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Navin Fluorine International Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2023

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 HIGHLIGHTS Amount H in crores unless otherwise stated

Particulars

Consolidated

Standalone

FY 2022-23

FY 2021-22

FY 2022-23

FY 2021-22

Revenue from Operations

2,07740

1,453.36

1,628.14

1,403.61

Other income

35.73

39.22

41.00

3747

Profit before Depreciation, Finance Costs, Exceptional items and Taxation

586.04

394.03

462.89

392.89

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

26643

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

1,63446

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)

(5448)

Reversal of excess provision of Dividend Distribution Tax

-

0.48

-

0.48

Surplus carried to Balance Sheet

1,901.05

1,579.62

1,861.91

1,603.16

*Remeasurement of (ioss)/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 H5/- 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 H7/- 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 Company''s website at https://www.nfii.in/investor/poiicies/ddp.pdf.

3. YEAR IN RETROSPECT

Your Company has had yet another successful year -consolidated revenues crossed H2,000 crore demonstrating success of the Company''s strategy supported by discipiined delivery of capital projects and excellence in execution. For the year ended March 31, 2023, your Company achieved a consolidated revenue from operations of H2,07740 cr., a growth of 43% as compared to H1,453.36 cr. during the

previous year. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items, increased from H394.03 cr. in the previous year to H586.04 cr. during the year ended March 31, 2023. Consolidated Profit before Tax (PBT), before exceptional items, was H495.88 cr in the current year as compared to H344.23 cr. in the previous year.

The Consolidated Operating EBITDA, before Other Income and Exceptional items, touched H550.31 cr., up from H354.81 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 Company''s 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.

AH business verticals secured strong growth underpinned by the Company''s 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. HPP (High Performance Products) business witnessed a growth of 64%, mainly, on account of better price realization and sales of HFOs to Honeywell International Inc.

CDMO business remains a key growth driver, witnessing a revenue growth of 29% to reach H448 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 business''s 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 H743 cr. vis-a-vis H566 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 Company''s facility. The Business aims to further its product portfolio by introducing newer and differentiated products.

During the year, HPP Business recorded sales of H886 cr. compared to H540 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. HPP 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 HF capacities towards high margin and value added products. With new capacity envisioned following the execution of the recently announced HF Capex, the business aims to leverage it''s position and expand by introducing newer high margin products and harnessing new opportunities. During the year, HPP business commenced operations of its plant at Dahej that supplies HFOs to Honeywell which also contributed significantly to it''s 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 Company''s 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 offerings and strengthen customer relationships along with providing building blocks for future growth. Timely capex execution and delivery of quality product has further strengthened the Company''s reputation and trust with the customers. Further, during the year the Company announced a capital expenditure of H450/- cr., to manufacture and supply HF. When commissioned, the plant will secure backward integration at Dahej and also cater to the growing market for HF 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 H80/- cr. for manufacturing R32 gas. Further, the Company invested significantly for debottlenecking of cGMP3 at Dewas and for development of the Company''s R&D capability at Bhestan. The investments will help access new business opportunities while enhancing operational safety and reliability, and securing cost efficiencies.

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 H3.10 cr. as seen in the financials is on account of timing

difference 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 efficiencies, new product development, working on novel chemistries and developing long-term partnerships continued to remain a core ingredient of the Company''s 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 H1,628.14 cr., Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items of H462.89 cr. and Profit before Tax (PBT), before exceptional items, of H418.24 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, H5.80 Cr. has been repaid by SSL and its current outstanding to the Company is H1.69 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 Company''s 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 Company''s 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 H513.86 cr., Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items of H129.26 cr. and Profit before Tax (PBT), before exceptional items, of H81.51 cr.

During the year assets capitalised in NFASL amounting to H1085 crore which included capitalisation for plant that supplies HFOs to Honeywell and our specialty chemical plants to supply fluorine based agri intermediates. Further, in FY24 we will incur capital expenditure on HF 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 H 844.08 cr. The said loans are secured by way of first charge on NFASL''s 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 Company''s 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 H9,90,91,745 /- (4,95,38,595 equity shares of face value of H2/- each fully paid and 14,555 equity shares of H2/- each, H1/- paid-up) to H9,91,33,420 /- (4,95,62,250 equity shares of face value of H2/- each fully paid and 8,920 equity shares of H2/- each, H1/- 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 Company''s 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 H6.14 crores towards CSR during financial year 2022-2023. The Company has spent H6.15 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 staff 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 efficiency.

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 SCHEMES

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. CHANGES 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 effect 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 effect from August 11, 2022. Further, pursuant to the appointment of Mr. Anish P. Ganatra as Chief Financial Officer and Key Managerial Personnel with effect from February 9, 2023, Mr. Roychowdhury resigned as Interim Chief Financial Officer and Key Managerial Personnel with effect from close of business hours of February 8, 2023 and he continues as CEO of HPP 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 NonExecutive Non-Independent Director of the Company as he had retired by rotation and offered 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 offered 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.

No.

Name

Chairman/Member

1.

Mr. Sunil S. Lalbhai

Chairman

2.

Mr. Pradip N. Kapadia

Member

3.

Mr. Mohan M. Nambiar

Member

4.

Ms. Radhika V. Haribhakti

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 MECHANISM

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 Company''s Ethics Policy,

b) To safeguard the confidentiality and interest of such empioyees/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.nfii.in/investor/poiicies/Whistie%20Biower%20Poiicy. pdf. The Company confirms that no personnei have been denied access to the Audit Committee pursuant to the whistie biower mechanism.

15. ANNUAL RETURN

The Annuai Return of the Company for the financiai year 2022-2023 is avaiiabie on the website of the Company at https://www.nfii.in/investor/annu_reports.htmi.

16. BOARD MEETINGS

During the year, the Board of Directors met eight times. The detaiis 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 annuai accounts, the appiicabie accounting standards have been foiiowed aiong with proper expianation reiating to materiai departures;

(b) The Directors have seiected such accounting poiicies and appiied them consistentiy and made judgments and estimates that are reasonabie and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financiai year and of the profits of the Company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguiarities;

(d) The Directors have prepared the annuai accounts on a going concern basis;

(e) The Directors have iaid down internai financiai controis (as required by Expianation to Section 134(5)(e) of the Act) to be foiiowed by the Company and such internai financiai controis are adequate and are operating effectiveiy;

(f) The Directors have devised proper systems to ensure compiiance with the provisions of aii appiicabie iaws and such systems are adequate and operating effectiveiy.

18. DECLARATION BY INDEPENDENT DIRECTORS

Mr. Pradip N. Kapadia, Mr. Sunii S. Laibhai, Mr. Sudhir G. Mankad, Mr. Harish H. Engineer, Ms. Radhika V. Haribhakti, Mr. Atui K. Srivastava, Mr. Ashok U. Sinha, Mr. Sujai A. Shah and Ms. Apurva S. Purohit are independent in terms of Section 149(6) of the Act and Reguiation 16 of SEBI Listing Reguiations. The Company has received requisite annuai deciarations/confirmations from aii the aforesaid Independent Directors confirming their independence and compiiance with the Code of Conduct for Independent Directors prescribed under Scheduie IV to the Act.

The Board of Directors of the Company is of the view that Independent Directors fuifiii the criteria of independence and they are independent from the management of the Company. Aii Independent Directors of the Company have confirmed that they have registered themseives with Independent Directors'' Database of The Indian Institute of Corporate Affairs (''IICA'') and have cieared the oniine proficiency test of IICA, as appiicabie.

19. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company has a poiicy on Appointment and Remuneration of Directors, Key Manageriai Personnei and Other Empioyees as per Section 178(3) of the Act and Reguiation 19 of SEBI Listing Reguiations, which inciudes:

• 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/ Poiicyardkmpe.pdf.pdf.

20. LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY AS PER SECTION 186 OF THE 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 arm''s 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 Company''s Policy on materiality of related party transactions and on dealing with related party transactions is available on the Company''s website at: https://www.nfil.in/ investor/poiicies/pmrptrpt.pdf.

22. STATEMENT OF COMPANY''S AFFAIRS

The state of Company''s affairs 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, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE 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 HARASSMENT

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 Harassment 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 efficient conduct of the Company''s 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 efficiently and these are persistently reviewed for effectiveness. The internal control system is maintained by qualified personnel and there is an internal audit review on a regular basis, to suggest adequacy and effectiveness 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 AUDITOR''S 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 H5,00,000/-

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 differential 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 Company''s 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 affecting 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 efficient 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 Highway,

194, Sir Mathuradas Vasanji Road,

Andheri (East), Mumbai 400069, India Tel: 91 22 6650 9999; Fax: 91 22 6650 9800 E-mail ID: [email protected]; Website: www.nfil.in CIN: L24110MH1998PLC115499


Mar 31, 2022

Your Directors are pleased to present the 24th Annual Report and the Annual Audited Financial Statements of the Company for the financial year ended March 31, 2022 along with the notes forming part thereof.

1. FINANCIAL AND OPERATIONAL HIGHLIGHTS

(H in crores)

Particulars

2021-2022

2020-2021

Revenue from Operations

1,403.61

1,133.11

Other income

3747

74.53

Profit before Depreciation, Finance Costs, Exceptional items and Taxation

392.89

385.37

Less: Depreciation and amortization expenses

44.25

40.67

Less: Finance Costs

1.66

142

Profit before exceptional items and tax

346.98

343.28

Add: Exceptional items

-

66.23

Profit before Taxation

346.98

409.51

Less: Tax Expense

80.55

110.30

Profit after Taxation

266.43

299.21

Add: Surplus brought forward from the previous year

1,391.51

1,131.94

Amount available for appropriation

1,657.94

1,431.15

Appropriation:

Other Comprehensive Income/(Loss)1

(0.78)

(0.05)

Payment of dividends

(5448)

(39.59)

Reversal of excess provision of Dividend Distribution Tax

0.48

-

Surplus carried to Balance Sheet

1,603.16

1,391.51

2. DIVIDEND

The Company has declared and paid an interim dividend of H5.00 per equity share (i.e. 250% of the face value) during the Financial Year 2021-2022, which was paid in November 2021. The Board of Directors is pleased to recommend a final dividend of H6.00 per equity share (i.e. 300% of the face value) for the Financial Year 20212022 which shall be paid on or after Tuesday, August 2, 2022 if declared by the Members of the Company at the forthcoming 24th Annual General Meeting.

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 Company''s website at https://nfii.in/poiicy/index.htmi.

3. YEAR IN RETROSPECT

For the year ended March 31, 2022, your Company achieved total revenue from operations of H1,403.61 cr., a growth of 24% as compared to H1,133.11 cr. during the previous year. Earnings before interest, tax, depreciation and amortization (EBITDA), before exceptional items, increased from H385.37 cr. in the previous year to H392.89 cr. during the year ended March 31, 2022. Profit before Tax (PBT), before exceptional items, was at H346.98 cr. in the

current year as compared to H343.28 cr. in the previous year.

The Operating EBITDA, before Other Income and Exceptional items, touched H355.42 cr., up from H310.84 cr. during the previous year, a growth of 14%. Operating EBITDA Margin for the year was at 25% against 27% in the previous year.

During the year, strong momentum in High Value Business performance continued. This business, which consists of Specialty Chemicals and CRAMS, saw an 18% growth over previous year. Legacy Business of Refrigerant Gases and Inorganic Fluorides witnessed a growth of 35%, mainly, on account of better price realisation.

CRAMS business continued to grow during the year, with turnover touching H298 cr. against H279 cr. during the previous year. 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 third year operation of cGMP3 plant saw optimum capacity utilisation as our capability to handle larger projects and complex chemistries significantly improved. There was a strong flow of projects from our existing customers as we continued to widen our reach across global pharma majors. The CRAMS business outlook continues to be strong and this vertical is expected to be one of the growth pillars for the Company.

Specialty Chemicals business reached a turnover of H566 cr. vis-a-vis H453 cr. in the previous year, showing a robust growth of 25%. It contributed around 40% of the overall turnover. The division showed growth 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 our facility. R&D capabilities and deep fluorination expertise will continue to strengthen newer opportunities pipeline, while we also work on capacity expansion and enhancing the product portfolio.

Inorganic Fluorides ended the year with a robust growth of 42% from H193 cr. in the previous year to H274 cr. during the year. It contributed around 20% of the overall turnover. This business had not done well during the previous year due to various challenges. However, the business picked up during the second half of the previous year and continued its momentum during the year as well backed by better price realisation.

Refrigerant Gases business also witnessed a robust growth of 28%, achieving a turnover of H266 cr. during the year against H208 cr. in the previous year. It contributed around 19% of the overall turnover. Despite phasing out of HCFC-22 (R22) for emissive purposes under the Montreal protocol, the Company achieved robust growth under

this vertical due to better price realisation coupled with growth in non-emissive segment.

Key raw material costs moved in a mixed trend through the year. Fluorspar prices and Boric Acid prices were more or less stable and the Company continued its strategy of importing fluorspar from diverse sources across the globe. Prices of almost all other critical raw materials increased significantly, more particularly, sulphur, caustic soda & chloroform were higher by 125%, 110% and 60% respectively Y-o-Y. On the energy cost front, average power cost was higher than previous year. Exchange traded power was available throughout the year. Average natural gas price for the Company was higher by about 50% in the current fiscal compared to that of the previous year.

During the year, the Board of Directors approved capital expenditure of H75/- cr. for debottlenecking of cGMP3 plant which will increase the plant capacity. The Board also approved capital expenditure of H78.65 cr. for infrastructure development and capability upgradation at its Bhestan site. This investment will help the Company in terms of New business opportunity/Incremental turnover, Cost saving, Safety enhancement etc.

While the Indian Rupee was volatile through the year, it behaved differently against different currencies. Against US$, it saw a consistent weakening amidst the volatility and depreciated more than 5% to H76.38 at end of the fiscal, compared to its opening levels at H72.72. Against GBP, which started the fiscal at H100.49 depreciated to the level of H103.81 in April 2021 before appreciating to H98.22 by the end of the financial year. The exchange loss of H0.69 cr. as seen in the financials is on account of timing difference of foreign exchange transactions and their realisation and / or restatement.

During the year, the Company continued to strengthen its teams across functions like Technology and Development, Research and Development and Business Development. Improvement of operational efficiencies, new product development, working on novel chemistries and developing long term partnerships continue to be the focus of the Company. Through the year, cross functional teams continued to work on successful scale-up, improving productivity, quality and costs of various products to enable businesses gain competitive advantage in the market.

During the year, amid the sustained implications of COVID-19, the Company continued to keep away from debt instruments for major part of the year with its strategy of staying invested in more reliable, liquid and safer instruments like Fixed Deposits and overnight funds / liquid funds. The Company has maintained its credit rating at

''CARE AA'', 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, has been maintained at ''CARE A1 '', indicating very strong degree of safety with respect to timely servicing of its short term financial obligations and lowest credit risk.

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

The year 2021-2022 started with the COVID-19 pandemic in full force. In many countries, including India, there were severe disruptions to regular business operations due to lockdown restriction and other emergency measures imposed by the Government. In this backdrop, the Company took various precautionary measures to protect employees and workmen, and the eco system in which they interact in view of the various directives of Central Government/concerned State Governments relating to lockdown and the need for social distancing.

The Company continued with harmonized plans at all its manufacturing sites and the corporate office which was initiated during previous year at the on-set of COVID-19 pandemic. The comprehensive plan was to prioritize and safeguard the health, safety and well-being of all our employees through independent teams at each site. The Company worked to ensure that as the manufacturing operations stepped up and the sites became fully operational, the health and safety of the employees was not compromised. The sites and employees continued to work without disruption by implementing adequate safety protocols, systematic sanitization of premises and restricted cross movement of employees through zoning mechanism. Various measures were implemented to ensure social distancing and contact tracing across the manufacturing sites. Health screening procedures were put in place and all employees and workmen underwent thermal screening at the entrance of work premises. Self-health declaration was implemented through a system driven mechanism to track health of employees, contractors and visitors.

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 [eased out on contemporary terms. SSL is utiLizing its current cash flows to repay its debt to the Company. During the year, H0.75 cr. has been repaid by SSL and its current outstanding to the Company is H6.93 cr.

i) 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 £5,013K and net Loss of £16K.

ii) NFIL (UK) Limited is the Wholly Owned Subsidiary (WOS) of the Company which was incorporated in the UK to acquire the baLance sharehoLding of 49% of MOL.

v) 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 CRAMS 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 our speciaLty and CRAMS business. This presence heLps us in taking informed decisions on procurement in terms of timeLiness, avaiLabiLity, quaLity and cost. These decisions heLp in optimizing our costs, proper planning and improving our margins. In view of the foregoing, it was thought prudent to have a permanent representation in China. Our presence in China is aLso heLping us to create strategic partnerships with key vendors.

vi) Navin Fluorine Advanced Sciences Limited (NFASL) was incorporated in February 2020. NFASL has announced various capitaL expenditures which are progressing well. NFASL announced a capital expenditure of H125/- cr., to manufacture and suppLy a key agro-chemicaL fluoro-intermediate to a muLtinationaL company under a muLti-year agreement worth H800/- cr. over a period of 5 years. The said investment also includes H15/- cr. towards expansion of effluent treatment plant. ALL these investments will create opportunities for new products in Life science

and crop science sectors in the Specialty Chemicals business. Moreover, these investments will lay the foundation for the next phase of growth of our Specialty Chemical business. It will help us enhance our product offerings and strengthen our customer relationships along with providing building blocks for future growth.

The CAPEXES undertaken during previous year and current year aggregating to H1,090/- cr. approx. including project cost escalation are proposed to be funded by equity infusion of H590/- cr. and by way of Rupee Term loans from 4 banks of H500/- cr. The said loans are to be secured by way of first charge on NFASL''s fixed assets, second charge on its current assets and corporate guarantee of the Company. During the year, NFASL has issued approx. 15 crore equity shares of the face value of H10/- each under the Right Issue totalling to approx. H150/- cr. With this investment, the total equity infusion as at end of the year by NFIL stands at approx. H400/- cr. Pending disbursement of loan from banks and infusion of balance portion of committed equity infusion by the Company, it has extended temporary funding of H293/- cr. to NFASL by way of Inter corporate deposit. Moreover, NFASL has received disbursement of H100/- cr. against sanctioned loan amount of H500/-cr. Thus, NFASL has spent total amount of H793/- cr., as at the end of the year, against total capex amount of H1090/- cr.

(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 joint venture 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 joint venture have been considered in the annual audited consolidated financial results of the Company.

During the year, NFASL became a material subsidiary of the Company. Policy for determining material subsidiary is available at: http://www.nfil.in/policy/index.html.

The Annual Audited Financial Statements of all subsidiary companies are placed on the Company''s 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 for obtaining the same.

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

5. CAPITAL STRUCTURE OF THE COMPANY

During the year, the Company has allotted an aggregate of 49,930 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 H9,89,91,885/- (4,94,88,665 equity shares of face value of H2/- each fully paid and 14,555 equity shares of H2/- each, H1/- paid-up) to H9,90,91,745/- (4,95,38,595 equity shares of face value of H2/- each fully paid and 14,555 equity shares of H2/- each, H1/- paid-up) as on March 31, 2022.

Out of 14,555 partly paid equity shares, the Company has received in-principle approval for listing in respect of 5,635 equity shares from National Stock Exchange of India Limited and BSE Limited. The Company is in the process of obtaining Corporate Action approvals from Depositories.

6. CHANGE IN REGISTERED OFFICE OF THE COMPANY

The Registered Office of the Company has shifted from 2nd Floor, Sunteck Centre, 37/40, Subhash Road, Vile Parle (East), Mumbai 400057 to Office No. 602, Natraj by Rustomjee, Near Western Express Highway, Sir Mathuradas Vasanji Road, Andheri (East), Mumbai 400069 w.e.f. October 7, 2021.

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

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

8. BUSINESS RESPONSIBILITY REPORT

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

(Share Based Employee Benefits) Regulations, 2014 and as substituted by 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 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.

13. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the 23rd Annual General Meeting of the Company held on July 26, 2021, the following were appointed/re-appointed by the shareholders:

• Mr. Radhesh R. Welling was re-appointed as a Director of the Company as he had retired by rotation and offered himself for re-appointment.

• Mr. Ashok U. Sinha was appointed as an Independent Director for a term of five consecutive years commencing from October 28, 2020 and ending on October 27, 2025.

• Mr. Sujal A. Shah was appointed as an Independent Director for a term of five consecutive years commencing from May 7, 2021 and ending on May 6, 2026.

• Mr. Vishad P Mafatlal was re-appointed as the Executive Chairman, designated as Chairman of the Company, for a period of 5 years with effect from August 20, 2021.

Pursuant to recommendation of the Nomination and Remuneration Committee, Ms. Apurva S. Purohit was appointed as an Additional and Independent Director by the Board of Directors on October 19, 2021 in accordance with Section 161(1) of the Act and the Articles of Association of the Company. Under the said Section 161(1), she will hold office as an Additional Director up to the ensuing Annual General Meeting. As required under Section 160 of the Act, notices have been received from Members of the Company proposing the candidature of Ms. Purohit as a Director. Accordingly, at the ensuing Annual General Meeting, it is proposed to appoint Ms. Purohit as an Independent Director for a term of five consecutive years commencing from October 19, 2021 and ending on October 18, 2026.

Mr. Ketan S. Sablok resigned as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. close of working hours of October 31, 2021 and, consequent to his resignation, the Board of Directors has appointed Mr.


9. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Limited (a part of Padmanabh MafatLaL Group), fulfilling CSR is a way of life which is more than an obligation and more than a duty.

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 Company''s updated CSR policy is available on the website at : https://www. nfil.in/policv/index.html.

The Company persistently endeavors to initiate activities for the betterment and upliftment of the disadvantaged, vulnerable and marginalized stakeholders in the society. Pursuant to the provisions of Section 135 of the Act, the Company was statutorily required to spend H5.23 crores towards CSR during financial year 2021-2022. The Company has spent H5.28 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.

