AFFLUENCE

The Members,
Your Directors have pleasure in presenting their 29th (Twenty Ninth) Annual Report on the business and operations of the Company and the financial statements for the Year ended March 31, 2018.

 Financial summary or highlights/Performance of the Company (Standalone)

Brief description of the Company’s working during the year/State of Company’s affair

The Company reported a revenue of INR 163.29Cr in Financial Year 2018 as against Financial Year 2017 INR 110.96Cr, achieving a 47% growth over the previous year. This was primarily due to higher capacity utilisation and also due to additional capacity acquired at Karakhadi, Vadodara, Gujarat. This capacity expansion is mainly into organo-bromides, which has doubled the reactor capacity from 45m3 to 95m3. Further, the Company is currently enhancing its Baroda plant capacity, taking the total reactor capacity to around 130m3 in the coming years.



The capacity expansion accompanied with economies of scale resulted in the net profits increasing from INR 8.13Cr in Financial Year 2017 to INR 12.61Cr in Financial Year 2018 showing a 55% growth over the previous year, with improvement in margins from 7% to ~8%.

Further, with readily available land, the Company is also planning to increase its Lithium compounds capacity at Dahej SEZ, Bharuch, Gujarat With strong R&D capabilities, capacity expansion & continuous efforts from the Directors for enhancing the performance, the Company expects positive growth in the coming years.

Change in the nature of business:

There are no changes in the business line of the Company.

Dividend:

4A. PREFERENCE SHARES:

The Directors of the Company has declared and paid Preference Dividend to Fully Redeemable Cumulative Preference shares of Rs.1,04,86,027/- during the Financial Year.

On 30th June 2017 Rs. 4.86 per shares amounting to Rs.51,99,907/-
   2.  On 29th December 2017 Rs. 4.94 per shares amounting to Rs. 52,86,120/-

The Directors of the Company has declared and paid Preference Dividend to Optionally Convertible Preference shares of Rs.13,00,000/- on 21st March 2018 at Rs. 10/- per share. 

4B. EQUITY SHARES:

For the financial year 2017-18 based on performance of the company, the board pleased to recommend a dividend of Rs.1/- per equity share.

Reserves

The Board transferred amount of Rs.88,00,000/- to Capital Redemption Reserves for the financial year under review. The Board do not recommend any amount to be transferred to General Reserves.

Share Capital

BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.

BONUS SHARES
The Company has not issued any Bonus Equity shares during the year under review.

ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS
The company under the provision of Section 43 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 [Chapter IV] has not issued any shares with Differential Rights.

Directors and Key Managerial Personnel

Mr. Shyamsunder Radheshyam Upadhyay, Director retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. 

The present directors of the Company are:

KEY MANAGERIAL PERSONNEL

The Company has Mr. Haridas Thakarshi Kanani as Managing Director. There was change in designation of Dr. Harin Kanani from Whole Time Director to Joint Managing Director w.e.f 22nd July 2017 during the Year.

Mr. Nimish Gorohandas Shah as Chief Financial Officer of the Company. Mr. Nimish Gorohandas Shah resigned from the post of Chief Financial Officer w. e. f. 31.12.2017. The Company is in search of appropriate candidate.


The Company had appointed Mr. Gaurav Kumar as Company Secretary with effect from 19th May, 2017 who resigned w.e.f. 14th March 2018. The Company is in search of appropriate candidate.

All independent directors have separately submitted a declaration that each of them meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013. Further there has been no change in the circumstances which may affect their status as Independent Director during the year.
 
Particulars of Employees

No employee of the company was in receipt of remuneration for the year in excess of limits prescribed under the provisions of Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The list of top 10 employees is available with the Company and any person who wish to receive the same may get the detailed list.

Meetings:

Board Meetings:

The Board of Directors met 10 times i.e on 10th April, 2017, 2nd May, 2017, 15th May, 2017, 19th May, 2017, 5th June, 2017, 22nd July, 2017, 4th August, 2017, 26th September, 2017, 29th December, 2017and 22nd February, 2017 during the financial year under review.

Audit Committee Meetings:

The Audit Committee met 2 times during the year i.e on 5th June, 2017 and 29th December, 2017.

Nomination and Remuneration Committee Meetings:

The Nomination and Remuneration Committee met 2 times during the year i.e 19th May, 2017, 4th August, 2017.

CSR Committee Meeting:

The CSR committee met 1 time during the year i.e on 26th September, 2017.

Details of Subsidiary/Joint Ventures/Associate Companies:

The Company does not have a subsidiary nor has any associate Company. The Company also does not have a holding Company.

Auditors:

The Auditors, M/s. JMT & Associates, Chartered Accountants, Mumbai were appointed for the period of five years from the conclusion of Annual General meeting of 2013-2014 till the conclusion of the Sixth Annual General Meeting i. e. for the financial year ended 31st March 2019 subject to the ratification of the members at every general meeting. It was therefore proposed to ratify their appointment and fix their remuneration. 

