Your Directors are pleased to present the 61st Annual Report together withthe Audited Statement of Accounts for the Year ended March 31 2018.
1. Financial performance of the Company
| || ||(Rs. in Lakhs) |
|Particulars || |
Year ended 31.03.2018
|Year ended 31.03.2017 |
| || || |
|Sales (Gross - including excise duty) ||99345.41 ||101986.16 |
|Less: Excise duty ||1511.23 ||7872.76 |
|Sales (Net of excise duty ) ||97834.18 ||94113.40 |
|Profit before tax ||3341.40 ||3628.77 |
|Less: Tax expenses (Incl. deferred tax) ||1181.33 ||1180.73 |
|Profit after tax ||2160.07 ||2448.04 |
|Add: Balance brought forward from previous period ||53143.64 ||52360.56 |
|Amount available for appropriation ||55303.71 ||54808.60 |
|Appropriations || || |
|Final dividend ||5770.45 ||2308.18 |
|Corporate tax on dividend ||1174.75 ||469.90 |
|Transfer to equity instruments through Other comprehensive income (OCI) || |
|Other comprehensive income (OCI) ||54.42 ||73.98 |
|Balance carried forward to the Balance Sheet ||48304.09 ||53143.64 |
2. Review of operations
The Company's continued operations reported sales for the year ended March 31 2018stood at ' 97834.18 lakhs as against ' 94113.40 lakhs for the previous year ended March31 2017 thereby recording marginal growth of 4% in sales. Of the total sales revenue forthe year under review 24% is contributed by exports. The Company remains committed andfocused on its drive for sustainable growth in all segments it operates through bettermaterial and cost management targeting new markets and introducing innovative products.
The Board of Directors are pleased to recommend a Final Dividend of ' 5/- per share(50%).
The Final Dividend together with tax thereon entails cash outflow of ' 1391.30 Lakhsand a payout of 53% of Profit for the year ended 31st March 2018.
The total dividend for the period under review amounts to ' 5/- per share (50%) ascompared to ' 25/- per share (250%) paid for the previous year.
Pursuant to the requirement of Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company have formulated and adoptedDividend Distribution Policy which is available on the website of the Company at www.clariant.com and also annexed as AnnexureA.
4. Corporate Governance Management Discussion and Analysis Report
The Company is committed to compliance standards ensuring checks and balances betweenthe Board and Management as well as a sustainable approach to create value for allstakeholders. As stipulated under SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 Report on Corporate Governance Management Discussion and Analysis aswell as Auditor's Certificate confirming the compliance with the conditions of CorporateGovernance are attached herewith and forms part of this Annual Report.
5. Significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future
During the year under review there has been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andCompany's operations in future.
6. Material changes between the date of the Board report and end of financial year
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
7. Subsidiary Company
As on March 31 2018 the Company does not have any subsidiary.
8. Details of Directors and Key Managerial Personnel
During the year under review Mr. Adnan Ahmad was appointed as Vice-Chairman andManaging Director effective from June 1 2017 in place of Dr. Deepak Parikh who wasappointed as Head of Region North America within the Clariant Group.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Mario Brocchi retires by rotation at the forthcomingAnnual General Meeting and being eligible he offers himself for re-appointment.
The above re-appointment forms part of the Notice of the 61st Annual GeneralMeeting and the respective Resolution is recommended for your approval.
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as prescribed under Section 149(6) of the Companies Act 2013 andSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
There were no other changes in the Key Managerial Personnel of the Company during theyear under review.
9. Audit Committee
The details on the composition meeting attendance etc. of the Audit Committee areprovided in the Corporate Governance Section of the Annual Report. The Board has acceptedall the recommendations of the Audit Committee during the Financial year under review.
10. Number of meeting of the Board
During the year under review the Board of Directors met 4 times on May 23 2017August 11 2017 November 13 2017 and February 13 2018.
11. Conservation of energy technology absorption foreign exchange earnings and outgo
As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the relevant information and data for the year endedMarch 31 2018 are annexed to this report as Annexure B.
