NGL Fine Chem Ltd Directors Report.

The Board of Directors are pleased to present the Companys Fortieth Annual Report and the Companys audited financial statements (consolidated and standalone) for the financial year ended 31st March, 2021.

1. OPERATING RESULTS

The operating results of the Company for the year ended 31st March, 2021 are as follows:

(Rs in Lakhs)
Year ended 31st March, 2021 Year ended 31st March, 2020 Year ended 31st March, 2021 Year ended 31st March, 2020
(Standalone) (Standalone) (Consolidated) (Consolidated)
Revenue from Operations 2,58,18.15 1,52,18.09 2,57,97.48 1,51,68.64
Profit before tax from continuing operations 7599.71 14,35.31 77,58.95 12,07.23
Tax Expenses (Including Deferred Tax) -20,52.75 -3,74.95 -20,87.06 -3,73.70
Profit after Tax 55,46.96 10,60.36 56,71.90 8,33.52
Total Comprehensive Income for the year 55,32.88 10,38.53 56,57.81 8,11.69

2. TRANSFER TO RESERVES

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

3. THE STATE OF THE COMPANYS AFFAIRS

During the year under review, your company achieved total revenue from operations of Rs 2,58,18.15 Lakhs (previous year Rs 1,52,18.09 Lakhs) resulting in increase of 69.65% over the previous year. The profit after tax (including other comprehensive income) is at Rs 55,32.88 Lakhs (previous year Rs 10,38.53 Lakhs resulting in increase of 432.76%).

The current year has been unprecedented with the Covid pandemic affecting the entire world. Its impact has been on every aspect of our life which has been constrained in terms of movement, social interaction, mobility of work and numerous other aspects. Global solutions were required to ensure return to efficient management of business. The company implemented borderless workspaces ensuring ease of work from home for office staff while mobility of personnel at factories was organised in such manner to ensure their health and safety through distancing and minimizing contact.

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

4. DIVIDEND

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

5. CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

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

6. FUTURE PROSPECTS

The covid pandemic is far from over and India has seen a second wave emerging from early 2021. In view of the alarming situation and deteriorating health scenario, the government re-imposed a lockdown from 15th April, 2021. This has once again disrupted supply chain logistics and movement of personnel. The company has continued measures adopted and implemented to ensure wellbeing, health and safety of its personnel and this has resulted in minimal impact on manufacturing operations. However, the length of the lockdown, the measures taken to control the pandemic may have an impact on the companys working and operations. In view of the uncertainty, it is difficult to visualise the impact it may have on the current year operations.

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

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

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

There was no transfer during the year to the Investor Education and Protection Fund in terms 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, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as Annexure A to Directors Report.

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

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed also discussed at the meetings of the Risk Management Committee and the Board of Directors of the Company. The Company has voluntarily constituted Risk Management Committee and its risk management policy is available on the website of the company: www.nglfinechem.com. The Company has amended risk management policy, in line with the latest amendments in the Policy, in its Board Meeting held on 01stJune, 2021 and also reconstituted it Risk Management Committee.

The company has implemented special Covid-19 sanitisation and decontamination measures at all its locations to ensure safety of personnel operating on premises. Social distancing 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 Companys internal controls system has been established on values of integrity and operational excellence and it supports the vision of the Company “To be the most sustainable and competitive Company in our industry”. The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors and their significant audit observations and follow up actions thereon are reported to the Audit Committee.

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

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013 read with Companies Corporate Social Responsibility (Policy) Rules, 2014. As per provision of Section 135 of the Companies 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 CSR activities, details of which are provided in attached Annexure B to Directors Report. The Company has amended CSR policy, in line with the latest amendments in the CSR Policy, in its Board Meeting held on June 1, 2021.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of investments made and loans given to subsidiaries has been disclosed in 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 arms length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. 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 are provided in the Companys financial statements (note 36) in accordance with the Accounting Standards.

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

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

15. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

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

16. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished as Annexure D to Directors Report. The annual Return is also available on the website of com the Company www.nglfinechem.

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

During the financial year, the Board met five times on 22nd May, 2020, 29th June, 2020, 12th August, 2020, 6th November, 2020 and 28th January, 2021.

18. DIRECTORS RESPONSIBILITY STATEMENT

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

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

That the selected accounting policies were applied consistently and the directors made judgments 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 on March 31, 2021, and that of the profit of the Company for the year ended on that date.

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

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

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

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

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

19. DEPOSITS

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

20. PARTICULARS OF EMPLOYEES AND REMUNERATION

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

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

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

The Nomination and Remuneration Committee of the Company has affirmed at its meeting held on 01st June, 2021 that the remuneration is as per the remuneration policy of the Company. The policy is available on the companys website: www.nglfinechem.com.

21. DIRECTORS

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

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

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

22. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS, THEIR APPOINTMENT AND REMUNERATION

The Nomination & Remuneration Committee of Directors have approved a Policy for Selection,

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

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

23. DECLARATION OF INDEPENDENT DIRECTORS

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

24. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The familiarisation program aims to provide Independent Directors with the pharmaceutical industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner. The familiarisation program also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes. The policy on Companys familiarisation program for Independent Directors is posted on Companys website at www. nglfinechem.com.

25. RATING

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

26. STATUTORY AUDITORS

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

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

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

27. INTERNAL AUDITORS

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

28. SECRETARIAL AUDITORS

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

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

29. COST AUDITORS

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

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

The Auditors Report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an Annexure F which forms part of this report.

31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Managements Discussion and Analysis Report for the year under review, as stipulated under regulation 34 (3) and Part B of schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Annual Report.

32. CORPORATE GOVERNANCE

The Company is committed towards maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under regulation 34 (3) and Part C of schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. The Certificate from the practicing Company Secretary confirming compliance with the conditions of Corporate Governance 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 in this Annual Report.

33. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES

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

34. REPORT ON CORPORATE GOVERNANCE

In terms of Listing Regulations, a report on Corporate Governance along with the certificate from M/s. HS Associates, Company Secretaries, confirming compliance of the conditions of Corporate Governance is annexed hereto and forms part of this Annual Report as Annexure H.

35. VIGIL MECHANISM

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

36. REPORTING OF FRAUD BY AUDITORS

During the year under review, the Internal Auditors, Statutory Auditors and Secretarial Auditor 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 Act, details of which needs to be mentioned in this Report.

37. ANNUAL EVALUATION BY THE BOARD

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

Corporate Governance Report.

38. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF 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

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

39. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the year there has been no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and companys operations in future.

40. COMMITTEES OF THE BOARD

In accordance with the Companies Act, 2013, the Board has also formed a Risk Management Committee on voluntary basis. 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 held during the year, are provided in the “Report on Corporate Governance”, a part of this Annual Report.

41. OTHER DISCLOSURES

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

No proceedings against the Company 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 time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof Not Applicable.

42. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section

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

43. POLICIES

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

44. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

Your Directors hereby confirm that the Company has complied with the necessary provisions of the revised Secretarial Standard 1 and Secretarial Standard 2 to the extent applicable to the Company.

45. ENHANCING SHAREHOLDER VALUE

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

46. CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operation include global and domestic demand and supply conditions affecting selling prices of raw materials, finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within and outside the country and various other factors. The current resurgence of Covid 19 pandemic has also affected the operations of the company.

47. ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors

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