The Company has received a certificate from the statutory auditors to the effect that they are eligible for ratification in terms of Section 141 of the Companies Act 2013. If ratified, M/s. JMT & Associates, Chartered Accountants shall hold office for the remaining term.

Auditors’ report

The Auditors’ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

Internal / Cost Audit & Internal Controls

M/s. Y. R. Doshi & Co., Cost Accountants, (Firm Registration No. 000003), were appointed as Cost Auditor of the Company for Financial Year 2017-18 as per the provisions of Section 138 of Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014.

Risk management policy

In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the same is reviewed periodically by the Board of Directors. Salient features of the policy are as under:-

Neogen Chemicals Limited is committed to the identification and comprehensive management of risk.
Risk is the effect of uncertainty on Neogen Chemicals Limited objectives and is inherent in our business. Risk management allows us to prevent losses or capitalize on opportunities.
Understanding risk and our appetite for risk will be key considerations in our decision making.
We aim to achieve a risk management culture through a series of risk management principles.

Extract of annual return:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I.

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 were no such significant and material changes affecting financial position of the company to which the financial statements relate and the date of the report.






Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future
   
During the year under review there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements.



The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

Deposits

The Company has not accepted any deposit as per the provisions of Section 73/76 of Companies Act, 2013 read with the Companies (Acceptance of Deposit Rules), 2014. 

Particulars of loans, guarantees or investments under section 186

The Company has not given any loan, has not provided any guarantee or security for any loan nor has done any investments during the Financial Year and therefore the provisions of Section 186 of Companies Act, 2013 are not applicable.

Particulars of contracts or arrangements with related parties:

The Related Party Transactions are as mentioned in Notes to Accounts. All transactions are in Ordinary Course of business and are at arm’s length.
Obligation of the company under the sexual harassment of women at workplace(Prevention, Prohibition and Redressal) Act,2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.








Conservation of energy, technology absorption and foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are enclosed as per “Annexure II” to the Board’s Report.

Corporate Social Responsibility (CSR)

As part of Initiative under “Corporate Social Responsibility”, the Company constituted “Corporate Social Responsibility Committee” under the Chairmanship of an Independent Director Mr. Hitesh Reshamwala. During the year under review, Company has contributed funds towards preservation and promotion of Cultural and art, Water supply for agriculture purpose ,special child education and vocational rehabilitation, promotion of tribal community through formal education, education and functional innovative for students. The contribution in this regard has been made to the Registered Trust managing leading hospital.

The Annual Report on CSR Activities is annexed as “Annexure III” to the Board’s Report.

Directors’ Responsibility Statement

The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had 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;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Transfer of Amounts to Investor Education and Protection Fund

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).







Committees of the board:

The details of composition of the Committees of the Board of Directors are as under:-

Audit Committee: The Company being a Limited Company having paid up capital of more than Rs. 10 Crores the Audit Committee is required to be constituted which has been duly constituted

Vigil Mechanism: Though the Company’s borrowing exceed Rs.50 crores for FY 2017-18.

Nomination & Remuneration Committee: The Company being a Limited Company having paid up capital of more than Rs. 10 Crores the Nomination & Remuneration Committee is required to be constituted, which is duly constituted.

Stakeholders Relationship Committee:

The Company was not required to constitute the Stakeholders Relationship Committee as the number of shareholders during the financial year were not more than 1000.

Corporate Social Responsibility Committee:

The Company having a net profit of Rs 5 crore or more during previous financial year, the CSR Committee is required to be constituted, which is duly constituted.

Internal Complaints Committee: UnderThe Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Acknowledgements
An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results.



For and on behalf of the Board of Directors
Neogen Chemicals Limited



______________________ _______________________
Haridas Kanani Dr. Harin Kanani
Managing Director Joint Managing Director
DIN: 00185487 DIN:05136947


Place: Thane
Date: 3rd May, 2018 


ANNEXURE II

Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a) Conservation of energy

(b) Technology absorption

(c) Foreign exchange earnings and Outgo

Particulars with regard to Foreign Exchange earnings and outgo appear in Note No.36to Note No.38 forming part of the accounts.
The Foreign exchange outgo for the Financial year were Rs.35,03,83,444/- for Import & Rs. 67,78,918/- for expenditure in foreign currency. Earning was Rs. 27,96,09,856/-. 



For and on behalf of the Board of Directors
Neogen Chemicals Limited



______________________ _______________________
Haridas Kanani Dr. Harin Kanani
Managing Director Joint Managing Director
DIN: 00185487 DIN: 05136947


Place: Thane
Date: 3rd May, 2018 


ANNEXURE III
CORPORATE SOCIAL RESPONSIBILITY (CSR)

(Pursuant to clause (o) of sub-section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014

A brief outline of the Company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs:

CSR POLICY
(As approved by the Board at its meeting held January 3, 2015)

As a responsible Company, It has since its inception participated in business activities which help in improving quality of life for the Communities where it operates. This also includes creating better livelihood opportunities:

Objective:

The main objective of CSR Policy is to lay down guidelines for Corporate Social Responsibility Activities of Neogen Chemicals Limited. The Policy is formulated in compliance with the requirements of the Companies Act, 2013 and rules made there under.