12. Corporate Social Responsibility
In terms of the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour Company has constituted a Corporate Social Responsibility (CSR) Committeewhich constitutes of following members:
|Name ||Category |
|Dr. (Mrs.) Indu Shahani ||Chairperson Independent Director |
|Mr. Kewal Handa ||Independent Director |
|Mr. Adnan Ahmad ||Vice-Chairman & Managing Director |
|Mr. Karl Holger Dierssen ||Non-Executive Director |
Your Company also has in place a CSR policy and the same is available on the website ofthe Company at www.clariant.com . A detailed report as per Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure C.
13. Nomination and Remuneration Policy
The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy on Nomination and Remuneration of its Directors and Key Managerial Personnel whichis annexed as Annexure D.
14. Board Evaluation and Familiarisation programme
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Board has carried out the annualevaluation of its own performance and Board Committees by seeking the inputs of Directorson various aspects of the Board / Committee Governance. The Board have reviewed theperformance of the Individual Directors and the Chairperson. The manner in which theevaluation has been carried out is stated in the Corporate Governance Report.
The details of programme for familiarization of the Independent Directors of yourCompany is available on the Company's website at www.clariant.com .
15. Particulars of Employee
As per provisions of Section 197 of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 disclosurepertaining to the particulars of employees who are in receipt of remuneration asprescribed under the said Section is annexed as Annexure E.
The statement of particulars of employees pursuant to Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisAnnual Report. However pursuant to provisions of Section 136 (1) of the Companies Act2013 the report and accounts are being sent to members excluding this statement ofparticulars of employees. Any member interested in obtaining a copy of this statement maywrite to Company Secretary at the registered office of the Company.
16. Directors' Responsibility Statement
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(i) In the preparation of the annual accounts for the year ended March 31 2018 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2018 and of the profitand loss of the Company for that period;
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) The Directors have prepared the annual accounts on a going concern basis;
(v) The Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively; and
(vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
17. Statutory Audit Report
M/s. Price Waterhouse Chartered Accountants LLP Statutory Auditors in their reporthave commented that the backup of the books of accounts and other books and papersmaintained in electronic mode has not been maintained on servers physically located inIndia. The Company would like to clarify that the Company's SAP is centralized in globalData Centers outside India where the backup storage is maintained. The Company isreviewing the maintenance of backup of SAP data in India as required under Rule 3 of theCompanies (Account) Rules 2014.
18. Cost Audit
The Board of Directors in pursuance of order under Section 148 of the Companies Act2013 appointed M/s. RA & Co. Cost Accountants as Cost Auditors of the Company tocarry out the audit of the cost accounts relating to the Company for the Financial year2018-19 subject to approval of Central Government if any. The cost audit report for the12 months ended March 31 2017 has been filed on due date.
19. Secretarial Audit Report
Pursuant to provisions of Section 204 of the Companies Act 2013 and Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhave appointed M/s J. R. Ahuja & Co. Company Secretary as Secretarial Auditor tocarry out the Secretarial Audit for the Financial year 2017-18.
The Secretarial Audit Report is annexed herewith as Annexure F. TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkand is self-explanatory and thus does not require any further comments.
20. Internal Financial Controls and their Adequacy
The details in respect of Internal Financial Controls and their adequacy are includedin the Management Discussion & Analysis Report which forms part of this Report.
21. Extract of Annual Return
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 an extract ofthe Annual Return in Form MGT-9 is annexed herewith as Annexure G.
22. Risk management policy
The Company has a robust Risk Management to identify evaluate business risks andopportunities. This framework seeks to create transparency minimize adverse impact on thebusiness objectives and enhance the Company's competitive advantage. Many risks identifiedby the business and functions are systematically addressed through mitigating actions on acontinuing basis. The Company has framed a Risk Management Policy to manage the risksinvolved in all activities of the Company to maximize opportunities and minimizeadversities.
23. Related Party Transactions
In line with the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has framed a Policy onMaterial Related Party Transactions which is available on Company's website atwww.clariant.com .
