) Sulakshana Securities Limited (SSL), an entity created to settle dues of the term lenders of Mafatlal Industries Limited, remained a wholly - owned subsidiary of the Company. After settling all the third-party dues, SSL was left with 1,455 Sq. Meters of commercial floor space at Mafatlal Centre, Nariman Point, Mumbai and a significant portion of this property has been leased out on contemporary terms. SSL is utilizing its current cash flows to repay its debt to the Company. During the year, 5.80 Cr. has been repaid by SSL and its current outstanding to the Company is 1.69 Cr.

(ii) The Company owns 100% of Manchester Organics Limited (MOL), a specialized chemicals research company in Runcorn, U.K., holding 51% of the ordinary voting shares of MOL directly and the balance 49% through NFIL (UK) Limited, a 100% stepdown subsidiary created for the purpose. During the year, MOL reported turnover of ?4478K and net loss of ?279K.

(iii) NFIL (UK) Limited is a Wholly Owned Subsidiary (WOS) of the Company which was incorporated in the UK to acquire the balance shareholding of 49% of MOL. (iv) A step-down subsidiary, NFIL USA Inc. was formed as a Wholly Owned Subsidiary of NFIL (UK) Limited. The primary objective of formation of this Company was to increase the market penetration in the USA of the CDMO business and attracting appropriate talent as and when the business needs expansion.

(v) Navin Fluorine (Shanghai) Co. Ltd. (which is the wholly owned foreign enterprise under Chinese Laws) was incorporated with a view to have a strategic presence closer to the source of key raw materials for the Companys specialty and CDMO business. This presence helps us in taking informed decisions on procurement in terms of timeliness, availability, quality and cost. These decisions help in optimizing costs, proper planning and improving margins. The Companys presence in China is also helping to create strategic partnerships with key vendors.

(vi) Navin Fluorine Advanced Sciences Limited (NFASL) was incorporated in February 2020. NFASL is a material subsidiary. NFASL commenced commercial operations during the financial year ended 31st March 2023, achieving total revenue from operations of 513.86 cr., Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items of 129.26 cr. and Profit before Tax (PBT), before exceptional items, of 81.51 cr.

During the year assets capitalised in NFASL amounting to 1085 crore which included capitalisation for plant that supplies FOs to oneywell and our specialty chemical plants to supply fluorine based agri intermediates. Further, in FY24 we will incur capital expenditure on F manufacturing plant and commission additional specialty chemical plant to supply fluorine based agri intermediates.

Capex undertaken in NFASL is funded through mix of debt and equity contribution. As on March 31, 2023, debt outstanding stood at Rs. 844.08 cr. The said loans are secured by way of first charge on NFASLs fixed assets, second charge on its current assets and corporate guarantees given by the Company.

(vii) The Company has subscribed to 25% of the initial equity share capital of Swarnim Gujarat Fluorspar Private Limited. It is a Joint Venture (JV) with Gujarat Mineral Development Corporation Limited (GMDCL) and Gujarat Fluorochemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDCL from its mines. The entire quantity of the finished product viz. acid grade fluorspar will be bought out by the Company and GFL. This is a feedstock de-risking initiative for long term fluorspar supply assurance, the most critical raw material of the Company.

Pursuant to Section 129(3) of the Act, a separate statement containing salient features of the financial statements of each subsidiary and JV of the Company is annexed in the format of Form AOC-1 to the Financial Statements of the Company. The financial statements of all the above-mentioned subsidiaries and JV have been considered in the Annual Audited Consolidated Financial Results of the Company.

NFASL is a material subsidiary of the Company. Policy for determining material subsidiary is available at: https:// www.nfil.in/investor/policies/mspf_01042019.pdf. The Annual Financial Statements of all subsidiary companies are placed on the Companys website at https://www.nfil. in/investor/annu_reports.html. Copies of the same will be made available to interested Members who may write to the Company Secretary in this regard.

No company has become or ceased to become subsidiary, associate or JV of the Company during the year.

5. CAPITAL STRUCTURE OF THE COMPANY

During the year, the Company has allotted an aggregate of 18,020 fully paid equity shares under Employees Stock Option Scheme 2007 and Employees Stock Option Scheme 2017.

