Mar 31, 2022
Your Directors are pleased to present to you the Forty Ninth Annual Report & Audited Statement of Accounts of the Company for the year ended March 31, 2022. The Management Discussion and Analysis has also been incorporated into this report.
STANDALONE FINANCIAL RESULTS - Summary
('' In Lakhs) |
||
Particulars |
Year Ended 31 Mar 2022 |
Year Ended 31 Mar 2021 |
Revenue from Operations |
1,43,809 |
85,718 |
Other Income |
1,473 |
879 |
Total Revenue |
1,45,282 |
86,597 |
Gross Profit/(Loss) before Interest, Finance Charges and Depreciation (EBITDA) |
25,475 |
19,836 |
Interest and Finance Charges |
(1,818) |
(1,887) |
Profit/(Loss) before Depreciation and Tax |
23,657 |
17,949 |
Depreciation |
(3,198) |
(2,521) |
Profit/(Loss) before Tax (PBT) |
20,459 |
15,428 |
Provision for Tax |
(4,929) |
(4,062) |
Profit/(Loss) after Tax |
15,530 |
11,366 |
Provision for Deferred Tax |
(299) |
396 |
Profit/(Loss) after Tax (PAT) |
15,231 |
11,762 |
The Net Revenue including Export Earning (FOB) during the year was ''15,791 Lakhs(Previous Year: '' 6,630 Lakhs). CONSOLIDATED FINANCIAL RESULTS ('' In Lakhs) |
||
Particulars |
Year Ended 31 Mar 2022 |
Year Ended 31 Mar 2021 |
Revenue from Operations |
1,99,819 |
1,08,574 |
Other Income |
1,159 |
687 |
Total Revenue |
2,00,978 |
1,09,261 |
Gross Profit/(Loss) before Interest, Finance Charges and Depreciation (EBITDA) |
45,237 |
22,756 |
Interest and Finance Charges |
(2,037) |
(2,091) |
Profit/(Loss) before Depreciation and Tax |
43,200 |
20,665 |
Depreciation |
(5,663) |
(4,952) |
Profit/(Loss) before Tax (PBT) |
37,537 |
15,713 |
Provision for Tax |
(9,208) |
(4,067) |
Profit/(Loss) after Tax |
28,329 |
11,646 |
Provision for Deferred Tax |
(206) |
123 |
Profit/(Loss) after Tax (PAT) |
28,123 |
11,769 |
Dividend
Based on the performance of the Company and the anticipated Investments in various Projects that have been announced, your Directors have recommended a dividend of '' 2.50 per share for the Financial Year 21-22 (previous year '' 2.20/-per share was paid). This would result in an out flow of '' 2,560 Lakhs, if approved by the shareholders at the Annual General Meeting.
MANAGEMENTâS DISCUSSION AND ANALYSISPost Covid Recovery
After almost two years of immense impact on the health care system and the people in general, the world seems to be slowly returning to normal. In spite of certain regions of the world that still have restrictions on normal activities, almost all industries and economies have returned to pre-Covid levels of activity. High vaccination levels in India and many parts of the world have helped a great deal in controlling the outbreak at manageable levels. Industrial output has grown year on year, beating market expectations. The job market in India has also seen a huge fillip, riding on the back of buoyancy of retail and industry performance.
The year started with the second wave hitting the country -and the world - very hard. The number of COVID infections increased many fold. The hospitals were inundated with patients needing critical care; unfortunately, there was a large loss of life also. Post September 2021, the world slowly got back on its feet and businesses started returning to normal. The last quarter of the year saw a significant impact in various spheres due to the Russia-Ukraine conflict and consequent internationational reactions. These geo-political issues have given rise to fluctuations in crude oil and other commodity prices, resulting in uncertainties in the market. Inflation rates have seen unprecedented increase. Your company has been able to weather through all these changes very effectively due to strong fundamentals that have been established in the past decade and the dedication and forethought of all the staff and management. There has been a tremendous push towards improving operations and bringing in best practices in all areas, including safety, environment, reliability and market focus.
The performance of your Company during the Financial Year 2021-22 has been excellent. The improvement in market demand witnessed in the last quarter of the previous year continued into the current financial year. The initiatives taken on energy generation and consumption
played a significant part in reducing the cost of production. The PA plant recorded the highest ever production and contributed significantly to reduce the overall energy cost at our Ranipet site.
The second wave of the pandemic took a huge toll on the country. Some of our operations, were impacted due to the second wave, during the first quarter of this financial year. Many of our employees caught the virus and were out of commission for a long time.
The various teams in your Company rose to the occasion and managed the operations through these disruptions and challenges. The efforts ensured that there were no interruptions to the operation of the plants resulting in substantially higher operating rates of all products.
The overall market resilience and optimism was reflected in the performance of your company. All the customer industry segments, viz. plasticizers, polyester resins, paints and pigments, food, pharma and personal care saw renewed demand, both in India and overseas. In India, the announcements by the Government on investments in infrastructure provided impetus to demand of our downstream products.
The summary of the quarterly performance given below reflects this growth.
Sl. No. |
Quarter |
Revenue in Rs. (Lacs) |
EBITDA in Rs.(Lacs) |
PBT in Rs.(Lacs) |
1 |
Q1 FY21-22 |
28,909 |
6,512 |
5,418 |
2 |
Q2 FY21-22 |
35,150 |
4,853 |
3,543 |
3 |
Q3 FY21-22 |
38,214 |
6,459 |
5,288 |
4 |
Q4 FY21-22 |
41,536 |
7,651 |
6,210 |
This buoyant performance was largely contributed by the high margins seen in the primary product, Phthalic Anhydride. The world also saw unprecedented increases in logistics cost and huge interruptions in supply chain across the board. This made it necessary for many industries to turn completely to local producers for supply of many raw materials and other ingredients. Imports inevitably came down because of uncertain supplies. This also contributed to the increased margins and greater demand for our products.
The past two years of pandemic induced issues has impacted the way people do business. The Governmentâs encouragement and push to get more and more people vaccinated has helped reduce hospitalisations. This has given people, including health care workers and employers a much greater confidence in their ability to handle any further waves of the infection. Hybrid work culture and video conferencing have become the norm.
Overall Business and the Individual Units/ Products
The performance of your company has been commendable in all respects and the strategies adopted at the market place yielded good results. The team worked diligently in optimising customer mix and were nimble in dealing with the logistics issues. This has resulted in your company posting the best ever consolidated results in its history.
Phthalic Anhydride (PAN)
Our main commodity business, Phthalic Anhydride (PAN) turned in an impressive performance despite huge increase in the price of raw material Ortho xylene in the last quarter of the financial year. Price increases of other raw materials also impacted one of our key market segment of pigments. The other market segments like paints, plasticizers and unsaturated Polyester resins fared reasonably well during the year. The efforts taken by the company during the last 5 years in focussing on healthy and growing customers, providing excellent service have shown good results.
On the manufacturing front, the modernisation and continuous upgrade of the PAN facilities at Ranipet in Tamil Nadu, resulted in better Productivity, Quality, Reliability and Safety.
With better margins and good working capital management your company could set aside its cash flows for business growth and projects; this will also help us in taking further growth decisions.
The project at Dahej, was commissioned in June 2021 after significant delays due to covid related manpower shortages and material deliveries. The various startup related problems were attended during subsequent quarters and the plant has now started producing in a stable manner since January 2022. We are now well positioned to meet customer demand effectively in our major west India market.
Fine Chemicals and Food Ingredients
The Fine Chemicals and Food Ingredients business bounced back from a sluggish 2020-21. We revamped some of the utilities and other systems to bring in efficiency and higher productivity. We are happy to report the highest ever production of Food ingredients in the year.
The business scenario was characterised by robust demand on the one hand and supply chain disruptions caused by the second and third waves of the pandemic on the other. Several employees in the plants had tested positive for Covid during the second wave. The investments made in equipment, spares and process technology helped your company to operate the plants at 20-25% higher rates in spite of the disruptions.
The combined strategy of focusing on high value European and American markets, procurement of raw materials in advance and smart pricing helped the business achieve its best operating margins since inception. The rapid increase in prices of key raw materials & freight costs were countered with suitable adjustments in pricing. Our sales to strategic markets like EU and US continued to be high, and in the process we were able to cater to a lot of new customers. The presence of our marketing and logistics subsidiary in the EU, TCL Global BV, played a key role in this.
Significant efforts went into maintaining relationships with customers and identifying new opportunities. From Q4 when supply chain started to stabilize, the business also started market seeding activity for the US. Plans for increasing the capacity for some of these products are now under management approval. Many of our customers have unveiled expansion plans and we foresee strong growth.
Human Resources and Strengthening the Organization
Continuing the organisation building that we had started in the previous financial year, there have been a lot of new inductions during the FY 2021-22. The middle management level has been strengthened with experts in each discipline. Younger professionals have also been inducted to keep the pipeline of managers, design & operation staff, and technicians healthy. This is in keeping with the company policy to induct and train a regular stream of young professionals every year. The structured training module followed by the company is known to be one of the most rigorous in the industry.
Our Group CEO, Mr. C. G. Sethuram has started working on various approaches to organizational growth, including new projects, products and strategic initiatives.
Our new CEO, Mr. Sanjay Sinha, has settled into the organisation smoothly. He has brought in best practices in business & manufacturing operations, and has been working with the teams to ensure reliability and consistency in processes.
We have also inducted a new site head in Ranipet, Mr. R. Srinivasa Raghavan as President-Manufacturing. He has had varied experience in operating petrochemical plants in western India. He is known for effectively working with teams to ensure cohesive operations. He also brings with him tremendous operating knowledge, which he has put to good use in the plants.
The various projects undertaken by the Company have necessitated hiring of engineers and managers at all levels. The process of recruitment has been very rigorous to ensure that the company is able to employ some of the best talents available. This has resulted in excellent work done in the technology and engineering areas. Many young employees have come forward with new ideas and produced efficiencies in processes.
Your company has also been working on updating the HR policies to reflect the best practices in industry.
With multiple sites and new challenges this is essential as we work in an increasingly volatile environment. We have restructured our HR department and have progressed well on the management development program of the company.
After successful commissioning and operation of the Dahej Phthalic Anhydride plant, your company has embarked on a large project in Dahej through a subsidiary, TCL Intermediates Pvt. Ltd. (TCL IPL), for manufacturing of Phthalic Anhydride, fine chemicals and derivatives. There will be two phases of capacity of about 110 KT each.
The engineering and procurement for the first phase is in progress and the commissioning of this plant is expected to be in Q3 to Q4 2023-24. The project is in the process of obtaining various regulatory approvals and is expected to start construction shortly.
US Project and US Subsidiary Activities
Our US subsidiary was able to progress significantly in the implementation of the project. Your company TCL India has now completed the 25 m$ Equity investment fully in the subsidiary. During the year, the subsidiary was able to complete ordering of almost all the equipment for the project and start on construction. Financial commitments for the project from Lenders have been finalized by the US subsidiary.
Modular construction of over 80% of the US plant has started at TCL Technology and Engineering (SEZ) Division in India. The subsidiary aims to minimize construction activity in the US by building the project modularly largely in India; this helps in cost optimization, safety and scheduling. The US subsidiary expects to commission the plant by H1-CY 2024.
Our Subsidiary in the Netherlands TCL Global BV
Our European subsidiary (TCL Global BV) in the Netherlands completed its first full year of operations and was profitable. TCL Global BV markets the products of TCL India and of our subsidiary in Malaysia in Europe. The presence of the subsidiary within Europe enables it to regularly interact with European customers, obtain quality market information and ability to sell to many direct customers resulting in better margins overall for the group. These interactions were instrumental in greater penetration in the EU market for all the products of TCL and OOSB. With the subsidiary in place, the TCL group is able to respond very quickly and to offer real time services to EU customers including supply of products out of an EU warehouse. As we expand our manufacturing in western India and in the us, we expect the European presence to be a significant catalyst for our export growth.
The Malaysian subsidiary âOptimistic Organic Sdn. Bhd.â posted an excellent performance during the year 2021-2022. This was because of many improvement programmes undertaken in the past years and during the year to ensure reliability of the plant for continued quality production. In addition, a complete reorganisation of customer mix was undertaken to maximise the sales quantity and net realisations. The geographical spread of the customers was also widened to minimise regional variations and risks arising from volatility in the markets. The company has also undertaken several initiatives during the year to strengthen behavioural safety and obtained A grade with >97% in the audit conducted by the Government of Malaysia. The company has achieved highest ever production and profits in the financial year and has built sufficient cash reserves for its growth plans.
STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)
(USD in Lakhs) |
|||
Sl. No. |
Particulars |
Year Ended 31-Mar-22 |
Year Ended 31-Mar-21 |
1 |
Revenue from Operations |
812.87 |
323.66 |
2 |
Other Income |
0.54 |
0.07 |
3 |
Total Revenue |
813.42 |
323.73 |
4 |
Gross Profit / (Loss) before Interest,Finance Charges and Depreciation (EBITDA) |
273.39 |
40.43 |
5 |
Interest and Finance Charges |
(1.74) |
(1.67) |
6 |
Profit/(Loss) before Depreciation and Tax |
271.65 |
38.76 |
7 |
Depreciation |
(33.78) |
(33.49) |
8 |
Profit/(Loss) before Tax (PBT) |
237.87 |
5.27 |
9 |
Provision for Tax |
(57.61) |
(3.37) |
10 |
Profit/(Loss) after Tax |
180.26 |
1.90 |
11 |
Provision for Deferred Tax |
- |
|
12 |
Profit/(Loss) after Tax (PAT) |
180.26 |
1.90 |
Your Companyâs finances have been strengthened over the last few years by ensuring better working capital management and improving cash flows through better margins. This has helped the company greatly in its growth over the past couple of years. The company has been net debt free and this has enabled us to make available funds for expansions and investments in subsidiaries. The past
few months have seen significant increases in raw material prices which have necessitated higher working capital in the business. However, due to the strength of its internal accruals, the company has been able to manage this without any additional borrowing. The finance team has also been strengthened to enable financial management of projects and additional sites.
The Prospects for the FY 2022-23
The announcements by the Indian Government during the previous FY regarding investments in infrastructure projects resulted in a definite improvement in the performance of all our customer segments. Our main product, Phthalic anhydride witnessed high price increases globally. This has been strongly aided the post Covid boom in retail and industrial activity within India.
In every user segment our customers have announced and have started implementing robust growth plans. This augurs well for our industry; our projects both in petrochemicals and in fine chemicals will help satisfy this growth over the coming years.
The period since September 2021 has been marked by high inflation in all primary products and especially so in metals, fuels, logistics, petrochemical feed stocks, and construction inputs.
The resultant reaction of governments around the world aimed at controlling inflation by increasing âPolicy Ratesâ in lending will act as a dampener not only for inflation but also for global growth. Since early June 2022 we are already seeing the early impact of these in prices of metals and some other commodities.
India has historically been insulated from sharp volatility in global markets and economic events; however, with our greater integration in the last few years, there will be an impact.