10. INDUSTRIAL RELATIONS

The engagement with workmen and staff 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 efficiency.

There were no disruptions to the business because of any Union issues. The total number of employees as on March 31, 2022 was 956.

11. INSURANCE

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

12. EMPLOYEES'' STOCK OPTION SCHEMES

The Company has two Employees'' Stock Option Schemes viz. Employees'' Stock Option Scheme 2007 and Employees'' Stock Option Scheme 2017. During the year, no 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

Basant Kumar Bansai as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. November 1, 2021. The Board places on record its appreciation for the invaluable contribution made by Mr. Sabiok during his tenure of over 24 years with the Company (including as Chief Financial Officer w.e.f. June 16, 2018).

Mr. Mohan M. Nambiar, Non-Executive - Non Independent Director, retires by rotation and being eligible, has offered himself for re-appointment at the forthcoming Annual General Meeting.

Brief profile of Mr. Nambiar and Ms. Purohit is provided in the Notice convening the 24th Annual General Meeting.

14. COMPOSITION OF COMMITTEES

The composition of the Audit Committee is as under:

Sr.

No.

Name

Chairman/Member

1.

Mr. Sunii S. Laibhai

Chairman

2.

Mr. Pradip N. Kapadia

Member

3.

Mr. Mohan M. Nambiar

Member

4.

Ms. Radhika V. Haribhakti

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.

15. VIGIL MECHANISM

In accordance with the requirements of the Act and the 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 Company''s Ethics Policy,

b. To safeguard the confidentiality and interest of such empioyees/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 webiink https:// www.nfii.in/poiicv/index.htmi. The Company confirms that no personnel have been denied access to the Audit Committee pursuant to the whistie biower mechanism.

16. ANNUAL RETURN

The Annuai Return of the Company for the financiai year 2021-2022 is available on the website of the Company at https://www.nfii.in/investor/annu reports.htmi.

17. 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.

18. 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 appiicabie accounting standards have been foiiowed along with proper explanation relating to material departures;

(b) The Directors have seiected such accounting poiicies and appiied them consistentiy and made judgments and estimates that are reasonabie and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financiai year and of the profits of the Company for that period;

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

(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 foiiowed by the Company and such internal financial controls are adequate and are operating effectively;

(f) The Directors have devised proper systems to ensure compiiance with the provisions of aii appiicabie laws and such systems are adequate and operating effectiveiy.

19. DECLARATION BY INDEPENDENT DIRECTORS

Mr. Pradip N. Kapadia, Mr. Sunii S. Laibhai, Mr. Sudhir G. Mankad, Mr. Harish H. Engineer, Ms. Radhika V. Haribhakti, Mr. Atui K. Srivastava, Mr. Ashok U. Sinha, Mr. Sujai A. Shah and Ms. Apurva S. Purohit are independent in terms

of Section 149(6) of the Act and Regulation 16 of the 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 Affairs (''IICA'') and have cleared the online proficiency test of IICA, as applicable.

20. 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 the 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 Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, has amended the Policy inter alia as per the amendment of the Listing Regulations and to align it as per the Act. The amended policy is available at the web-link http://www. nfil.in/policy/index.html.

21. LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY AS PER SECTION 186 OF THE ACT

The details of loans and guarantees given, and the investments made by the Company as on March 31, 2022 are provided in the Financial Statements and its notes.

22. 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 arm''s length basis.

The Company has not entered into 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 the Listing Regulations. The Company has nothing to report in Form AOC-2, hence, the same is not annexed.

The Company has amended the policy on materiality of related party transactions and on dealing with related party transactions, inter alia, as per the Listing Regulations. The said Policy is available on the Company''s website at : https://nfil.in/policy/index.html.

23.STATEMENT OF COMPANY''S AFFAIRS

The state of Company''s affairs 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.

24. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE 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.

25. 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.

26. ANNUAL PERFORMANCE EVALUATION

Pursuant to the provisions of the Act and the 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 the 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 was of the unanimous view that each Independent Director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the Non-Independent Directors (including the Chairperson) 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.

27. 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.

28. PREVENTION OF WORKPLACE HARASSMENT

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 Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaints were received from employees in this regard.

29.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 shareholders and issues public notice in respect of shares to be transferred to IEPF in the newspaper, on timely basis.

30. 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 efficient conduct of the Company''s 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 built-in review and control mechanism to ensure that such control systems are adequate and operating efficiently and these are persistently reviewed for effectiveness. The internal control system is maintained by qualified personnel and there is an internal audit review on a regular basis, to suggest adequacy and effectiveness of the system and to recommend improvements.

31.STATUTORY AUDITORS

At the 19th Annual General Meeting held on June 29, 2017, the Members of the Company approved the appointment of Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) (''PWC'') to hold office from the conclusion of the 19th Annual General Meeting until the conclusion of the 24th Annual General Meeting of the Company.

As the first term of PWC as Statutory Auditors of the Company will expire upon conclusion of the forthcoming 24th Annual General Meeting, the Board of Directors, based on the recommendation of the Audit Committee, approved the re-appointment of PWC as Statutory Auditors 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. The Board recommends to the Members, passing of the resolution for re-appointment of PWC as mentioned at Item No. 4 of the Notice convening the 24th Annual General Meeting.

32.STATUTORY AUDITOR''S 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, 2022.

33.SECRETARIAL AUDIT REPORT

Pursuant to Section 204(1) of the Act and Regulation 24A of the Listing Regulations, the Secretarial Audit Report of the Company for the financial year ended March 31, 2022 issued by Makarand M. Joshi & Co., Practising Company Secretaries, is annexed as ''Annexure 8'' to this Report. Further, the Secretarial Audit Report of Navin Fluorine Advanced Sciences Limited, the Material Wholly Owned Subsidiary, for the financial year 2021-2022 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.

34.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.

Mr. Bhalchandra C. Desai (Membership No. M-1077) who was appointed as Cost Auditor of the Company by the Board for conducting the Cost Audit for the financial year 2021-2022 passed away during the said year. Based on the recommendation of Audit Committee, the Board has 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 20212022 on agreed remuneration of H5,00,000/-.

Further, 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 2022-2023 on agreed remuneration of H5,00,000/-.

As required under the Act, necessary resolutions seeking Members'' ratification for the remuneration payable to B. Desai & Co. are included as Item Nos. 10 and 11 of the Notice convening the 24th Annual General Meeting.

The Cost Audit Report in respect of the financial year 2021-22 will be filed within the statutory timeline.

35.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.

36.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 differential 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 Company''s 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 affecting 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.

37. APPRECIATION

The Directors wish to place on record their appreciation

for the devoted services of the employees, who have

largely contributed to the efficient 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

Place: Mumbai Chairman

Date: May 7, 2022 DIN: 00011350

Registered Office:

Office No. 602, 6th floor, Natraj by Rustomjee,

Near Western Express Highway,

194, Sir Mathuradas Vasanji Road,

Andheri (East), Mumbai 400069, India Tel: 91 22 6650 9999; Fax: 91 22 6650 9800 E-mail ID: [email protected]; Website: www.nfil.in CIN: L24110MH1998PLC115499

1

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


Mar 31, 2019

The Directors are pleased to present the 21st Annual Report together with the audited accounts for the year ended 31st March, 2019.

1. FINANCIAL AND OPERATIONAL highlights (Rs. in lakhs)

2018-19

2017-18

Revenue from Operations

95,513

88,606

Other income

3,477

9062

Profit before Depreciation, Finance Costs, and Taxation

25,288

30,132

less: Depreciation

2,588

3,817

Finance Costs

47

66

Profit before Taxation

22,653

26,248

Less: Tax Expense

7,805

8,352

Profit for the year

14,848

17,896

add: Surplus brought forward from the previous year

71,808

57,540

Amount available for appropriation

86,656

75,436

Appropriation:

Other Comprehensive Income/(Loss)1

(31)

(68)

Payment of dividends (including tax)

(6,185)

(3,560)

Surplus carried to Balance Sheet

80,440

71,808

*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 paid an interim dividend of Rs. 3.80 per share on 494,43,950 equity shares of nominal value of Rs. 2/- each, aggregating to Rs. 1,878.87 lakhs in the month of October 2018. The Board of Directors is pleased to recommend a final dividend for the year of Rs. 4/- per share on 494,57,165 equity shares of nominal value of Rs. 2/- each, aggregating to Rs. 1,978.29 lakhs.

3. YEAR IN RETROSPECT

During the year, the net turnover reached a high of Rs. 95,531 lakhs, a growth of 17% over the previous year''s net sales of Rs. 81,773 lakhs (excluding Rs. 5,568 lakhs from our Dahej operations until 30th November 2017). The major contributors to this growth were Specialty Chemicals, Inorganic Fluorides and Refrigerant Gas businesses. The domestic business grew by 20%, clocking Rs. 51,345 lakhs driven by Specialty Chemicals and Inorganic Fluorides. Exports reached Rs. 44,168 lakhs posting a year-on-year growth of 13% over Rs. 38,971 lakhs of the previous fiscal (excluding Rs. 5,568 lakhs from our Dahej operations until 30th November 2017), predominantly driven by Specialty Chemicals and Refrigerant Gases.

The key driver for the profit growth has been better market penetration leading up to higher volumes, better capacity utilisation and dynamic pricing. The Operating Profit for the year, before Other Income, increased by 12% over that of the previous year. Operating EBITDA, before Other Income, reached Rs. 21,811 lakhs, up from Rs. 21,070 lakhs in FY 2017-18. Operating EBITDA Margin for the year was at 23% against 24% in FY 2017-18. Profit before tax (PBT) dropped by 14% from Rs. 26248 lakhs in FY 2017-18 to Rs. 22653 lakhs during the year under review. Profit after tax (PAT) at Rs. 14848 lakhs in the current year recorded a decrease of 17% from Rs. 17896 lakhs in FY 2017-18. The drop in PBT and PAT for the year vis-a-vis FY 201718, was mainly on account of the mark to market adjustments of the investment portfolio as well as sale of equity shares of Mafatlal Industries Ltd. and NOCIL Ltd. in FY 2017-18.

Specialty Chemicals business saw a healthy growth of 33%, reaching a turnover of Rs. 30005 lakhs in the current year vis-a-vis Rs. 22488 lakhs in FY 201718. It contributed around 31% of the overall turnover. The exports share in this business was about 40%. After two flat years, the business revived significantly on the back of efforts to increase domestic sales driven by demand from life sciences segment and the exports, which is mainly towards the Crop science industry, also improved in terms of volume as well as pricing. The efforts on creating a diversified portfolio of innovative products, winning new customers and penetration into new markets is ongoing. The key emphasis of this business has been on investing in research and development, towards building a strong product portfolio in niche fluorochemicals.

Inorganic Fluorides business registered a significant growth from Rs. 14542 lakhs in FY 2017-18 to Rs. 19709 lakhs during the current year, a growth of 36% year on year. It contributed around 21% of overall turnover. The growth has been fueled by positive traction in volumes and prices, both in the domestic as well as the export sectors across key product portfolios. The growth in the domestic consuming industries, led to positive demand generation in this segment. The sustained efforts over the last few years, led to addition of new overseas customers.

Refrigerant Gases business witnessed a growth of 14% year-on-year, achieving a turnover of Rs. 28026 lakhs during the year against Rs. 24545 lakhs in FY 2017-18. It contributed around 29% of overall turnover. The exports in the Refrigerant portfolio, constituted approximately 44%. The domestic market witnessed a weak demand during the year. Exports performed well in both volume as well as realisations on the back of supply constraints, and strong market expansion in Middle East. Pricing corrections both in the domestic and export market along with volume expansion in exports, helped in the increase in turnover.

CRAMS business during the current year was about 12% lower than FY 2017-18, reaching a turnover of Rs. 17787 lakhs during the year against Rs. 20179 lakhs in FY 2017-18 (excluding Rs. 5568 lakhs from our Dahej operations until 30th November 2017). It contributed 19% of overall Turnover for the year. Successful delivery of a variety of orders, addition of new customers as well as repeat orders from innovator global pharma majors, has reinforced the business''s confidence in the capability to build and operate a world class cGMP facility. The focus continues on effective interface of project management and delivery framework, deepening customer relationships and effective capacity utilisation. Customer audits by several pharma majors have been successfully completed during the year.

During last year, the Board had approved a capital expenditure of Rs. 11500 lakhs towards creating additional cGMP capacity and associated infrastructure. This capex is underway at the Company''s Dewas facility, which is the hub of the CRAMS activities. The new capacity is expected to come on stream by second half of FY2019-20. The expanded capacity will be utilized for the Company''s growing contract manufacturing activity for the value added complex chemicals and fluoro intermediates, manufactured for innovator pharma companies across the globe. The Investment in expansion of the capacity is based on customer inquiries and discussions and in anticipation of future research pipeline of innovators. The new capacity addition will be similar to the Company''s existing multi product plant configuration with multistage batch and products processing capabilities. The Company has reached out to markets in the US, Europe and Japan by having direct representations in those geographies, in addition to the strong presence of Manchester Organics Limited (MOL) in the UK.

During the year the costs of key raw materials moved northwards. The Company continued its strategy of importing fluorspar, its key raw material, from diverse sources. However, fluorspar prices increased by almost 45% year on year due to global supply constraints as well as weakening rupee. Sulphur and chloroform, the other critical raw materials experienced strong inflationary trends exerting stress on the margins across product lines. Sulphur price witnessed over 30% increase while chloroform prices increased by 45% in comparison to FY 2017-18. Price of boric acid too moved 25% upwards during the year.

On the energy cost front, cost of power has remained steady during the year vis-a-vis FY 2017-18. Non-availability of exchange traded power for most of the current year, continued to be a challenge. However, this has restarted towards the end of the current year. Price of natural gas for the Company increased by 16% in the current fiscal compared to that of the previous year.

The year proved to be one of the most volatile for currencies with US Dollar (USD) swinging more than 14%, British Pound (GBP) 11% and Euro 10%. Against USD the Rupee was at its strongest in April at Rs. 64.88 and the weakest in October at Rs. 74.33, depreciating by almost 15%. Towards the end of the current fiscal it was around Rs. 69.18. GBP, which was around Rs. 91.45 towards the beginning of the fiscal appreciated almost 12% to touch Rs. 97.97 level against the Indian Rupee in October from its yearly low of Rs. 87.95 in August. At the end of the current fiscal it was at Rs. 90.14. Euro too, amidst the volatile global scenario appreciated by almost 11% against the Indian Rupee. Euro was at its highest in October at Rs. 85.84 and had fallen to its weakest level of Rs. 77.60 towards the end of the fiscal. The exchange loss of Rs. 199.28 lakhs as seen in the financials is on account of timing difference of foreign exchange transactions and their realisation and / or restatement.

Deeper penetration into various market and customer segments, improving operating efficiencies and continuous margin improvement has been the sustained focus of the Company. Through the year, the R & D, technology, production, marketing and supply chain teams worked relentlessly to improve productivity, quality and costs of various products, to offer a competitive marketing edge to the businesses on one hand and a flexible sourcing strategy on the other. The top-line growth coupled with higher capacity utilisation, helped in better absorption of overheads, contributing to improvements in the operating margins.

During the year a conservative inventory policy was followed in order to remain closer to the market prices of all the raw materials and access the resultant movement in the finished product prices.

The receivables and inventories management have been an area of key management attention and are in line with the scope and scale of operations and the levels were well within acceptable industry norms.

The Company sustained its good financial health with a sizeable treasury income. The Company has maintained its credit rating at ''CARE AA, 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 shortterm facilities of tenure less than one year, has been maintained at ''CARE A1 , indicating very strong degree of safety with respect to timely servicing of its short term financial obligations and lowest credit risk. During the year the Company maintained ''CARE A1 '' rating for issuance of Standalone Commercial Papers, to the extent of Rs. 6000 lakhs.

The Company is fully committed towards its responsibilities in health, safety and environmental (HSE) management and has continued to make sizable investments in HSE during the year, across all its locations. The Company is amongst very few Corporates in the country who has ''Responsible Care'' accreditation from the Indian Chemical Council. ''Responsible Care'' is the chemical industry''s unique global initiative that drives continuous improvement in health, safety & environment performance together with open and transparent communications with stakeholders. The logo is awarded in recognition of a company''s commitment to sustainability. Our Responsible Care accreditation was reaffirmed for another period of three years starting from January 2018.

During the year, the Company has been conferred two awards by the Indian Chemical Council (ICC). One was the ICC award for "Excellence in Human Resource Management in Chemical Industry" for the year 2017 and the second was Certificate of Merit for the "Best Compliant Company for the Distribution Code under Responsible Care" for the year 2017. Apart from these, the Company also received the "CSR Excellence Award 2018" for Health and Sanitation in Gujarat CSR Summit - 2018.

4. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has five subsidiaries and two Joint Ventures:

(i) Sulakshana Securities Limited (SSL), an entity created to settle dues of the term lenders of Mafatlal Industries Limited (MIL), 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 in 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, Rs. 246 lakhs has been repaid by SSL and its current outstanding to the Company is Rs. 1110 lakhs.

(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) Ltd., a 100% step-down subsidiary created for the purpose. During the year MOL reported turnover of £ 4568k and net loss of £ 203k.

(iii) A 100% subsidiary, NFIL (UK) Ltd was formed in the UK to acquire the balance shareholding of 49% from the shareholders of Manchester Organics Ltd. During the year, the Company made further infusion of £ 830 K into NFIL (UK) Ltd., which has been utilized to service the HDFC Bahrain Term Loan taken by NFIL (UK) Ltd. to part finance the 49% acquisition of MOL.

(iv) A step-down subsidiary, NFIL USA Inc. was formed last year, as a 100% subsidiary of NFIL (UK) Ltd. The primary objective of formation of this Company was to increase the market penetration in the USA of the CRAMS business and attracting appropriate talent as and when the business needs expansion.

(v) Navin Fluorine (Shanghai) Co. Ltd. (which is a 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 our specialty and CRAMS business. The quality and the cost of these materials make a significant impact on various value added products being made by the Company. In view of the foregoing, it was thought prudent to have a permanent representation in China. During the year, our Chinese presence has helped immensely to ensure timely procurement of some of the key raw materials for our CRAMS and specialty business. We could exercise a better control over quality, cost of procurement and timeliness due to our presence in China. Our footprint in China is also helping us to create strategic partnerships with key vendors.

(vi) 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 (GMDC) and Gujarat Fluorochemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDC 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. During the year various matters affecting overall costing of the project and product were discussed threadbare between the partners. This will help the partners to initiate the project related activities during the coming financial year.

(vii) The Company had entered into a Joint Venture (JV) agreement with Piramal Enterprises Limited (PEL) and accordingly a company by the name of Convergence Chemicals Private Limited (CCPL) has been formed to leverage the Company''s capability in niche fluorination chemistry and deep outreach of the JV partner in the healthcare space. PEL holds 51% and the Company owns 49% of the equity share capital of CCPL. During FY 2017-18, the Company''s business relating to manufacture and sale of Specialty Fluorochemicals at Dahej was transferred to Convergence Chemicals Private Limited, with effect from 1st December 2017, on a going concern basis by way of slump sales together with all the identified assets, liabilities, consents, permissions, services of employees etc.

The financial position of each of the said seven Companies is given in the Notes to Consolidated Financial Statements.

The accounts of all the above subsidiaries and joint ventures have been considered in the consolidated financial results of the Company.

The Company does not have any material subsidiary. Policy on material subsidiary is available on web link http://www.nfil.in/ policy/index.html

The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available a copy thereof to any member of the Company who may be interested in obtaining the same.

5. REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

As required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, management discussion and analysis and corporate governance report are annexed as Annexure 1 and Annexure 2 respectively to this Report.

6. BUSINESS RESPONSIBILITY REPORT:

As required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance prospective, in the prescribed form is annexed as Annexure 3.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Ltd. (a part of Padmanabh Mafatlal Group), fulfilling CSR is a way of life. It is a legacy coming down from the same value tree, the lineage of Late Mr. A. N. Mafatlal who inspired implementation of a range of CSR activities over the last fifty years, in areas like poverty alleviation, healthcare, education, women''s welfare etc. in rural India. The Company will continue to follow the path by contributing to social welfare and nation development.

Pursuant to the provision of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Mr. S. G. Mankad is the Chairman of the Committee and Mr. H. H. Engineer and Mr. V. P. Mafatlal are the other members of the Committee. The CSR Policy formulated by the Board based on the recommendations of the CSR Committee is available on web link http://www.nfil.in/policy/index.html

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act is Rs. 315.45 Lakhs and the Company has spent Rs. 329.19 Lakhs during the current financial year (as against Rs. 296.52 Lakhs during the previous year). Thus, the Company has spent more amount on CSR activities than legally mandated. The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure 4 to this Report.

8. INDUSTRIAL RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full cooperation from the employees.

The Company continues to focus on extensive training and developmental activities and efficiency and quality improvement initiatives. The total number of employees as on 31st March, 2019 was 715.

9. INSURANCE

The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.

10. EMPLOYEE STOCK OPTION SCHEME

The Company has two Employees'' Stock Option Schemes -Employees'' Stock Option Scheme, 2007 ("ESOS - 2007") and Employees'' Stock Option Scheme, 2017 ("ESOS - 2017"). During the year, there were no material changes in the Employee Stock Option Schemes of the Company and the Schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014.

During the year, 15,040 Stock Options were granted to the employees. Pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 as amended from time to time, the details of stock options as on 31st March, 2019 are annexed as Annexure 5 to this Report.

11. RE-CLASSIFICATION AS PER REGULATION 31A OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS), REGULATIONS 2015

The Company had, at its Annual General Meeting held on 24th July, 2018, obtained the approval of the shareholders for re-classification of the following Persons/Entities (not holding any shares in the Company) from "Promoter and "Promoter Group" category to Public category as per Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015:

Sr. No.

Particulars

1.

A.N. Mafatlal Karta of A.N.M. HUF 4 Mafatlal

2.

Hrishikesh A Mafatlal

3.

Hrishikesh Arvind Mafatlal

4.