The paid-up share capital of the Company has increased from 9,90,91,745 /- (4,95,38,595 equity shares of face value of 2/- each fully paid and 14,555 equity shares of 2/- each, 1/- paid-up) to 9,91,33,420 /- (4,95,62,250 equity shares of face value of 2/- each fully paid and 8,920 equity shares of 2/- each, 1/- paid up) as on March 31, 2023.

Out of 14,555 partly paid equity shares, 5,635 equity shares have been converted into fully paid equity shares and listed on the Stock Exchanges viz. BSE Limited and National Stock Exchange of India Limited, and the Company is in process of obtaining corporate action approval from Depositories for 860 partly paid shares.

6. REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS, AND CORPORATE GOVERNANCE

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), Management Discussion and Analysis Report and Corporate Governance Report are annexed as ‘Annexure 1 and ‘Annexure 2 respectively to this Report.

7. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with SEBI Listing Regulations, the Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective, in the prescribed form is annexed as ‘Annexure 3 to this Report.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company firmly believes in giving back to the society and maintaining healthy and collaborative relationships with the communities in which it operates. The Company will continue to consistently act as a good corporate citizen and it sincerely believes in creating a positive impact on communities through contributions via CSR.

The CSR Policy of the Company is reflective of its CSR philosophy and highlights the snapshot of activities undertaken by the Company. The scope of the Policy includes the areas covered under the Policy and activities eligible for CSR contribution. The other aspects covered by the Policy include guiding principles for: (i) selection of CSR activities and annual action plan, (ii) execution of CSR activities and (iii) monitoring CSR activities, along with voluntary impact assessment.

The Companys updated CSR policy is available on the website at: https://www.nfil.in/investor/policies/NFIL_CSR_ Policy_1.pdf During the year under review, the Company endeavored to touch the lives of communities in which it operates through projects in the areas of health, education, sports and animal care, among other equally important social causes. Pursuant to the provisions of Section 135 of the Act, the Company was statutorily required to spend 6.14 crores towards CSR during financial year 2022-2023. The Company has spent 6.15 crores.

The requisite details on CSR initiatives pursuant to Section 135 of the Act read with the Companies (Corporate Social

Responsibility Policy) Rules, 2014 are annexed as ‘Annexure 4 to this Report.

9. INDUSTRIAL RELATIONS

The engagement with workmen and sta_ remained cordial and harmonious during the year and the management received full co-operation from employees. The Company continues to focus on extensive training and developmental activities directed towards safety, quality and e_ciency. There were no disruptions to the business because of any Union issues. The total number of employees as on March 31, 2023 was 1,053.

10. INSURANCE

The properties, insurable assets and interests of the Company such as buildings, plants and machineries, and stocks among others are adequately insured.

11. EMPLOYEES STOCK OPTION SCEMES

The Company has two Employees Stock Option Schemes viz. Employees Stock Option Scheme 2007 and Employees Stock Option Scheme 2017. During the year, 1,55,000 Stock Options were granted and there were no material changes in the Employees Stock Option Schemes of the Company. The Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. In this regard, a Certificate from Makarand M. Joshi & Co., the Secretarial Auditors of the Company, will be placed at the ensuing 25th Annual General Meeting for inspection by Members.

Relevant details of the Employees Stock Option Schemes pursuant to the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are specified in ‘Annexure 5 to this Report.

12. CANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, Mr. Basant Kumar Bansal, Chief Financial Officer and Key Managerial Personnel of the Company, resigned with e_ect from close of business hours of August 10, 2022 and consequently, Mr. Partha Roychowdhury was appointed as an Interim Chief Financial Officer and Key Managerial Personnel of the Company with e_ect from August 11, 2022. Further, pursuant to the appointment of Mr. Anish P. Ganatra as Chief Financial Officer and Key Managerial Personnel with e_ect from February 9, 2023, Mr. Roychowdhury resigned as Interim Chief Financial Officer and Key Managerial Personnel with e_ect from close of business hours of February 8, 2023 and he continues as CEO of PP Business of the Company.

At the 24th Annual General Meeting of the Company held on July 27, 2022, the following Directors were appointed/ re-appointed by the Members of the Company:

• Mr. Mohan M. Nambiar was re-appointed as a Non-Executive Non-Independent Director of the Company as he had retired by rotation and o_ered himself for reappointment.

• Ms. Apurva S. Purohit was appointed as an Independent Director for a term of five (5) consecutive years commencing from October 19, 2021 and ending on October 18, 2026.