There are warning signs on the horizon of deflationary and near recessionary conditions in the EU and in the US. Within India this will affect prices rather than volumes which we expect to be healthy. The management of your company however is very sensitive of these possibilities and is well prepared to handle these uncertainties. Our strong balance sheet gives us the confidence to execute the planned projects without any interruption. We will keep our shareholders regularly informed of developments.
Besides the regular development and training, we initiated and put in place a large number of programmes to address the impact of Covid. As states and districts gradually lift and reduce their shelter-at-home orders, we have encouraged our employees who have been working from home to return to office. We are working hard towards keeping our employees up to date and making sure they are safe in the workplace. We continue to provide round the clock care and assistance to our employees & families as well as to the community.
Since the availability of Vaccination to fight COVID-19, we have ensured an active vaccination campaign for all employees and their families and to the community. Here we work closely with the Tamil Nadu Government which has been very supportive.
Your Company would like to thank all its employees for their active support to the business and the community during the pandemic. We see our employees - our people - as the main foundation on which our company is built. Our performance would not have been possible without them.
We continue to engage in many activities both with the local administrations and the government agencies as public Initiatives. Since last year we set up multiple oxygen plants and provided oxygen concentrators to Hospitals and Tertiary care centres at places such as CMC Vellore and Government hospital Chennai. These will now directly help Hospitals and save lives. As these Plants have a long life of more than 3 decades, they become a permanent asset for the Hospitals and reduce the cost of Oxygen dramatically. During Q3 we also donated generously to the Tamil Nadu âChief Ministerâs public relief fund.
We have also contributed towards the development of the public wellbeing of the SIPCOT panchayat through sanitation for government schools, artificial limbs for amputees, Paediatric cardiac surgeries, education for tribal and underprivileged children in the Local area.
Your company was actively involved in the interactions with various stakeholders. Our employees are office bearers in various Industrial associations like Confederation of Indian Industries, Indian Chemical Council, Chemical Industries Association. These associations are in constant engagement with the Government at the centre and in the States. Your company is seen as a keen participant in all Industry initiatives, like simplification of procedures, changes and postulation of regulatory framework, feedback to statutory authorities, skilling for the industry, labour laws, trade and tariff related measures & trade negotiations.
The company is also directly interacting with the local communities and participates in several projects in the community. As Our shareholders know we strongly support the Thirumalai Charity Trust, the Thirumalai Mission Hospital and the Akshaya Vidya Trust both with financial support as also management guidance for their various programs & projects. More information about these is given elsewhere in this report. We are also in constant engagement with the district authorities and statutory authorities at a local level through periodic meetings.
None of this would be possible without the interest and participation of our stakeholders - Customers, Bankers, Suppliers, Distributors, Consultants, and Government agencies, and the local Communities.
We hope to have the continued involvement of all shareholders in the affairs of the company and to share in the achievements of the company in the years to come.
The Board of your Company consists of
? The Chairman & Managing Director -Mr. R. Parthasarathy
? Managing Director & Chief Financial Officer -Mrs. Ramya Bharathram
? Executive Director - Mr. P. Mohana Chandran Nair
? Six Independent Non-Executive Directors:
? Mr. R. Ravi Shankar
? Mr. Raj Kataria
? Mr. Dhruv Moondhra
? Mr. Arun Ramanathan
? Mr. Rajeev M Pandia
? Mrs. Bhama Krishnamurthy
? A Non-Executive Director:
? Mr. R. Sampath - Chairman - Ultramarine and Pigments Ltd.
They are supported closely by
? Mr. C.G. Sethuram - Group Chief Executive Officer
? Mr. Sanjay Sinha - Chief Executive Officer
? Mr. T. Rajagopalan - Company Secretary
And the Business and Functional Heads
? Mr. S. Venkatraghavan - President - Food Ingredients
? Mr. R. Srinivasaraghavan - President - Factory Operations
? Ms. J. Radha - Executive Vice President, Finance
? Mr. B. Krishnamurthy - Executive Vice President, Accounts & Systems
During the year under review, Mrs. Ramya Bharathram was appointed as Managing Director at the 48th Annual General Meeting of the Company held on July 21, 2021 and Mr. N. Subramanian, Independent Director of the Company, has retired on August 5, 2021.
Mr. R. Parthasarathy''s tenure as Chairman and Managing Director will expire on July 31, 2022, and the Board recommends that he be re-appointed as Chairman and Managing Director of the Company for a further period of three years beginning August 1, 2022.
Mr. Arun Ramanathan''s tenure as Independent Director of the Company expires on July 21, 2022. Hence it is proposed to reappoint him at the ensuing Annual General Meeting for a period of Three (3) years.
Your Directors play a very active role in the Company. They bring in expertise in Business Strategy and Management, Technology, Finance & Accounting, Governance, Project Appraisal & Management, Government Relations.
Their interaction with the Management team is frequent and intense, at the Board and Committees, through reviews, suggestions, criticisms & advices to the Management team over the last 8 years.
The executive management team in turn has been very transparent in presenting and discussing initiatives & plans and failures, issues & responses.
This healthy and open interaction has been of immense value to the governance, health and growth of the Company.
The Committees in the Board, especially the Risk Management Committee, Business Review Committee and the Audit Committee met often and participated in depth by setting goals, reviewing performance, correcting slippages and monitoring execution.
The Nomination & Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been active in their respective roles.
Further details of these are given in the Corporate Governance Report.
Your Company continues to play an active and important role in the welfare of the local communities.
The Founders of your Company, Mr. N.S. Iyengar and Mr. N.R. Swamy had set up the Thirumalai Charity Trust (TCT) in 1970, and The Akshaya Vidya Trust (AVT) in 1994.
Thirumalai Chemicals supports TCT financially and through management reviews and in their infrastructure planning & development process.
The TCT works in Ranipet District where our main Indian manufacturing site is located, since 1983, providing services in Community Healthcare, Womenâs Empowerment, Disability, De-addiction, and Village development.
The TCT founded and operates the Thirumalai Mission Hospital, which provides primary healthcare in 315 villages, covering over 160,000 people. The Hospital provides both out-patient and in-patient services through departments of General Medicine, Emergency services, Intensive Medical Care, General Surgery, Paediatrics, Obstetrics, Gynaecology, Orthopaedics, ENT, Dentistry, Physiotherapy, De-addiction & Rehabilitation.
With TCLs support, the Thirumalai Mission Hospital has set up a separate centre for Non-Communicable Diseases
such as Diabetes, Thyroid disorders, Endocrinology, Obesity, Osteoporosis, etc. The dialysis service started at TMH last year is expanding to serve more people.
This addresses a critical need of the community.
The Vedavalli Vidyalaya Schools (with 3 schools at 2 campuses), managed by The Akshaya Vidya Trust, have around 2,600 students, out of whom 70% are from rural families.
Industrial Relations during the year under review continued to be very cordial.
All taxes and statutory dues have been paid on time. Payment of interest and instalments to the Financial Institutions and Banks are being made as per schedule. Your Company has not collected any Fixed Deposits during the Financial Year.
Contribution to the Exchequer:
The amounts paid to the Central and State Exchequer by way of GST, Customs duties (incl. paid to supplier), Income Tax and other taxes, is about '' 31,316 Lakhs on Gross Sales of about '' 1,42,368 Lakhs (Previous Year '' 20,740 Lakhs on Gross Sales of about '' 84,134 Lakhs).
Contribution to the Exchequer is about 20% of your Companyâs Sales.
Calculated on FOB basis, Exports amounted to '' 15,791 Lakhs (previous year '' 6,630 Lakhs)
Particulars of loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the Financial Year were in the ordinary course of business and on an Armâs length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interests of the Company. Suitable disclosure as required by the Indian Accounting Standards (Ind AS24) has been made in the notes to the Financial Statements.
The Board has approved of a policy for Related Party Transactions which has been uploaded on the Companyâs website.
Directors'' Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
In preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.
We have selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period.
We have taken proper and sufficient care to maintain adequate Accounting Records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
We have prepared the Annual Accounts on a going concern basis.
Proper Internal Financial Controls were in place and that the Financial controls were adequate and were operating effectively.
Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks. The Company has re-constituted the Business Risk Management Committee on 26.05.2021 and the details of the Committee are as given below:
Sr. No. |
Name of member |
Category |
1. |
Mr. Rajeev M. Pandia |
Independent Director |
2. |
Mr. Dhruv Moondhra |
Independent Director |
3. |
Mrs. Ramya Bharathram |
Managing Director & CFO |
4. |
Mr. Sanjay Sinha |
Chief Executive Officer |
5. |
Mr. B. Krishnamurthy |
Executive Vice President Accounts & Systems |
Vigil Mechanism / Whistle Blower Mechanism
The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
Corporate Social Responsibility (CSR) Committee
The Committee recommended continuing support for the Thirumalai Charity Trustâs Health and Rural Development
Projects and for the Akshaya Vidya Trustâs Educational Programmes.
The composition of the Corporate Social Responsibility Committee is given below:
Sr. No. |
Name of member |
Category |
1. |
Mr. Arun Ramanathan |
Independent Director & Chairman |
2. |
#Mr. N. Subramanian |
Independent Director |
3. |
Mrs. Bhama Krishnamurthy |
Independent Director |
4. |
Mr. R. Sampath |
Director (Promoter) |
# Retired on 5th August, 2021
A detailed note is given in the Corporate Governance report.
Total Expenditure on Corporate Social Responsibility (CSR) as percent of average net profit of the Company as per section 135(5 )
The Companyâs total spending on CSR is 2% percent of average net profit of the Company as per section 135(5) towards Health and Sanitation Programmes
Statement pursuant to Listing Agreement:
Your Company''s shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.
Business Responsibility Report:
Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the Annual Report of the top 1000 listed entities based on market capitalization (calculated as on 31st March of every Financial Year), shall include a Business Responsibility Report (BR Report).
Your Company is in the top 1000 listed entities as on 31st March, 2022. The Company, has presented its BR Report for the Financial Year 2021-22, which is part of this Annual Report.
Report on Corporate Governance
The Report on Corporate governance is annexed herewith.
Pursuant to the provisions of the Companies Act, 2013 and under obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from the Directors, covering various aspects of the Boardâs functioning such as adequacy of the composition of the Board and its Committees, Board culture, Execution and Performance of specific duties, obligations and governance.
A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders, etc.
The performance evaluation of the Independent Directors is carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
Appraisal of Boardâs performance
It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board.
Board evaluation contributes significantly to improved performance and aims at,
⢠Improving the performance of Board in line with the corporate goals and objectives.
⢠Assessing the balance of skills, knowledge and experience on the Board.
⢠Identifying the areas of concern and issues to be focused on for improvement.
⢠Identifying and creating awareness about the role of Directors individually and collectively as Board.
⢠Fostering Team work among the members of the Board.
⢠Effective Coordination between the Board and Management.
⢠Overall growth of the organization
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by the Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. AAC-2085) were appointed as
the Statutory Auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 21, 2021, to hold office from the conclusion of the Forty Eighth AGM till the conclusion of the Fifty Third AGM to be held in the year 2026.
The Internal Auditors M/s. M.S. Krishnaswamy & Co, Chartered Accountants, have played an important role in strengthening the internal controls within the Company.
M/s GSVK & Co., Cost Accountants, were appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during the Financial Year 2021-22. The Cost Audit Report was filed with the MCA, Government of India, by the Company on August 07, 2021, well before September 30, 2021, the due date of filing for the Financial Year 2020-21.
The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for the Financial Year 2021-22. The Secretarial Audit Report for the Financial Year ended March 31, 2022 is attached to this Report. The Secretarial Audit Report does not contain any qualifications, or reservations or adverse remarks.
Pursuant to the provisions of section 92(3) and Section 134 (3) (a) of the Companies Act, 2013 a copy of the Annual Return of the Company for the year ended March 31,2022 will be placed on the website of the Company at http://www.thirumalaichemicals.com.
In terms of the provisions of section 197(12) of the of the Companies Act, 2013 read with the Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the Annexure B to the Directors'' report.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013:
a) The ratio of the remuneration of each Director to the median employeeâs remuneration for the Financial Year and such other details as prescribed is as given below:
Name of Director Ratio
1. Mr. R. Parthasarathy (Managing Director) 159: 1
2. Mrs. Ramya Bharathram (Managing Director and CFO*) 104: 1
3. Mr. P. Mohana Chandran Nair (Whole-time Director) 17: 1
For this purpose, sitting fees paid to the Directors have not been considered as remuneration.
b) The percentage increase in remuneration of Managing Director, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year:
Mr. R. Parthasarathy - (Managing Director): 29%
Mr. T. Rajagopalan - (Company Secretary): 18%
*Mrs. Ramya Bharathram - Managing Director, was appointed as the Chief Financial Officer of the Company on July 24, 2018. No additional remuneration was paid to her for functioning as the CFO.
c) The percentage increase in the median remuneration of employees in the Financial Year: NIL %
The number of permanent employees on the rolls of the Company: 523
d) The explanation on the relationship between average increase in remuneration and Company performance:
e) The Companyâs PAT has increased from '' 11,762 Lakhs to '' 15,231 Lakhs, an increase of 29% against which the average increase in remuneration is 40%;
f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:
Name |
Designation |
Remuneration '' In Lakhs |
% Increase in Remuneration |
PAT '' in Lakhs |
% increase in PAT |
Mr. R. Parthasarathy |
Managing Director |
619 |
29 |
15,231 |
29% |
Mrs. Ramya Bharathram |
Managing Director and CFO |
408 |
70 |
||
Mr. T.Rajagopalan |
Company Secretary |
40 |
18 |
* It consists of Salary/Allowances & Benefits.
The remuneration of the Managing Director Mr. R. Parthasarathy includes the commission of '' 374 Lakhs, which works out to approximately 2.46% to the net profit for the Financial Year ended March 31,2022.
As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and the Financial Performance of the Company.
g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current Financial Year and the previous Financial Year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
Date |
Issued Capital (No. of Shares) |
Closing Market Price per share '' |
EPS in '' |
PE Ratio |
Market Capitalization ('' in Lakhs) |
31.03.2021 |
102,388,120 |
86 |
11.49 |
7.44 |
87,542 |
31.03.2022 |
102,388,120 |
266.00 |
14.88 |
17.88 |
2,72,352 |
Increase /(Decrease) |
NA |
181 |
3 |
10 |
1,84,811 |
% of Increase/(Decrease) |
NA |
211 |
29 |
140 |
211 |
Issue Price of the share at the last Public Offer (IPO) |
1 |
||||
Increase in market price as on 31.03.2022 as compared to Issue Price of IPO |
265 |
||||
Increase in % |
26,400 |
h) Average percentile increase already made in the salaries of Employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in the Managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration is 27% for Employees other than Managerial Personnel & 16% for Managerial Personnel (KMP and Senior Management)
i) The key parameters for any variable component of remuneration availed by the Directors:
Except Mr. R. Parthasarathy (Managing Director), Mrs. Ramya Bharathram (Managing Director) and Mr. P. Mohana Chandran Nair, (Whole-time Director), no Directors have been paid any remuneration, as only sitting fees have been paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits as per the provision of sec.197 of the Companies Act, 2013.
j) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Not Applicable
k) If remuneration is as per the remuneration policy of the Company: Yes
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars required to be included in terms of Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure C.