Rekha Hrishikesh Mafatlal

5.

Aarti Manish Chadha

6.

Hrishikesh A Mafatlal

7.

Anjali Kunal Agarwal

8.

Priyavrata Mafatlal

9.

Gayatri Pestichem Manufacturing Pvt Ltd

10.

Mafatlal Industries Ltd

11.

NOCIL Limited

12.

Suremi Trading Private Limited*

13.

Sumil Holdings Pvt Ltd

14.

Shamir Texchem Private Limited

15.

Sushripada Investments Pvt Ltd

16.

Arvi Associates Pvt Ltd

* Additionally, the reclassification approval was also sought for Milekha Texchem Co. Pvt. Ltd and Shripad Associates Pvt. Ltd. which merged into Suremi Trading Private Limited.

Subsequent thereto, the Company had made applications to the Stock Exchanges for their approval for the aforementioned reclassification. The Company has received the approvals from Stock Exchanges for the re-classification on 8th February, 2019.

12. DIRECTORATE:

Mr. S. S. Khanolkar resigned as Managing Director of the Company with effect from close of business hours of 12th October, 2018. The Board places on record its sincere appreciation for the valuable services rendered by Mr. Khanolkar during his tenure. Mr. R. R. Welling was appointed as Managing Director of the Company for a period of five years with effect from 11th December, 2018 subject to approval by the Members of the Company.

As per the provisions of Sections 149, 152 and Schedule IV of the Companies Act, 2013 read with the relevant Rules thereunder, the Company had appointed Mr. H. H. Engineer, Mr. P. N. Kapadia, Mr. S.S. Lalbhai, Mr. S. M. Kulkarni and Mr. S. G. Mankad as Independent Directors at its 16th Annual General Meeting held on 25th June, 2014. Mrs. R. V. Haribhakti was appointed as an Independent Director w.e.f. 30th July, 2014. As the above named Independent Directors shall be completing their first term of appointment upon completion of five years from the respective dates of their appointment during the current year, it is proposed to re-appointment them for another term of five consecutive years. Also, it is proposed to appoint Mr. A. K. Srivastava as an Independent Director of the Company with effect from the conclusion of the 21st Annual General Meeting for a period of five consecutive years. Mr. A. K. Srivastava is already on the Board of the Company as a Non-Executive Director.

In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 2013, Mr. V. P. Mafatlal retires by rotation and being eligible, seeks reappointment.

Brief profiles of the directors seeking appointment/re-appointment have been given in the Notice convening the Annual General Meeting.

13. CHANGES IN KEY MANAGERIAL PERSONNEL:

As reported in the last Annual Report, Mr. Sitendu Nagchaudhuri, the Chief Financial Officer of the Company, tendered his resignation, with effect from close of business hours on 15th June, 2018. The Board of Directors appointed Mr. Ketan Sablok as the Chief Financial Officer of the Company with effect from 16th June, 2018.

14. EXTRACT OF THE ANNUAL RETURN:

Extract of the Annual Return for the Financial Year ended on 31st March, 2019 as required by Section 92(3) of the Act and Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is annexed as Annexure 6 to this Report.

The same has been placed on the website of the Company and can be accessed at www.nfil.in.

15. NUMBER OF 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.

16. 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 affairs 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(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 effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

17. DECLARATION BY INDEPENDENT DIRECTORS:

Mr. P.N. Kapadia, Mr. S.S. Lalbhai, Mr. S.M. Kulkarni, Mr. S.G. Mankad, Mr. H.H. Engineer and Mrs. R.V. Haribhakti are independent in terms of Section 149(6) of the Act and Regulation 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The Company has received requisite declarations/confirmations from all the above Directors confirming their independence.

18. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The policy on Directors appointment and remuneration approved by the Board of Directors is available on the web link is http://www. nfil.in/policy/index.html

19. AUDITORS REPORT:

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2019.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

Particulars of loans given and of the investments made by the Company as at 31st March, 2019 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made investment in 8,30,000 equity shares of £ 1/each of NFIL (UK) Ltd. and 13,72,537 equity shares of RMB 1/- each of Navin Fluorine (Shanghai) Co. Ltd.

The Company also made investments in schemes of various mutual funds aggregating to Rs. 27,128.71 lakhs and during this period realized Rs. 25548.06 lakhs on redemption of units of various mutual funds and debentures. During the year under review, no new loans were given by the Company.

21. SECRETARIAL AUDIT REPORT:

Pursuant to Section 204(1) of the Act, the Secretarial Audit Report for the Financial Year ended 31st March, 2019 given by M/s. Makarand M. Joshi & Co., Company Secretaries is annexed as Annexure 7 to this Report. The same does not contain any adverse remarks.

22. RELATED PARTY TRANSACTIONS:

All the related party transactions that were entered into during the year in the ordinary course of business were on arms'' length basis. Related Party Transactions Policy is available on web link http// www.nfil.in/policy/index.html

23. STATEMENT OF COMPANY''S AFFAIRS:

The state of the Company''s affairs is given under the heading "Year in Retrospect" and various other headings in this Report and in Management Discussion and Analysis Report which is annexed to the Directors'' Report.

24. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, is annexed as Annexure 8 to this Report.

25. RISK MANAGEMENT POLICY:

The Company has a structured risk management policy. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during the decision making. It is dealt with in greater details in the Management Discussion and Analysis section.

26. ANNUAL PERFORMANCE EVALUATION:

In compliance with the provisions of the Act, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation was carried out as under:

Board:

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:

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship 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, the Rules framed thereunder and the Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the Chairperson) 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 each of the non-independent directors was providing good business and people leadership.

27. DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure 9 to this Report.

28. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The requisite details relating to the remuneration of the specified employees covered under the above Rules are annexed as Annexure 10 to this Report.

29. PREVENTION OF WORKPLACE HARASSMENT:

The Company is committed to providing 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 Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaints were received from employees.

30. INTERNAL FINANCIAL CONTROLS:

The existing internal financial controls are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. They have been reviewed and found satisfactory by the Management on the following key control matrices:

a. Entity level controls;

b. Financial controls; and

c. Operational controls

Which included authority and organization matrix, standard operating procedures, risk management practices, compliance framework within the organization, ethics and fraud risk management, management information system, self-assessment of control point, business continuity and disaster recovery planning and budgeting systems.

31. AUDITORS:

At the 19th Annual General Meeting held on 29th June, 2017, the Members approved appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/ N500016) to hold office from the conclusion of the 19th Annual General Meeting until the conclusion of the 24th Annual General Meeting (subject to ratification of the appointment by the Members, at every Annual General Meeting held after the 19th Annual General Meeting) on such remuneration as may be fixed by the Board apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

On 7th May, 2018, Section 40 of the Companies Amendment Act, 2017 (amending Section 139 of the Companies Act, 2013) was notified whereby ratification of Statutory Auditor''s appointment is not required at every Annual General Meeting. Accordingly, resolution for ratification of appointment of Statutory Auditors is not proposed.

32. COST AUDITORS:

As per the requirements of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is applicable to the Company. The Audit of the Cost Accounts relating to Chemical products is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee, appointed Mr. B.C. Desai, Cost Auditor, Ahmedabad (Membership No.M-1077) to audit the cost accounts of the Company for the year 2019-20 from 1st April, 2019 to 31st March, 20120 on a remuneration of Rs. 5,00,000/. As required under the Act, necessary resolution seeking Member''s ratification for the remuneration payable to Mr. B.C. Desai is included as item No. 14 of the Notice convening the 21st Annual General Meeting. The Cost Audit Report in respect of Financial Year 2018-19 will be filled on or before the due date.

33. STATUTORY DISCLOSURES:

There were no transactions/events with respect to the following items during the financial year under review and accordingly no disclosure or reporting is required with respect to the same:

1. Deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014

2. Issue of equity shares with differential rights as to dividend, voting or otherwise

3. Receipt of any remuneration or commission by the Managing Director/Whole-time Director of the Company from any of its subsidiaries

4. Significant or material orders passed by the regulators or courts or tribunals which impact the going concern status and the Company''s operations in future

5. Buyback of shares

6. Material changes and commitments, affecting 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 unless otherwise stated in the report

The details pertaining to the composition of various committees of the Board including the Audit Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee and the details of establishment of Vigil Mechanism are included in the Corporate Governance Report, which is a part of this report.

The Company has complied with the Secretarial Standards on Meetings of the Board of Directors and General Meetings issued by ICSI.

34. APPRECIATION:

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

For and on behalf of the Board,

Navin Fluorine International Limited

V.P. Mafatlal

Place: Mumbai Chairman

Dated: 6th May, 2019 (DIN:00011350)

Regd. Office:

2nd floor, Sunteck Centre,

37/40, Subhash Road, Vile Parle (East),

Mumbai 400057.

Tel: 91 22 6650 9999, Fax: 91 22 6650 9800

E-mail: [email protected], Website: www.nfil.in

CIN: L24110MH1998PLC115499


Mar 31, 2018

DIRECTORS’ REPORT

To,

The Members

Navin Fluorine International Limited

The Directors are pleased to present the 20th Annual Report together with the audited accounts for the year ended March 31, 2018.

1. FINANCIAL AND OPERATIONAL HIGHLIGHTS (RS, in lakhs)

_2017-18_ 2016-17

Revenue from Operations

88,606

73,680

Other income

9,062

5,568

Profit before Depreciation, Finance Costs, and Taxation

30,132

20,561

less: Depreciation

3,817

2,835

Finance Costs

66

50

Profit before Taxation

26,248

17,676

Less: Tax Expense

8,352

4,411

Profit for the year

17,896

13,265

add: Surplus brought forward from the previous year

57,540

47,823

Amount available for appropriation

75,436

61,088

Appropriation:

Other Comprehensive Income/(Loss)1

(68)

(72)

Payment of dividends (including tax)

(3,560)

(3,476)

Surplus carried to Balance Sheet

71,808

57,540

2. DIVIDEND

The Company paid an interim dividend of RS,3.40 per share on 493,45,560 equity shares of nominal value of RS,2/- each, aggregating to RS,1,677.75 lakhs in the month of October 2017. The Board of Directors is pleased to recommend a final dividend for the year of RS,3.60 per share on 493,50,810 equity shares of nominal value of RS,2 each, aggregating to RS,1,776.63 lakhs and a special dividend for the year, on completion of 50 years of business, of RS,3.00 per share on 493,50,810 equity shares of nominal value of RS,2 each, aggregating to RS,1,480.52 lakhs.

3. SUB-DIVISION OF FACE VALUE OF EQUITY SHARES

At the 19th Annual General Meeting of the Company held on June 29, 2017, Members had passed Resolution approving sub-division of shares in the ratio of 5 Equity Shares of H 2 each for every 1 Equity Share of RS, 10 each. The record date for the aforesaid sub-division was July 20, 2017. Accordingly, the face value of equity shares of the Company stands reduced to RS,2/- per share.

4. YEAR IN RETROSPECT

The Operating Profit for the year increased by 42% over that of the previous year. EBITDA for the year reached RS,30,132 lakhs, up from RS,20,561 lakhs in FY2016-17, a growth of 47% year on year. EBITDA Margin for the year was 31%, up from 26% in FY2016-17, an expansion of 500 basis points. Profit before tax (PBT) increased by 48% from RS,17,676 lakhs in FY2016-17 to RS,26,248 lakhs during the year under review. Profit after tax (PAT) at RS,17,896 lakhs in the current year recorded an increase of 35% from RS,13,265 lakhs in FY2016-17.

The key driver for the profit growth has been better market penetration leading up to higher volumes, greater capacity utilization and dynamic pricing. During the year the net turnover reached a high of RS,87,341 lakhs, a growth of 26% over the previous year''s net sales of H69,508 lakhs. The major contributors to this growth were Contract Research & Manufacturing (CRAMS), Inorganic Fluorides and Refrigerant Gas businesses. This revenue includes H5,568 lakhs from our Dahej operations until 30th November 2017 (previous year H1,578 lakhs).

Exports reached H45,096 lakhs posting a healthy year-on-year growth of 44% over H31,361 lakhs of the previous fiscal, predominantly driven by CRAMS, Inorganic Fluorides and Refrigerant Gases. The domestic business grew by 11%, driven by Inorganic Fluorides, Refrigerant Gases and Specialty Fluorochemicals businesses.

CRAMS business continued to achieve significant growth, achieving a turnover of RS,25,746 lakhs during the year up from RS,13,775 lakhs in F Y 2016-17, a robust year-on-year growth of 87%. It contributed 29% of overall Turnover for the year. This revenue includes RS,5,568 lakhs from our Dahej operations until 30th November 2017 (previous year RS,1,578 lakhs). Successful delivery of a variety of orders as well as repeat orders from innovator global pharma majors, has reinforced the business''s confidence in the capability to build and operate a world class cGMP facility. Effective capacity utilization of the cGMP manufacturing plant at Dewas has underpinned such growth during the year. Customer audits by several pharma majors have been successfully completed during the year.

Inorganic Fluorides business registered a significant growth from RS,12031 lakhs in FY 2016-17 to RS,14,823 lakhs during the current year, a growth of 23% year on year. It contributed around 17% of overall turnover. The growth has been fuelled by positive traction in the volumes and prices, both in the domestic as well as the export sector across key product portfolios. The exports business doubled during the year to constitute 13% of the total inorganic basket, which further improved the capacity utilization in this vertical.

Refrigerant Gases business witnessed a growth of 15% year-on-year, achieving a turnover of RS,24,193 lakhs during the year against RS,21,104 lakhs in F Y 2016-17. It contributed around 28% of overall turnover. The exports in the Refrigerant portfolio, constituted approximately 35%. Despite the seasonal nature of the product, pricing corrections both in the domestic and export market helped in the increase in turnover. The exports segment was strong due to growth in demand in key export markets.

Specialty Chemicals business remained more or less flat with a turnover of RS,22,579 lakhs in the current year vis-a-vis RS,22,598 lakhs in FY 2016-17. It contributed around 26% of the overall turnover. The exports share in this business was about 38%. The business continued to experience headwinds in demand generation from both global agrochemicals and domestic pharma majors. The efforts on creating a diversified portfolio of innovative products, winning new customers and penetration into new markets is ongoing. The key emphasis of this business has been on investing in research and development, towards building a strong product portfolio in niche fluorochemicals.

During the year the costs of key raw materials moved in mixed directions. The Company continued its strategy of importing fluorspar, its key raw material, from diverse sources and achieved in maintaining a steady price during the year. Sulphur and chloroform, the other critical raw materials experienced strong inflationary trends exerting stress on the margins across product lines. Sulphur price witnessed a sharp 20% increase while chloroform prices increased by 15% in comparison to F Y 2016-17. Price of boric acid showed a marginal downtrend during the year.

On the energy cost front, cost of power increased by 5% vis-a-vis F Y 2016-17. Non-availability of exchange traded power from other states to Southern Gujarat, continues to be a challenge. Price of natural gas for the Company increased by 18% in the current fiscal compared to that of the previous year.

The Indian Rupee to US Dollar exchange remained fairly range bound. The Rupee was at its strongest around mid-January at H63.60 and the weakest in mid-October at RS,65.30 moving in a bandwidth of about 3%. Towards the end of the current fiscal it was around RS,65.03. The year witnessed major shifts in the British Pound (GBP) and Euro. The GBP - INR rates were around RS,79.45 in April, moving up to RS,92.55 by March. At the end of the current fiscal it was at H91.25, recording a movement of about 16%. The Euro also moved about 17% during the current fiscal. Euro - INR was at RS,68.82 in mid-April and by March it reached RS,80.21. The exchange gain of RS,58 lakhs shown under Other Income, is on account of timing difference of foreign exchange transactions and their realization and / or restatement.

During the current year, the Company approved a capital expenditure of RS,11,500 lakhs towards creating additional cGMP capacity and associated infrastructure. This capex is underway at the Company''s Dewas facility, which is the hub of the CRAMS activities. The new capacity is expected to come on stream by June 2019. The expanded capacity will be utilized for the Company''s growing contract manufacturing activity for the value added complex chemicals and fluoro intermediates, manufactured for innovator pharma companies across the globe. The Investment in expansion of the capacity is based on customer enquiries and discussions and in anticipation of future research pipeline of innovators. The new capacity addition will be similar to the Company''s existing multi product plant configuration with multistage batch and products processing capabilities. The Company has reached out to markets in the US, Europe and Japan by having direct representations in those geographies, in addition to the strong presence of Manchester

Organics Limited (MOL) in the UK. The integration with MOL has also worked well and helped gain a higher share in the CRAMS universe of fluorinated molecules.

The Company''s business relating to manufacture and sale of Specialty Fluorochemicals at Dahej was transferred to Convergence Chemicals Private Limited, a joint venture between the Company and Piramal Enterprise Limited, with effect from December 1, 2017, on a going concern basis by way of slump sales together with all the identified assets, liabilities, consents, permissions, services of employees etc. Revenue from operations of this business till November 30, 2017 was RS,5568 lakhs (previous year RS,1,578 lakhs), which are included in the results.

Through the year, the technology teams worked relentlessly to improve productivity, quality and costs of various products to offer a competitive marketing edge to the businesses on one hand and flexibility of sourcing to the supply chain team on the other. Continuous focus on improving operating efficiencies across manufacturing and supply chain applications, during the year, have helped the Company improve its margins and secure deeper penetration in the market. The top-line growth coupled with higher capacity utilization, helped in better absorption of overheads, contributing to improvements in the operating margins.

During the year a conservative inventory policy was followed in order to remain closer to the market prices of all the raw materials and access the resultant movement in the finished product prices.

The receivables and inventories management have been an area of key management attention and are in line with the scope and scale of operations and the levels were well within acceptable industry norms.

The Company sustained its good financial health with a sizeable treasury income. The Company has maintained its credit rating at ''CARE AA, 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, has been maintained at ''CARE A1 '', indicating very strong degree of safety with respect to timely servicing of its short term financial obligations and lowest credit risk. During the year the Company maintained ''CARE A1 '' rating for issuance of Standalone Commercial Papers, to the extent of RS,6,000 lakhs.

The Company is fully committed towards its responsibilities in health, safety and environmental (HSE) management and has continued to make sizeable investments in HSE during the year, across all its locations. The Company is amongst very few Corporate in the country who has ''Responsible Care'' accreditation from the Indian Chemical Council. ''Responsible Care'' is the chemical industry''s unique global initiative that drives continuous improvement in health, safety & environment performance together with open and transparent communications with stakeholders. The logo is awarded in recognition of a company''s commitment to sustainability. Our Responsible Care accreditation was reaffirmed for another period of three years starting from January 2018.

During the year, the Company has been declared a winner in the Chemical Industry Category-II "Excellence in Management of Health and Safety" by Indian Chemical Council, exemplifying the Company''s commitment towards HSE

5. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has five subsidiaries and two Joint Ventures:

(i) Sulakshana Securities Limited (SSL), an entity created to settle dues of the term lenders of Mafatlal Industries Limited (MIL), remained a wholly-owned subsidiary of the Company. After settling all the third-party dues, SSL was left with 1,455 Sq. Mtrs of commercial floor space in 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, RS,330 lakhs has been repaid by SSL and its current outstanding to the Company is RS,1,049 lakhs.

(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) Ltd., a 100% step-down subsidiary created for the purpose. During the year MOL reported turnover of £4674K and net profit of £265K. MOL declared a final dividend of £75K.

(iii) A 100% subsidiary, NFIL (UK) Ltd was formed in the UK to acquire the balance shareholding of 49% from the shareholders of Manchester Organics Ltd. During the year, the Company made further infusion of £1625K into NFIL (UK) Ltd., which has been utilized to service the HDFC Bahrain Term Loan taken by NFIL (UK) Ltd. to part finance the 49% acquisition of MOL.

(iv) A step-down subsidiary, NFIL USA Inc. was formed during the year, as a 100% subsidiary of NFIL (UK) Ltd. The primary objective of formation of this Company was to increase the market penetration in US of the CRAMS business and attracting appropriate talent as and when the business needs expansion.

(v) Navin Fluorine (Shanghai) Co. Ltd. (which is a 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 our specialty and CRAMS business. The quality and the cost of these materials make a significant impact on various value added products being made by the Company. In view of the foregoing, it was thought prudent to have a permanent representation in China. During the year, our Chinese presence has helped immensely to ensure timely procurement of some of the key raw materials for our CRAMS and specialty business. We could exercise a better control over quality, cost of procurement and timeliness due to our presence in China. Our footprint in China is also helping us to create strategic partnerships with key vendors.

(vi) 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 (GMDC) and Gujarat Fluorochemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDC 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. During the year various matters affecting overall costing of the project and product were discussed threadbare between the partners. This will help the partners to initiate the project related activities during the coming financial year.

(vii) The Company has entered into a Joint Venture (JV) agreement with Piramal Enterprises Limited (PEL) and accordingly a company by the name of Convergence Chemicals Private Limited (CCPL) has been formed to leverage the Company''s capability in niche fluorination chemistry and deep outreach of the JV partner in the healthcare space. PEL holds 51% and the Company owned 49% of the equity share capital of CCPL. During the year, Company''s business relating to manufacture and sale of Specialty Fluorochemicals at Dahej was transferred to Convergence Chemicals Private Limited, with effect from December 1, 2017, on a going concern basis by way of slump sales together with all the identified assets, liabilities, consents, permissions, services of employees etc.

The financial position of each of the said seven Companies is given in the Notes to Consolidated Financial Statements.

The accounts of all the above subsidiaries and joint ventures have been considered in the consolidated financial results of the Company

The Company does not have any material subsidiary. Policy on material subsidiary is available on we blink http://www.nfil.in/policy/index.html

The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available a copy thereof to any member of the Company who may be interested in obtaining the same.

6. REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

As required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, management discussion and analysis and corporate governance report are annexed as Annexure 1 and Annexure 2 respectively to this Report.