The Board recommends to the Members of the Company the re-appointment of Mr. Vishad P. Mafatlal, Director of the Company, who retires by rotation at the forthcoming AGM. and being eligible, has o_ered himself for re-appointment as a Director.

The current term of Mr. Radhesh R. Welling, Managing Director, will end on December 10, 2023. Pursuant to recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its Meeting held on May 13, 2023, re-appointed Mr. Welling as the Managing Director of the Company for five (5) consecutive years commencing from December 11, 2023 to December 10, 2028 subject to approval of the Members of the Company. As required under Section 160 of the Act, notices have been received from Members of the Company proposing the candidature of Mr. Welling as a Director. The first term of Mr. Atul K. Srivastava as an Independent Director will end on June 20, 2024 and based on the recommendation of the Nomination and Remuneration Committee, it is recommended to re-appoint Mr. Srivastava for another five (5) consecutive years from June 21, 2024 and ending on June 20, 2029. As required under Section 160 of the Act, notices have been received from Members of the Company proposing the candidature of Mr. Srivastava as a Director.

Brief profiles of Mr. Mafatlal, Mr. Welling and Mr. Srivastava are provided in the Notice convening the 25th Annual General Meeting.

13. COMPOSITION OF COMMITTEES

The composition of the Audit Committee is as under:

Sr. Name Chairman/Member
No.
1. Mr. Sunil S. Lalbhai Chairman
2. Mr. Pradip N. Kapadia Member
3. Mr. Mohan M. Nambiar Member
4. Ms. Radhika V. aribhakti Member

During the year, there were no instances when the recommendations of the Audit Committee were not accepted by the Board of Directors of the Company. The details pertaining to the composition of various committees including the Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee are included in the Corporate Governance Report, which forms part of this Report.

14. VIGIL MECANISM

In accordance with the requirements of the Act and SEBI Listing Regulations, the Company has a Whistle Blower Policy approved by the Board of Directors.

The objectives of the policy are: a) To provide a mechanism for employees and Directors of the Company and other persons dealing with the Company to report to the Audit Committee, any instances of unethical behavior, actual or suspected fraud or violation of the Companys Ethics Policy, b) To safeguard the confidentiality and interest of such employees/Directors/other persons dealing with the Company against victimization, who notice and report any unethical or improper practices, and c) To appropriately communicate the existence of such mechanism, within the organization and to outsiders. Whistle Blower Policy is available on the web-link https:// www.nfil.in/investor/policies/Whistle%20Blower%20Policy. pdf. The Company confirms that no personnel have been denied access to the Audit Committee pursuant to the whistle blower mechanism.

15. ANNUAL RETURN

The Annual Return of the Company for the financial year 2022-2023 is available on the website of the Company at https://www.nfil.in/investor/annu_reports.html.

16. BOARD MEETINGS

During the year, the Board of Directors met eight times. The details of the Board Meetings are provided in the Corporate Governance Report.

17. DIRECTORS RESPONSIBILITY STATEMENT

As required under the provisions of Section 134 of the Act, your Directors report that: (a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a_airs of the Company at the end of the financial year and of the profits of the Company for that period; (c) The Directors have taken proper and su_cient 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; (d) The Directors have prepared the annual accounts on a going concern basis; (e) The Directors have laid down internal financial controls (as required by Explanation to Section 134(5)(e) of the Act) to be followed by the Company and such internal financial controls are adequate and are operating e_ectively; (f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating e_ectively.

18. DECLARATION BY INDEPENDENT DIRECTORS

Mr. Pradip N. Kapadia, Mr. Sunil S. Lalbhai, Mr. Sudhir G. Mankad, Mr. arish Rs.. Engineer, Ms. Radhika V. aribhakti, Mr. Atul K. Srivastava, Mr. Ashok U. Sinha, Mr. Sujal A. Shah and Ms. Apurva S. Purohit are independent in terms of Section 149(6) of the Act and Regulation 16 of SEBI Listing Regulations. The Company has received requisite annual declarations/confirmations from all the aforesaid Independent Directors confirming their independence and compliance with the Code of Conduct for Independent Directors prescribed under Schedule IV to the Act.

The Board of Directors of the Company is of the view that Independent Directors fulfill the criteria of independence and they are independent from the management of the Company. All Independent Directors of the Company have confirmed that they have registered themselves with Independent Directors Database of The Indian Institute of Corporate A_airs (‘IICA) and have cleared the online proficiency test of IICA, as applicable.

19. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has a policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Other Employees as per Section 178(3) of the Act and Regulation 19 of SEBI Listing Regulations, which includes:

• Criteria for identification of persons for appointment as Directors and in senior management positions

• Criteria for determining qualifications, positive attributes, independence of a Director

• Board Diversity

• Remuneration to Non-Executive Directors, Key Managerial Personnel and Senior Management and remuneration to other employees The policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Other Employees is available at the web-link https://www.nfil.in/investor/policies/ Policyardkmpe.pdf.pdf.

20. LOANS, GUARANTEES AND INVESTMENTS MADE BY TE COMPANY AS PER SECTION 186 OF TE ACT

The details of loans and guarantees given, securities provided and the investments made by the Company as on March 31, 2023 are provided in the Annual Audited Financial Statements and its notes.

21. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were in the ordinary course of the business and on the arms length basis.

The Company has not entered into any material contracts or arrangements or transactions with related parties as per Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI Listing Regulations. The Company has nothing to report in Form AOC-2, hence, the same is not annexed.

The Companys Policy on materiality of related party transactions and on dealing with related party transactions is available on the Companys website at: https://www.nfil.in/ investor/policies/pmrptrpt.pdf.

22. STATEMENT OF COMPANYS AFFAIRS

The state of Companys a_airs is given under the heading "Year in Retrospect" and various other headings in this Report and in the Management Discussion and Analysis Report which is annexed to this Report.

23. ENERGY CONSERVATION, TECNOLOGY ABSORPTION AND FOREIGN EXCANGE EARNINGS AND OUTGO

In terms of Section 134 of the Act read with the Companies (Accounts) Rules, 2014, the information on conservation of energy, technology absorption and foreign exchange earnings and outgo is disclosed in ‘Annexure 6 to this Report.

24. RISK MANAGEMENT POLICY

The Company has a structured risk management framework and policy that provides an all-inclusive approach to safeguard the organization from various risks, both operational and strategic, through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks that could materially impact the business objectives. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during the decision making. More details are provided in the Management Discussion and Analysis Report and Corporate Governance Report.

25. ANNUAL PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and SEBI Listing Regulations, performance evaluation was carried out as under:

Board of Directors

In accordance with the criteria suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes and Board dynamics. The Independent Directors, at their separate meeting, also evaluated the performance of the Board as a whole based on various criteria. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

Committees of the Board of Directors

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee and the Risk Management Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes and committee dynamics. The Board was of the unanimous view that all the committees were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act read with the Rules made thereunder and SEBI Listing Regulations.

Individual Directors

(a) Independent Directors: In accordance with the criteria suggested by the Nomination and Remuneration Committee, the performance of each Independent Director was evaluated by the entire Board of Directors (excluding the Director being evaluated) on various parameters like qualification, experience, availability and attendance, integrity, commitment, governance, independence, communication, preparedness, participation and value addition. The Board appreciated the contribution made by all the Independent Directors in guiding the management in achieving higher growth and concluded that continuance of each Independent Director on the Board will be in the interest of the Company. The Board was also of the unanimous view that each Independent Director was a reputed professional and brought his/her rich experience to the deliberations of the Board.

(b) Non-Independent Directors: The performance of each of the Non-Independent Directors (including the Executive Chairman) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. Various criteria considered for the purpose of evaluation included qualification, experience, availability and attendance, integrity, commitment, governance, communication etc. The Independent Directors and the Board were of the unanimous view that all the Non-Independent Directors were providing good business and people leadership.

26. PARTICULARS OF EMPLOYEES

The requisite details under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of ‘Annexure 7 to this Report.

The requisite details relating to the remuneration of the specified employees under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report. Further, this Report and Financial Statements are being sent to Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure will be open for inspection by any Member. Interested Members may write to the Company Secretary.

27. PREVENTION OF WORKPLACE ARASSMENT

The Company is committed to provide an environment, which is free of discrimination, intimidation and abuse. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual arassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaints were received from employees in this regard.

28. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As per Section 124 of the Act read with the Rules made thereunder, any dividend amount transferred to Unpaid Dividend Account which remains unclaimed or unpaid for 7 years is transferred to IEPF and shares in respect of which dividend has not been paid or claimed for 7 consecutive years or more are transferred to IEPF.