Companyâs objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability
and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation, plant breakdowns, industrial relations, etc.
The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Statutory Auditors, Cost Auditors, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review.
The Directors also appreciate and value the contributions made by the employees of our Company at all levels.
For and on behalf of the Board of Directors
R. Parthasarathy R. Ravi Shankar
Managing Director Director
(DIN:00092172) (DIN:01224361)
Place: Ranipet Place: Chennai
Date: 26th May, 2022 Date: 26th May, 2022
Mar 31, 2019
To,
DIRECTORS'' REPORT
With Management Discussion & Analysis
The Members,
Thirumalai Chemicals Limited
Your Directors are pleased to present to you the Forty Sixth Annual Report & the Audited Statement of Accounts of the Company for the year ended March 31, 2019. The Management Discussion and Analysis has also been incorporated into this report.
Standalone Financial Results - Summary
Rs, In Million)
Particulars |
Year Ended 31 Mar 2019 |
Year Ended 31 Mar 2018 |
Revenue from Operations |
9,943 |
10,372 |
Other Income |
142 |
100 |
Total Revenue |
10,085 |
10,472 |
Gross Profit / (Loss) before Interest, Finance Charges and Depreciation (EBITDA) |
1,690 |
2,390 |
Interest and Finance Charges |
(107) |
(109) |
Profit / (Loss) before Depreciation and Tax |
1,583 |
2,281 |
Depreciation |
(152) |
(104) |
Profit / (Loss) before Tax (PBT) |
1,431 |
2,177 |
Provision for Tax |
(445) |
(737) |
Profit / (Loss) after Tax |
986 |
1,440 |
Add : Provision for Deferred Tax |
(25) |
- |
Profit / (Loss) after Tax (PAT) |
961 |
1,440 |
- The Net Revenue including Export Earning (FOB) during the year was '' 1,000 Million (Previous Year: '' 1,430 Million).
Consolidated Financial Results
C In Million)
Particulars |
Year Ended 31 Mar 2019 |
Year Ended 31 Mar 2018 |
Revenue from Operations |
12,610 |
13,376 |
Other Income |
116 |
68 |
Total Revenue |
12,726 |
13,444 |
Gross Profit / (Loss) before Interest, Finance Charges and Depreciation (EBITDA) |
2,175 |
2,963 |
Interest and Finance Charges |
(122) |
(128) |
Profit / (Loss) before Depreciation and Tax |
2,053 |
2,835 |
Depreciation |
(364) |
(305) |
Profit / (Loss) before Tax (PBT) |
1,689 |
2,530 |
Provision for Tax |
(483) |
(740) |
Profit / (Loss) after Tax |
1,206 |
1,790 |
Provision for Deferred Tax |
(70) |
(86) |
Profit / (Loss) after Tax (PAT) |
1,136 |
1,704 |
Dividend
Based on the Company''s performance, the Directors are pleased to recommend for approval of the members, a dividend of '' 2/- per share of Re.1 face value, for the year ended March 31, 2019.
In the previous year ended March 31, 2018, a dividend of '' 20/per share was paid on each share of '' 10 face value, which was thereafter split into 10 shares of Re.1 face value each.
The final dividend on equity shares, if approved by the shareholders, would involve a cash outflow of '' 247 Million, including dividend taxes.
Subsidiaries
Cheminvest Pte Ltd. Singapore is a 100 % investment subsidiary of your company and it has a step-down manufacturing subsidiary viz. Optimistic Organic Sdn. Bhd., Malaysia (OOSB) in Malaysia; and another Lapiz Europe Ltd in the United Kingdom. Lapiz Europe Limited is a subsidiary of your company that handles REACH registration and regulatory compliance for the marketing of the groups products in the EU.
TCL Global BV is a Netherlands based 100% subsidiary of your company which has been established to facilitate the business, marketing, regulatory and investment requirements of your company overseas.
Business Performance
Your company has 2 principal product groups in its business portfolio; these are all presently manufactured in Ranipet, and from next year we will begin manufacturing in Gujarat, starting with our major commodity product Phthalic Anhydride.
The year started out well, but in H2 we faced market challenges.
In our commodities businesses the trading environment saw a sharp downturn in Q3 and Q4 of the year in important sectors affecting markets both of your company and those of the subsidiary in Malaysia.
While this had a number of causes, these were aggravated by the volatility in crude oil and related Petrochemical prices, the slowdown in the Far East, and the US trade restrictions that affected the Chinese and Far East markets- these caused a sharp drop in product prices.
Demand for many related commodities fell due to market apprehensions over these volatile prices, and volumes and margins shrank in India and in key export markets. In spite of excellent performance in the first two Quarters, the overall performance of your company for the year was below expectations.
A reversal in these factors is already being seen in the first Quarter of the current year. Prices have firmed up and the offtake has steadily increased since the beginning of the first Quarter.
We remain concerned over the negative impact on Indian Industry, of declining Chinese growth and the US-China trade dispute - these create large idle capacities in the Far East that depend on the Chinese market : affected producers naturally seek other markets: which better than IndiaRs,
To compound this, in thousands of industrial products the FTA''s concluded 12-15 years ago have steadily led to zero import duties for products from major economies like S.Korea and the Asean.
This is a major reason why Investment in India in the chemical sector (and in many others) has been so anaemic for a decade -it became far more profitable to import for India, than to make in India.
This has led to poor employment growth and worsening trade balance.
We are working closely with the Government to ensure fair trade in this uncertain environment. I am happy to say that the Government''s approach is very positive.
The Indian market is growing well and we are confident that policy changes under discussion will help encourage greater investment in manufacturing in India. As you are aware, in the last 2 years we have taken steps to invest in modernization of our manufacturing units and expand.
The GST has settled down and the impact has been a positive for Medium and Large scale companies. The recent and proposed changes will remove the difficulties faced by small and tiny units.
The large defaults and major scams that have blown open in these two years is a scandal that exposes the corruption and cronyism that had become endemic. There are bound to be more failures among stressed companies and groups.
We have to hope that the efforts of the regulators and this Government to expose these and bring these promoters and bankers to book, will not stop, but help create a more robust framework in our financial and governance systems.
It has made borrowing difficult and expensive even for genuine investments and companies. This is a matter for concern and need to be addressed to avoid throttling them.
The recent US announcement withdrawing preferential treatment for Indian goods will not affect most of our products.
Our Fine Chemicals products were affected by the integration difficulties of the plant improvements that took longer than expected and led to lower volumes. These have settled down only by the end of Q1-FY 2019-20.
The Market remains robust and Indian demand is growing well.
Your company has continued to work on major initiatives in growth, operating efficiencies, costs, marketing, HR and project management.
Phthalic Anhydride Business:
The division posted robust performance during Q1 and Q2 and was able to minimize the effects of downturn Q3 and Q4. During these two latter Quarters, demand for the product in
Asia and India slowed as a result of price uncertainties; margins between the raw material & final product shrunk sharply in tandem. This resulted in poor performance during these two Quarters.
The Company had to contend with imports, including off-spec products into the Country. In order to manage the situation, we have initiated many steps to mitigate this risk of dumping by distressed foreign suppliers. We are fully confident of handling these temporary issues effectively, and grow.
However, on the demand side, Asia with India in particular, continues to be the fastest growing region in the world. Our company is well placed to take advantage of this factor because of its established reputation across markets for over four decades and our technical and commercial competence in these segments.
Besides sales, effective management of inventory and receivables is critical to our health, especially in this volatile environment. The good systems and hard work on these in the last few years, helped us maintain positive cash flows without strain to fund our operations and investments in growth.
The company''s investment at Dahej in Gujarat received environment clearance and consent to establish during the year, but much later than was expected. Construction has commenced in Q3 and is in full swing. The plant is expected to be ready for operations by Q4 of 2019-20.
The modernization project envisaged at Ranipet is in its final stage of completion and is under commissioning currently in Q1 of 2019-20.
These two projects - the modernization of the technology / revamp in the existing plants, and the creation of New capacity in western India - will help the company improve efficiencies in Cost, supply-chain, Process operations and in Environmental & Safety performance. These will also provide a continuous and reliable supply of the product and address the growing market. The project in Dahej located close to customers and suppliers, will particularly help the company improve services to its customers with quick response times.
Food Ingredients and Fine Chemicals:
Food Ingredients
The demand for our products grew well and especially so in the domestic market; we were able to sell all our volumes promptly in India, the EU and start market seeding in North America. These are naturally produced and present in fruits and in all mammals & humans and are critical for metabolism. These make them among the safest of ingredients for foods, juices & beverages.
The company has been in these products since 1992, when we developed these in our R&D and commercialized them.
Being products for human consumption, and the stringent regulatory and approval processes, access into EU earlier from 1993 and more recently into the US and to global users, customer specific product development exercises that were started in recent years have enabled us to meet the needs of prestigious new customers in the market globally. This has helped us acquire prime new customers in the US and EU during the year.
We continue to be the preferred & exclusive supplier to most customers in the domestic market; and a key supplier to many MNC customers in the European market. We have built up an excellent reputation in the markets we serve and the competence to deliver to the requirements of demanding customers across geographies.
The domestic market is still very fragmented and the company has set up an effective distribution network to serve the many small and tiny users across the country for different applications.
The new technology developed in-house for these products was commercialized and stabilized during the year and continues to be operated at the modernized facility. There were some production interruptions and losses during the implementation of these changes. These are since in full operation.
Your company has taken steps to obtain Indian and global patents for the same.
With these, we have laid the foundations to grow these businesses further with the project now under planning.
The Phthalic derivatives products performed steadily. Subsidiary - Optimistic Organic Sdn Bhd, Malaysia :
There were sharp fluctuations in feedstock and product prices in Asia, which led to below targeted volumes and margins. Again this was mainly in H2 of the year but impacted the whole year''s performance. Despite this, the company was able to maintain profitable performance during the year.
Our subsidiary also initiated restructuring of Maleic Anhydride sales across various markets in South East Asia, India, Middle East and Europe for maximizing its margins.
The MA derivatives project was recently commissioned. Trial production to stabilize the operations is underway. These are used as additives in water-based coatings, adhesives, emulsions, etc. Our product quality meets international standards and is under trials at various customers for acceptance and placement of orders. This project was fully funded by the subsidiary''s internal cash flows - a result of their working capital management initiatives.
During H2, the Board of the subsidiary revamped it''s management team; a new Managing Director Mr. Ambrish Maheswari took charge- he has over 35 years of experience in Technology, Projects, and Business Management at senior levels in a global environment. He joined us from the Aditya Birla group, where he was the Managing Director of one of the group''s companies in Thailand.
Besides him, they have inducted a new Manufacturing head & executive team, and have also set up a Technology & Project group.
These will help the company improve operations; and to implement a further expansion in capacity in Maleic Anhydride that they are now planning.
STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB) |
Year Ended 31 Mar 2019 |
Year Ended 31 Mar 2018 |
Revenue from Operations |
42.40 |
51.65 |
Other Income |
0.55 |
0.03 |
Total Revenue |
42.95 |
51.68 |
Gross Profit / (Loss) before Interest, Finance Charges and Depreciation (EBITDA) |
6.94 |
9.39 |
Interest and Finance Charges |
0.08 |
0.60 |
Profit / (Loss) before Depreciation and Tax |
6.86 |
8.79 |
Depreciation |
3.13 |
3.23 |
Profit / (Loss) before Tax (PBT) |
3.73 |
5.56 |
Provision for Tax |
0.42 |
- |
Profit / (Loss) after Tax |
3.31 |
5.56 |
Add : Provision for Deferred Tax |
0.57 |
(1.36) |
Profit / (Loss) after Tax (PAT) |
2.74 |
4.20 |
GROWTH AND NEW PROJECTS :
While there are many challenges current and new, our abilities to manage these we have a strong base and a good reputation with our suppliers, customers and stakeholders, built over many decades.
The Management and Operating teams are highly motivated and capable. We are further strengthening our teams and our systems to manage the planned growth and challenges ahead.
The markets for our products are strong, and we are creating the needed diversity in products, customers and geographies to address vagaries.
Two years ago we started on investments in modernization in our older plants in India & Malaysia, and growth in product range and capacity in Malaysia and now in western India.
We are confident of prospects, despite the increased volatility worldwide.
Phthalic Anhydride:
The company will cater to the growing demand of the product from its modernized facility in Ranipet in Tamil Nadu and from its new facility in Dahej, Gujarat now under implementation. These will improve efficiencies and cost competitiveness, besides serve our major customers in western India more effectively.
Efforts are on with the Government of India by the chemical industry to address the injury caused to domestic production by unfavorable FTAs and Trade Policies and the surging imports of various products.
Subsidiary - Optimistic Organic Sdn Bhd., Malaysia:
The plants at OOSB need to be expanded & modernized to deliver higher production and to deliver the cost efficiencies of modern plants, with current global standards of safety and reliability.
The initial design work is in progress. They propose to fund this project over the next two years largely with their internal cash flows, supplemented by borrowing. It will add over 50% to their capacity, and bring down costs, both due to technology and scale.
Additional production of Maleic Anhydride will be sold to the customers in Europe, Middle East, India, South East Asia and Japan catering to the growing demand in these market segments.
Food and Feed Ingredients
Production from the revamped facility in India, will enable the company to address the growing requirements both in the domestic and international markets in the ensuing year FY-20. It will also help in ensuring market seeding and in-depth development for the product in the US and Europe ahead of the project being evaluated.
This project under final stages of evaluation, is designed to produce these food ingredients & fine chems and their intermediates, in the US; this is proposed in an integrated unit, based on the large volumes of low-cost raw material from shale gas, available locally.
Your company is in the final stages of studying the project viability. Negotiations for the site, raw materials, state incentives and other aspects are nearing a final stage and your company expects to be ready to start investing in the project within the next few months. This investment will substantially increase the footprint of your company as a player in these products globally, and prepare the basis for future growth in bulk chemical products and these and many other fine chemicals, based out of the best feedstock location worldwide.
Funding - for Operations and Investments Our Balance Sheets on a stand-alone & consolidated basis are robust and our cash flows over the last few years have been good. This has given us the resources and the confidence to invest in the future - in India and overseas. We remain conservative in borrowings and leverage.
Risk Management:
Two years ago, we improved the rigour of risk management approach - with an external specialist, supervised by a subcommittee which includes experienced Directors and members from the management team.
A large number of major and minor prospective risks have been identified both internal and external to the company. These include strategic, supply chain, business, financial, safety, fraud, efficiency, competition, succession and a host of other aspects. These are evaluated based on priorities, and a structured programme of mitigation and review being put in place. This is an ongoing exercise.
Our People
We are fortunate to have a deeply motivated team of managers and staff, across the company.
As we informed you last year, your Company started a revamp of the management structure and Teams in 2012.
Over these years, this has led to improved competence in Manufacturing & Technology, in supply chain, Business & Marketing, and in Finance, Safety, Sustainability and Compliance.
To manage future growth, a programme of staff & leadership development and succession planning was initiated two years ago, aligned with ongoing performance improvement programmes. This has started showing initial results.