All the Related Party Transactions entered during the year under review were inordinary course of business and on arm's length basis. All the Related Party Transactionsare placed before Audit Committee for review and approval. Prior omnibus approval aregranted by Audit Committee for Related Party Transactions which are of repetitive natureentered in the ordinary course of business and are on arm's length basis.
The disclosure of Related Party Transactions as required under Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 in the FormAOC-2 is annexed as Annexure H.
24. Particulars of loans guarantees or investments
The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 is given in the notes forming part of FinancialStatements.
25. Public Deposits
During the year under review the Company has not accepted any deposits from the publicfalling under Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014 and as such no amount of principal or interest was outstanding as onthe Balance Sheet date.
26. Vigil Mechanism
The Company believes in upholding professional integrity and ethical behavior in theconduct of its business. To uphold and promote these standards the Company has adoptedGroup's Integrity Line Policy which is akin to Whistle Blower Policy or Vigil MechanismPolicy for its Directors and Employees to report genuine concerns about unethicalbehavior actual or suspected fraud or violation of the Code of Conduct without fear ofreprisal.
27. Prevention of Sexual Harassment of Women at Workplace
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. During the year under review there was one instance of an allegation of SexualHarassment which stands addressed.
28. Details in respect of frauds reported by auditors under sub-section (12) of Section143 other than those which are reportable to the Central Government
No matters of actual or alleged fraud has been reported by the auditors undersub-section (12) of Section 143 of the Companies Act 2013.
The Board of Directors wish to place on record its sincere appreciation for the supportreceived from its stakeholders including shareholders bankers distributors suppliersand business associates. The Directors recognize and appreciate the sincere and hard workloyalty dedicated efforts and contribution of all the employees that ensured sustainedperformance in a challenging business environment. The Directors also express theirappreciation of the assistance and unstinted support received from Clariant groupCompanies.
For and on behalf of the Board of Directors
|Mr. Kewal Handa ||Mr. Adnan Ahmad |
|Chairman ||Vice-Chairman & Managing Director |
|DIN (00056826) ||DIN (00046742) |
|Navi Mumbai May 15 2018 || |
DIVIDEND DISTRIBUTION POLICY
The Securities Exchange Board of India vide its Notification No. SEBI/LADNRO/ GN/201617/008 dated July 08 2016 inserted Regulation 43A in the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 [LODR] mandating the formulation of a DividendDistribution Policy for the top 500 listed entities based on their market capitalisationcalculated on March 31 of every financial year.
In compliance with Regulation 43A of the LODR the Company is required to frame aDividend Distribution Policy. The objective of this policy is to ensure the right balancebetween the quantum of Dividend paid and amount of adequate financial resources availablefor various business purposes.
3. EFFECTIVE DATE
The Policy shall become effective from the date of its adoption by the Board i.e.February 10 2017.
a) Act' means the Companies Act 2013 and Rules made thereunder including anyamendments or modifications thereof.
b) Board of Directors' or Board' means the collective body of the Directorsof the Company.
c) Company' means CLARIANT CHEMICALS (INDIA) LIMITED.
d) Dividend' shall mean Dividend as defined under Companies Act 2013.
e) Policy' means Dividend Distribution Policy'.
5. PARAMETERS FOR DISTRIBUTION OF DIVIDEND
The Company shall pay dividend in compliance with the provisions of Section 123of the Act and Companies (Declaration and Payment of Dividend) Rules 2014.
The Board of Directors of the Company shall declare dividends at its owndiscretion and at such periodicity as they may deem fit. The Board will consider thefollowing parameters for declaration of Dividend:
Financial Parameters / Internal Factors:
The Board of Directors of the Company would consider the Free Cash Flow projections forthe year under consideration for declaring or recommending dividend to shareholders.
The Board of Directors of the Company would consider the prevailing legal requirementsregulatory conditions or restrictions laid down under the Applicable Laws including taxlaws for declaring or recommending dividend to shareholders.