7. BUSINESS RESPONSIBILITY REPORT

As required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance prospective, in the prescribed form is annexed as Annexure 3.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Ltd. (a part of Padmanabh Mafatlal Group), fulfilling CSR is a way of life. It is a legacy coming down from the same value tree, the lineage of Late Mr.A.N. Mafatlal who inspired implementation of a range of CSR activities over the last fifty years, in areas like poverty alleviation, healthcare, education, women''s welfare etc. in rural India, The Company will continue to follow the path by contributing to social welfare and nation development.

Pursuant to the provision of Section 135 of the Companies Act,

2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Mr. S.G. Mankad is the Chairman of the Committee and Mr.H.H. Engineer and Mr. V.P. Mafatlal are the other members of the Committee. The CSR Policy formulated by the Board based on the recommendations of the CSR Committee is available on we blink http://www.nfil.in/policy/index.html

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act is RS,223.98 lakhs and the Company has spent RS,296.52 lakhs during the current financial year (as against RS,302.08 lakhs during the previous year). Thus, the Company has spent more amount on CSR activities than legally mandated. The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure 4 to this Report.

9. INDUSTRIAL RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full cooperation from the employees.

The Company continues to focus on extensive training and developmental activities and efficiency and quality improvement initiatives. The total number of employees as on March 31, 2018 was 684.

10. INSURANCE

The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.

11. EMPLOYEE STOCK OPTION SCHEME

At the last Annual General Meeting of the Company held on June 29, 2017, the Members had approved grant of options to the eligible employees of the Company and its Subsidiaries upto a maximum of 5% of the Issued and Paid-up Capital of the Company from time to time.

During the year 58830 Stock Options were granted to the employees. Pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as amended from time to time, the details of stock options as on March 31, 2018 are annexed as Annexure 5 to this Report.

12. DIRECTORATE

Pursuant to the provisions of Section 149 (6) of the Act, Mr. T. M. M. Nambiar has ceased to be an Independent Director with effect from June 29, 2017 consequent upon appointment of Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company wherein his relative (son-in-law) is one of the Partners but he does not audit the accounts of the Company. Pursuant to the provisions of the Act, Mr. T.M.M. Nambiar retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

13. CHANGES IN KEY MANAGERIAL PERSONNEL

Mr. Sitendu Nagchaudhuri, the Chief Financial Officer of the Company has tendered his resignation, with effect from close of business hours on June 15, 2018, to pursue his career interests beyond the Company. The said resignation has been accepted by the Board of Directors. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors has decided to appoint Mr. Ketan Sablok, who is currently Vice-President Finance, as the Chief Financial Officer of the Company with effect from June 16, 2018. Mr.Sablok is a Chartered Accountant and a Cost Accountant. He joined the Company in 1997 and has worked across various facets of finance, accounting, MIS, Systems Design and Integration, Business Planning and Analysis and Acquisition in the last 21 years of his tenure with the Company.

14. EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return for the Financial Year ended on March 31, 2018 as required by Section 92(3) of the Act and Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is Annexed as Annexure 6 to this Report.

15. NUMBER OF BOARD MEETINGS

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

16. 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 affairs 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(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 effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

17. DECLARATION BY INDEPENDENT DIRECTORS

Mr. P.N. Kapadia, Mr. S.S. Lalbhai, Mr. S.M. Kulkarni, Mr. S.G. Mankad, Mr. H.H. Engineer and Mrs. R.V. Haribhakti are independent in terms of Section 149(6) of the Act and Regulation 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

The Company has received requisite declarations/confirmations from all the above Directors confirming their independence.

18. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy on Directors appointment and remuneration approved by the Board of Directors is available on the we blink http://www.nfil. in/policy/index.html.

19. AUDITORS REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended March 31, 2018.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT

Particulars of loans given and of the investments made by the Company as at March 31, 2018 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made investment in 16,25,000 equity shares of £ 1/each of NFIL (UK) Ltd. and 13,73,391 equity shares of RMB 1/- each of Navin Fluorine (Shanghai) Co. Ltd.

The Company also made investments in schemes of various mutual funds aggregating to RS,52,869.11 lakhs and during this period realized RS,32,742.06 lakhs on redemption of units of various mutual funds and debentures. During the year under review, no new loans were given by the Company.

21. SECRETARIAL AUDIT REPORT

Pursuant to Section 204(1) of the Act, the Secretarial Audit Report for the Financial Year ended March 31, 2018 given by M/s.Makarand M. Joshi & Co., Company Secretaries is annexed as Annexure 7 to this Report. The Company had inadvertently not published its Dividend Distribution Policy in last year''s Annual Report. Based on query from National Stock Exchange, the Company has agreed to disclose the Policy for that year in this year''s Annual Report. The Dividend Distribution Policy for the current year and last year is unchanged and the same is also available on the website of the Company at we blink http://www.nfil.in/policy/index.html. Through inadvertence there was some delay in transferring the unpaid dividend amount in case of interim dividend. Otherwise, the Company has been regular in transferring its unpaid dividend to Investor Education and Protection Fund. As regards delay in certain filings, which was through oversight, the Company has taken necessary steps. As regards Code of Conduct, the Company will take necessary steps.

22. RELATED PARTY TRANSACTIONS

All the related party transactions that were entered into during the year in the ordinary course of business were on arms'' length basis. In case of related party transaction for transfer of undertaking at Dahej to Convergence Chemicals Pvt. Ltd. during the year, necessary approval was obtained from the Shareholders by way of Postal Ballot. Related Party Transactions Policy is available on we blink http//www.nfil.in/policy/index.html

23. STATEMENT OF COMPANY''S AFFAIRS

The state of the Company''s affairs is given under the heading "Year in Retrospect" and various other headings in this Report and in Management Discussion and Analysis Report which is annexed to the Directors'' Report.

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

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors'' Report.

25. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 134 of the Act, read with The Companies (Accounts) Rules, 2014, is annexed as Annexure 8 to this Report.

26. RISK MANAGEMENT POLICY

The Company has a structured risk management policy. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during the decision making. It is dealt with in greater details in the Management Discussion and Analysis section.

27. ANNUAL PERFORMANCE EVALUATION

In compliance with the provisions of the Act, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation was carried out as under:

Board:

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, Board dynamics etc. 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

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc. 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, the Rules framed there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the Chairperson) 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, independence, impartiality, communication, business leadership, people leadership, meeting conduct, preparedness, participation, transparency and investor relations and value addition. The Independent Directors and the Board were of the unanimous view that each of the non-independent directors was providing good business and people leadership.

28. DEPOSITS

The Company has not accepted or continued any public deposits as contemplated under Chapter V of the Act.

29. DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure 9 to this Report.

30. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to the remuneration of the specified employees covered under the above Rules are annexed as Annexure 10 to this Report.

31. ORDERS BY REGULATORS, COURTS OR TRIBUNALS

No significant and/or material orders were passed by any regulator or court or tribunal impacting the going concern status and the Company''s operations in future.

32. INTERNAL FINANCIAL CONTROLS

The existing internal financial controls are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. They have been reviewed and found satisfactory by the Management on the following key control matrices:

a. Entity level controls;

b. Financial controls; and

c. Operational controls

Which included authority and organization matrix, standard operating procedures, risk management practices, compliance framework within the organization, ethics and fraud risk management, management information system, self-assessment of control point, business continuity and disaster recovery planning and budgeting systems.

33. AUDITORS

At the 19th Annual General Meeting held on June 29, 2017, the Members approved appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/ N500016) to hold office from the conclusion of the 19th Annual General Meeting until the conclusion of the 24th Annual General Meeting (subject to ratification of the appointment by the Members, at every Annual General Meeting held after the 19th Annual General Meeting) on such remuneration as may be fixed by the Board apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

On May 7, 2018, Section 40 of the Companies Amendment Act, 2017 (amending Section 139 of the Companies Act, 2013) has been notified whereby ratification of Statutory Auditor''s appointment is not required at every Annual General Meeting. Accordingly, resolution for ratification of appointment of Statutory Auditors is not proposed.

34. COST AUDITORS

As per the requirements of Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014, the Audit of the Cost Accounts relating to Chemical products is being carried out every year. The Board of Directors have based on the recommendation of the Audit Committee appointed Mr. B.C. Desai, Cost Auditor, Ahmadabad (Membership No.M-1077) to audit the cost accounts of the Company for the year 2018-19 from April 1, 2018 to March 31, 2019 on a remuneration of RS,3,50,000/-. As required under the Act, necessary resolution seeking Member''s ratification for the remuneration payable to Mr. B.C. Desai is being included in the Notice convening the 20th Annual General Meeting. The Cost Audit Report in respect of Financial Year 2017-18 will be filled on or before the due date i.e. September 27, 2018.

35. APPRECIATION

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

For and on behalf of the Board,

V.P. Mafatlal

Place: Mumbai Chairman

Dated: May 9, 2018 (DIN:00011350)

Regd. Office:

2nd floor, Sunteck Centre,

37/40, Subhash Road, Vile Parle (East),

Mumbai 400057.

Tel: 91 22 6650 9999,

Fax: 91 22 6650 9800

E-mail: [email protected],

Website: www.nfil.in

CIN: L24110MH1998PLC115499


Mar 31, 2017

To,

The Members

Navin Fluorine International Limited

The Directors are pleased to present the Nineteenth Annual Report together with the audited accounts for the year ended 31st March 2017.

1. FINANCIAL RESULTS:

(Rs, in lacs)

Current Year

Previous Year

Operating Income

70123

63624

Other income (including non-recurring income)

2988

2469

EBITDA before exceptional items

17962

14084

add: Exceptional Items

2733

-

less: Depreciation

2835

2092

Interest

50

320

Tax

4409

3025

Profit After Tax

13401

8647

add: Surplus brought forward from the previous year

39001

32827

Amount available for appropriation

52402

41474

Appropriation:

Interim dividend

1077

978

Special dividend

734

-

Proposed final dividend

-

1077

Corporate dividend tax

368

418

Surplus carried to Balance Sheet

50223

39001

Note: Figures are regrouped wherever necessary to make the information comparable.

2. DIVIDEND

The Company paid an interim dividend of Rs 11.00 per share as well as a special dividend of H7.50 per share on 97,91,297 equity shares of nominal value of Rs,10/- each, aggregating to Rs,1810.65 lacs in the month of October 2016. The Board of Directors is pleased to recommend a final dividend for the year of H13/- per share on 97,91,297 equity shares of nominal value of Rs 10/- each, aggregating to Rs,1272.88 lacs.

3. RESTRUCTURING OF PROMOTER''S SHAREHOLDING:

During the year, Mr. H.A. Mafatlal, Mr. V.P. Mafatlal, their family members, family trusts and companies including the three listed entities viz. the Company, Mafatlal Industries Ltd. and NOCIL Ltd. entered into an agreement to amicably restructure the shareholding of the three listed companies and other group companies such that the Management of the Company resided with Mr. V.P. Mafatlal and the Management of Mafatlal Industries Ltd. and NOCIL Ltd. resided with Mr. H.A. Mafatlal. The restructuring is part of a family settlement and succession plan between Mr. H.A. Mafatlal and Mr. V.P. Mafatlal.

4. SUB-DIVISION OF FACE VALUE OF EQUITY SHARES:

Subject to the approval of the Members, the Board of Directors have approved the proposal for sub-division of the face value of each equity share of the Company of H10/- into 5 equity shares of the face value of H2/- each. Necessary resolutions for approval of the same together with consequential changes in the Memorandum of Association are being placed for approval of the Members at the ensuing 19th Annual General Meeting.

5. YEAR IN RETROSPECT

The Company has recorded a Revenue of Rs 70123 Lacs during the year vs. Rs 63624 Lacs achieved during F.Y 2015-16 i.e. a growth of 10% year on year. The growth in Top Line is principally driven by Contract Research & Manufacturing (CRAMS) & Inorganic Fluorides Businesses.

Domestic Sales achieved a growth of 12% year on year, from Rs 34873 Lacs in F.Y.2015-16 to Rs 39123 Lacs in the current year, driven by Inorganic Fluorides, Refrigerant Gases & Specialty Fluor chemicals Businesses. Exports Turnover clocked a growth of 8% year on year, from Rs 28751 Lacs in F.Y. 201516 to Rs 31000 Lacs during the current year, predominantly driven by CRAMS Business.

CRAMS business continued its journey of gaining momentum, by achieving a turnover of Rs 13743 Lacs during the year vs. Rs 8654 Lacs in F.Y. 2015-16 ; i.e. a growth of 59% year-on-year. It contributed roughly 20% of overall Turnover for the year. Successful delivery of a variety of orders across a range of scales from Innovator Pharma Majors, through effective utilization of the new cGMP manufacturing plant at Dewas has underpinned such growth during the year. Numerous Customer Audits have been successfully completed during the year, which reinforced Business''s confidence in the capability to build and operate a world class cGMP facility.

Refrigerant Gases business remained stable at Rs 21557 Lacs during the year vs. Rs 21696 Lacs in F.Y. 2015-16. It contributed around 31% of overall Turnover; of which, exports contributed approximately 33%. Despite the seasonal nature of the product, Refrigerants BU fared well on the domestic front on account of prolonged summers & steady growth in underlying demand in the refrigeration & air conditioning sectors. However, this was partially offset by some headwinds in exports side of the business on account of price softening due to Chinese supplies, quota renewal challenges as well as Foreign Exchange constraints for imports into some of the Middle East countries.

Inorganic Fluorides business registered a significant growth from Rs 9399 Lacs in F.Y. 2015-16 to Rs 12031 Lacs during the current year , i.e. a growth of 28% year on year. It contributed around 17% of overall Turnover. The growth has been predominantly fuelled by positive traction in the domestic sector across key product portfolios.

Specialty Chemicals business remained more or less flat with a turnover of H22792 Lacs in the current year vs. Rs 23875 Lacs in F.Y. 2015-16. It contributed around 32% of overall Turnover of which, exports contribute roughly 43%. This BU continued to experience headwinds in terms of demand downturn from both global agrochemical majors as well as domestic pharma companies. However, ongoing efforts on creating a diversified portfolio of innovative products, winning new customers and penetration into new markets enabled to offset such impact to a significant extent. Here, the focus remains on investing in research & development towards building strong product offerings in niche fluorochemicals,

EBITDA before exceptional item for the year is Rs 17962 Lacs, up from Rs 14084 Lacs in F.Y. 2015-16, a growth of 28% year on year. EBITDA Margin for the year is 25%, up from 21% in F.Y. 2015-16, i.e. an expansion of 400 basis points.

Profit before Tax (PBT) before Exceptional Items grew by 29% year on year, to Rs 15078 Lacs in the current year, from Rs 11672 Lacs in F.Y. 2015-16. PBT Margin recorded a growth of 300 basis points, i.e. from 18% in F.Y. 2015-16 to 21% in the current year.

As part of an agreement executed amongst Mr. H. A. Mafatlal, Mr. V. P. Mafatlal, their family members, family trusts & companies including the three listed entities, viz. the Company, Mafatlal Industries Ltd and NOCIL Ltd and approved by the Board of Directors on 6th August 2016, the Company has divested part of its shareholding in Mafatlal Industries Ltd and in NOCIL Ltd during the year. The profit arising out of divestment of such Long Term investments amounting to Rs 2733.18 lacs has been shown under "Exceptional Items" in the Statement of Profit and Loss.

Profit after Tax (PAT) for the year stands at Rs 13401 Lacs, up from Rs 8647 Lacs in F.Y. 2015-16 i.e. a growth of 55% year on year. PAT margin for the current year is 18% vs. 13% in F.Y. 2015-16 i.e. a growth of 500 basis points year on year.

Cost of key Raw Materials like Sulphur, Fluorspar, Chloroform & Boric Acid exhibited a downward trend during the year. Chloroform prices continue to be subject to volatility due to supply fluctuations. Price of Bromine has, however, shown a marginal uptrend during the year. The Company pursues a Supply Chain strategy of importing Fluorspar from diverse regions to de-risk dependence on a single source / geography.

On the energy cost front, cost of Power has gone down marginally by around 4% year on year. Non-availability of exchange traded power from other states to Southern Gujarat, continues to be a challenge. Prices of Natural Gas has shown a downturn of around 11% year on year, on account of weak global demand.

Indian Rupee has recorded some appreciation vs. key Foreign Currencies during the year, by around 2% vs. US Dollar, 15% vs. GBP & 8% vs. Euro. However, the Company being

Net Exporter, with Exports predominantly executed in US Dollars; the strengthening Indian Rupee has in fact resulted into a headwind for Export realizations during the year. The Exchange Loss of Rs 37 Lacs shown under Other Expenses, is on account of timing difference of foreign exchange transactions and their realization and/or restatement.

Net Working Capital management continues to be a key focus for the Company and the levels of Net Working Capital are in line with the scope & scale of operations and well within acceptable industry benchmark.

The Company has reinforced focus on improving Free Cash Flow Efficiency on the enterprise on a sustainable basis and has a commendable Treasury Income. The Company has been successful to maintain its Credit Rating at "CARE AA" for borrowings with a tenure of more than one year and fund based facilities during the year, signifying high degree of safety regarding timely servicing of financial obligations and very low credit risk;. The rating for short term facilities with a tenure of less than a year is maintained at "CARE A1 ", indicating very strong degree of safety regarding timely servicing of financial obligations and lowest credit risk. During the year, the Company has also maintained "CARE A1 " rating for issuance of Standalone Commercial Papers, to the extent of Rs 3000 Lacs.

During the year, MSCI (Morgan Stanley Capital International) has announced changes to the constituents for the MSCI India domestic small cap index and as a part of the change, the Company has been included in the said index

During the year, the company has commissioned the Pilot Plant for the new generation refrigerant gas HFO 1234 yf, in line with the Technology Transfer & Joint Process Development Agreement entered into with Honeywell during last year. HFO-1234yf is a next-generation hydrofluoric-olefin (HFO) refrigerant with GWP less than 1 and is a near drop-in replacement for R-134a, a hydro fluorocarbon (HFC), for use in vehicle air conditioning systems globally. This agreement depicts Honeywell''s confidence in company''s capabilities in developing new generation Fluoro intermediates.

The Company has secured Product validation from Customer & subsequently commenced commercial production & shipment of the Fluoro intermediate product from its Production Facility at Dahej, during Q IV of the year. Subject to certain preconditions and regulatory approvals, the facility producing this product will be transferred from the Company to the Joint Venture Company with Piramal Enterprises Ltd, by way of a Business Transfer Arrangement through Slump Sales, during the coming financial year.

The Company continues to maintain its focus on improving operating efficiencies across its manufacturing and supply chain applications, which helped the Company improve its margins and secure deeper penetration in the market. During the year these initiatives were further reinforced. The top-line growth helped a better absorption of overheads contributing to improvements in the operating margins.

The R&D and Technology functions pursued it''s agenda of excellence through the year for improvement in productivity, quality and costs of various products to enable Businesses with a competitive offering on one hand and flexibility of sourcing to the supply chain function on the other.

The Company is fully committed towards its responsibilities in health, safety and environmental (HSE) management and has continued to make sizable investments in HSE during the year, across all its locations. The Company is amongst very few Corporate in the country who has ''Responsible Care'' accreditation from the Indian Chemical Council. ''Responsible Care'' is the chemical industry''s unique global initiative that drives continuous improvement in health, safety & environment performance together with open and transparent communications with stakeholders. The logo is awarded in recognition of a company''s commitment to sustainability. During the year, the Company has been declared a Winner in the Category of "Operational Excellence in Safety" for its Responsible Care Initiatives in Distribution at the Manufacturing & Supply Chain Summit Awards 2017; which exemplifies the Company''s commitment towards safety. The Surat & Dewas Plants of the Company have secured Certificates of Appreciation for Safety in Operations from the National Safety Council during the year.

6. SUBSIDIARIES AND JOINT VENTURES

The Company has four subsidiaries and two Joint Ventures:

(i) Sulakshana Securities Limited (SSL), an entity created to settle dues of the term lenders of Mafatlal Industries Limited (MIL), remained a wholly-owned subsidiary of the Company. After settling all the third-party dues, SSL was left with 1,455 Sq. Mtrs. of commercial floor space in 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, Rs 192.90 lacs has been repaid by SSL and its current outstanding to the Company is Rs 1906 lacs.

(ii) The Company now owns 100% of Manchester Organics Limited (M.O.L.), a specialized chemicals research company in Runcorn, U.K., holding 51% of the ordinary voting shares of M.O.L. directly and the balance 49% through NFIL (UK) Ltd., a 100% step-down subsidiary created for the purpose.

During the year M.O.L. reported excellent performance with a turnover of £ 5.581 M, i.e. a growth of 17% over F.Y. 2015-16 turnover of £ 4.773 M and a Profit after Tax of £ 778 K, which is a five times improvement over F.Y. 2015-16 PAT of £ 153 K. During the year, M.O.L. has paid a Dividend of £ 291 K (Rs 234 Lacs) to the Company.

(iii) A 100% step-down subsidiary by the name of NFIL (UK) Ltd was formed in the U.K. last year to acquire the balance shareholding of 49% from the shareholders of Manchester Organics Ltd. During the year, the Company has made further equity infusion of £ 931 K into NFIL (UK) Ltd, which , along with the Dividend of £ 280 K received by NFIL (UK) Ltd from M.O.L. ; have been utilized to service the HDFC Bank Bahrain Term Loan taken by NFIL (UK) Ltd during last year to part finance the acquisition of 49% of M.O.L.

(iv) Some of the key raw materials for our specialty and CRAMS business are procured from China. The quality and the cost of these material make a significant impact on various value added products being made by the company. and therefore It was thought fit to have a strategic presence closer to the source. In view of the foregoing, it was thought prudent to have a permanent representation in China. Accordingly, a trading outfit by the name of Navin Fluorine (Shanghai) Co. Ltd. (which is a wholly owned foreign enterprise under Chinese Laws) was incorporated last year. During the year, our Chinese presence has helped immensely to ensure timely procurement of some of the key raw materials for our CRAMS business. We could exercise a better control over quality, cost of procurement and timeliness due to our presence in China. Our footprint in China is also helping us to create strategic partnerships with key vendors. The total capital investment over a period of 20 years is proposed to be RMB 12.50 Million (app. Rs 1176 Lacs).