On your behalf and on behalf of the Board, we thank all our employees for their hard work and outstanding commitment to your Company.
Our Associates
We have a close relationship with the many associates in our business- our Customers, Bankers, Regulatory Agencies, Suppliers, Distributors, and the many service providers and many specialist consultants. We treat them as partners in our business and developed into rewarding and close relationships with them.
BOARD AND MANAGEMENT
The Board of your Company consists of
- The Chairman & Managing Director - Mr. R. Parthasarathy
- Two Executive Directors: -
- Mr. P.M.C. Nair: Director (Manufacturing & Projects)
- Ms. Ramya Bharathram: Director-Strategic Initiatives and Chief Financial Officer
- Six Independent Non-Executive Directors:
- Mr. R. Ravi Shankar
- Mr. N. Subramanian
- Mr. Raj Kataria
- Mr. Dhruv Moondhra
- Mr. Arun Ramanathan
- A Non-Executive Director:
- Mr. R. Sampath - Chairman - Ultramarine and Pigments Ltd.
- An Additional Director:
- Mr. Rajeev M Pandia They are supported closely by
- Mr. C.G. Sethuram - Chief Executive Officer
- Mr. T. Rajagopalan - Company Secretary And the Business and Functional Heads
- Mr. S.V.S Rama Raju - President
- Mr.S. Venkatraghavan - President
- Mr. Sanjeev Gokhale - Vice President-International Marketing
- Mr B. Krishnamurthy - Sr. General Manager-Finance During the year, your Board has inducted (at its meeting held on 24th July, 2018) Mr. Rajeev M Pandia as an Additional Director. As his term of appointment expires on the conclusion of the ensuing Annual General Meeting, the Board recommends his appointment as an Independent Director of the Company under Sec.149 of the Companies Act, 2013.
The term of appointment of the Chairman and Managing Director, Mr. R. Parthasarathy will be expiring as on July 31, 2019, and the Board recommends his re-appointment as the Chairman and Managing Director of the Company for a further period of three years from August 01, 2019.
The term of four Independent Directors of the Company ends on August 5, 2019. Hence it is proposed to reappoint them at the ensuing Annual General Meeting.
Your Directors play a very active role in the Company. They bring in expertise in Business Strategy and Management, Technology, Finance & Accounting, Governance, Project Appraisal & Management, Government Relations.
Their interaction with the management team is frequent and intense, at the Board and Committees, through reviews, suggestions, criticisms & advice to the management team over the last 7 years.
The executive management team in turn has been very transparent in presenting and discussing initiatives & plans and failures, issues & responses.
This healthy and open interaction has been of immense value to the governance, health and growth of the company.
The Committees in the Board, especially the Business Review Committee and the Audit Committee met often and participated in depth by setting goals, reviewing performance, correcting slippages and monitoring execution.
The Nomination & Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been active in their respective roles.
Further details of these are given in the Corporate Governance Report.
SOCIAL RESPONSIBILITY
Your Company continues to play an active and important role in the welfare of the local communities.
The Founders of your Company, Mr.N.S. Iyengar and Mr. N.R. Swamy had set up the Thirumalai Charity Trust (TCT)in 1970, and the Akshaya Vidya Trust (AVT) in 1994.
We support them financially and through management reviews and in their infrastructure planning & development process.
The TCT works in Vellore district where our main Indian manufacturing site is located, since 1983, providing services in Community Healthcare, Women''s Empowerment, Disability, De-addiction, and Village Development.
The TCT founded and operates the Thirumalai Mission Hospital, which provides primary healthcare in 315 villages, covering over 160,000 people. The Hospital provides both out-patient and in-patient services through departments of General Medicine, Emergency services, Intensive Medical Care, General Surgery, Pediatrics, Obstetrics, Gynecology, Orthopedics, ENT, Dentistry, Physiotherapy, De-addiction & Rehabilitation.
With our company''s support, the Thirumalai Mission Hospital has set up a separate center for Non-Communicable Diseases such as Cardiovascular, Diabetes, Thyroid disorders, Endocrinology, Obesity, Osteoporosis, etc.
This addresses a critical need of the community.
The Vedavalli Vidyalaya Schools (with 3 schools at 2 campuses), managed by the Akshaya Vidya Trust, have around 2,600 students, out of whom 70% are from rural families.
Their performance is reviewed periodically by the Company''s CSR Committee.
Industrial Relations:
Industrial Relations during the year under review continued to be very cordial.
Finance
All taxes and statutory dues have been paid on time. Payment of interest and installments to the Financial Institutions and Banks are being made as per schedule. Your Company has not collected any Fixed Deposits during the Financial Year.
Contribution to the Exchequer:
The amounts paid to the Central and State Exchequer by way of GST, Customs duties (incl. paid to supplier), Income Tax and other taxes, is about '' 1,828 Million on Gross Sales of about '' 9,943 Million (Previous Year '' 2,346 Million on Gross Sales of about '' 10,372 Million).
Contribution to the Exchequer is about 18.38 % of your Company''s Sales.
Exports:
Calculated on FOB basis, Exports amounted to '' 1,000 Million (previous year '' 1,430 Million)
Particulars of loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Related Party Transactions
All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the financial year were in the ordinary course of business and on an arm''s length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interests of the Company. Suitable disclosure as required by the Accounting Standards (Ind As 24) has been made in the notes to the Financial Statements.
The Board has approved of a policy for related party transactions which has been uploaded on the Company''s website.
Directors'' Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
i) In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
ii) We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period.
iii) We have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) We have prepared the Annual Accounts on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Business Risk Management
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks. The Company has constituted a Business risk management Committee and the details of the Committee are as under:
Sl. No. |
Name of member |
Category |
1 |
Mr. Dhruv Moondhra |
Independent Director |
2 |
Mr. R. Parthasarathy |
Managing Director |
3 |
Mrs. Ramya Bharathram |
Executive Director/CFO |
4 |
Mr. C.G.Sethuram |
Chief Executive Officer |
5 |
Mr. P.M.C. Nair |
Executive Director |
6 |
@Mr. P. Krishnamooorthy |
Chief Financial Officer |
@ till 31.05.2018
Vigil Mechanism / Whistle Blower Mechanism
The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
Corporate Social Responsibility (CSR) Committee
The Committee recommended continuing support for the Thirumalai Charity Trust''s Health and Rural development projects and for the Akshaya Vidya Trust''s Educational programmes.
The composition of the Corporate Social Responsibility Committee is given below:
S.No. |
Name of the Director |
Category |
1. |
Mr. N. Subramanian |
Independent Director |
2. |
Mr. Raj Kataria |
Independent Director |
3. |
Mr. R. Sampath |
Director (Promoter) |
Total Expenditure on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):
The Company''s total spending on CSR is 1.53% of the average profit after taxes in the previous three financial years towards
Health and Sanitation Programmes more details given in the Annexure - A.
Statement pursuant to Listing Agreement
Your Company''s shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.
Report on Corporate Governance
The Report on Corporate governance is annexed herewith. Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and under obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, board culture, execution and performance of specific duties, obligations and governance.
A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
Appraisal of Board''s performance
It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board.
Board evaluation contributes significantly to improved performance and aims at,
- Improving the performance of Board in line with the corporate goals and objectives.
- Assessing the balance of skills, knowledge and experience on the Board.
- Identifying the areas of concern and issues to be focused on for improvement.
- Identifying and creating awareness about the role of Directors individually and collectively as Board.
- Fostering team work among the members of the Board.
- Effective coordination between the Board and Management.
- Overall growth of the organization
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by the Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.
Statutory Auditors
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. AAC-2085) were appointed as the statutory auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 29, 2017, to hold office from the conclusion of the Forty Third AGM till conclusion of the Forty Eighth AGM to be held in the year 2021.
Internal Auditors
The Internal Auditors M/s. M.S. Krishnaswamy & Co have played an important role in strengthening the internal controls within the Company. The Company''s System Auditors M/s. Aneja Associates contributed significantly in improving our Business processes and our compliance & governance systems and practices.
Cost Auditors
Mr. G. Sundaresan, Cost Accountant, was appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during the Financial Year 2018-19. The Cost Audit Report was filed with MCA, Government of India, by the Company on August 16, 2018, well before September 30, 2018, the due date of filing for the Financial Year 2017-18.
Secretarial Audit
The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for the Financial Year 2018-19. The Secretarial Audit Report for the Financial Year ended March 31, 2019 is attached to this Report. The Secretarial Audit Report does not contain any qualification, or reservations or adverse remark.
Web link of Annual Return
Pursuant to provisions of section 92(3) and Section 134
(3) (a) of the Companies Act, 2013 a copy of Annual Return of the Company for the year ended March 31, 2019 will be placed on the website of the company at http://www. thirumalaichemicals.com
Personnel
In terms of the provisions of section 197(12) of the Companies Act, 2013 read with the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the Annexure B to the Directors'' report.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013:
a) The ratio of the remuneration of each Director to the median employee''s remuneration for the financial year and such other details as prescribed is as given below:
Name of Director Ratio
1. Mr. R. Parthasarathy (Managing Director) 95.72: 1
2. Mrs. Ramya Bharathram (Executive Director and CFO*) 41.08 : 1
3. Mr. P. Mohana Chandran Nair (Executive Director) 16.74 : 1
For this purpose, sitting fees paid to the Directors have not been considered as remuneration.
b) The percentage increase in remuneration of Managing Director, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:
Mr. R. Parthasarathy - (Managing Director) : (13.27)%
Mr. T. Rajagopalan - (Company Secretary) : (1.4)%
Mrs. Ramya Bharathram, Whole time Director, was appointed as the Chief Financial Officer of the Company on July 24, 2018. No additional remuneration was paid to her for functioning as CFO.
c) The percentage increase in the median remuneration of employees in the Financial Year: 0.37 %
d) The number of permanent employees on the rolls of Company: 487
e) The explanation on the relationship between average increase in remuneration and Company performance:
The Company''s PAT has declined from 1,440 Million to 961 Million, a decrease of 33% against which the average decrease in remuneration is 19%;
f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:
Name |
Designation |
Remuneration IN ''* |
% Increase In Remuneration |
PAT in Mn |
% decrease in PAT |
Mr.R. Parthasarathy |
Managing Director |
32,703,257 |
(13.27) % |
964 |
( 33 )% |
@Mr.P. Krishnamoorthy |
Chief Financial Officer |
2,108,759 |
- |
||
#Mrs. Ramya Bharathram |
Whole Time Director and Chief Financial Officer |
14,034,800 |
(2.06)% |
||
Mr. T.Rajagopalan |
Company Secretary |
3,129,200 |
(1.40) % |
* It consists of Salary/Allowance & Benefits. @ CFO till 31.05.2018
# Appointed as a CFO on 24.07.2018
The remuneration of the Managing Director Mr. R. Parthasarathy includes the commission of '' 15 Mn, which works out to approximately 1.55 % to the net profit for the Financial Year ended March 31, 2019.
As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and Financial Performance of the Company.
g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the Current Financial Year and Previous Financial Year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
Date / Particulars # |
Issued Capital (No. of Shares) |
Closing Market Price per share '' |
EPS in Rs, |
PE Ratio |
Market Capitalization ('' in Cr) |
31.03.2018 |
102388120 |
170.26 |
14.06 |
12.11 |
1743.26 |
31.03.2019 |
102388120 |
88.30 |
9.03 |
9.77 |
904.09 |
Increase / (Decrease) |
NA |
(81.96) |
(5.03) |
(2.34) |
(839.17) |
% of Increase/ (Decrease) |
NA |
(48.14) |
(35.78) |
(19.32) |
(48.14) |
Issue Price of the share at the last Pubic Offer (IPO) |
1 |
||||
Increase in market price as on 31.03.2019 as compared to Issue Price of IPO |
87.30 |
||||
Increase in % |
8730 |
# figures recast to reflect corresponding to split of face value from 17th August 2018 (from '' 10 each to Re.1 each).
h) Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration 7.99% for Employees other than Managerial Personnel & 1.89 % for Managerial Personnel (KMP and Senior Management)
i) The key parameters for any variable component of remuneration availed by the Directors:
Except Mr. R. Parthasarathy (Managing Director), Mrs. Ramya Bharathram (Executive Director) and Mr. P. Mohana Chandran Nair, (Executive Director), no Directors have been paid any remuneration, as only sitting fees are paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits as per the provision of sec.197 of the Companies Act, 2013.
j) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year: Not Applicable k) If remuneration is as per the remuneration policy of the Company: Yes
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars required to be included in terms of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-C.
Cautionary Statement
Company''s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation, plant breakdowns, industrial relations, etc.
Acknowledgements
The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review.
The Directors also appreciate and value the contributions made by the employees of our Company at all levels.
For and on behalf of the Board of Directors
Mumbai R. Parthasarathy R. Ravi Shankar
6th May 2019 Managing Director Director
(DIN:00092172) (DIN:01224361)
Mar 31, 2018
To,
The Members
Thirumalai Chemicals Limited
The Directors are pleased to present to you the Forty Fifth Annual Report & Audited Statement of Accounts of the Company for the year ended March 31, 2018. The Management Discussion and Analysis has also been incorporated into this report.
STANDALONE FINANCIAL RESULTS
(Rs. In Million)
Item |
Year Ended |
Year ended |
31 Mar 2018 |
31 Mar 2017 |
|
Revenue from Operations |
10372 |
9446 |
Other Income |
100 |
78 |
Total Revenue |
10472 |
9524 |
Gross Profit / (Loss) before |
2390 |
1403 |
Interest, Finance Charges and |
||
Depreciation (EBITDA) |
||
Interest and Finance Charges |
109 |
146 |
Profit / (Loss) before |
2281 |
1257 |
Depreciation and Tax |
||
Depreciation |
104 |
140 |
Profit / (Loss) before Tax (PBT) |
2177 |
1117 |
Provision for Tax |
(737) |
(390.0) |
Profit / (Loss) after Tax |
1440 |
727 |
Add : Provision for Deferred Tax |
- |
14 |
Profit / (Loss) after Tax (PAT) |
1440 |
741 |
- The Net Revenue including Export Earning (FOB) during the year was Rs. 1430 Million (Previous Year: Rs. 1088.8 Million).
CONSOLIDATED FINANCIAL RESULTS (Rs. In Million)
Year Ended 31 Mar 2018 |
Year ended 31 Mar 2017 |
|
Revenue from Operations |
13376 |
11158 |
Other Income |
68 |
41 |
Total Revenue |
13444 |
11199 |
Gross Profit / (Loss) before |
2963 |
1618 |
Interest and Finance Charges |
||
and Depreciation (EBITDA) |
||
Interest and Finance charges |
128 |
167 |
Profit / (Loss) before |
2835 |
1451 |
Depreciation and Tax |
||
Depreciation |
305 |
358 |
Profit / (Loss) before Tax (PBT) |
2530 |
1093 |
Provision for Tax |
(740) |
(391) |
Profit / (Loss) after Tax |
1790 |
702 |
Add : Provision for Deferred Tax |
(86) |
5 |
Profit / (Loss) after Tax (PAT) |
1704 |
707 |
Dividend
Based on the Companyâs performance, the Directors are pleased to recommend for approval of the members, a dividend of Rs. 20/- per share for the year ended March 31, 2018 (previous year Rs. 18.75 per share was paid).