Philosophy of Neogen Chemicals Limited on CSR:

Neogen on a voluntary basis has contributed towards welfare of society over a period of time. Now, Company will strive to do its best to follow the requirements of New Companies Act, on CSR obligation in letter and spirit.

Projects / Programs to be undertaken:

The activities to be undertaken by the Company as CSR activities shall be the projects/programs relating to the activities/subjects specified enumerated in the Schedule VII of the Companies Act, 2013 or any amendment thereto or modification thereof.

The Committee shall from time to time decide/recommend to the Board on, CSR activities to be undertaken, the geographical area covered, agencies or trusts or NGOs with which the projects/activities are to be undertaken, Amount to be spent on various projects whether ongoing or fresh.



While deciding on the CSR activities, priority shall be given to the needs and requirements of communities or area in the vicinity of the manufacturing facilities of the Company.

The CSR programs or projects or activities that the Company plans to undertake for the execution/implementation are as under:

Improving the quality of life in rural areas.
Ensuring environmental sustainability including measures for reducing inequalities faced by social and economically backward groups.
Contribution to funds for promoting technology.
Investing in various rural development projects.
Contributing to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for development and relief.
Other areas approved by the CSR Committee that are covered in the CSR Rules as amended from time-to-time.

The Company will continue to engage with stakeholders including experts, NGOs and the Government and would take up such other CSR activities in line with Government’s intent and which are important for society.

2. The Composition of the CSR Committee

3. Average Net Profit of the Company for last 3 financial year

Average Net Profit: Rs. 9,63,82,511 /-

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above)

The Company is required to spend Rs.: 19,27,650/-

5. Details of CSR Spend for the Financial Year;

Total amount spent for the financial year: Rs.19,75,000 /-

Manner in which the amount spent during the financial year is detailed below:

The cumulative spends on each of the above long term projects disclosed from this year.

6. In case company has failed to spend the two percent of the average net profit for the last three financial years or any part thereof, the reasons for not spending the amount.

Not Applicable.





A responsibility statement of CSR committee :

Through this report, the Company seeks to communicate its commitment towards CSR to the Ministry of Corporate Affairs. Members of CSR Committee confirm that the implementation and monitoring of CSR Policy is in compliance with CSR Objectives and Policy of the Company.


For and on behalf of the Board of Directors
Neogen Chemicals Limited



Sd/-
Hitesh Reshamwala
Chairman of the Committee


                                 

The Company reported a revenue of INR 163.29Cr in Financial Year 2018 as against Financial Year 2017 INR 110.96Cr, achieving a 47% growth over the previous year. This was primarily due to higher capacity utilisation and also due to additional capacity acquired at Karakhadi, Vadodara, Gujarat. This capacity expansion is mainly into organo-bromides, which has doubled the reactor capacity from 45m3 to 95m3. Further, the Company is currently enhancing its Baroda plant capacity, taking the total reactor capacity to around 130m3 in the coming years. The capacity expansion accompanied with economies of scale resulted in the net profits increasing from INR 8.13Cr in Financial Year 2017 to INR 12.61Cr in Financial Year 2018 showing a 55% growth over the previous year, with improvement in margins from 7% to ~8%. Further, with readily available land, the Company is also planning to increase its Lithium compounds capacity at Dahej SEZ, Bharuch, Gujarat With strong R&D capabilities, capacity expansion & continuous efforts from the Directors for enhancing the performance, the Company expects positive growth in the coming years.

a) Conservation of energy (i) the steps taken or impact on conservation of energy Regularly maintained by installing energy efficient equipment’s. (ii) the steps taken by the company for utilizing alternate sources of energy NA (iii) the capital investment on energy conservation equipment’s NA

(b) Technology absorption (i) the efforts made towards technology absorption As we have in house R&D we continue to improve our processes. (ii) the benefits derived like product improvement, cost reduction, product development or import substitution • Addition of new product. • Increase in Market Share • Increase in production capacity utilization • Improvement in Quality • Increase in productivity (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- N.A (a) the details of technology imported N.A (b) the year of import; N.A (c) whether the technology been fully absorbed N.A (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof N.A (iv) the expenditure incurred on Research and Development 5.40 Lacs is capital expenditure 89.06 Lacs is revenue expenditure.

(c) Foreign exchange earnings and Outgo Particulars with regard to Foreign Exchange earnings and outgo appear in Note No.36 to Note No.38 forming part of the accounts. The Foreign exchange outgo for the Financial year were Rs.35,03,83,444/- for Import & Rs. 67,78,918/- for expenditure in foreign currency. Earning was Rs. 27,96,09,856/-.

25. Directors’ Responsibility Statement The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that— (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had 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; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.