(v) 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 (GMDC) and Gujarat Fluor chemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDC 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. During the year various matters affecting overall costing of the project and product were discussed threadbare between the partners. This will help the partners to initiate the project related activities during the coming financial year.

(vi) The Company has entered into a Joint Venture (JV) agreement with Piramal Enterprises Limited (PEL) and accordingly a company by the name of Convergence Chemicals Private Limited (CCPL) has been formed to leverage the Company''s capability in niche fluorination chemistry and deep outreach of the JV partner in the healthcare space. PEL holds 51% and the Company owns 49% of the equity share capital of CCPL. During the year, product validation has been secured and commercial operations have begun at the facility. Subject to certain preconditions and regulatory approvals, the facility producing this product will be transferred from the Company to CCPL, by way of a Business Transfer Arrangement through Slump Sales, during the coming F.Y. Necessary approval for the same is being sought separately from the Members under the provisions of Section 180(1)(a) and Section 188 of the Companies Act, 2013, through postal ballot.

The financial position of each of the said six Companies is given in the Notes to Consolidated Financial Statements.

The Accounts of all the above subsidiaries and joint ventures have been considered in the consolidated financial results of the Company.

The Company does not have any material subsidiary. Policy on material subsidiary is available on we blink http://www.nfil.in/policy/index.html

The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available a copy thereof to any member of the Company who may be interested in obtaining the same.

7. REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, management discussion and analysis and corporate governance report are annexed as Annexure 1 and Annexure 2 respectively to this Report.

8. BUSINESS RESPONSIBILITY REPORT:

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance prospective, in the prescribed form is annexed as Annexure 3.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Ltd. (a part of Padmanabh Mafatlal Group), fulfilling CSR is a way of life. It is a legacy coming down from the same value tree, the lineage of Late Mr. A.N. Mafatlal who inspired implementation of a range of CSR activities over the last fifty years, in areas like poverty alleviation, healthcare, education, women''s welfare etc. in rural India, The Company will continue to follow the path by contributing to social welfare and nation development.

Pursuant to the provision of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Mr. S.G. Mankad is the Chairman of the Committee and Mr. H.H. Engineer and Mr. V.P. Mafatlal are the other members of the Committee. The CSR Policy formulated by the Board based on the recommendations of the CSR Committee is available on we blink http://www.nfil.in/policy/index.html

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act is Rs 176.11 lacs and the Company has spent H302.08 lacs during the current financial year (as against Rs 194.81 lacs during the previous year). Thus, the Company has spent more amount on CSR activities than legally mandated, .The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure 4 to this Report.

10. INDUSTRIAL RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full cooperation from the employees. During the year the Company has signed a Memorandum of Understanding for wage revision with workers which is effective for a period of three years from 1st April, 2016.

The Company continues to focus on extensive training and developmental activities and efficiency and quality improvement initiatives. The total number of employees as on 31st March 2017 was 762.

11. INSURANCE

The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.

12. EMPLOYEE STOCK OPTION SCHEME 2007

During the year 11,215 Stock Options were granted to the employees out of the unallotted options under the employees Stock Option Scheme 2007. Pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31st March 2017 under the "Employee Stock Option Scheme 2007" are annexed as Annexure 5 to this Report. The Company is proposing a new Scheme for Employee''s Stock Option for which necessary approval is sought from the Members.

13. DIRECTORATE

Pursuant to the agreement entered into amongst the Promoters, as referred to in Para 3 of this Report, Mr. H.A. Mafatlal stepped aside as Chairman and Director of the Company with effect from close of office hours on 19th August, 2016. The Board places on record its deep sense of appreciation for the contribution made by Mr. H.A. Mafatlal in providing exemplary leadership to the Board and the Company and also for the invaluable contribution made by him in the growth of the Company during his long association.

The Board of Directors appointed Mr. V.P. Mafatlal (who was already on the Board of Directors as Non-Executive Promoter Director) as Executive Chairman designated as Chairman of the Board of Directors and the Company for a period of five years with effect from 20th August, 2016 subject to the approval of the Members at the ensuing Annual General Meeting.

Pursuant to the provisions of the Act, Mr. A.K. Srivastava retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

14. EXTRACT OF THE ANNUAL RETURN:

Extract of the Annual Return for the Financial Year ended on 31st March, 2017 as required by Section 92(3) of the Act and Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is Annexed as Annexure 6 to this Report.

15. NUMBER OF 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.

16. 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 affairs 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(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 effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

17. DECLARATION BY INDEPENDENT DIRECTORS:

Mr. T.M.M. Nambiar, Mr. PN. Kapadia, Mr. S.S. Lalbhai, Mr. S.M. Kulkarni, Mr. S.G. Mankad, Mr. H.H. Engineer and Ms. R.V. Haribhakti are independent in terms of Section 149(6) of the Act and Regulation 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015:

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

18. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The requisite details as required by Section 134(3)(e), Section 178(3) & (4) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 are annexed as Annexure 7 to this Report.

19. AUDITORS REPORT:

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2017.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

Particulars of loans given and of the investments made by the Company as at 31st March, 2017 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made investment in 9,31,000 equity shares of £ 1/- each of NFIL (UK) Ltd.

The Company also made investments in schemes of various mutual funds aggregating to Rs 31897.93 lacs and during this period realized Rs 28866.28 lacs on redemption of units of various mutual funds and debentures. During the year under review, no new loans were given by the Company.

21. SECRETARIAL AUDIT REPORT:

Pursuant to Section 204(1) of the Act, the Secretarial Audit Report for the Financial Year ended 31st March, 2017 given by Mr. Manuprasad Patel, Practicing Company Secretary is annexed as Annexure 8 to this Report. The said Report does not contain any qualifications or adverse remarks.

22. RELATED PARTY TRANSACTIONS:

There are no materially significant related party transactions made by the Company during the year All the related party transactions that were entered into during the year in the ordinary course of business were on arms'' length basis, except the promoters shareholding changes (selling of shares of NOCIL Limited and Mafatlal Industries Ltd. by the Company) which were on arms'' length basis, for which requisite approvals were obtained from Audit Committee and Board of Directors. The transaction amounts were not exceeding the applicable statutory limits and therefore no approval from the Shareholders were required. Related Party

Transactions Policy is available on we blink http//www.nfil.in/ policy/index.html.

23. STATEMENT OF COMPANY''S AFFAIRS:

The state of the Company''s affairs is given under the heading "Year in Retrospect" and various other headings in this Report and in Management Discussion and Analysis Report which is annexed to the Directors'' Report.

24. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors'' Report.

25. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 134 of the Act, read with The Companies (Accounts) Rules, 2014, is annexed as Annexure 9 to this Report.

26. RISK MANAGEMENT POLICY:

The Company has a structured risk management policy. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during the decision making. It is dealt with in greater details in the Management Discussion and Analysis section.

27. ANNUAL PERFORMANCE EVALUATION:

In compliance with the provisions of the Act, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation was carried out as under:

Board:

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, Board dynamics etc. The Independent Directors, at their separate meetings, 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:

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc. 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, the Rules framed there under and the Listing Agreement/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 preparedness, participation, value addition, focus on governance and communication. The Board was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the Chairperson) 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 transparency, business leadership, people leadership, focus on governance, communication, preparedness, participation and value addition. The Independent Directors and the Board were of the unanimous view that each of the non-independent director was providing good business and people leadership.

28. DEPOSITS:

The Company has not accepted or continued any public deposits as contemplated under Chapter V of the Act.

29. DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure 10 to this Report.

30. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The requisite details relating to the remuneration of the specified employees covered under the above Rules are annexed as Annexure 11 to this Report.

31. ORDERS BY REGULATORS, COURTS OR TRIBUNALS:

No significant and/or material orders were passed by any regulator or court or tribunal impacting the going concern status and the Company''s operations in future.

32. INTERNAL FINANCIAL CONTROLS:

The existing internal financial controls are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. They have been reviewed and found satisfactory by the Management on the following key control matrices:

a. Entity level controls;

b. Financial controls; and

c. Operational controls

Which included authority and organization matrix, standard operating procedures, risk management practices, compliance framework within the organization, ethics and fraud risk management, management information system, self-assessment of control point, business continuity and disaster recovery planning and budgeting systems.

33. AUDITORS:

The existing Statutory Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, will retire upon conclusion of the ensuing 19th Annual General Meeting, in compliance with the provisions relating to mandatory rotation of auditors under the Act.

Based on the recommendations of the Audit Committee and subject to the approval of the Members at the ensuing 19th Annual General Meeting, the Board of Directors have approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/ N50016) as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing 19th Annual General Meeting until the conclusion of the 24th Annual General Meeting.

The specific notes forming part of the accounts referred to in the Auditors'' Report are self-explanatory and give complete information.

34. COST AUDITORS:

As per the requirements of Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014, the Audit of the Cost Accounts relating to Chemical products is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee appointed Mr. B.C. Desai, Cost Auditor, Ahmadabad (Membership No.M-1077) to audit the cost accounts of the Company for the year 2017-18 from 1st April 2017 to 31st March 2018 on a remuneration of H3,50,000/-. As required under the Act, necessary resolution seeking Member''s ratification for the remuneration payable to Mr. B.C. Desai is included as item No. 11 of the Notice convening the 19th Annual General Meeting. The Cost Audit Report in respect of Financial Year 2016-17 will be filled on or before the due date i.e. 27th September 2017.

35. APPRECIATION:

The Directors wish to place on record their appreciation of the devoted services of the employees, who have largely contributed to the efficient management of your company. The Directors also place on record their appreciation for the continued support from the shareholders, the lenders and other associates.

For and on behalf of the Board,

V.P. Mafatlal

Place: Mumbai Chairman

Dated: 28th April, 2017 (DIN:00011350)


Mar 31, 2016

The Directors are pleased to present the Eighteenth Annual Report together with the audited accounts for the year ended 31st March 2016.

1. FINANCIAL RESULTS:

(Rs, in lacs)

Operating Income 63,624 54,612

Other income (including non-recurring income) 2,469 2,664

EBITDA 14,084 8,996

less: Depreciation 2,092 1,864

Interest 32 324

Tax 3,025 1,870

Profit After Tax 8,647 4,938

add: Surplus brought forward from the previous year 32,827 30,427

Amount available for appropriation 41,474 35,200

Appropriation:

Transfer to general reserve - 494

dividend 978 733

Proposed final dividend 1,077 830

Corporate dividend tax 418 316 Surplus carried to Balance Sheet 39,001 32,827

Note: Figures are regrouped wherever necessary to make the information comparable.

2. DIVIDEND

The Company paid an interim dividend of Rs, 10/- per share on 97,79,497 equity shares of nominal value of Rs, 10/- each, aggregating to Rs, 977.95 lacs in the month of October 2015. The Board of Directors is pleased to recommend a final dividend for the year of Rs, 11/- per share on 97,87,297 equity shares of nominal value of Rs, 10/- each, aggregating to Rs, 1,076.60 lacs.

3. YEAR IN RETROSPECT

The Company has registered a Revenue of Rs, 63,624 lacs during the year vs. Rs, 54,612 lacs achieved during F. Y 2014- 15 i.e. a growth of 17% year on year. The growth in Top Line is principally driven by Refrigerant Gases, Specialty Chemicals & Contract Research & Manufacturing Services (CRAMS) Businesses.

Exports Turnover delivered a significant growth of 47% year on year, from Rs, 19,549 lacs in F. Y. 2014-15 to Rs, 28,751 lacs during the current year, predominantly fuelled by Specialty Chemicals and CRAMS Businesses. Domestic Sales remained more or less flat during the year.

Refrigerant Gases business grew from Rs, 19,487 lacs in F. Y. 2014-15 to Rs, 21,696 lacs during the year, a growth of 11% year on year. It contributed around 33% of overall Turnover of which, Exports contribute roughly 38%. Despite the seasonal nature of the product, Refrigerant Gases Business fared well on the domestic front on account of milder winters during the October-December quarter. However, this was marred by some headwinds in exports side of the business on account of quota renewal challenges in the Middle East as well as Foreign Exchange constraints for imports imposed in a few countries.

Specialty Chemicals business grew from Rs, 21,512 lacs in F. Y. 2014-15 to Rs, 23,875 lacs during the current year, growth of 11% year on year. It contributed around 38% of overall Turnover, of which, Exports contribute roughly 46%. This Business witnessed slower off take from global agrochemical majors as well as domestic pharma companies. However, ongoing efforts on creating a diversified portfolio of products, customers and markets enabled to offset such impact to a significant extent. Here, the focus continues to be on investing in research & development towards building a strong product portfolio with niche fluorochemicals, along with widening the reach to new customers and new markets.

CRAMS business grew almost threefold, albeit on a small base, to Rs, 8,654 lacs during the year from Rs, 3,099 lacs in F.Y. 2014-15. It contributed roughly 14% of overall Turnover for the year vis-a-vis 6% contribution in last year. The new cGMP manufacturing plant at Dewas has gone on stream as per plan. Numerous Customer Audits have been successfully completed during the year, enhancing confidence in the Business''s capability to build and operate a world class cGMP facility.

Inorganic fluorides contributed Rs, 9,399 lacs i.e. 15% of overall sales. Growing acceptance of the products in overseas markets is offsetting the weak domestic demand. Exports contributed 11% of the sales of this Business..

EBIDTA for the year is Rs, 14,084 lacs, up from Rs, 8,996 lacs in F.Y. 2014-15, a growth of 57% year on year. EBIDTA Margin for the year is 21%, up from 16% in F. Y. 2014-15, i.e. an expansion of 500 basis points.

Profit before Tax (PBT) grew by 71% year on year, to Rs, 11,672 lacs in the current year, from Rs, 6,808 lacs in F. Y. 2014-15. PBT Margin recorded a growth of 50%, i.e. from 12% in F. Y. 2014-15 to 18% in the current year.

Profit after Tax (PAT) for the year stands at Rs, 8,647 lacs , up from Rs, 4,938 lacs in F. Y. 2014-15 i.e. a growth of 75% year on year. PAT margin for the current year is 13% vs. 9% in F. Y. 2014-15 i.e. a growth of 44% year on year.

Cost of key Raw Materials have exhibited a downward trend during the year with Sulphur, Fluorspar, Chloroform & Boric Acid prices softening in the range of 5%-15% year on year. Chloroform prices continue to be subject to volatility due to supply fluctuations. Price of Bromine has, however, shown a marginal uptrend during the year. There has been a devaluation of Indian Rupee vs. US Dollar of around 7% year on year. The Company continues to import Fluorspar from diverse regions as part of supply chain security to de-risk dependence on a single source / geography.

On the energy cost front, cost of power has gone up by around 5% year on year. Non-availability of exchange traded power from other States to Southern Gujarat, continues to be a challenge. Prices of natural gas has however shown a downturn of around 18% year on year, on account of weak global cues.

Indian Rupee has devalued during the year, by around 7% vs. US Dollar. The GB Pound exchange rate remained flat year on year, whereas the Euro exchange rate has shown some appreciation by around 6% year on year. However, the Company being a net exporter, with exports predominantly executed in US Dollars; the weakening Indian Rupee has helped in higher export realisation during the year. The Exchange Loss of Rs, 114 lacs shown under Other Expenses, is on account of timing difference of foreign exchange transactions and their realisation & /or restatement.

There is an increase in the net working capital of the Company by around Rs, 816 lacs year on year, predominantly on account of Receivables due to higher sales towards the end of the year. Inventories have been maintained more or less at the same level of last year through effective planning & control. Net working capital management continues to be a key focus for the Company and the level of net working capital is in line with the scope & scale of operations of the Company and is well within acceptable industry benchmark.

The Company has reinforced focus on improving tree cash flow efficiency of the enterprise on a sustainable basis and has a commendable Treasury Income. The Company has been successful to secure an upgrade in it''s Basel II Credit Rating from "CARE AA-" in F.Y. 2014-15 to "CARE AA" during the year , signifying high degree of safety regarding timely servicing of financial obligations and very low credit risk, for borrowings with a tenure of more than one year and fund based facilities. The rating for short term facilities with a tenure of less than a year is maintained at "CARE A1 ", indicating very strong degree of safety regarding timely servicing of financial obligations and lowest credit risk. During the year, the Company has obtained "CARE A1 " rating for issuance of Standalone Commercial Papers, to the extent of Rs, 3,000 lacs.

The Company acquired the balance 49 % equity in subsidiary in the U.K., Manchester Organics Limited (M.O.L.) at an aggregate price of GBP 6.30 million, through its 100% step down subsidiary, NFIL (UK) Limited, funded by GBP 2.58 m of own funds and GBP 3.2 M of Loan from HDFC Bank, Bahrain supported by SBLC from HDFC Bank, India. Such acquisition is in line with the Company''s strategy of further leveraging the combined scope & scale and complementing strengths of both the entities in the CRAMS space, especially in the areas of Business Development, Process Management and Delivery framework optimisation; with key focus in Europe and the U.S.

During the year, the Company entered into an agreement with Honeywell for a small scale manufacturing project for the new generation refrigerant gas HFO 1234 yf. HFO-1234yf is a next-generation hydrofluoro-olefin (HFO) refrigerant with GWP less than 1 and is a near drop-in replacement for R-134a, a hydrofluorocarbon (HFC) , for use in vehicle air conditioning systems globally. This agreement depicts Honeywell''s confidence in the Company''s capabilities in developing new generation Fluoro intermediates.

The Company continues to pursue an aggressive plan to improve operating efficiencies across its manufacturing and supply chain applications, which helped the Company improve its margins and secure deeper penetration in the market. During the year these initiatives were further consolidated. The top-line growth helped a better absorption of overheads contributing to the improvements in the operating margins and set-off increase in input costs.

Research & Development and Technology functions strived persistently through the year for improvement in productivity, quality and costs of various products to enable Businesses with a competitive offering on one hand and flexibility of sourcing to the supply chain function on the other.

The Company is fully committed to its responsibilities in health, safety and environmental (HSE) management and has continued to make sizable investments in HSE during the year. The Company is amongst very few Corporates in the country who has ''Responsible Care'' accreditation from the Indian Chemical Council. ''Responsible Care'' is the chemical industry''s unique global initiative that drives continuous improvement in health, safety & environment performance together with open and transparent communications with stakeholders. The logo is awarded in recognition of a Company''s commitment to sustainability. The Surat plant of the Company has been awarded with the "Silver Trophy" and a certificate by National Safety Council of India for commendable Occupational Safety & Health performance. It is the only manufacturing unit in this category in Gujarat to get this award during F. Y. 2015-16, which exemplifies the Company''s commitment towards safety. The Company continues to invest in HSE programmes across all its locations.

4. SUBSIDIARIES AND JOINT VENTURES

The Company has four subsidiaries and two Joint Ventures:

(i) Sulakshana Securities Limited (SSL), created to settle dues of the term lenders of Mafatlal Industries Limited (MIL), continued to remain a wholly-owned subsidiary of the Company. After settling all the third-party dues, SSL now is left with 1,455 Sq. Mtrs. of commercial floor space in 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 Rs, 260.07 lacs has been repaid by SSL and its current outstanding to the Company is Rs, 2,010 lacs.

(ii) The Company held 51% of the ordinary voting shares of Manchester Organics Limited (MOL), a specialized chemicals research Company in Runcorn, U.K. In October, 2015, the Company acquired balance 49% in MOL through NFIL (UK) Ltd., a 100% step-down subsidiary created for the purpose. During the year MOL reported a turnover of Rs, 4,485 lacs and a profit before tax of Rs, 246 lacs.

(iii) Some of the key raw materials for our specialty and CRAMS business are procured from China. The quality and the cost of these material make a significant impact on various value added products being made by the Company and therefore It was thought fit to have a strategic presence closer to the source. In view of the foregoing, it was thought prudent to have a permanent representation in China. Accordingly, a trading outfit by the name of Navin Fluorine (Shanghai) Co. Ltd. (which is a wholly owned foreign enterprise under Chinese Laws) has been incorporated. The total capital investment over a period of 20 years is proposed to be RMB 12.50 Million (Approx Rs, 1,283 lacs).

(iv) During the year a 100% step-down subsidiary by the name of NFIL (UK) Ltd was formed to acquire the balance shareholding of 49% from the shareholders of Manchester Organics Ltd. The transaction for acquisition was completed in the month of October, 2015 at an aggregate price of GBP 6.30 million.

(v) 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 (GMDC) and Gujarat Fluorochemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDC 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. The JV is yet to start its operations.

(vi) The Company has entered into a Joint Venture (JV) agreement with Piramal Enterprises Limited (PEL) and accordingly a Company by the name of Convergence Chemicals Private Limited (CCPL) has been formed to leverage the Company''s rich legacy in fluorine chemistry and the deep outreach of the JV partner in the healthcare space. PEL holds 51% and the Company owns 49% of the equity share capital of CCPL. The Company is currently conducting trial run of the product and the final product is under approval with the customer. Post receipt of such approvals, full scale commercial production and sale is expected to commence during the year.

The Accounts of all the above subsidiaries and joint ventures have been considered in the consolidated financial results of the Company.

The financial position of each of the said six Companies is given in the Notes to Consolidated Financial Statements.

The Company does not have any material subsidiary. Policy on material subsidiary is available on weblink http://www. nfil.in/policy/index.html The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available a copy thereof to any member of the Company who may be interested in obtaining the same.

5. REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

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

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Ltd. (a part of Arvind Mafatlal Group), fulfilling CSR is a way of life. Arvind Mafatlal Group has been implementing a range of CSR activities over the last fifty one years, in areas like poverty alleviation, healthcare, education, women''s welfare etc. in rural India.

Pursuant to the provision of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Shri H.A. Mafatlal is the Chairman of the Committee and Shri S. G. Mankad, Shri H.H. Engineer and Shri V.P. Mafatlal are the other members of the Committee. The CSR Policy formulated by the Board based on the recommendations of the CSR Committee is available on weblink http://www.nfil.in/policy/index.html The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act is Rs, 141.84 lacs and the Company has spent Rs, 194.81 lacs during the current financial year (as against Rs, 131.73 lacs during the previous year). Thus, the Company has spent more amount on CSR activities than legally mandated. The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure 3 to this Report.