The final dividend on equity shares, if approved by the shareholders, would involve a cash outflow of Rs. 247 Million, including dividend taxes.
Subsidiaries
Cheminvest Pte Ltd. Singapore is a 100 % investment subsidiary of your Company and it has a step-down subsidiary viz. Optimistic Organic Sdn. Bhd., Malaysia (OOSB), a manufacturing Company in Malaysia and another viz. Lapiz Europe Limited in the United Kingdom.
Particulars of loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Related Party Transactions
All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the financial year were in the ordinary course of business and on an Armâs length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interests of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
The Board has approved of a policy for related party transactions which has been uploaded on the Companyâs website.
Directorsâ Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
i) In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
ii) We 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 profit or loss of the Company for that period.
iii) We have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) We have prepared the annual accounts on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Business Risk Management
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks. The Company has constituted a Business Risk Management Committee and the details of the Committee are as under:
Sl. No. |
Name of member |
Category |
1 |
Mr. Dhruv Moondhra |
Independent Director |
2 |
Mr. R. Parthasarathy |
Managing Director |
3 |
Mrs. Ramya Bharathram |
Executive Director |
4 |
Mr. C.G.Sethuram |
Chief Executive Officer |
5 |
Mr. P.M.C. Nair |
Executive Director |
6 |
Mr. P.Krishnamoorthy |
Chief Financial Officer |
Vigil Mechanism / Whistle Blower Mechanism
The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
Corporate Social Responsibility (CSR) Committee
The Committee recommended continuing support for the Thirumalai Charity Trustâs Health and Rural development projects and for the Akshaya Vidya Trustâs Educational programmes.
The composition of the Corporate Social Responsibility Committee is given below:
S.No. |
Name of the Director |
Category |
1. |
Mr. N. Subramanian@ |
Independent Director |
2. |
Mr. Raj Kataria |
Independent Director |
3. |
Mr. R. Sampath |
Director (Promoter) |
4. |
Mr. P. Shankar * |
Independent Director |
@ Inducted from 28/10/2017 # Ceased from 31/07/2017
A detailed note is given in the Corporate Governance report.
Total Expenditure on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):
The Companyâs total spending on CSR is 2.97% of the average profit after taxes in the previous three financial years towards Health Programmes.
Statement pursuant to Listing Agreement
Your Companyâs shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.
Report on Corporate Governance
A Report on Corporate governance is annexed herewith. The Auditorsâ Report on the same is also annexed. Extracts of annual return and Secretarial Audit report are attached as required u/s 134 of the Companies Act, 2013.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and under obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from Directors, covering various aspects of the Boardâs functioning such as adequacy of the composition of the Board and its Committees, Board culture, Execution and Performance of specific duties, obligations and governance.
A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
Appraisal of Boardâs performance
It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board.
Board evaluation contributes significantly to improved performance and aims at,
- Improving the performance of Board in line with the corporate goals and objectives.
- Assessing the balance of skills, knowledge and experience on the Board.
- Identifying the areas of concern and issues to be focused on for improvement.
- Identifying and creating awareness about the role of Directors individually and collectively as Board.
- Fostering Team work among the members of the Board.
- Effective Coordination between the Board and Management.
- Overall growth of the organization
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by your Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.
Statutory Auditors
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. AAC-2085) were appointed as the statutory auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 29, 2017, to hold office from the conclusion of the Forty Third AGM till conclusion of the Forty Eighth AGM to be held in the year 2021.
Internal Auditors
The Internal Auditors M/s. M.S. Krishnaswamy & Co have played an important role in strengthening the Systems and internal Controls within the Company. The Companyâs System Auditors M/s. Aneja Associates also contributed significantly in improving the System Operating Procedures.
Cost Auditors
Mr. G. Sundaresan, Cost Accountant, was appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during the Financial Year 2017-18. The Cost Audit Report was filed with MCA, Government of India, by the Company on August 08, 2017, well before September 30, 2017, the due date of filing for the Financial Year 2016-17.
Secretarial Audit
The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit Report for the Financial Year ended March 31, 2018 is attached to this Report. The Secretarial Audit Report does not contain any qualification, or reservations or adverse remark.
Extracts of Annual Return
Extracts of Annual Return of the Company for the year ended March 31, 2018 are attached to this Report.
Personnel
In terms of the provisions of section 197(12) of the of the Companies Act, 2013 read with the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - the names and other particulars of employees are set out in the Annexure B to the Directorsâ report.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013:
a) The ratio of the remuneration of each director to the median employeeâs remuneration for the financial year and such other details as prescribed is as given below: Name of Director Ratio
1. Mr. R. Parthasarathy (Managing Director) 110.77 : 1
2. Mrs. Ramya Bharathram ( Executive Director) 42.10 : 1
3. Mr. P. Mohana Chandran Nair (Executive Director) 15.95 : 1
For this purpose, Sitting fees paid to the Directors have not been considered as remuneration.
b) The percentage increase in remuneration of Managing Director, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year:
Mr. R. Parthasarathy - (Managing Director) : 36.10 %
Mr. P. Krishnamoorthy - (Chief Financial Officer) : 16.81 %
Mr. T. Rajagopalan - (Company Secretary) : 19.68 %
c) The percentage increase in the median remuneration of employees in the Financial Year: 7.18 %
d) The number of permanent employees on the rolls of Company: 461
e) The explanation on the relationship between average increase in remuneration and Company performance:
The Companyâs PAT has grown from Rs. 741 Million to Rs. 1440 Million, an increase of 94% against which the average increase in remuneration is 22.99%; and this increase is aligned with the Compensation Policy of the Company.
f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:
Name |
Designation |
Remuneration in â* |
% Increase in Remuneration |
PAT in Million* |
% Increase in PAT |
Mr.R. Parthasarathy |
Managing Director |
37,705,028 |
36.10 % |
1440 |
94% |
Mr. P. Krishnamoorthy |
Chief Financial Officer |
5,595,800 |
16.81 % |
||
Mr. T. Rajagopalan |
Company Secretary |
3,173,670 |
19.68 % |
*It consists of Salary/Allowance & Benefits.
The remuneration of the Managing Director Mr. R. Parthasarathy includes the commission of Rs. 20 Million, which works out to approximately 1.39 % to the net profit for the Financial Year ended March 31, 2018.
It may be noted that the increase in the remuneration is mainly due to the significant increase in Net Profit, and commission as a result.
As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and Financial Performance of the Company.
g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
Date |
Issued Capital (No. of Shares) |
Closing Market Price per share Rs. |
EPS in Rs. |
PE Ratio |
Market Capitalisation (Rs. in Cr) |
31.03.2017 |
10238812 |
883.35 |
72.41 |
12.20 |
904.45 |
31.03.2018 |
10238812 |
1702.60 |
140.63 |
12.11 |
1743.26 |
Increase / (Decrease) |
NA |
819.25 |
68.22 |
(0.09) |
838.81 |
% of Increase/ (Decrease) |
NA |
92.74 |
94.21 |
(0.74) |
92.74 |
Issue Price of the share at the last Pubic Offer (IPO) |
10 |
||||
Increase in market price as on 31.03.2018 as compared to Issue Price of IPO |
1692.60 |
||||
Increase in % |
16926 |
h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration is 11.36 % for Employees other than Managerial Personnel & 17.83 % for Managerial Personnel (KMP and Senior Management)
i) The key parameters for any variable component of remuneration availed by the Directors:
Except Mr. R. Parthasarathy (Managing Director), Mrs. Ramya Bharathram (Executive Director) and Mr. P. Mohana Chandran Nair, (Executive Director), no Directors have been paid any remuneration, as only sitting fees are paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits as per the provision of sec.197 of the Companies Act, 2013.
j) The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year: Not Applicable
k) If remuneration is as per the remuneration policy of the Company: Yes
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars required to be included in terms of Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-C.
Acknowledgements
The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review.
The Directors also appreciate and value the contributions made by the employees of our Company at all levels.
For and on behalf of the Board of Directors
Mumbai R. Parthasarathy R. Ravishankar
3rd May 2018 Managing Director Director
(DIN:00092172) (DIN:01224361)
Mar 31, 2017
To,
The Members
Thirumalai Chemicals Limited
The Directors are pleased to present to you the Forty Fourth Annual Report & Audited Statement of Accounts of the Company for the year ended March 31, 2017. The Management Discussion and Analysis has also been incorporated into this report.
(Rs. In Mn)
STANDALONE FINANCIAL |
Year Ended |
Year ended |
RESULTS |
31 Mar 2017 |
31 Mar 2016 |
Revenue from Operations |
8,614.7 |
7,804.4 |
Other Income |
77.7 |
116.7 |
Total Revenue |
8,692.4 |
7,921.1 |
Gross Profit / (Loss) before |
1,422.1 |
957.7 |
Interest, Finance Charges and |
||
Depreciation |
||
Interest and Finance Charges |
150.3 |
209.7 |
Profit / (Loss) before |
1,271.8 |
748.0 |
Depreciation and Tax |
||
Depreciation |
141.4 |
107.9 |
Profit / (Loss) before Tax |
1,130.4 |
640.1 |
Provision for Tax |
(390.0) |
(235.0) |
Profit / (Loss) after Tax |
740.4 |
405.1 |
Add : Provision for Deferred Tax |
14.2 |
22.2 |
Profit / (Loss) after Tax |
754.6 |
427.3 |
Balance in Profit & Loss Account |
971.8 |
667.8 |
Less : Adjustments related to |
0.0 |
0.0 |
Depreciation |
||
Add : Profit / (Loss) for the year |
754.6 |
427.3 |
Profit available for |
1,726.4 |
1,095.1 |
appropriation |
- On a Net Revenue from operation of Rs.8,614.7 Mn (Previous Year: Rs.7804.4 Mn)
- the Gross Profit of the Company amounted to Rs.1,422. 1 Mn (Previous Year: Rs.957. 70 Mn).
- After providing for Interest & Finance charges, and Depreciation, the Profit after Tax is Rs.754.6 Mn (Rs.427.3 Mn in the previous year).
- The Net Revenue includes Export Earning (FOB) of Rs.1,088.8 Mn (Previous Year: Rs.1023.8 Mn),
- and Other Income of Rs.77. 7 Mn (Previous Year: Rs.116.7 Mn),
Dividend
Based on the Companyâs performance, the Directors are pleased to recommend for approval of the members a dividend of Rs.18.75 per share for the year ended March 31, 2017 (previous year a total of Rs.10 per share was paid by two interim dividends)
The final dividend on equity shares, if approved by the shareholders, would involve a cash outflow of Rs.231.1 Mn, including dividend taxes.
Subsidiaries
Tarderiv International Pte Ltd., Singapore is a 100 % investment subsidiary of your Company and it has a wholly owned step-down subsidiary , Cheminvest Pte Ltd. Singapore, which in turn owns 100% of Optimistic Organic Sdn. Bhd., Malaysia (OOSB) a manufacturing Company in Malaysia.
Business Performance
Your Company has improved its performance in 2016-17. The markets for our products were robust. We were able to make significant improvements in Business efficiencies and Margins, Costs, Working Capital management and Finance Charges. These have helped us improve profitability and Cash flows.
Indian demand for most products is growing steadily. We also see an increasing demand for better products & services, and in newer applications. We have responded proactively to these by better packaging, logistics & customer service, and product differentiation to help us retain and improve our market share.
Both within India and in our many overseas markets , Thirumalai Chemicals Limited is a respected and preferred supplier.
On the Trade front, the FTAs that India has signed in the last decade with ASEAN, Singapore, Thailand and South Korea have resulted in a ballooning of low priced imports of Phthalic Anhydride and many other products. Similarly over the past two years, our customers are faced by surging imports of their products - Plasticizers, Resins, Compounds. This is driven by desperate companies in countries having large surpluses - the result of slowdown of Chinese and Local demand. The Zero Duty on these products caused by the FTAs further supports them, at the expense of Indian manufacturing, jobs and deficits. India has become the natural dumping ground for surpluses at any price.
We are now working with the Government, with our Customers and Industry Associations to see how this can be addressed. The GOI has been very helpful and is deeply concerned.
Meanwhile, over the past few years we have made sustained efforts to improve competitiveness through a number of initiatives. Most of these have reached maturity. The steady improvement over the past few years and the positive results during the year is a result of these initiatives.
The Company is now far more resilient to fight competition, and to grow.
Phthalic Anhydride Business :
The business unit performed well.
We have had some growth in Phthalic Anhydride. But this was partly muted by the inverted duty structure between our Product and Raw material.
Largely due to active representations and work by us and our Industry, the Government in its recent Budget, reduced the import duty for our main feedstock to Zero from 2.5% ( this was earlier reduced from 5% to 2.5%). This has given us some relief. Your Companyâs successes in efficiency improvement and management of cost, volatility, and supply chain helped us mitigate these structural negatives. We managed to maintain and improve operating margins and cash flows.
We have touched on our plans for technology change, manufacturing revamp and capacity additions, later in this report.
Food Ingredients and Fine Chemicals:
The Food Ingredients and Fine Chemicals businesses also did well.
A first Phase expansion of these units was completed recently, and has reached full capacity.
Further increases are under execution this year.
Domestic marketing for these products has been strengthened and we have started on a programme of product customization and product differentiation to add value. These initiatives involve working closely with the customers so that we can satisfy their new and changing functional requirements.
This enables us to improve our customer base in these products globally, and forms the basis for our growth plans.
Subsidiary - Optimistic Organic Sdn Bhd., Malaysia:
Our Subsidiary M/s Optimistic Organic Sdn, Bhd., (OOSB) has completed its Maleic Anhydride expansion. As this was built within a functioning petrochemical plant, the plant went through a number of shutdowns which caused production and sales losses during the expansion works and start-up. The ramp up to full capacity has also been slow, affecting their performance during the year. In spite of loss of volumes their cash flows during the past years were decent and largely funded the expansion and refurbishment programme.
We now expect better performance from them during FY-18. The subsidiary is diversifying into downstream derivatives and value added products, which will make it stronger. The location of OOSB provides strong advantages in raw materials, utilities and logistics.
These plans are designed to dovetail with our growth strategies.
Industrial Relations:
Industrial Relations during the year under review continued to be very cordial.
Financial and Operating Performance:
Your Company achieved a Net profit of Rs.754.6 Mn compared to Net profit of Rs.427.3 Mn in the previous year, a Gross Profit before Interest and Finance Charges and Depreciation of Rs.1,422.1 Mn (previous year Rs.957.70 Mn) and a Profit Before Depreciation and Tax of Rs.1,271.80 Mn (previous year Rs.748.0 Mn).
Finance
All taxes and statutory dues have been paid on time. Payment of interest and installments to the Financial Institutions and Banks are being made as per schedule. Your Company has not collected any Fixed Deposit during the Financial Year. Contribution to the Exchequer:
The amounts paid to the Central and State Exchequer by way of Excise Duty, Sales Tax, Customs duties ( incl. paid to supplier), Income Tax , etc., is about Rs.1,571.5 Mn on Gross Sales of about Rs.8,614.7 Mn .