6. UTILISATION OF RETAINED EARNINGS
The Company may declare dividend out of the profits of the Company for the year or outof the profits for any previous year or years or out of the Free Reserves available fordistribution for Dividend after having due regard to the parameters laid down in thispolicy.
7. CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS OF THE COMPANY MAY OR MAY NOT EXPECTDIVIDEND
The shareholders of the Company may not expect Dividend under the followingcircumstances:
a. In the event of inadequate Free Cash Flows for the year or for future years.
b. In the event of Force Major events outside the control of the Company.
c. If the prevailing regulatory environment does not permit declaration or payment ofdividend.
8. PARAMETERS TO BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARES
Company has issued only one class of shares i.e equity shares. The policy shall besuitably revisited at the time of issue of any new class of shares depending upon thenature and guidelines thereof.
9. POLICY REVIEW
The Board of Directors of the Company are authorised to amend modify or review thisPolicy in whole or in part at any point of time as may be deemed necessary.
In case of any amendment(s) clarification(s) circular(s) etc. issued by the relevantauthorities not being consistent with the provisions laid down under this Policy thensuch amendment(s) clarification(s) circular(s) etc. shall prevail upon the provisionshereunder and this Policy shall stand amended accordingly from the effective date as laiddown under such amendment(s) clarification(s) circular(s) etc.
10. PUBLICATION ON WEBSITE
The Policy will be available on the Company's website at www.clariant.com .
(a) The above Policy does not constitute a commitment regarding the future dividends ofthe Company but only represents a general guidance regarding dividend policy. Thestatement of the Policy does not in any way restrict the right of the Board to use itsdiscretion in the recommendation of the Dividend to be distributed in the year and theBoard reserves the right to depart from the policy as and when circumstances so warrant.
(b) No part of this Policy nor the fact of its distribution should form the basis ofor be relied on in connection with any contract or commitment or investments decisionwhatsoever. Investor/prospective advisors must be sought on specific situation from well-informed legal investment tax financial and management professionals.
Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) theCompanies (Accounts) Rules 2014 and forming part of the Report of the Directors
A. Conservation of Energy
(i) Steps taken or impact on conservation of energy:
Installation of membrane diffusers for better aeration surface area which led toreduction in electricity consumption
Usage of advanced continuous drying equipment for pigments has reduced steam andelectricity consumption thereby improving the quality of the products
Replacement of existing pumps with optimized energy efficient pumps
Optimization of batch sizes to reduce overall energy cost
Installation of washing machine for filter cloth washing resulting in reducedwater consumption and cycle time
Reduction of water usage through water recycling/zero leak/membrane filter press
Water conservation through rain water harvesting
Use of LED lights in place of existing lighting system
(ii) Steps taken by the company for utilizing alternate
sources of energy:
Agro mass briquettes being the most economical fuel are used to produce 95% ofsteam required on site
Use of transparent roof sheets and Solar Tubes for natural lights therebyleading to reduction in energy consumption
Use of turbo ventilators for extraction of heat from the building
(iii) Capital investment on energy conservation equipment: ' 1.74 Crores
B. Technology Absorption
(i) The efforts made towards technology absorption:
Efforts were initiated by Company's Product Development and Innovation Group towork on top line innovations and life cycle innovation projects
A specific Filtration Technology is being deployed for effective and fasterfiltration to reduce process time cycle
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution:
Use of specific Filtration Technology led to reduction in process time cycle andthereby resulting in cost reduction
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year): Nil
(iv) The expenditure incurred on Research and Development: Nil
C. Foreign exchange earnings and outgo:
The particulars of foreign exchange earned and used during the year is given below:
The Foreign Exchange earned ' 25312 Lakhs (previous period ' 23131 Lakhs).
Foreign exchange used ' 27993 Lakhs (previous period ' 21542 Lakhs).
For and on behalf of the Board of Directors
|Mr. Kewal Handa ||Mr. Adnan Ahmad |
|Chairman ||Vice-Chairman & Managing Director |
|DIN (00056826) ||DIN (00046742) |
|Navi Mumbai May 15 2018 || |