7. INDUSTRIAL RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full cooperation from the employees.

During the year, extensive training and developmental activities were undertaken, both in-house and out-bound for the employees. Various efficiency and quality improvement initiatives, including some functional and behavioral training programs were undertaken. The total number of employees as on 31st March 2016 was 686.

8. INSURANCE

The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.

9. EMPLOYEE STOCK OPTION SCHEME 2007

During the year 30,023 Stock Options were granted to the employees out of the unallotted options under the employees Stock Option Scheme 2007. Pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31st March 2016 under the "Employee Stock Option Scheme 2007" are annexed as Annexure 4 to this Report.

10. DIRECTORATE

Pursuant to the provisions of the Companies Act, 2013, Shri V.P. Mafatlal retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re- appointment.

11. EXTRACT OF THE ANNUAL RETURN:

Extract of the Annual Return for the Financial Year ended on 31st March, 2016 as required by Section 92(3) of the Companies Act, 2013 and Rules 12(1) of the Companies (Management & Administration), Rules 2014 is Annexed as Annexure 5 to this Report.

12. NUMBER OF BOARD MEETINGS:

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

13. DIRECTORS RESPONSIBILITY STATEMENT:

As required under the provisions of Section 134 of the Companies Act, 2013, 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 affairs 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(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 effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

14. DECLARATION BY INDEPENDENT DIRECTORS:

The following Directors are independent in terms of Section 149(6) of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

i) Shri T.M.M. Nambiar

ii) Shri P.N. Kapadia

iii) Shri S.S. Lalbhai

iv) Shri S.M. Kulkarni

v) Shri S.G. Mankad

vi) Shri H.H. Engineer

vii) Smt. R.V. Haribhakti

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

15. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The requisite details as required by Section 134(3)(e), Section 178(3) & (4) and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 are annexed as Annexure 6 to this Report.

16. AUDITORS REPORT:

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2016.

17. CHANGES IN KEY MANAGERIAL PERSONNEL:

The Board of Directors at its meeting held on 29th June, 2015 appointed Shri Sitendu Nagchaudhuri as Chief Financial Officer of the Company w.e.f. 8th July, 2015 in place of Shri Partha Roychowdhury. The Directors place on record their appreciation for the contribution made by Shri Roychoudhury during his tenure.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

Particulars of loans given and of the investments made by the Company as at 31st March, 2016 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made the following investments:

(a) 25,84,000 equity shares of £ 1/- each of NFIL (UK) Ltd.

(b) 12,22,919 equity shares of RMB 1/- each of Navin Fluorine (Shanghai) Co. Ltd.

(c) 49,00,000 equity shares of Rs,10/- each in Convergence Chemicals Pvt. Ltd.

The Company also made investments in schemes of various mutual funds aggregating to Rs, 17,346.55 lacs and during this period realized Rs, 17,280.65 lacs on redemption of units of various mutual funds and debentures. During the year under review, no new loans were given by the Company.

19. SECRETARIAL AUDIT REPORT:

Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report for the Financial Year ended 31st March, 2016 given by Shri Manuprasad Patel, Practicing Company Secretary is annexed as Annexure 7 to this Report.

20. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the year under report were on an arm''s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is available on weblink http//www.nfil.in/policy/index.html.

21. STATEMENT OF COMPANY''S AFFAIRS:

The state of the Company''s affairs is given under the heading "Year in Retrospect" and various other headings in this Report and in Management Discussion and Analysis Report which is annexed to the Directors'' Report.

22. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors'' Report.

23. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 134 of the Act, read with The Companies (Accounts) Rules, 2014, is annexed as Annexure 8 to this Report.

24. RISK MANAGEMENT POLICY:

The Company has a structured risk management policy. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during the decision making. It is dealt with in greater details in the Management Discussion and Analysis section.

25. ANNUAL PERFORMANCE EVALUATION:

In compliance with the provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation was carried out as under:

Board:

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, Board dynamics etc. The Independent Directors, at their separate meetings, 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:

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc. 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, the Rules framed thereunder and the Listing Agreement/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 preparedness, participation, value addition, focus on governance and communication. The Board was of the unanimous view that each independent director was a reputed professional and brought his / her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the Chairperson) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included transparancy, business leadership, people leadership, focus on governance, communication, preparedness, participation and value addition. The Independent Directors and the Board were of the unanimous view that each of the non- independent directors was providing good business and people leadership

26. DEPOSITS:

The Company has not accepted or continued any public deposits as contemplated under Chapter V of the Act.

27. DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure 9 to this Report.

28. DISCLOSURE UNDER RULE 5(2) AND 5(3) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The requisite details relating to the remuneration of the specified employees covered under the above Rules are annexed as Annexure 10 to this Report.

29. ORDERS BY REGULATORS, COURTS OR TRIBUNALS:

No significant and/or material orders were passed by any regulator or court or tribunal impacting the going concern status and the Company''s operations in future.

30. INTERNAL FINANCIAL CONTROLS:

The existing internal financial controls are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. They have been reviewed and found satisfactory by the Management on the following key control matrices:

a. Entity level controls;

b. Financial controls; and

c. Operational controls

which included authority and organization matrix, standard operating procedures, risk management practices, compliance framework within the organization, ethics and fraud risk management, management information system, self-assessment of control point, business continuity and disaster recovery planning and budgeting systems etc.

31. AUDITORS:

At the 16th Annual General Meeting held on 25th June, 2014, the members approved appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Registration No.117364W) to hold office from the conclusion of the 16th Annual General Meeting until the conclusion of the 19th Annual General Meeting, (subject to ratification of the appointment by the Members, at every Annual General Meeting held after the 16th Annual General Meeting) on such remuneration as may be fixed by the Board, apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

In accordance with Section 139 of the Act, Members are requested to ratify the appointment of the Auditors for the balance term to hold office from the conclusion of the 18th Annual General Meeting till the conclusion of the 19th Annual General Meeting. The specific notes forming part of the accounts referred to in the Auditors'' Report are self- explanatory and give complete information.

32. COST AUDITORS:

As per the requirements of Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014, the Audit of the Cost Accounts relating to Chemical products is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee appointed Shri B. C. Desai, Cost Auditor, Ahmedabad (Membership No. M-1077) to audit the cost accounts of the Company for the year 2016-17 from 1st April 2016 to 31st March 2017 on a remuneration of Rs, 3,50,000. As required under the Act, necessary resolution seeking Member''s ratification for the remuneration payable to Shri B.C. Desai is included as item No. 5 of the Notice convening the 18th Annual General Meeting. The Cost Audit Report in respect of Financial Year 2015-16 will be filled on or before the due date i.e. 27th September 2016.

33. APPRECIATION:

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

For and on behalf of the Board,

Place: Mumbai H.A. Mafatlal

Dated: 30th April, 2016 Chairman


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Seventeenth Annual Report together with the audited accounts for the year ended 31st March 2015.

1. financial results

(Rs. in lacs) Current year previous year

operating income 54612 44914

other income (including non- recurring income) 2664 2936

EBiDTA 8996 9007

less: Depreciation 1864 2055

Interest 324 540

Tax 1870 1346

Profit after tax 4938 5066

add: Surplus brought forward from the previous year 30427 27695

Amount available for appropriation 35200 32762

Appropriation:

Transfer to general reserve 494 507

Interim dividend 733 732

Proposed final dividend 830 830

Corporate dividend tax 316 265

Surplus carried to Balance sheet 32827 30427

Note: Figures are regrouped wherever necessary to make the information comparable.

2. DIVIDEND

The Company paid an interim dividend of Rs. 7.50 per share on 97,69,797 equity shares of nominal value of Rs. 10/- each, aggregating to Rs. 732.73 lacs in the month of october 2014. The Board of Directors is pleased to recommend a final dividend for the year of Rs. 8.50 per share on 97,69,797 equity shares of nominal value of Rs. 10/- each, aggregating to Rs. 830.43 lacs.

3. YEAR IN RETRoSPECT

operating profits for the year increased by 20% over that of the previous year while the profit before tax (PBT) increased by 6% from Rs. 6,412 lacs (including a write-back of Rs. 380 lacs) in FY14 to Rs. 6,808 lacs during the year under review. Profit after tax (PAT) at Rs. 4,938 lacs in the current year marginally declined by 3% from Rs. 5,066 lacs in FY14.

The increase in operating profit has been mainly driven by deeper market penetration leading up to higher volumes and capacity utilisation. The marginal decline in PAT is primarily on account of recent changes in the tax laws. Until FY14 surpluses arising from certain class of investments maturing between one and three years could avail indexation benefits and a lower rate of long term capital gains tax. In the current fiscal these incomes have become taxable at the full marginal rate. The Company has a substantial income from this stream. Hence, the adverse change in taxation increased the effective tax rate for the Company in the current year thereby reducing the PAT.

During the year the Non-CER turnover reached an all-time high of Rs. 54,612 lacs, a growth of 22% over the previous year''s Rs. 44,914 lacs driven by the refrigerant, specialty and the contract research and manufacturing services (CRAMS) businesses. Inorganic fluorides registered a 7% decline in the top line. The details have been discussed in the management discussions & analysis section of this annual report.

Exports at Rs. 19,785 lacs, posted a healthy year-on-year growth of 45% over Rs. 13,518 lacs of the previous fiscal. Inorganic fluoride exports doubled during the year to reach up to 10% of the total inorganic fluoride sales and improve capacity utilisation. The domestic business grew at 12% as the robust growths in refrigerants and specialties were partially off-set by a muted inorganic fluorides sales.

The specialties and CRAMS are expected to be the growth drivers while refrigerant (HCFC 22) is already into its first year of phase-down under the Montreal Protocol.

During the year, the costs of key raw materials moved in mixed directions. The Company continued to use diverse sources for fluorspar (the most important raw material which is fully imported) and achieved an overall savings of 10% in comparison to the previous year''s cost despite a steady decline in the value of Indian Rupee against the US Dollar. Sulphur and chloroform, the other critical raw materials experienced strong inflationary trends exerting stress on the margins across product-lines. Sulphur price witnessed a sharp 30% increase and price of Chloroform has more than doubled in comparison to FY14. The key raw materials will continue to remain expensive in the near future except for fluorspar which is expected to remain stable.

The energy cost at Surat, Gujarat has been 27% higher than that of the previous year. Natural gas cost for the Company increased by 11% in the current fiscal compared to that of the previous year despite weak global prices. The other adverse factor has been non-availability of exchange traded power from other states, in South Gujarat.

The new port at Hazira, 30 kms. from Surat, has been in operation since last year. Given the fact that 34% of the Company''s turnover comes from exports and 66% of the raw material are imported, the nearness to an all weather port brings in a permanent cost advantage to the Company.

The Company is a net exporter. The INR to USD exchange moved in a bandwidth of 10% during the year with the Indian Rupee getting weaker which helped the export realisations. However, INR gained against both the British Pound (GBP) and Euro during the year by ~ 10% and 20% respectively. The exchange loss of Rs. 95 lacs booked in other expenses is on account of timing differences between the actual foreign currency transactions and their realisation or re-statements.

As you are aware, during the previous fiscal, the Company implemented an aggressive plan to improve the operating efficiencies across its manufacturing and materials management functions which helped the Company improve its margins and get more aggressive in growing the volumes, both in the domestic and international markets. During the year, these initiatives were further consolidated. The top-line growth helped a better absorption of overheads contributing to the improvements in the operating margins.

A Capex of Rs. 6,000 lacs is underway at Dewas, MP which is the hub of our Crams activities. The facility will come on stream in the first half of the FY16. This is the largest dedicated contract manufacturing set-up of the Company, ready to manufacture a diversified range of fluorinated molecules for its CRAMS customers in a cGMP environment. So far more than 40 molecules have been worked on and delivered to more than 20 global pharma majors. It is also in the process of reaching out to markets in the US West coast, Western Europe and Japan by having direct representations in those geographies in addition to the strong presence of Manchester organics Limited (MOL) in the UK. The NFIL-MOL integration has also worked well and helped gain a higher share in the CRAMS universe of fluorinated molecules.

Through the year the technology teams worked hard to improve productivity, quality and costs of various products to offer a competitive marketing edge to the businesses on one hand and flexibility of sourcing to the supply chain team on the other.

During the year, a conservative inventory policy for raw materials was followed in order to remain closer to the market prices of all the key raw materials and access the resultant movement in the finished product prices. There has been increase in receivables, inventories and payables. The overall net working capital increased by Rs. 916 lacs. The working capital remains an area of key management attention and the levels are well within acceptable industry norms.

The company maintained a good financial health with a sizeable treasury income. The Basel II rating of the Company is maintained at ''CARE AA-'' (indicating high degree of safety regarding timely servicing of financial obligations and very low credit risk) for borrowings with a tenure of more than one year and fund-based facilities. The rating for short-term facilities (less than one year) has been maintained at ''CARE A1 '' (indicating very strong degree of safety regarding timely servicing of financial obligations and lowest credit risk) for its non-fund based facilities. During the year the Company received a ''CARE A1 '' rating for issuance of unsecured commercial papers to the extent of Rs. 2,000 lacs.

The Company is fully committed to its responsibilities in health, safety and environmental (HSE) management and has continued to make sizable investments in HSE during the year. The Company received ''Responsible Care'' logo certification from the Indian Chemical Council. ''Responsible Care'' is the chemical industry''s unique global initiative that drives continuous improvement in HSE performance together with open and transparent communications with stakeholders. The logo is awarded in recognition of a company''s commitment to sustainability. With this the Company joins an exclusive club of chemical companies in India who have been awarded the privilege to use this logo.

During the year the Company''s facility at Surat received various HSE awards and recognitions and letters of appreciation from the Government of Gujarat, National Safety Council, etc. The Company run several in-house HSE awareness programmes at all its locations.

4. SUBSIDIARIES AND JOINT VENTURES

The Company has two subsidiaries and two Joint Ventures:

(i) Sulakshana Securities Limited (SSL), created to settle dues of the term lenders of Mafatlal Industries Limited (MIL), continued to remain a wholly-owned subsidiary of the Company. After settling all the third-party dues, SSL now is left with 1,455 Sq. mtrs. of commercial floor space in 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 Rs. 337.16 lacs has been repaid by SSL and its current outstanding to the Company is Rs. 2,200 lacs.

(ii) The Company holds 51% of the ordinary voting shares of Manchester Organics Limited (MOL), a specialized chemicals research company in Runcorn, U.K. During the year MOL reported a turnover of Rs. 4,868 lacs and a profit before tax of Rs. 817 lacs and its accounts have been considered in the consolidated results of the Company.

(iii) 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 (GMDC) and Gujarat Fluorochemicals Limited (GFL) formed for the purpose of beneficiation of fluorspar ores to be supplied by GMDC 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. The JV is yet to start its operations. Its final accounts for the year ended 31st March 2015 have been considered in the consolidated results of the Company.

(iv) During the year, the Company entered into a Joint Venture (JV) agreement with Piramal Enterprises Limited (PEL) and accordingly a company by the name of Convergence Chemicals Private Limited (CCPL) has been formed to leverage the Company''s rich legacy in fluorine chemistry and the deep outreach of the JV partner in the healthcare space. PEL holds 51% and the Company owns 49% of the equity share capital of CCPL. Its final accounts for the year ended 31st March 2015 have been considered in the consolidated results of the Company.

The financial position of each of the said four Companies is given in the Notes to Consolidated financial statements.

The Company does not have any material subsidiary. Policy on material subsidiary is available on weblink http://www. nfil.in/policy/index.html

The audited accounts of the subsidiary companies are placed on the Company''s website and the same are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available a copy thereof to any member of the Company who may be interested in obtaining the same.

5. REPORTS ON MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

As required under the Listing Agreement with Stock Exchanges ("Listing Agreement"), management discussion and analysis and corporate governance report are annexed as Annexure 1 and Annexure 2 respectively to this Report.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

At Navin Fluorine International Ltd. (a part of Arvind Mafatlal Group), fulfilling CSR is a way of life. Arvind Mafatlal Group has been implementing a range of CSR activities over the last fifty years, in areas like poverty alleviation, healthcare, education, women''s welfare in rural India, etc.

Pursuant to the provision of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Shri H. A. Mafatlal is the Chairman of the Committee and Shri S. G. Mankad, Shri H.H. Engineer and Shri V. P. Mafatlal are the other members of the Committee. The Board of Directors, based on the recommendations of the Committee, formulated a CSR Policy encompassing the Group''s and the Company''s philosophy for describing its responsibility as a Corporate citizen, laying down the guidelines and mechanisms for undertaking socially relevant programmes for welfare and sustainable development of the community at large. CSR Policy is available on weblink http://www.nfil.in/policy/ index.html

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of Section 135 of the Act is Rs. 300.29 lacs and the Company has spent Rs. 131.73 lacs during the current financial year (as against Rs. 34.60 lacs during the previous year). The shortfall in the spend during the year under report is intended to be utilized in a phased manner in future, upon identification of suitable projects within the Company''s CSR Policy. The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure 3 to this Report.

7. INDUSTRIAL RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full co- operation from the employees. During the year, a three years wage settlement was reached with the union at Bhestan, which came into effect from 1st April 2013.

During the year, extensive training and developmental activities were undertaken, both in-house and out-bound for the employees. Various efficiency and quality improvement initiatives, including some functional and behavioral training programs were undertaken. The total number of employees as on 31st March 2015 was 641.

8. INSURANCE

The properties and insurable assets and interests of the Company, like building, plant and machinery and stocks, among others, are adequately insured.

9. EMPLOYEE STOCK OPTION SCHEME 2007

During the year 86,700 Stock Options were granted to the employees out of the unalloted options under the employees Stock Option Scheme 2007. Pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31st March, 2015 under the "Employee Stock Option Scheme 2007" are annexed as Annexure 4 to this Report.

10. DIRECTORATE

Pursuant to the provisions of the Act, Shri S.S. Khanolkar retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. Shri S.S. Khanolkar has been re-appointed as Managing Director for a period of five years with effect from 1st January, 2016, subject to approval of the Members at the ensuing Annual General Meeting.

The Board of Directors has appointed Smt. R.V. Haribhakti as an Additional Director w.e.f. 30th July, 2014. She will hold Office up to the ensuing Annual General Meeting, of the Company and being eligible, offers herself for re- appointment. Notice under Section 160 of the Act, has been received by the Company from a Member, signifying his intention to propose the candidature of Smt. R.V. Haribhakti as an Independent Director of the Company.

Shri A.K. Srivastava, retires as Finance Director with effect from 30th April, 2015. The Board wishes to place on record, its sincere appreciation for the services rendered by Shri A.K. Srivastava during his tenure as Finance Director of the Company. The Board of Directors has appointed Shri A.K. Srivastava as an Additional Director w.e.f. 1st May, 2015. He will hold office up to the ensuing Annual General Meeting of the Company, and being eligible, offers himself for re- appointment. Notice under Section 160 of the Act, has been received by the Company from a Member, signifying his intention to propose the candidature of Shri A.K. Srivastava as a Director of the Company.

11. extract of the annual RETURN

Extract of the Annual Return for the Financial Year ended on 31st March, 2015 as required by Section 92(3) of the Act is annexed as Annexure 5 to this Report.

12. NUMBER OF BOARD MEETINGS

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

13. 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 affairs 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 sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(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 effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of applicable laws and such systems are adequate and operating effectively.

14. DECLARATION BY INDEPENDENT DIRECTORS

The following Directors are independent in terms of Section 149(6) of the Act and Clause 49 of the Listing Agreement:

i) Shri T.M.M. Nambiar

ii) Shri P.N. kapadia

iii) Shri S.S. Lalbhai

iv) Shri S.M. kulkarni

v) Shri S.G. Mankad

vi) Shri H.H. Engineer

vii) Smt. R.V. Haribhakti

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

15. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The requisite details as required by Section 134(3)(e), Section 178(3) & (4) and Clause 49 of the Listing Agreement are annexed as Annexure 6 to this Report.

16. AUDITORS REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2015.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT Particulars of loans given and of the investments made by the Company as at 31st March, 2015 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made investments by way of subscribing to equity shares of the face value of Rs. 10/- each at par as under:

(a) 2,94,04,900 equity shares of Rs. 10/- each of Convergence Chemicals Pvt. Ltd.

(b) 10,70,000 equity shares of Rs. 10/- each of Swarnim Gujarat Fluorspar Pvt. Ltd.

The Company also made investments in schemes of various mutual funds aggregating to Rs. 9,885.12 lacs and during this period realized Rs. 15,694.90 lacs on redemption of units of various mutual funds and debentures. During the year under review, no new loans were given by the Company.

18. SECRETARIAL AUDIT REPoRT

Pursuant to Section 204 of the Act, the Secretarial Audit Report for the Financial Year ended 31st March, 2015 given by Shri Manuprasad Patel, Practising Company Secretary is annexed as Annexure 7 to this Report.

As regards the observations made in the said Secretarial Rudit Report, regarding shortfall in the spend on CSR activities, explanation is given in this Directors'' Report under the heading "Corporate Social Responsibility".

19. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the year under report were on an arm''s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is available on weblink http://www.nfil.in/policy/index.html

20. STATE OF COMPANY''S AFFAIRS

The state of the Company''s affairs is given under the heading "Year in Retrospect" and various other headings in this Report and in Management Discussion and Analysis Report which is annexed to the Directors'' Report.

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

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors'' Report.

22. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 134 of the Act, read with The Companies (Accounts) Rules, 2014, is annexed as Annexure 8 to this Report.

23. RISK MANAGEMENT POLICY

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section.

24. ANNUAL PERFORMANCE EVALUATION

In compliance with the provisions of the Act and Clause 49 of the Listing Agreement, the performance evaluation was carried out as under:

Board:

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, Board dynamics etc. The Independent Directors, at their separate meetings, 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:

The performance of the Audit Committee, the Corporate Social Responsibility Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. 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, the Rules framed thereunder and the Listing Agreement.