Contribution to the Exchequer is about 18 % of your Companyâs Sales
Exports:
Calculated on FOB basis, Exports amounted to Rs.1,088.8 Mn (previous year Rs.1,023.8 Mn)
Particulars of loans, guarantees or investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Related Party Transactions
All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the financial year were in the ordinary course of business and on an Armâs length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of clause 23 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the financial year which were in conflict with the interests of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
The Board has approved a policy for related party transactions which has been uploaded on the Companyâs website.
Directorsâ Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
i) In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
ii) We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.
iii) We have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) We have prepared the annual accounts on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Business Risk Management
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks. Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee and the details of the Committee are as under:
Sl. No. |
Name of member |
Category |
1 |
Mr. Dhruv Moondhra |
Independent Director |
2 |
Mr. R. Parthasarathy |
Managing Director |
3 |
Mrs. Ramya Bharathram |
Executive Director |
4 |
Mr. C.G.Sethuram |
Chief Executive Officer |
5 |
Mr. P.M.C. Nair |
Executive Director |
6 |
Mr. P.Krishnamoorthy |
Chief Financial Officer |
Vigil Mechanism / Whistle Blower Mechanism
The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
Corporate Social Responsibility (CSR) Committee
The Committee recommended continuing support for the Thirumalai Charity Trustâs Health and Rural development projects.
The composition of the Corporate Social Responsibility Committee is given below:
Sl.No. |
Name of Director |
Category |
1 |
Mr. P. Shankar |
Independent Director |
2 |
Mr. Raj Kataria |
Independent Director |
3 |
Mr. R. Sampath |
Director |
A detailed note is given in the Corporate Governance report.
Total Expenditure on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):
The Companyâs total spending on CSR is 2.05 % of the average net profit in previous three financial years towards Health and Education Programmes.
Statement pursuant to Listing Agreement Your Companyâs shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.
Report on Corporate Governance
A Report on Corporate governance is annexed herewith. The Auditorsâ Report on the same is also annexed. An extract of annual return and Secretarial Audit report are attached as required u/s 134 of the Companies Act, 2013.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from Directors, covering various aspects of the Boardâs functioning such as adequacy of the composition of the Board and its Committees, Board culture, Execution and Performance of specific duties, obligations and governance.
A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
Appraisal of Boardâs performance
It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board. Board evaluation contributes significantly to improved performance and aims at,
- Improving the performance of Board towards corporate goals and objectives.
- Assessing the balance of skills, knowledge and experience on the Board.
- Identifying the areas of concern and issues to be focused on for improvement.
- Identifying and creating awareness about the role of Directors individually and collectively as Board.
- Building Team work among Board members.
- Effective Coordination between Board and Management.
- Overall growth of the organization
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by your Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.
Statutory Auditors
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) were appointed as the statutory auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 29, 2016, to hold office from the conclusion of the Forty Third AGM till conclusion of the Forty Eighth AGM to be held in the year 2021.
Internal Auditors
The Internal Auditors M/s. M.S. Krishnaswamy & Co have played an important role in strengthening the Systems and internal Controls within the Company. The Companyâs System Auditors M/s. Aneja Associates also contributed significantly in improving the System Operating Procedures.
Cost Auditors
Mr. G. Sundaresan, Cost Accountant, was appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during the Financial Year 2016-17. The Cost Audit Report was filed with MCA, Government of India, by the Company on August 02,2016, well before September 30, 2016, the due date of filing for the Financial Year 2015-16.
Secretarial Audit
The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for the Financial Year 2016-17. The Secretarial Audit Report for the Financial Year ended March 31, 2017 is attached to this Report. The Secretarial Audit Report does not contain any qualification, or reservations or adverse remark.
Extract of Annual Return
Extract of Annual Return of the Company for the year ended March 31, 2017 is attached to this Report
Personnel
In terms of the provisions of section 197(12) of the of the Companies Act, 2013 read with the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the Annexure A to the Directorsâ report.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013:
a) The ratio of the remuneration of each Director to the median employeeâs remuneration for the financial year and such other details as prescribed is as given below:
Name of Director Ratio
1. Mr. R. Parthasarathy (Managing Director) 87.23 : 1
2. Mrs. Ramya Bharathram (Executive Director) 45.89 : 1
3. Mr. P. Mohana Chandran Nair (Executive Director) 12.76 : 1 For this purpose, Sitting fees paid to the Directors have not been considered as remuneration.
b) The percentage increase in remuneration of Managing
Director, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year:
Mr. R. Parthasarathy (Managing Director) : NIL
Mr. P. Krishnamoorthy (Chief Financial Officer) : 44%
Mr. T. Rajagopalan (Company Secretary) : 28%
c) The percentage increase in the median remuneration of employees in the financial year : 9.38%
d) The number of permanent employees on the rolls of Company : 418
e) The explanation on the relationship between average increase in remuneration and Company performance:
The Companyâs PAT has grown from Rs.427.3 Mn to Rs.754.6 Mn, an increase of 76% against which the average increase in remuneration is 10.23%; and this increase is aligned with the Compensation Policy of the Company.
f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:
Name |
Designation |
Remuneration IN Rs. |
% Increase In Remuneration |
PAT Rs. in Mn |
% Increase in PAT |
Mr.R. Parthasarathy |
Managing Director |
27,703,527 |
NIL |
740.4 |
76 |
Mr.P. Krishnamoorthy |
Chief Financial Officer |
4,790,600 |
44 |
||
Mr. T. Rajagopalan |
Company Secretary |
2,651,870 |
28 |
* It consists of Salary/Allowance & Benefits.
The remuneration of the Managing Director Mr. R. Parthasarathy includes the commission of Rs.10 Mn , which works out to approximately 1.33 % to the net profit for the Financial Year ended March 31, 2017.
It may be noted that the increase in the remuneration is mainly due to the significant increase in Net Profit, and commission as a result.
As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and Financial Performance of the Company.
g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:
Date |
Issued Capital (No. of Shares) |
Closing Market Price per share Rs. |
EPS in Rs. |
PE Ratio |
Market Capitalisation (Rs. in Mn) |
31.03.2016 |
10,238,812 |
179.95 |
41.73 |
4.31 |
1,842.50 |
31.03.2017 |
10,238,812 |
883.35 |
73.71 |
11.98 |
9,044.50 |
Increase / (Decrease) |
NA |
703.40 |
31.98 |
7.67 |
7,202.00 |
% of Increase/ (Decrease) |
NA |
390.89 |
76.64 |
177.96 |
390.88 |
Issue Price of the share at the last Pubic Offer (IPO) |
10 |
||||
Increase in market price as on 31.03.2017 as compared to Issue Price of IPO |
873.35 |
||||
Increase in % |
8,733.50 |
h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration is 9.38 % for Employees other than Managerial Personnel & 37.98 % for Managerial Personnel (KMP and Senior Management)
i) The key parameters for any variable component of remuneration availed by the Directors:
Except for Mr. R. Parthasarathy (Managing Director), Mrs. Ramya Bharathram (Executive Director) and Mr. P. Mohana Chandran Nair, (Executive Director), no Directors have been paid any remuneration, as only sitting fees are paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits subject to the approval of the Shareholders at their meeting held on July 5, 2013.
j) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Not Applicable k) If remuneration is as per the remuneration policy of the Company: Yes
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars required to be included in terms of Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-B.
Cautionary Statement
Companyâs objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation, plant breakdowns, industrial relations, etc.
Acknowledgements
The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review. The Directors also appreciate and value the contributions made by the employees of our Company at all levels.
For and on behalf of the Board of Directors
Chennai R. Parthasarathy R. Ravishankar
20th May 2017 Managing Director Director
(DIN:00092172) (DIN:01224361)
Mar 31, 2014
The Directors present the FORTY FIRST ANNUAL REPORT AND AUDITED
STATEMENT OF ACCOUNTS of the Company for the year ended March 31, 2014.
(Rs. In Lakhs)
STANDALONE FINANCIAL RESULTS Year ended Year ended
31.03.2014 31.03.2013
Revenue from Operations 103,344 114,564
Income from Windmill Operation 137 192
Other Income 1584 816
105,065 115,572
Gross Profit / (Loss) before Interest and
Finance charges and
Depreciation 6,107 10,912
Interest and Finance charges 4,542 5,202
Profit / (Loss) before Depreciation and Tax 1,565 5,710
Depreciation 1,221 1,287
Profit / (Loss) before Tax 344 4,423
Provision for Current Tax 260 1,884
Profit / (Loss) after Current Tax 84 2,539
Provision for Deferred Tax 273 236
Profit / (Loss) after Tax 357 2,775
Balance in Profit & Loss Statement 5,621 4,041
5,978 6,816
APPROPRIATIONS
Dividend - 768
Tax on Dividend - 127
General Reserve - 300
Balance carried forward - 5621
5,978 6,816
On a Revenue from operation of Rs.103,344 Lakhs (Rs.114,564 Lakhs)
including Export earning on FOB basis of Rs.7,187 lakhs (Rs.6,595
lakhs), Income from windmill operation of Rs.137 Lakhs (Rs.192 Lakhs)
and Other Income of Rs.1584 lakhs (Rs.816 lakhs), the Gross Profit of
the Company amounted to Rs. 6,107 lakhs (proft of Rs.10,912 lakhs in
the previous year). After providing for Interest and Finance charges,
Depreciation, the Profit after Tax is Rs.357 lakhs (Rs.2,775 lakhs in
the previous year).
Dividend: Your Directors, intend to conserve the resource, have not
recommended for any dividend for financial year 2013-14 (Previous Year
total dividend  Rs.7.50 per share).
Subsidiaries : Tarderiv International Pte Ltd., Singapore is a
wholly-owned subsidiary of your Company and it has two step-down
subsidiaries viz., Cheminvest Pte Ltd, Singapore and Optimistic Organic
Sdn. Bhd., Malaysia.
MANAGEMENT''S DISCUSSIONS AND ANALYSIS
The Performance, Plans and Prospects of your Company are given below.
1. Scenario overview
2013-14 was a difficult year for the region and for India. India''s
growth in key sectors was fat, and in some sectors negative. This was
aggravated by high inflation for the third year in a row, large public
deficits and a sharp devaluation of the rupee and a mood of economic
crisis.
2. Your Companies Businesses:
Phthalic Anhydride (PA)
The PA business was badly impacted by low volumes and margins, since
the main customer segments viz., Construction, Plastics, Auto, and
Paints suffered deeply. The situation was further affected by the
Government''s Trade and Commerce policies, resulting in a food of low
priced import from around the world  which increased by 100% in the
last 6 - 8 months.
These resulted in capacity utilization falling sharply in the second
half. Unit costs are very dependent on capacity utilization; these two
factors lead to losses in the PA business.
The senior management team is actively working toward correcting the
unfair trade situation at a policy level, and we are now hopeful of
correction.
PA Derivatives
PA Derivatives business performed reasonably well; but demand was
stagnant.
Both in our PA and Derivatives businesses, your company''s Business &
Manufacturing teams are working on internal cost reduction projects
aimed at reducing manufacturing and sales cost in various areas -- in
energy, packing and logistics, finance and improving business
efficiencies.
The Food Ingredients Businesses
These businesses were positive contributors; this despite the slowdown
in the Indian market and in the export market in Europe.
These businesses continued to be profitable and to some extent mitigated
the loss from the PA business.
Overseas Subsidiary : Optimistic Organic Sdn. Bhd., (OOSB), Malaysia
Maleic Anhydride (MA) is a very versatile intermediate that goes into
many dozens of Specialty Applications in Foods, Polymers, Coatings,
Pharma and Specialty Chemicals.
Your overseas subsidiary M/s. OOSB registered a turnover of USD 45.25
million, (prev year USD 51.22 million), a decrease of 11.66 % over the
previous year, and a profit before tax of USD 2.46 million (prev year
USD 3.61 million).
The profit was impacted by the shut downs, especially for plant
refurbishments which are critical for the planned expansion.
The Subsidiary has witnessed a complete turnaround in the 2 years since
we acquired it fully: the Subsidiary has not only become profitable, but
has repaid a good part of its debt. The subsidiary has undertaken a 30%
capacity expansion largely funded by internal cash flows.
Management Team and Human Resources
Mr. Dhanpat Raj Dhariwal retired as CEO in end of October 2013.
He has played a key role during his tenure in improving the business
and manufacturing performance of the company.
He has been succeeded by Mr. C. G. Sethuram, a Chemical Engineer and
Management Graduate with about 30 years of experience in various
businesses within the Chemical industry.
Mr. P.M.C. Nair, a Chemical manufacturing veteran with more than 3
decades of experience, has joined as President- Manufacturing. Mr. Nair
has extensive experience in the Chemicals and Fertilizers Industry, and
last served as the Executive Director-Operations at RCF.
We are further strengthening the teams for the PA, MA and Food
Ingredient businesses units.
At the Board level,
- Mr. Atul Agarwal, who has been a Director and Chairman of the Audit
Committee of our company, and an active member of the Business review
committee of the Company, stepped down after 10 years of contributions
to our Company.
- Mr. Pradeep Rathi, Managing Director of Sudarshan Chemicals stepped
down after a long association with the company.
- Mr. S. Sridhar stepped down after many decades with the company.
Your Board places on record their deep sense of gratitude for the
contributions of Mr. Atul Agarwal, Mr. Pradeep Rathi and Mr. S.
Sridhar.
Our new Directors include:
- Mr. Ravi Shankar, FCA and Diplomate from IIM-Ahmedabad, is a Finance
Professional with extensive experience in Business Management, M&A and
Strategic Consultancy. He was a senior partner with Ernst and Young; He
is a member of the Audit Committee, Nomination & Remuneration
Committee, Business Review Committee and Corporate Social
Responsibility Committee.
- Mr. Raj Kataria is an experienced Investment Banker with over 20
years in Mergers and Acquisitions and Capital
Markets. He also has significant expertise in Company Law, and Corporate
Structuring matters; He is a member of the Audit Committee, Nomination
& Remuneration Committee, Stakeholders Relationship Committee and
Corporate Social Responsibility Committee.
- Mr. Dhruv Moondra is an entrepreneur, and Director & Chief Executive
Offcer of Arcelor Mittal Dhamm Processing Pvt Ltd. besides various
other companies. He is a graduate in Economics from Cornell University.
Systems, Audits and Governance:
We now have regular audits of Systems, Policies & Risks, along with
Transaction & Compliance audit, and Statutory Audit. All Auditors
report to the Audit Committee of the Board, and to the full Board.
The Business Review Committee of the Board reviews the budgets plans
and corrective actions on a regular basis with the management and
operations team. The Business Review Committee had 4 meetings in the
current year.
Social Responsibility:
Your company has since the very beginning been closely engaging with
the communities and people that it operates in, in many ways. These
activities are carried out through the Thirumalai Charity Trust (TCT)
and the Akshaya Vidya Trust (AVT). The TCT has been active since 1982
in Vellore District, Tamil Nadu in the empowerment of women,
development of micro businesses, supporting entrepreneurship, rural
health care, alcoholism rehab, social and health education, and in
aiding the disabled, in 300 villages.