The details of shares and dividends transferred to IEPF by the Company during the year are available at: https://www.nfil. in/investor/unpaid.html. The Company intimates concerned Members and issues public notice in respect of shares to be transferred to IEPF in the newspaper, on timely basis.

29. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to Financial Statements. It has laid down certain guidelines, policies, processes and structures which are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. These controls enable and ensure the systematic and e_cient conduct of the Companys business, protection of assets, prevention and detection of frauds and errors and the accuracy and completeness of the accounting and financial records. The controls have been reviewed and found satisfactory on the following key control matrices: a. Entity level controls b. Financial controls c. Operational controls The Company has a built-in review and control mechanism to ensure that such control systems are adequate and operating e_ciently and these are persistently reviewed for e_ectiveness. The internal control system is maintained by qualified personnel and there is an internal audit review on a regular basis, to suggest adequacy and e_ectiveness of the system and to recommend improvements.

30.STATUTORY AUDITORS

At the 24th AGM held on July 27, 2022, the Members of the Company approved the re-appointment of Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) for a second term of 5 consecutive years commencing from the conclusion of the 24th Annual General Meeting until the conclusion of 29th Annual General Meeting based on the recommendation of the Audit Committee and the Board.

31. STATUTORY AUDITORS REPORT

There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in their report on the Financial Statements of the Company for the financial year ended March 31, 2023.

32. SECRETARIAL AUDIT REPORT

Pursuant to Section 204(1) of the Act and Regulation 24A of SEBI Listing Regulations, the Secretarial Audit Report of the Company for the financial year ended March 31, 2023 issued by Makarand M. Joshi & Co., Practicing Company Secretaries, is annexed as ‘Annexure 8 to this Report. Further, the Secretarial Audit Report of Navin Fluorine Advanced

Sciences Limited, a Material Wholly Owned Subsidiary, for the financial year ended March 31, 2023 issued by MMJB & Associated LLP, Practising Company Secretaries, is annexed as ‘Annexure 9 to this Report. The aforesaid Reports do not contain any qualification, reservation or adverse remark or disclaimer.

33. COST RECORDS AND COST AUDITORS

Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is applicable to the Company and accordingly, such accounts and records are being maintained.

The Board of Directors, based on the recommendation of the Audit Committee, appointed B. Desai & Co., (Firm Registration No. 005431), Cost Accountants, as Cost Auditors to audit the cost accounts of the Company for the financial year 2023-2024 on agreed remuneration of 5,00,000/-. As required under the Act, necessary resolution seeking Members ratification for the remuneration payable to B. Desai & Co. will be placed at the forthcoming Annual General Meeting. The Cost Audit Report in respect of the financial year 2022-2023 will be filed within the statutory timeline.

34. SECRETARIAL STANDARDS

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

35. STATUTORY DISCLOSURES

a) The Company has not accepted any deposit from the public pursuant to Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014; b) The Company has not issued equity shares with di_erential rights as to dividend, voting or otherwise; c) The Managing Director, Whole Time Director and Key Managerial Personnel of the Company have not received any remuneration or commission from any of its subsidiaries; d) No significant and material Orders have been passed by the regulators or courts or tribunals which impact the going concern status and the Companys operations in future; e) As there was no buyback of shares during the year, the Company has nothing to disclose with respect to buyback of shares; f) None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act; g) There were no material changes and commitments a_ecting the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this Report. h) As permitted under the provisions of the Act, the Board does not propose to transfer any amount to general reserve.

36. APPRECIATION

The Directors wish to place on record their appreciation for the devoted services of the employees, who have largely contributed to the e_cient management of your Company. The Directors also place on record their appreciation for the continued support from the shareholders, customers, suppliers, Governments, bankers, lenders and other stakeholders.

By order of the Board of Directors For NAVIN FLUORINE INTERNATIONAL LIMITED

Vishad P. Mafatlal

Chairman DIN: 00011350

Date: May 13, 2023 Place: Mumbai

Registered Office:

Office No. 602, 6th floor, Natraj by Rustomjee, Near Western Express ighway, 194, Sir Mathuradas Vasanji Road, Andheri (East), Mumbai 400069, India Tel: +91 22 6650 9999; Fax: +91 22 6650 9800 E-mail ID: info@nfil.in; Website: www.nfil.in CIN: L24110M1998PLC115499