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 engagement, leadership, analysis, decision making, communication, governance and interest of stakeholders. The Board was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also 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.

(b) Non-Independent Directors: The performance of each of the non-independent directors (including the chair person) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance and interest of stakeholders. The Independent Directors and the Board were of the unanimous view that each of the non-independent directors was providing good business and people leadership

25. DEPoSITS

The Company has not accepted or continued any public deposits as contemplated under Chapter V of the Act.

26. DISCLoSURE Under SECTIoN 197(12) And rule 5(1) of the companies (appointment and remuneration of managerial personnel) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure 9 to this Report.

27. DISCLoSURE UNDER RULE 5(2) AND 5(3) OF THE companies (appointment and remuneration of MANAGERIAL PERSoNNEL) RULES, 2014

The requisite details relating to the remuneration of the specified employees covered under the above Rules are annexed as Annexure 10 to this Report.

28. orders by regulators, courts or tribunals

No significant and/or material orders were passed by any regulator or court or tribunal impacting the going concern status and the Company''s operations in future.

29. internal financial controls

The existing internal financial controls are commensurate with the nature, size, complexity and the business processes followed the Company. They have been reviewed and found generally satisfactory by an independent expert on the following key control matrices:

a. Entity level controls

b. Financial controls and

c. operational controls

which included authority and organization matrix, standard operating procedures, risk management practices, compliance framework within the organization, ethics and fraud risk management, management information system, self assessment of control point, business continuity and disaster recovery planing, budgeting system, etc.

30. AUDIToRS

At the 16th Annual General Meeting held on 25th June, 2014, the members approved appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara (Registration No.117364W) to hold office from the conclusion of the 16th Annual General Meeting until the conclusion of the 19th Annual General Meeting, (subject to ratification of the appointment by the Members, at every Annual General Meeting held after the 16th Annual General Meeting) on such remuneration as may be fixed by the Board, apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

In accordance with Section 139 of the Act, Members are requested to ratify the appointment of the Auditors for the balance term to hold office from the conclusion of the 17th Annual General Meeting till the conclusion of the 19th Annual General Meeting. The specific notes forming part of the accounts referred to in the Auditors'' Report are self- explanatory and give complete information.

31. cost auditors

As per the requirements of Section 148 of the Act, read with The Companies (Cost Records and Audit) Rules, 2014, the Audit of the Cost Accounts relating to Chemical products is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee, appointed Shri I.V Jagtiani, Cost Auditor, Mumbai (Membership No. M-997) to audit the cost accounts of the Company for the year 2015-16 from 1st April 2015 to 31st March 2016 on a remuneration of Rs. 3.50 lacs. As required under the Act, necessary resolution seeking member''s ratification for the remuneration payable to Shri I.V. Jagtiani is included as item Number 8 of the Notice convening the 17th Annual General Meeting. The Cost Audit Report in respect of Financial Year 2014-15 will be filed on or before the due date i.e. 27th September 2015.

32. APPRECIATION

The Directors wish to place on record their appreciation of the devoted services of the employees, who have largely contributed to the efficient management of your company. The Directors also place on record their appreciation for the continued support from the shareholders, the lenders and other associates.

For and on behalf of the Board,



Place : Mumbai H.A. Mafatlal Dated : 28th April, 2015 Chairman


Mar 31, 2013

To, The Members of Navin Fluorine International Limited

The Directors are pleased to present the Fifteenth Annual Report together with the audited accounts for the year ended 31 March, 2013.

1. FINANCIAL RESULTS Rs. in lacs

Operating Income 52469 70386

Other income (including non-recurring income) 1385 9101

EBIDTA 9428 34071

Less: aepreciation 1961 1773

Interest 610 354

Tax 2541 8820

Profit After Tax 4316 23124

Add: Surplus brought forward from the previous year 25518 13223

Amount available for appropriation 29834 36347

Appropriation Transfer to general reserve 432 2320

Interim Dividend 732 830

Proposed Final Dividend 732 634

Proposed Special Dividend - 5857

Corporate Dividend Tax 243 1188

Surplus carried to Balance Sheet 276951 25518

Note: Figures are regrouped wherever necessary to make the information comparable.

2. DIVIDEND

Your Company paid an interim dividend of Rs. 7.50 per share on 97,61,097 equity shares of nominal value of Rs.10/- each, aggregating to Rs. 732.08 lacs in the month of October 2012. The Board of Directors is pleased to recommend a final dividend for the year of Rs. 7.50 per share on 97,61,097 equity shares of nominal value of Rs. 10/- each, aggregating to Rs. 732.08 lacs.

3. YEAR IN RETROSPECT

Revenue from operations declined by 25% from Rs. 70386 lacs to Rs. 52469 lacs during the year. Though the Specialty business grew by 13% over the previous year and the Contract Research and Manufacturing (CRAMS) business grew by six times over the previous year, they were not enough to offset the decline in income from carbon credits from Rs. 25190 lacs to Rs. 5711 lacs. Due to lower income from carbon credits and reversal of provision with regard to non-current investment in the previous year of Rs. 7493 lacs, profit before tax declined by 79% from Rs. 31944 lacs to Rs. 6858 lacs and profit after tax declined by 81 % from Rs. 23124 lacs to Rs. 4316 lacs as compared to the previous year.

During the year there has been a dramatic change in the economic and regulatory environment within the European Union which was the primary market for the carbon credits generated by the company. Henceforth, carbon credits generated from destruction of Hydro fluorocarbons are not allowed to be used as a carbon offset instrument within the European Union. Further, as a consequence of lower economic activity within the European Union, the demand for carbon credits sharply declined bringing the value down to a near zero.

The weakening of the rupee against the US Dollar continued to put inflationary pressures on the economy for the second consecutive year. From a level of Rs. 49 to a US dollar in 2012, it weakened to a level of Rs. 54/55 during the last half of the current fiscal year. Inflation also remained at a fairly high level during the year. The compounded effect resulted in stagnation of govt, spends, low capex and the depressed consumer demand resulting into weakening of overall demand pull for the products of the Company.

As you are aware, the company decided to get into the global Contract Research and Manufacturing Services (CRAMS) space three years back and some initial investments were made to that end. During the year these investments have started bearing their first fruits and the revenues from this business has come along the lines of the business plan. The Contract Research Organisation (CRO) built in Surat has supported the contract manufacturing operations at Dewas as per the business plan. Manchester Organics Limited (MOL), our subsidiary in the U.K. has been an integral part of the overall CRAMS strategy of the Company. The CRO at Surat, the Contract Manufacturing Operations (CMO) at Dewas and MOL has been able to work in a well co-ordinated manner to deliver the desired objectives. During the year the company partnered with several global pharma majors in their respective R&D initiatives. In the coming years a significant growth is expected from this vertical both by improving capacity utilization and through additional capex spends.

Five new products have been introduced in the Bulk and Specialty businesses during the year for seeding the markets. We expect good potential upsides from these products in the coming years.

The Refrigerant Gases business has been under severe price pressures. This has been further accentuated by the mismatch in the movement of inputs cost and prevailing market prices of the finished products. The Bulk Fluorides business retained a steady performance along with the lines of the previous year.

As you are aware, the prices of some of the major raw materials of the Company e.g. fluorspar and chloroform increased substantially during the second half of the last fiscal and part of the inventories were carried forward into the current fiscal. This, along with weakening of the Rupee against the USD for the second consecutive year, impacted the margins of the Company adversely. As a matter of procurement strategy, now the Company has decided to reduce the inventory levels and move on to contracting smaller parcel sizes with its major suppliers.

The Rupee depreciation also resulted into higher fuel cost. There has been a more than 20% rise in the price of natural gas which travelled farther to depress the margins. Part of this negative has been made up by reducing the overall cost of power by participation in power trading, thereby moving on to sources which are cheaper than the local grid power.

The company maintained a good financial health with a sizeable treasury income. The Basel II rating of the Company is maintained at ''CARE AA-'' (indicating high degree of safety regarding timely servicing of financial obligations and very low credit risk) for borrowings with a tenure of more than one year and fund-based facilities. The rating for short-term facilities (less than one year) has been maintained at ''CARE A1 '' (indicating very strong degree of safety regarding timely servicing of financial obligations and lowest credit risk) for its non-fund based facilities.

The Company is fully committed to its responsibilities in health, safety and environmental (HSE) management and has continued to make sizable investments in HSE during the year.

During the year, the Company embarked on the "Responsible Care" an internationally acclaimed comprehensive Health, Safety and Environment (HSE) initiative which once implemented, will take the Company to an elite club of community, climate and nature conscious organizations.

The Company is conscious about its social responsibilities and during the year, it started a mobile medical facility for the neighboring areas in Surat. During the year, it also participated in supporting and upgrading a school for physically challenged children in Surat.

4. SUBSIDIARY AND ASSOCIATES

Sulakshana Securities Limited (SSL), created through the Sanctioned Scheme of Rehabilitation (SS) of Mafatlal Industries Limited (MIL) to settle dues of the term lenders of MIL, continued to remain a wholly-owned subsidiary of your Company.

The Company holds 51% stake in Manchester Organics Limited (MOL), an operating specialised chemical research company in Runcorn, U.K. Its accounts have been considered in the consolidated results of the Company.

As per the general exemption granted under Section 212(8) of the Companies Act, 1956, by the Government of India, Ministry of Corporate Affairs, New Delhi vide its General Circular No.2/2011, dated 8 February, 2011, Balance Sheet and Profit and Loss Account, Directors'' Report and the Auditors'' Report of the subsidiary companies have not been attached with the Balance Sheet of the Company.

However, other details required to be given as per the said General Circular No.2/2011, dated 8 February, 2011 have been disclosed in the Annual Report.

The Annual Accounts and related information of the subsidiary companies are open for inspection by any member/investor at the Registered Office of the Company on any working days between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents/ details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary company are also available on the Company''s website.

Your Company holds 43% of the equity share capital of Mafatlal Denim Limited (MDL) which is its only associate company. The Board of Directors of the Company at its meeting held on 17 December, 2012 consented to the Scheme of Arrangement and Amalgamation inter-alia, of MDL with Mafatlal Industries Limited, the appointed date being 1 April, 2012. On the said Scheme becoming effective, Mafatlal Denim Limited will cease to be an Associate. Consent of the Hon''ble High Courts of Gujarat and Bombay for the Scheme of Arrangement and Amalgamation was received on 8 April, 2013 and 26 April, 2013 respectively and will be filed with the Registrar of Companies shortly. As the substantive requirements of the amalgamation process have been completed, financials of Mafatlal Denim Limited have not been consolidated in the current year.

Pursuant to the agreement entered into by the Company with the Gujarat Mineral Development Corporation Limited (GMDC) and Gujarat Fluorochemicals Limited (GFL), Swarnim Gujarat Fluorspar Private Limited, a Joint Venture company (JV), has been incorporated during the year for beneficiation of fluorspar ore to be supplied by GMDC to ensure long term supply of fluorspar, which is a key raw material of the Company. The Company has subscribed to 25% of the initial equity share capital by payment of Rs. 1.25 lacs. The JV is to yet start its operations and the final accounts have not been prepared as on 31 March, 2013. No significant impact is expected on the revenue, expenses, assets and liabilities in consolidated accounts of the Company.

5. INDUSTRIAL RELATIONS

There were cordial and harmonious industrial relations during the year and the management received full cooperation from the employees. The long term wage settlement at Bhestan has expired on 31 March, 2013 and has been taken up by both the management and the employees for re-negotiation in a spirit of cooperation.

During the year, extensive training and developmental activities were undertaken, both in-house and out-bound for the employees. Various efficiency and quality improvement initiatives, including some functional and behavioral training programs were undertaken. The total number of employees as on 31 March, 2013 was 594.

6. INSURANCE

The properties and insurable assets and interests of your Company, like building, plant and machinery and stocks, among others, are adequately insured.

7. PARTICULARS OF EMPLOYEES

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

8. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of this report.

9 . EMPLOYEE STOCK OPTION SCHEME 2007 Pursuant to the provisions of Guidelines 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31 March, 2013 under the "Employee Stock Option Scheme 2007" are set out in the Annexure to the Directors'' Report.

10. REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

As required under the Listing Agreement with Stock Exchanges, reports on corporate governance as well as management discussion and analysis are attached and forms part of the Directors'' Report.

11. DIRECTORATE

The Board wishes to inform with profound grief, the sad and sudden demise of Shri R. Sankaran, a Director of the Company, on 28 February 2013. Shri Sankaran was associated with the Company since March 2007. The Board places on record its sincere appreciation of the invaluable and active contribution made by Shri Sankaran in the progress of the Company.

Shri H.A. Mafatlal has been reappointed as Chairman and Executive Director for a period of 5 years with effect from 1 May, 2013. Shri A.K. Srivastava has been reappointed as Whole Time Director designated as "Finance Director" for a period of 2 years with effect from 1 May, 2013. Both these reappointments are subject to approval of the members in the General Meeting. Accordingly the necessary approval of the members is sought at the ensuing Annual General Meeting. Shri S.M. Kulkarni and Shri S.G. Mankad both retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors report that:

i) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures

ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent. The purpose was to give a true and fair view of the state of affairs of your Company and the profit of the Company at the end of the financial year.

iii) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding your Company''s assets and for preventing and detecting fraud and other irregularities.

iv) The Directors prepared the annual accounts on a going concern basis.

13. AUDITORS

At the Annual General Meeting, members are requested to appoint Auditors for the current year and fix their remuneration. The specific notes forming part of the accounts referred to in the Auditors'' Report are self-explanatory and give complete information.

14. COST AUDITORS

As per the requirements of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the audit of the Cost Accounts relating to sulphuric acid is being carried out every year. The Company has appointed Shri I.V. Jagtiani, Cost Auditor, Mumbai to audit the cost accounts for the year 2012-13 from 1 April, 2012 to 31 March, 2013 for which necessary approval from the Central Government has been received. The Cost Audit Report in respect of Financial Year 2012-13 will be filed on or before the due date i.e. 27 September, 2013.

15. DONATION

During the year under review, the Company made donations of Rs. 5.22 crores for various charitable and other purposes.

16. APPRECIATION

The Directors wish to place on record their appreciation of the devoted services of the employees, who have largely contributed to the efficient management of your company. The Directors also place on record their appreciation for the continued support from the shareholders, the lenders and other associates.

For and on behalf of the Board,

H.A. Mafatlal

Chairman

Mumbai

Dated: 30 April, 2013


Mar 31, 2012

To The members of Navin Fluorine International Limited

The Directors are pleased to present the Fourteenth Annual Report together with the audited accounts for the year ended 31st March 2012.

1. Financial Results (Rupees in lacs)

Current year Previous Year

Operating Income 70386 43074

Other income (including non-recurring income) 9101 1039

EBIDTA 34071 12313

Less: Depreciation 1773 1355

Interest 354 360

Tax 8820 3434

Profit After Tax 23124 7164

Add: Surplus brought forward from the previous year 13223 8502

Amount available for appropriation 36347 15666 Appropriation

Transfer to general reserve 2320 716

Interim Dividend 830 656

Proposed Final Dividend 634 830

Proposed Special Dividend 5857 -

Corporate dividend tax 1188 241

Surplus carried to Balance Sheet 25518 13223

Note: Figures are regrouped wherever necessary to make the information comparable.

Fiscal 2012 has been significant in many ways;

- The Company achieved its highest ever sales and profits during the year.

- Money advanced to Mafatlal Industries Limited (MIL) and/or the group companies to support MIL's restructuring have been received back by the Company, including interest wherever applicable, except Rs. 3000 lacs which remained invested as on 31st March 2012 in the fully redeemable non- cumulative preference shares of MIL and which is expected to be redeemed soon.

As reported earlier, the Company invested in fully redeemable non-cumulative preference shares of MIL in the year 2004-05 pursuant to the order of the BIFR in the matter of MIL's financial restructuring. During the year 2010-11, MIL's net worth turned positive and it was out of the purview of BIFR. During the year, MIL redeemed such preference shares worth Rs. 3000 lacs (face value) as they could leverage the idle assets and improve liquidity. In view of the aforesaid, a provision of Rs. 5940 lacs made in an earlier year towards diminution in the value of investments in MIL preference shares has been written back as no longer required. Similarly, provisions made for Rs. 1552 lacs towards diminution in value of investments made in Mafatlal Denim Limited has also been written back as no longer required. On these two counts, the aggregate amount of Rs. 7493 lacs have been written back to the Profit & Loss Account of the Company.

2011-12 started on a high with strong demand pull from the FMCG, pharma, agro and chemical industries, both in and outside of India. However, as the year progressed, the financial crisis deepened in Europe, the US industry indicators continued to remain weak resulting in an overall slowdown in demand in those economies which finally impacted the finished product prices adversely, creating a price-cost imbalance in strategic raw materials.

In India, the weakening of the rupee put enormous inflationary pressures on the economy in the second half of the current year under review forcing the government to take fiscal measures which stagnated public spending, reduced capital and consumer spending which eventually resulted into weakening of overall market demand for the final products of the Company's customers. This in turn adversely impacted the Company's volumes and prices in the second half of the year.

The Indian rupee vis-a-vis the US $ started the year at 44.45 and was closely range-bound until September when it started weakening rapidly. It reached Rs. 54.26 by mid-December before starting to cool off only to reach 48.92 in the first week of February 2012. The Euro followed suit starting the year at 63.23 to a rupee, rising to 71.08 during the last week of November and coming down to 64.12 in February 2012.

Since December 2010, the issuance of carbon credits by the United Nations Framework Convention on Climate Change (UNFCCC) got regularized and no inordinate delays have been faced by the Company in the issuance of its carbon credits. However, as the financial crisis deepened and prolonged in the European Union, the primary market for carbon credits, the Certified Emission Reduction (CER) prices took a sharp hit coming down from Euro 12 per CER to a level of Euro 4 by December. No near term price correction is expected though the Company will be able to sell its full quantity of carbon credits generated till December 2012. It is now certain that the carbon credits generated by the Company, classified as CERs from industrial gases, will not be accepted as a carbon off-set instrument beyond May 2013 by the European Union Emission Trading Scheme, thereby severely restricting their marketability and value proposition.

The Company took several long-term, futuristic steps in the past three years by making sizable investments in:

- R&D and pilot plant

- Multi-product plant at Surat

- Contract Research Organization at Seurat

- Contract Research and Manufacturing Services (CRAMS) facility at Dewas

Following these significant investments and commissioning of the facilities, the Company is now ready to meet changing customer needs and provide flexible product mix from the enhanced process capabilities. This will also enhance the product pipeline for future growth of the Company.

On the 3rd May 2011, the Company made a strategic investment by taking a 51% stake in a research company called Manchester Organics Limited (MOL), in the U.K to derive value from their fluorine R&D which can eventually lead to scale-up operations in India. This will enhance presence of the Company among the R&D fraternities and customers in Europe and the United States. The integration between the Company and MOL is proceeding as per plan and the synergy advantages have already started to show up.

Your Company is alert to its responsibilities in health, safety and environmental management. The Company makes sizable investments in HSE year on year.

The rating of the Company has now been upgraded to 'CARE AA-'(indicating high degree of safety regarding timely servicing of financial obligations and very low credit risk) for borrowings with a tenure of more than one year and fund-based facilities. The rating for short-term facilities (less than one year) has been maintained at 'CARE A ' (indicating very strong degree of safety regarding timely servicing of financial obligations and lowest credit risk) for its non-fund based facilities.

During the year the Company acquired land from the Gujarat Industrial Development Corporation at Dahej for a consideration of Rs. 2596 lacs which also includes some basic land development costs. This land will be used for the future expansion plans of the Company which are currently under various stages of consideration.

During the year, the Company signed a Memorandum of Understanding (MOU) with Gujarat Mineral Development Corporation (GMDC) and Gujarat Fluorochemicals Limited (GFL) to enter into a Joint Venture for the beneficiation of fluorspar ore to be supplied by GMDC to ensure long term supply of fluorspar, which is a key raw material for the Company. It is expected to come on stream during the later part of 2012-13.

The strong cash flows during the year have been preserved and deployed in high yield, low risk financial instruments and bank fixed deposits.

During the year, residual debentures worth Rs.140 lacs were repaid and as on 31st March 2012 the Company has no long-term borrowing.

4. Subsidiary and Associates

Sulakshana Securities Limited (SSL), created through the Sanctioned Scheme of Rehabilitation (SS) of Mafatlal Industries Limited (MIL) to settle dues of the term lenders of MIL, continued to remain a wholly-owned subsidiary of your Company.

During the year, the Company acquired 5100 equity shares of £0.01 each (51% stake) in Manchester Organics Limited (MOL), a company in U.K. engaged in specialized chemical research.

Accordingly, from 3rd May 2011, the said MOL has become a subsidiary of your Company.

As per the general exemption granted under Section 212(8) of the Companies Act, 1956, by the Government of India, Ministry of Corporate Affairs, New Delhi vide its General Circular No.2/2011, dated 8th February 2011, Balance Sheet and Profit and Loss Account, Directors' Report and the Auditors' Report of the subsidiary companies have not been attached with the Balance Sheet of the Company.

However, other details required to be given as per the said General Circular No.2/2011, dated 8th February 2011 have been disclosed in the Annual Report.

The Annual Accounts and related information of the subsidiary companies are open for inspection by any member/investor at the Registered Office of the Company on any working days between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents/ details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary company are also available on the Company's website.

Your Company continues to hold 43% of the equity share capital of Mafatlal Denim Limited (MDL) which is its only associate company.

5. Industrial Relations

There were cordial and harmonious industrial relations during the year and the management received full cooperation from the employees.

During the year, extensive training and developmental activities were undertaken, both in-house and out-bound for the employees. Various efficiency and quality improvement initiatives were conducted including some functional and behavioral training programs. A new managerial performance system called Balanced Score Card has been introduced during the year to bring in higher levels of synergy among various functions and departments and align their goals and objectives to the broader organizational goals. The total number of employees as on 31st March, 2012 was 571.