The Thirumalai Mission Hospital provides Secondary and Specialised
healthcare for the communities of Vellore district.
The Thirumalai Mission Hospital (TMH) and the Vedavalli Vidyalaya
Schools operate with support from the Company. Now over 2500 children
are educated through the 3 VV schools at 2 campuses.
RISKS AND CONCERNS
1. While the domestic market in India is growing, aggressive and cheap
imports due to inverted duties and dumping are dampening domestic
manufacturing and may continue until government policy is corrected.
2. In our PA business, we are dependent on a single raw material
supplier. This could be a risk due to logistic constraints, and single
source risks. Your Company is working on diversifying our sources.
3. For PA derivatives, Alcohol availability continues to be a concern,
resulting in increased cost of alcohol  since for supply we have to
compete with Liquor and Petrol blending.
Awards and Recognitions:
The Company has participated in various important Competitions and
Programmes to benchmark and improve ourselves and motivate our
employees. The Company is recognized for its performance in Energy and
Water management, Ethical Business practices, Manufacturing Excellence
and in CSR / Social initiatives.
We have received the following Awards and Recognitions over the last
year: National Award Excellence in Energy Management, Ramakrishna Bajaj
National Quality Award, and CSR Excellence & Leadership, to mention a
few.
Employees:
Industrial relations with employees remained cordial during the year.
We thank our employees, for their sustained effort and commitment to
your Company.
Financial and Operating performance
Your Company achieved a Net Proft of Rs.357 lakhs compared to Net proft
of Rs. 2,775 lakhs in the previous year.
Contribution to Exchequer
The amounts paid to the Central and State Exchequer by way of Excise
Duty, Sales Tax, Customs duties (incl. paid to supplier), Income Tax,
etc. is about Rs.13,415 Lakhs on Net Sales of about Rs.103,344 Lakhs.
Contribution to the Exchequer is about 12.7% of your Company''s Sales.
Exports:
Calculated on FOB basis, Exports amounted to Rs.7,187 Lakhs (Rs. 6,595
lakhs).
Current Year Business
In the Phthalic Anhydride business, large volumes of imports have
affected sales in the domestic market. The market situation continues
to be challenging but your company is gearing itself to rise above
these.
The International markets present a difficult trade situation given the
volatility in prices of Raw material and in the finished product. The
Management and Operating teams are working to address these.
Continuous improvement in cost and efficiency will continue to be a
focus in the coming year.
In the Food Ingredients Business, the margins have improved, while
reducing costs. Active efforts are being taken to expand the market.
The Focus for FY 2014-15
The Management team has set itself the following key tasks:- 1) Work
towards early correction of the Inverted Duty, caused by various Trade
Agreements
2) Improve gross margins on all products
3) Improve raw material supply chain and costs, to derive significant
cost efficiencies
4) Drive down total cost -- manufacturing and post manufacturing, by
eliminating activities, improved reliability and better management of
working capital.
Cautionary Statement
The statements made in this report are based on considered assumptions
and expectations. Actual results may differ in future. The Company
assumes no responsibility with respect to forward looking statements
that may be amended or modified later, on the basis of subsequent
developments, information or events.
Directors Responsibility Statement
As required pursuant to the Companies (Amendment) Act, 2000, the Board
of Directors confirms that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
ii) 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 true and fair view of the state of affairs of
the company at the end of the financial year and of the profit or loss of
the company for that period.
iii) the directors have taken proper and sufficient care to maintain
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities.
iv) the directors have prepared the annual accounts on a going concern
basis.
Finance
All taxes and statutory dues are being paid on time. Payment of
interest and installments to the Financial Institutions and Banks are
being made as per schedule. Your Company is also very regular in
meeting its commitments to its depositors. Deposits aggregating Rs.
20.95 lakhs due for repayment on or before March 31, 2014 were not
claimed by the depositors as on that date.
Statement pursuant to Listing Agreement
Your Companies shares are listed with the National Stock Exchange of
India Ltd. and the BSE Ltd. We have paid the respective annual listing
fees and there are no arrears.
Report on Corporate Governance
A Report on Corporate governance is annexed herewith. Auditors'' Report
on the same is also annexed.
Industrial Relations Industrial Relations during the year under review
continued to be cordial.
Auditors
M/s. CNK & Associates LLP, Chartered Accountants, Statutory Auditors of
our Company hold office until the conclusion of the ensuing AGM. The
notice convening the AGM is self-explanatory. Members are requested to
appoint M/s. CNK & Associates LLP, Chartered Accountants, as Auditors
for the Current Year.
Cost Auditors
Mr.G.Sundaresan, Cost Accountant, was appointed as Cost Auditor to
conduct cost audit of the cost records maintained by our Company in
respect of products manufactured during the financial year 2013-14. Cost
Compliance and Cost Audit Reports were fled with MCA, Govt. of India,
by the Cost Auditor on Sept.23, 2013 and Sept.25, 2013 respectively,
well before Sept.30, 2013, the due date of fling for the financial year
2012-13.
Personnel
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees are set out in the
Annexure A to the directors'' report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required to be included in terms of Section 217 (1)(e)
of the Companies Act, 1956 with regard to conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure B.
Acknowledgements
The Directors would like to place on record our sincere appreciation
for the continued support given by the Banks, Government Authorities,
Customers, Vendors, Shareholders and Depositors during the period under
review. The Directors also appreciate and value the contributions made
by the employees of our Company at all levels.
For and on behalf of the Board of Directors
Mumbai R. Parthasarathy R. Ravi Shankar
12th May 2014 Managing Director Director
Mar 31, 2013
To The Members of Thirumalai Chemicals Ltd.
The Directors present the FORTIETH ANNUAL REPORT AND AUDITED STATEMENT
OF ACCOUNTS of the Company for the year ended March 31, 2013.
(Rs. In lakhs)
STANDALONE FINANCIAL RESULTS Year ended Year ended
31.3.2013 31.3.2012
Revenue from operations 114,584 90,649
Income from Windmill Operation 192 138
Other Income 816 563
115,592 91,350
Gross Profit / (Loss) before Interest
and Finance Charges and Depreciation 10,912 7,198
Interest and Finance charges 5,202 5,237
Profit / (Loss) before Depreciation and Tax 5,710 1,961
Depreciation 1,287 1,381
Profit / (Loss) before Tax 4,423 580
Provision for Current Tax 1,884 346
Profit / (Loss) after Current Tax 2,539 234
Provision for Deferred Tax 236 244
Profit / (Loss) after Tax 2,775 478
Balance in Profit & Loss Statement 4,041 3,563
Profit available for appropriation 6,816 4,041
APPROPRIATIONS
Dividend 768 -
Tax on Dividend 127 -
General Reserve 300 -
Balance carried forward 5,621 4,041
6,816 4,041
On a Revenue from operation of Rs.114,584 lakhs (Rs. 90,649 lakhs)
including Export earning on FOB basis of Rs. 6,595 lakhs (Rs. 11,909
lakhs), Income from windmill operation of Rs. 192 lakhs (Rs. 138 lakhs)
and Other Income of Rs. 816 lakhs (Rs. 563 lakhs), the Gross Profit of
the Company amounted to Rs. 10,912 lakhs (Profit of Rs. 7,198 lakhs in
the previous year). After providing for Interest and Finance charges,
Depreciation, the Profit after Tax is Rs. 2,775 lakhs (Rs. 478 Lakhs)
in the previous year.
Dividend: Your Company paid an interim dividend of Rs. 5.00/- per share
(50% on the face value of Rs. 10/-) in February 2013. The directors are
now pleased to recommend a final dividend of Rs. 2.50/- per share (25%
on the face value of Rs. 10/-). This, together with the interim
dividend, aggregates to a total dividend of Rs.7.50 per share (75% on
the face value of Rs. 10/-) for the financial year ended 31st March
2013, on the paid-up capital of Rs. 10.24 cr. (Previous Year Dividend -
Nil)
Subsidiaries: Tarderiv International Pte Ltd., Singapore is a
wholly-owned subsidiary of your Company and it has two step-down
subsidiaries viz. Cheminvest Pte Ltd., Singapore and Optimistic Organic
Sdn. Bhd., Malaysia.
Directors'' Responsibility Statement
As required pursuant to the Companies (Amendment) Act, 2000, the Board
of Directors confirms that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
ii) 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 true and fair view of the state of affairs of
the company at the end of the financial year and of the profit or loss
of the company for that period.
iii) the directors have taken proper and sufficient care to mainten
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities.
iv) the directors have prepared the annual accounts on a going concern
basis.
Finance
All taxes and statutory dues are being paid on time. Payment of
interest and installments to the Financial Institutions and Banks are
being made as per schedule. Your Company is also very regular in
meeting its commitments to its depositors. Deposits aggregating Rs.
11.95 Lakhs due for repayment on or before March 31, 2013 were not
claimed by the depositors as on that date.
Statement pursuant to Listing Agreement
Your Company''s shares are listed with The National Stock Exchange and
The Bombay Stock Exchange Ltd. We have paid the respective annual
listing fees and there are no arrears.
Report on Corporate Governance
A Report on Corporate governance is annexed herewith. Auditors'' Report
on the same is also annexed.
Industrial Relations
Industrial Relations during the year under review continued to be
cordial.
Directors
Mr. Dilip J Thakkar, Director, resigned from the Board with effect from
May 25, 2012 The Board has placed on record its appreciation of the
valuable contribution made to your Company by Mr Dilip J Thakkar.
Mr. K. V. Krishnamurhty, Director, expired on January 16, 2013. The
Board has placed on record its appreciation of the valuable
contribution made to your Company by Mr K.V.Krishnamurhty.
Mr. N. Subramanians was appointed as an Additional Director with effect
from September 13, 2012 in accordance with Article 126 of the Articles
of Association of the Company and Section 260 of the Companies Act,
1956. Mr N.Subramanian holds office only up to the date of the
forthcoming Annual General Meeting (AGM) and a Notice under Section 257
of the Act has been received from a Member signifying his intention to
propose Mr. N. Subramanian''s appointment as a Director.
Mr. Raj Kataria was appointed as an Additional Director with effect
from January 28th, 2013 in accordance with Article 126 of the Articles
of Association of the Company and Section 260 of the Companies Act,
1956. Mr Raj Kataria holds office only up to the date of the
forthcoming Annual General Meeting (AGM) and a Notice under Section 257
of the Act has been received from a Member signifying his intention to
propose Mr Raj Kataria''s appointment as a Director.
Dr. S. Rama Iyer, Mr. P. Shankar, and Mr. A. Janakiraman, Directors of
your company, retire at the ensuing Annual General Meeting and being
eligible offer themselves for re-appointment.
The Board recommends their aforesaid appointments / reappointments.
Auditors
M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants,
Statutory Auditors of your Company hold office until the conclusion of
the ensuing AGM. The notice convening the AGM is self- explanatory.
Members are requested to re-appoint M/s. Contractor, Nayak and
Kishnadwala, Chartered Accountants, as Auditors for the Current Year.
Cost Auditors
Mr.G.Sunderesan, Cost Accountant, was appointed as Cost Auditor to
conduct cost audit of the accounts maintained by your Company in
respect of products manufactured for the financial year 2012-13.
Personnel
In terms of the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees are set out in the
Annexure to the directors'' report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required to be included in terms of Section 217 (1)(e)
of the Companies Act, 1956 with regard to conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure-1.
Acknowledgements
The Directors would like to place on record their sincere appreciation
for the continued support given by the Banks, Government Authorities,
Customers, Vendors, Shareholders and Depositors during the period under
review. The Directors also appreciate and value the contributions made
by the employees of your Company at all levels.
For and on behalf of the Board of Directors
Mumbai R.Parthasarathy
29th May 2013 Managing Director
Mar 31, 2011
The Directors present their THIRTY EIGHTH ANNUAL REPORT AND AUDITED
STATEMENT OF ACCOUNTS of the Company for the year ended March 31, 2011.
(Rs. In lakhs)
STANDALONE FINANCIAL RESULTS Year ended Year ended
31.3.2011 31.3.2010
Sales 82,780 66,541
Income from Windmill Operation 146 195
Other Income 1,081 556
84,007 67,292
Gross Profit before Interest Finance
Charges and Depreciation 5,727 7,033
Interest and Finance charges 1,751 1,994
Profit before Depreciation and Tax 3,976 5,039
Depreciation 1,339 1,236
Profit before Tax 2,637 3,803
Provision for Current Tax 30 25
Profit after Current Tax 2,607 3,778
Provision for Deferred Tax 710 1,203
Profit after Tax 1,897 2,575
Prior Year Adjustment (42) 11
Balance in Profit & Loss Account 1,708 19
Profit available for appropriation 3,563 2,605
APPROPRIATIONS
Dividend - 512
Tax on Dividend - 85
General Reserve - 300
Balance carried forward 3,563 1,708
3,563 2,605
On a Sales turnover of Rs. 82,780 lakhs (Rs. 66,541 lakhs) with Export
Turnover at Rs. 8,888 lakhs (Rs. 6,822 lakhs) including Export earning
on FOB basis of Rs. 8,665 lakhs (Rs. 6,417 lakhs), Income from windmill
operation of Rs. 146 lakhs (Rs. 195 Lakhs) and Other Income of Rs.
1,081 lakhs (Rs. 556 lakhs), the Gross Profit of the Company amounted
to Rs. 5,727 lakhs (Profit of Rs. 7,033 lakhs in the previous year).
After providing for Interest and Finance charges, Depreciation, Current
and Deferred taxation and some adjustments, the Net Profit amounted to
Rs. 1,897 lakhs compared to Profit of (Rs. 2,575 lakhs) in the previous
year. The performance during the year is explained below in Industry
Developments.
Subsidiaries
During the year the Company has set up a subsidiary in Singapore
-Tarderiv International Pte Ltd. and two step-down subsidiaries viz.
Cheminvest Pte Ltd - Singapore and Optimistic Organic Sdn Bhd Malaysia.
As per Section 212 of the Companies Act, 1956, we are required to
attach the Directors Report, Balance Sheet and Profit & Loss Account
of our Subsidiary. The Ministry of Corporate Affairs, Government of
India vide its general circular no.2/2011 dated February 8, 2011 has
provided an exemption to Companies from complying with Section 212,
provided such Companies publish the audited Consolidated financial
statements in the Annual Report. Accordingly, the Annual Report does
not contain the financial statements of our Subsidiary. The audited
annual accounts and related information of our subsidiary, where
applicable, will be made available, upon request.
Dividend
Your Directors intend to conserve the resources for long term benefits
of the Shareholders and have decided not to recommend any dividend for
2010-2011. (Previous Year- Rs. 5 per share)
MANAGEMENTS DISCUSSIONS AND ANALYSIS
Mission and Business Strategy
The Company decided in the beginning of the Financial Year to do a
thorough review of its businesses; the Opportunities available, our
position in the Indian and International markets, Competitive
capability and gaps the Changes and Resources needed to build on the
opportunities. Based on these Studies and Reviews, the Company decided
that to deliver Profitability and sustained Growth, it will focus on
the specific goals viz.,
a) Transforming our commodity Chemical Business (Phthalic Anhydride) to
be globally competitive in size & profitability.
b) Around of our existing Derivatives Businesses which serve the Food
and Cosmetic and other Industries, building strong businesses of
significant size in each area to deliver a broader range of products to
these customers and growing these businesses significantly over the
next few years.
c) Identifying and developing a New Business of good profitability and
potential.
Industry Outlook and Your Companys Performance
Opportunities and Threats and our Reponses
Your company has the reasonable world scale capacity of 140,000 tonnes
for its prime product, Phthalic Anhydride. Your Company has a good
volume and market growth in India in a difficult year. Phthalic
Anhydride is a key Industrial Raw Material and has great potential.
Indian demand is growing steadily over 10% - 12% in line with growth in
Construction, Coatings, Automotive, Printing & Packaging, etc.
The Phthalic Anhydride business is extremely competitive as a Commodity
Business involving high material costs, large capacities in the Far
East, very low tariff barriers etc. During the last few years, the
Asian markets have been very cyclical, and there has been large scale
dumping into India at marginal costs during 2010-11. During 2009-10 the
Government of India had addressed this issue temporarily for one year
through Safeguard Duties, which were withdrawn in early 2010.
While prices of inputs rose, Trading margins dropped significantly in
Asia & India, resulting in severe pressure on our Phthalic Anhydride
margins. While the production and sales are our highest ever, profits
have been disappointing.
On the positive side, your Company has a good position, given the scale
capacity, improvements in technology, reputation, sales and marketing
networks, and experienced and committed employees.
The Company has decided that the only way to drive this Business to
greater profitability is by becoming globally competitive, work
actively to improve sales margins while we work to become the Least
Cost Producer and scale up. As a part of these strategic efforts, the
Company has also taken up improvements in Technology which will result
in significant Operating advantages. These are expected to be completed
during 2011-12 end. The Company is also actively working to improve its
sales, distribution & supply chain for better margins.
Your Company remains optimistic about the bright future for its
Phthalic Business. It will endeavor to build on its strengths for
competitive advantage and profits.
The main market for our product Phthalic Anhydride is largely in
Western India. The resultant Logistics and Working Capital costs have
become increasingly important. The Company is therefore also reviewing
all options to address its strategic positions in this regard.
1. The Food Ingredients and Fine Chemicals products of the Company
have been identified as a Business area for focused and significant
growth. These products of the Company directed towards the Food,
Beverage, and Cosmetic Industries. The Company plans to grow these
significantly over the next 5 years both in scale and in product /
functional range. About 60% of our sale is in the International market,
largely in the developed world. The growth of this Business will be
useful also to de-risk the cyclicality of our Commodity Chemical
Businesses and increase the Companys profitability.
Both in our Food Ingredients and in our Fine Chemicals/ Derivatives,
the Company has achieved good growth in Production, Revenues, and
Profits during the year. The task for the next few years will be to
grow this Division significantly as it is extremely promising and the
Company has a good position in Technology, both in the Indian and
International markets.
2. The Company did not produce Maleic Anhydride due to the high cost
of raw material Benzene. The Plant is mothballed, well maintained and
in good condition. The Company is looking at options on how to derive
Profit and Value from this Plant, which has been idle for nearly 3
years. The Company met a portion of the local demand through imports
and distribution.
Managements Reply to qualification given in the Auditors Report
With regard to the qualification made by the Auditors in their report
(Para 4) since Optimistic Organic Sdn. Bhd (OOSB) has acquired the
liabilities and is continuing operation, the Board believes that the
amounts referred to in Para 4 are recoverable.
Financial and Operating performance
Company achieved a Net Profit of Rs. 1,897 lakhs Compared to Net profit
of Rs. 2,575 lakhs in the previous year.
Contribution to Exchequer
The amounts paid to the Central and State Exchequer by way of Excise
Duty, Sales Tax, Customs duties (incl. paid to supplier), Income Tax,
etc is about Rs. 9,497 Lakhs on Net Sales of about Rs. 76,707 Lakhs.
That is, over 12 % of Companys Sales is contributions to the
Exchequer.
Research and Development
The Companys in-house Research and Development facility is approved by
the Government of India, Department of Science and Technology, and
under Section 35 (2AB) of the Income Tax, 1961. It is focusing on
developing and improving our Fine Chemicals, Food Ingredients and
Derivatives businesses, both in terms of Grades, Applications and New
products.
The Company has seen significant results from the efforts of the last 2
years in our Derivatives and Food Ingredients Businesses, where we are
now selling to new Applications and at better margins in Exports and
also in India than previously.
An amount of Rs. 237 lakhs (Rs. 209 Lakhs) has been spent during the
year for these projects on which the Company avails a weighted
deduction of 200 % (150 %)
Risks and concerns
Severe pressure on margins, high raw material prices, availability of
substitutes, indiscriminate imports, foreign exchange fluctuations are
some of the factors which could impact adversely.
Volatility in prices of the Raw Material as also the Companys end
products are normal features in this line of business which can have
bearing on the Companys operations.
Also, Dumping of Phthalic Anhydride into our Country at very low
numbers from the Far East is a matter of concern.
Current Year
Demand growth is strong in all our products in India. There has been a
steady surge in Raw Material prices. The end markets are still taking
time to adjust to these higher levels. Our Food Ingredients and
Derivatives Business has been doing well.
The Improvement Programmes started during the last year will start
yielding results during this year. We hope to improve our Revenues and
our Profitability. The Plants have been operating smoothly with regular
Maintenance and Shutdowns for Catalyst changes and Technology
upgradation during this year but these have not affected the Sales.
Outlook
Your Company remains optimistic about the bright future lying ahead. It
will endeavor to grow its leadership by building on it strengths for
competitive advantage. Towards this the Company has undertaken a
business review process by appointing external consultants.
Cautionary Statement
The statements made in the report are based on assumptions and
expectations. Actual results may differ in future. The Company assumes
no responsibility in respect of forward looking statements that may be
amended or modified on the basis of subsequent developments,
information or events.
Exports
Calculated on FOB basis, Exports amounted to Rs. 8,665 lakhs (Rs. 6,417
Lakhs). The Company has been awarded the status
of One Star Export House in recognition of the Companys export
performance. Your Company focuses on exports to achieve higher volumes
year after year.
Directors Responsibility Statement
As required pursuant to the Companies (Amendment) Act, 2000, the Board
of Directors confirm that:
i] in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
ii] 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 true and fair view of the state of affairs of
the company at the end of the financial year and of the profit or loss
of the company for that period .
iii] the directors have taken proper and sufficient care of the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities.
iv] the directors have prepared the annual accounts on a going concern
basis.
Finance
All taxes and statutory dues are being paid on time. Payment of
interest and installments to the Financial Institutions and Banks are
being made as per schedule. The Company is also very regular in meeting
its commitments to its depositors. Deposits aggregating Rs. 8.44 Lakhs
due for repayment on or before March 31, 2011 were not claimed by the
depositors as on that date.
Statement pursuant to Listing Agreement
The Companys shares are listed with the National Stock Exchange Ltd.
and the Bombay Stock Exchange Ltd. Your Company has paid the respective
annual listing fees up-to- date and there are no arrears.
Report on Corporate Governance
The Report on Corporate Governance as stipulated under clause 49 of the
listing agreement forms part of the Annual Report and is annexed
herewith.
As required by the Listing Agreement, Auditors Report on Corporate
Governance and a declaration by the Chairman & Managing Director with
regard to the Code of Conduct are attached to the said Report.
The Management Discussion and Analysis is given as a separate statement
forming part of the Annual Report.
Further as required under Clause 49 of the Listing Agreement, a
certificate duly signed by the Managing Director and the Chief
Financial Officer on the Financial Statements of the Company for the
year ended 31st March, 2011, was submitted to the Board of Directors at
their meeting held on May 30, 2011
Personnel
Industrial Relations are extremely cordial. The Company has entered
into a new 4-year Agreement with the Workmen. All the staff are being
rigorously trained to upgrade themselves, while new manpower is also
being inducted at different levels to strengthen the operations of the
Company. The Directors wish to place on record their appreciation of
the devoted services rendered by the employees.
Directors
Mr. Dilip Thakkar, Dr. S. Rama Iyer, Mr.K.V.Krishnamurthy, Directors of
the Company, retire by rotation at the ensuing Annual General Meeting
and are eligible for reappointment.
The Board commends the aforesaid reappointments.
Auditors
M/s. Contractor, Nayak and Kishnadwala, Chartered Accountants,
Statutory Auditors of the Company hold office until the conclusion of
the ensuing AGM. The notice convening the AGM is self explanatory.
Members are requested to re-appoint M/s. Contractor, Nayak and
Kishnadwala as Auditors for the Current Year.
Particulars of Employees
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of the
Employees) Rules, 1975, as amended, forms part of the Directors
Report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, this report and
accounts are being sent to all the Shareholders of the Company,
excluding the statement of particulars of employees under Section
217(2A) of the Companies Act, 1956. Any Shareholder interested in
obtaining a copy of the said statement may write to the Company
Secretary and the same will be sent by post.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required to be included in terms of Section 217 (1)(e)
of the Companies Act, 1956 with regard to conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure.
Acknowledgements
Your Directors would like to place on record their sincere appreciation
for the continued support given by the Banks, Government Authorities,
Customers, Vendors, Shareholders and Depositors during the year under
review. Your Directors also appreciate and value the contributions made
by its executives, staff and workers of the Company at all levels.
For and on behalf of the Board of Directors
R.Sampath
Chairman
Mumbai
30th May, 2011.
Mar 31, 2010
The Directors present their THIRTY SEVENTH ANNUAL REPORT AND AUDITED
STATEMENT OF ACCOUNTS of the Company for the year ended March 31, 2010.
(Rs. In lakhs)
FINANCIAL RESULTS Year ended Year ended
31.3.2010 31.3.2009
Sales 66.541 51,281
Income from Windmill Operation 195 98
*
Other Income 556 712
67,292 52,091
Gross Profit / (Loss) before Interest
and Finance Charges and Depreciation 7,033 (4,062)
Interest and Finance charges 1,994 1,703
Profit / (Loss) before Depreciation
and Tax 5,039 (5,765)
Depreciation 1,236 1,222
Profit / (Loss) before Tax 3,803 (6,987)
Provision for Current Tax 25 12
Profit / (Loss) after Current Tax 3,778 (6,999)
Provision for Deferred Tax 1,203 (2,405)
Profit / (Loss) after Tax 2,575 (4,594)
Prior Year Adjustment 11 (6)
Balance in Profit & Loss Account 19 (4,619)
Profit available for appropriation
2,605 19
APPROPRIATIONS
Dividend 512 -
Tax on Dividend 85 -
General Reserve 300 -
Balance carried forward 1,708 19
2,605 19
On a Sales turnover of Rs. 66,541 lakhs (Rs. 51,281 lakhs) with Export
Turnover at Rs.6,822 lakhs (Rs. 11.205 lakhs) including Export earning
on FOB basis of Rs. 6,417 lakhs (Rs. 10,990 lakhs), Income from
windmill operation of Rs. 195 lakhs (Rs. 98 Lakhs) and Other Income of
Rs.556 lakhs (Rs. 712 lakhs), the Gross Profit of the Company amounted
to Rs. 7033 lakhs (Loss of Rs.4062 lakhs in the previous year). After
providing for Interest and Finance charges, Depreciation. Current and
Deferred taxation and some adjustments, the Net Profit amounted to Rs.
2575 lakhs compared to loss of (Rs.4594 lakhs) in the previous year.
The performance during the year is explained below in Industry
Developments.
Dividend
Your Directors are pleased to reeoir -nri p.iyment of Dividend @ Rs. 5
per share. The total cash outflow on account of this dividend payment
including distribution tax will be Rs. 597 lakhs. The dividend after
approval by (he shareholders at the forthcoming AGM will be paid to the
eligible shareholders by 12" August 2010.
Exports
Calculated on FOB basis, Exports including Deemed Exports amounted to
Rs. 10,241 lakhs (Rs. 17,005 LakhsJ.The Company has been awarded the
status of One Star Export House in recognition of the Companys
export performance. Your Company focuses on exports to achieve higher
volumes year after year.
Status of TCL Industries (Malaysia) Sdn Bhd (TCLM)
The Companys investment of Rs. 1,828 lakhs was written down against
the Securities Premium and other reserves as approved by the Honble
High Court, Bombay.
The production during calendar year 2009 was more than 26000 Mts.
With respect to the qualification in the Auditors report. Note no.27
in Schedule 19 is self explanatory and therefore do not call for any
further comments.
Directors Responsibility Statement
As required pursuant to the Companies (Amendment) Act, 2000, the Board
of Directors confirm that:
i] in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
ii] 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 true and fair view of the state of affairs of
the company at the end of the financial year and of the profit or loss
of the company for that period .
iii] the directors have taken proper and sufficient care of the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities.
iv] the directors have prepared the annual accounts on a going concern
basis.
Finance
All taxes and statutory dues are being paid on time. Payment of
interest and installments to the Financial Institutions and Banks are
being made as per schedule. The Company is also very regular in meeting
its commitments to its depositors. Deposits aggregating Rs. 8.92 Lakhs
due for repayment on or before March 31, 2010 were not claimed by the
depositors as on that date.
Statement Pursuant to Listing Agreements
The Companys shares are listed with The National Stock Exchange and
the Bombay Stock Exchange. Your Company has paid the respective annual
listing fees up-to-date and there are no arrears.
Report on Corporate Governance
A Report on Corporate governance is annexed herewith. Auditors Report
on the same is also annexed.
Personnel
Industrial relations continue to remain cordial. The Directors place on
record their appreciation of the devoted services rendered by the
employees.
Directors
Mr. Pradeep Rathi, Mr.A.Janakiraman and Mr.P.Shankar, Directors of the
Company, retire by rotation at the ensuing Annual General Meeting and
are eligible for reappointment.
The Board commends the aforesaid reappointments.
Auditors
M/s. Contractor. Nayak and Kishnadwala. Chartered Accountants, the
Statutory Auditors of the Company hold office until the conclusion of
the ensuing AGM. The notice convening the AGM is self explanatory.
Members are requested to re-appoint M/s. Contractor, Nayak and
Kishnadwala as Auditors for the Current Year.
Particulars of Employees
The details of employees of the Company in receipt of remuneration in
excess of the limits under Section 217(2A) of the Companies Act, 1956
is given in Annexure 1.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required to be included in terms of Section 217 (l)(e)
of the Companies Act, 1956 with regard to conservation of energy,
technology absorption, foreign exchange earnings and outgo are given in
Annexure- 2.
Acknowledgement
TheBoard of Directors acknowledge and thank its employees at all
levels, the Vendors, Customers, Service Providers, Government Agencies,
Bankers, Members and Depositors for their continued support.
For and on behalf of the Board of Directors
S. Sridhar
Chairman & Managing Director
Mumbai
21st May, 2010
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