6. Insurance

The properties and insurable assets and interests of your Company, like building, plant and machinery and stocks, among others, are adequately insured.

7. Particulars of Employees

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

8. Energy, Technology and Foreign Exchange

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of this report.

9. Employee Stock Option Scheme 2007

Pursuant to the provisions of Guidelines 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31st March 2012 under the "Employee Stock Option Scheme 2007" are set out in the Annexure to the Directors' Report.

10. Reports on Corporate Governance and Management Discussion Analysis

As required under the Listing Agreement with Stock Exchanges, reports on corporate governance as well as management discussion and analysis are attached and forms part of the Directors' Report.

11. Directorate

Shri S. S. Lalbhai and Shri P. N. Kapadia both retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

12. Directors' Responsibility Statement

As required under the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors report that:

i) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures.

ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent. The purpose was to give a true and fair view of the state of affairs of your Company and the profit of the Company at the end of the financial year.

iii) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding your Company's assets and for preventing and detecting fraud and other irregularities.

iv) The Directors prepared the annual accounts on a going concern basis.

13. Auditors

At the Annual General Meeting, members are requested to appoint Auditors for the current year and fix their remuneration. The specific notes forming part of the accounts referred to in the Auditors' Report are self-explanatory and give complete information.

14. Cost Auditors

As per the requirements of the Central Government and pursuant to the provisions of Section 233 B of the Companies Act, 1956, the audit of the Cost Accounts relating to sulphuric acid is being carried out every year. The Company has appointed Shri I.V. Jagtiani, Cost Auditor, Mumbai to audit the cost accounts for the year 2011-12 from 1st April 2011 to 31st March 2012 for which necessary approval from the Central Government has been received. The Cost Audit Report in respect of Financial year 2011-12 will be filled on or before the due date

i.e. 27th September, 2012.

15. Donation

During the year under review, the Company, as a settler, created Arvind Mafatlal Foundation for various public charitable objectives. During the year, in fulfillment of its Corporate Social Responsibilities, the Company made a donation of Rs.531.50 lacs for various charitable and other purposes.

16. Appreciation

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

For and on behalf of the Board,

Mumbai, H. A. Mafatlal

Dated: 30th April 2012 Chairman


Mar 31, 2011

The Directors are pleased to present the 13th Annual Report together with the audited accounts for the year ended 31st March 2011.

1. Financial Results (Rupees in lacs.)

Current Year Previous Year

Operating Income 42969 42933

Other income (including non-recurring income) 1144 790

EBIDTA before exceptional items 12269 13589

Less: Depreciation 1355 1107

Interest 312 249

Tax 3438 4797

PAT before exceptional items 7164 7436

Less: Exceptional items - -

Proft after tax 7164 7436

Add: Surplus brought forward from the previous year 8502 3545

Amount available for appropriation 15666 10981

Appropriation

Transfer to debenture redemption reserve - -

Transfer to general reserve 716 744

Interim Dividend 656 656

Proposed Final Dividend 830 757

Corporate dividend tax 241 241

Surplus carried to Balance Sheet 13223 8502

Note: Figures are regrouped wherever necessary to make the information comparable.

2. Dividend

Your Company declared an interim dividend of Rs.6.50 per share in the month of October 2010 aggregating to Rs.656.49 lacs for 10099889 equity shares of nominal value of Rs.10/- each. The Board of Directors is pleased to recommend a fnal dividend for the year of Rs.8.50 per share on 9761097 equity shares of nominal value of Rs.10 each, aggregating to Rs.829.69 lacs taking the total dividend payout to Rs.15/- per share of a nominal value of Rs.10 each.

3. Year in retrospect

Turnover for the year remained fat at Rs. 42,969 lacs against Rs. 42,933 lacs of the previous year. Proft after tax of Rs. 7,164.38 lacs remained broadly at the same level as that of the previous year.

India in 2010-11 was clearly a high demand infation economy with a healthy demand pull. In contrast to the earlier years, 2008-09 being a year of economic meltdown and 2009-10 being a year of correction, this has been a year of consolidation for many Indian corporates.

Global commodity prices have once again been on the upswing. Crude Oil reached a high of $ 110 a barrel in last March from $ 75 a barrel in June ’10. Similarly, all the major raw material prices steadily escalated during the current fscal. There has been an increase of 30 % to 50 % in the prices of fuorspar, sulphur and chloroform, the most critical raw materials for the Company. However, through some medium term strategic buying, your Company could smother the impact of rising raw material costs while progressively increasing the selling prices of its products. During the year there have been steady price corrections for many of the fnished products of the Company, bringing their margins back on track. Their sustainability, which is a function of the global demand-supply equilibrium, now needs to be carefully watched. Demand for refrigerant gases, bulk fuorides and specialty chemicals was robust in the second half of the current fscal, both in the international and local markets.

The Indian Rupee during the year remained volatile against the US $. It reached a low of Rs. 47.51 and a high of Rs. 44.03 during the year, fuctuating in a 10% band. The Indian Rupee remained weak from May to September ’10 and thereafter kept on strengthening for the balance part of the year. This resulted in weakening of the export value realisation in the second half of the year. Unlike the US $, the Euro steadily strengthened against the Indian Rupee in the second half of the fscal, which helped the Company’s Carbon price realisation. The Euro moved in a 15% band against the rupee from a low of Rs.56 in mid May to a high of Rs.64 in March ’11.

During 2010 – 11, worldwide issuance of Certifed Emissions Reductions (CERs) from industrial gases projects, which includes your Company’s Project, were inordinately delayed due to an extensive study conducted by the Clean Development Mechanism (CDM) Board. As a result there was no issuance of CERs until the end of December ’10 and there was no CER income booked during the second and third quarter of the current fscal. Majority of the CERs issued since the third quarter has been utilised in fulflling the old long term contracts.

The demand for carbon credits in the near term and until the end of 2012 is expected to remain steady. However, there are growing uncertainties around the Kyoto Protocol, its continuity beyond 2012 and most importantly the eligibility of industrial gases, CERs for use within the European Union (80 % of the current market) beyond 2012 as a carbon of-set instrument.

A strategic plan to grow the Specialty Chemicals business was formulated and a medium term road-map was drawn-up. Accordingly your Company took several steps in the past two years namely; investments in R&D, Pilot Plant, a multi-purpose plant and entry into Contract Research and Manufacturing Services (CRAMS).

The state-of-the-art R&D centre commissioned in 2009-10 at Surat will help your Company to develop new value-added molecules based on specifc customer requirements whereas the pilot plant is expected to speed up the process of commercialization of the new molecules. Following signifcant investments in R&D and Pilot Plant, your Company also commissioned the state-of-the-art Multi Product Plant during the current fscal, which increased your Company’s ability to meet changing customer needs and provide fexible product mix of enhanced process capabilities. During this year a state-of-the- art Contract Research (CRO) facility was built at Surat which will support your Company’s entry into CRAMS. The contract manufacturing operations will predominantly emerge out of Dewas which will house the small batch cGMP (Current Good Manufacturing Practices) plant. Both the CRO and cGMP will become fully operational during the frst quarter of 2011-2012.

Your Company as a good corporate citizen, is alert to its responsibilities in health, safety and environmental management, the details of which are covered in the management discussion and analysis.

Your Company continues to be rated as (a) ‘CARE A+’ (indicating adequate safety for timely servicing of debt obligations and low credit risk) for borrowings with a tenure of more than one year and fund-based facilities and (b) ‘PR1+’ (indicating strong capacity for timely payment of short-term debt obligations and lowest credit risk) for its non-fund based facilities.

During the year the residual debt of Rs. 801 lacs was paid. Debentures worth Rs. 140 lacs were also repaid during the year and the balance debentures of Rs.140 lacs shall be paid of in the month of August 2011.

During the year your Company purchased 61599 Sq. Ft (built up area) of ofce space in Lower Parel, Mumbai at a total investment of Rs. 4756.74 lacs. The rental income from this property has handsomely contributed to the results of the Company.

4. Subsidiary and associates

Sulakshana Securities Limited (SSL), created through the Sanctioned Scheme of Rehabilitation (SS) of Mafatlal Industries Limited (MIL) for settlement of dues of the term lenders of MIL, continued to remain a wholly-owned subsidiary of your Company.

Pursuant to the exemption granted to the Company by the Central Government vide its letter No. 47/41/2011-CL-III dated 31st January 2011, the Company has not attached copies of the Balance Sheet and Proft and Loss Account, Directors’ Report and Auditors’ Report of the subsidiary company for the fnancial year ended 31st March 2011 and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of the Company. However, the other details, as required by the Central Government while granting the said exemption, are disclosed in this Report.

The annual accounts and related information of the subsidiary company are open for inspection by any member / investor at the Registered Ofce of the Company on working days between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents / details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary company are also available on the Company’s website.

Your Company continues to hold 43% of the equity share capital of Mafatlal Denim Limited (MDL) which is its only associate company.

5. Industrial relations

There were cordial and harmonious industrial relations during the year and the management received full cooperation from the employees. During the year, a long-term wage settlement with the Workmen has been entered into.

During the year extensive training and developmental activities were undertaken, both in-house and out-bound, for the management as well as unionized employees. The workmen actively participated in several small group activities to identify and implement efciency improvement programmes wherein they demonstrated self initiative and sense of ownership.

6. Insurance

The properties and insurable assets and interests of your Company, like building, plant and machinery and stocks, among others, are adequately insured.

7. Particulars of employees

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this Report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

8. Energy, technology and foreign exchange

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of this Report.

9. Employee Stock Option Scheme 2007

Pursuant to the provision of Guidelines 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines 1999, as amended, the details of stock options as on 31st March 2011 under the “Employee Stock Option Scheme 2007” are set out in the Annexure to the Directors’ Report.

10. Reports on Corporate Governance and Management Discussion Analysis

As required under the Listing Agreement with stock exchanges, reports on corporate governance as well as management discussion and analysis are attached and forms part of the Directors’ Report.

11. Directorate

Shri Satish Kakade, Managing Director of the Company tendered his resignation with efect from 1st January 2011. The Board of Directors places on record its appreciation for the valuable services rendered by Shri Satish Kakade.

Shri Shekhar Khanolkar, who was President – Fluorochemicals and a Member of the Board, has been elevated as Managing Director with efect from 1st January 2011.

The Board of Directors has appointed Shri Sudhir Mankad as an Additional Director with efect from 29th April 2011. He will hold ofce up to the ensuing Annual General Meeting of the Company and being eligible, ofers himself for reappointment. Notices under Section 257 of the Companies Act, 1956, have been received by the Company from members signifying their intention to propose the candidature of Shri Sudhir Mankad as a Director of the Company.

Shri T.M.M. Nambiar and Shri V.P. Mafatlal both retire by rotation at the ensuing Annual General Meeting and being eligible, ofer themselves for reappointment.

12. Buy Back of Shares

The Board of Directors at their Meeting held on 24th September 2010, announced Buy Back of 338792 Equity Shares of the Company at a price of Rs.400/- per share. Accordingly, 338792 Equity Shares of the Company were bought back and extinguished. Consequently the paid up share capital of the Company stands reduced from 10099889 Equity Shares of Rs.10/- each to 9761097 Equity Shares of Rs.10/- each.

13. Directors’ responsibility statement

As required under the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors report that:

i) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures.

ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent. The purpose was to give a true and fair view of the state of afairs of your Company and the proft of the Company at the end of the fnancial year.

iii) The Directors took proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding your Company’s assets and for preventing and detecting fraud and other irregularities.

iv) The Directors prepared the annual accounts on a going concern basis.

14. Auditors

At the Annual General Meeting, members are requested to appoint Auditors for the current year and fx their remuneration. The specifc notes forming part of the accounts referred to in the Auditors’ Report are self explanatory and give complete information.

15. Cost Auditors

As per the requirements of the Central Government and pursuant to the provisions of Section 233 B of the Companies Act, 1956, the audit of the Cost Accounts relating to the product “Sulphuric Acid” is being carried out every year. The Company has appointed Shri I.V. Jagtiani, Cost Auditor, Mumbai to audit the cost accounts for the year 2010-2011 i.e. from 1st April 2010 to 31st March 2011 for which necessary approval of the Central Government has been received vide their letter no. 52/801/CAB/1989 dated 26th May 2010. The Cost Audit Report in respect of Financial Year 2010-2011 will be fled on or before the due date i.e. 27th September 2011.

16. Donation

During the year, your Company made donation of Rs.15 lacs for charitable and other purposes.

17. Appreciation

The Directors wish to place on record their appreciation of the devoted services of the workers, staf and ofcers who have largely contributed to the efcient management of your Company. The Directors also place on record their appreciation for the continued support from the shareholders, the lenders and other business associates.

For and on behalf of the Board

Mumbai, H. A. Mafatlal

Dated: 29th April 2011 Chairman


Mar 31, 2010

The Directors are pleased to present the 12th Annual Report together with the audited accounts for the year ended 31 st March 2010.

1. Financial results

[Rupees in lacs)

Current year Previous year

Operating income 42,933 41,788

Other income (including non- recurring income) 790 474

EBIDTA before exceptional items 13,589 10,648

Less: Depreciation and impairment 1,107 1,718

Interest 249 863

Tax 4,797 2,780

PAT before exceptional items 7,436 5,286

Less: Exceptional items - 757

Profit after tax 7,436 4,529

Add: Surplus brought forward from the previous year 3,545 1,013

Amount available for appropriation 10,981 5,542

Appropriation

Transfer to contingency reserve - 250

Transfer to debenture redemption reserve 81 112

Transfer to general reserve 744 453

Interim dividend 656 505

Proposed final dividend 757 505

Corporate dividend tax 241 173

Surplus carried to Balance sheet 8,502 3,545

Note: Figures are regrouped wherever necessary to make the information comparable.

2. Dividend

Your Company declared interim dividend of Rs. 6.50 per share in the month of October 2009 aggregating to Rs. 656.49 lacs for 1,00,99,889 equity shares of nominal value of Rs. 1 0 each. The Board of Directors is pleased to recommend a final dividend for the year of Rs. 7.50 per share on 1,00,99,889 equity shares of nominal value of Rs. 10 each, aggregating to Rs. 757.49 lacs taking the total dividend payout to Rs. 14 per share of a nominal value of Rs. 1 0 each.

3. Year in retrospect

• Turnover of your Company for the year remained flat at Rs. 42,933 lacs against Rs. 41,788 lacs of the previous year.

• Profit before tax increased by 67% from Rs. 7,309 lacs to Rs. 12,233 lacs.

¦ Profit after tax increased by 64% from Rs. 4,529 lacs to Rs. 7,436 lacs.

2009-10 reflected signs of recovery after a weak 2008-09. It was a year of plunging costs, especially the ones linked to the global commodity prices. As indicated in the previous year, the recessionary trends continued until mid-year and demand started picking up in the second half of the year. Your Company did well to retain the finished products prices at a higher level while capturing the gains from low input costs. Demand for the refrigerant gases and specialty chemicals were robust in the last quarter while bulk fluoride was under some price pressures.

The Indian Rupee strengthened against the US $ by over 10% during 2009-10. The year started at Rs. 50 to a dollar while it ended at Rs. 45 to a dollar hurting the export value of your Company. Handsome gains could be captured in the import leg of your Companys transactions. The Euro movement during the year against the rupee was wider. Starting the year at 67, Euro peaked to 71 in October to climb down to 60 in March 10.

During the second full year of its operation the Clean Development Mechanism (CDM) project achieved 100% capacity utilisation and contributed handsomely towards the global efforts on abatement of green-house gases emissions. The entire sales of Certified Emissions Reductions (CERs) are in dollars and Euros. Weakening of the dollar and Euro adversely impacted the realisations from the CDM project.

CER prices also remained range bound. The year started low and the prices improved in the later half of the year. However, the advantage of a higher price was eroded partially by the weakening of US dollar and Euro around the same time.

The demand for carbon credits in the near term is expected to remain steady despite uncertainties around the Kyoto Protocol and its continuity beyond 2012.

Prices of almost all key raw materials e.g. Fluorspar, Sulphur and Chloroform, among others, softened during the year. Significant share of these gains was locked in by your Company through long to medium term procurement contracts. Though there were price pressures on the bulk fluorides and some of the refrigerant gases initially, the finished product prices looked up during the third and fourth quarters and your Company could cash in the advantages locked in through strategic buying of its major raw materials. Natural gas was available during the year in good quantities but at a 20% higher price putting enormous pressures on the cost of conversion.

As stated last year, a major Company-wide initiative was carried out and areas of cost reduction and profit improvement were identified and benchmarked with the best in industry. In each of the operating functions targets were set and pursued relentlessly which yielded handsome long-term benefits to your Company.

As a part of the all round efficiency improvement plan your Company focused relentlessly on rationalising its deployment of expensive working capital and was able to substantially reduce inventories and receivables from Rs. 12,1 64 lacs at the beginning of the year to Rs. 8,614 lacs as on 31st March, 2010 releasing Rs. 3,550 lacs from working capital.

Your Company also formulated a strategic plan, defining its medium term objectives and launched its contract research and contract manufacturing initiatives at its existing site in Dewas, Madhya Pradesh. The ensuing investments will get commissioned towards the fourth quarter of the current fiscal.

During 2009-10, your Company commissioned the pilot plant as an integral part of its state-of-the art R&D centre in Surat. This will help your Company to develop new value-added molecules based on specific customer requirements and speed up the process of their commercialisation. It will also serve as the initial backbone to the contract research and manufacturing initiatives.

In order to strengthen the process capabilities and widen the product range following significant investment in R&D, your Company is also building a multi-purpose plant to become operational by the middle of the current financial year. With this, your Company will considerably consolidate its specialty fluorochemicals operations in Surat by moving in some of the compatible processes, equipment and plants from Dewas.

NFIL is aware of its responsibilities as a good corporate citizen in health, safety and environmental management, the details of which are covered in the management discussion and analysis.

Your Company continues to be rated as (a) CARE A (indicating adequate safety for timely servicing of debt obligations and low credit risk) for its term borrowings and fund-based facilities and (b) PR1 (indicating strong capacity for timely payment of short-term debt obligations and lowest credit risk) for its non-fund based facilities.

Your Company is well on course of repaying the old term borrowings. During 2009-10, repayments of Rs. 1,676 lacs were made and as at the end of the year term borrowings stood at Rs. 801 lacs. Debentures worth Rs. 143 lacs were repaid during the year and working capital borrowings were reduced by Rs. 2,310 lacs.

Reduction in working capital, term loans, debentures and cash flows from CDM helped your Company achieve a debt/equity ratio of 0.04 and a substantial reduction in your Companys interest bill.

4. Subsidiary and associates

Sulakshana Securities Limited (SSL), created through the Sanctioned Scheme of Rehabilitation (SS) of Mafatlal Industries Limited (MIL), for settlement of dues of the term lenders of MIL, continued to remain a wholly-owned subsidiary of your Company.

Pursuant to the exemption granted to the Company by the Central Government vide its letter No.47/2/2010-CL-III dated 5th April 2010, the Company has not attached copies of the Balance Sheet and Profit and Loss Account, Directors Report and Auditors Report of the subsidiary company for the financia year ended 31st March 2010 and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of the Company. However, the other details as required by the Central Government while granting the said exemption are disclosed in this Report.

The annual accounts and related information of the subsidiary company are open for inspection by any member/investor at the Registered Office of the Company on working days between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents/details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary company are also available on the Companys website.

Your Company continues to hold 49% of the equity share capital of Mafatlal Denim Limited (MDL) which is its only associate company. The financials of MDL for the year ended 31st March, 2010 being not available, could not be dealt with as per AS-23 in the results of the Company. Accordingly, the auditors have drawn attention to this fact in their report to the consolidated financial statements of the Company. Further, as per the last audited accounts of MDL as on 31st March 2009 there is substantial erosion of net worth and the erosion is continuing. Consequently appropriate provisions were made against this investment.

5. Industrial relations

There were cordial and harmonious industrial relations during the year and the management received full cooperation from the employees.

The workmen actively participated in several small group activities to identify and implement efficiency improvement programmes wherein they demonstrated self initiative and sense of ownership.

6. Insurance

The properties and insurable assets and interests of your Company, like building, plant and machinery and stocks, among others, are adequately insured.

7. Particulars of employees

nformation as per Section 21 7 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this Report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

8. Energy, technology and foreign exchange

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required, to be disclosed in terms of Section 21 7(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed hereto and forms part of this Report.

9. Employee Stock Option Scheme 2007

Pursuant to the provision of Guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999, as amended, the details of stock options as on 31stMarch 2010 under the "Employee Stock Option Scheme 2007" are set out in the Annexure to the Directors Report.

10. Reports on Corporate Governance and Management Discussion Analysis

As required under the Listing Agreement with stock exchanges, reports on corporate governance as well as management discussion and analysis are attached and forms part of the Directors Report.

11. Directorate

Shri Sharad M. Kulkarni and Shri R. Sankaran retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment.

12. Directors Responsibility Statement

As required under the provisions of Section 21 7 (2AA) of the Companies Act, 1956, your Directors report that:

i. In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures.

ii. The Directors selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent. The purpose was to give a true and fair view of the state of affairs of your Company and the profit of the Company at the end of the financial year.

iii. The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding your Companys assets and for preventing and detecting fraud and other irregularities.

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

13. Auditors

At the Annual General Meeting, members are requested to appoint Auditors for the current year and fix their remuneration. The specific notes forming part of the accounts referred to in the Auditors Report are self explanatory and give complete information.

14. Donation

During the year, your Company made donation of Rs. 16.75 lacs for charitable and other purposes.

15. Appreciation

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers who have largely contributed to the efficient management of your Company. The Directors also place on record their appreciation for the continued support from the shareholders, the lenders and other business associates.

For and on behalf of the Board,

H.A. Mafatlal

Mumbai Chairman

Dated: 28th April 2010

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