Your Directors are pleased to present the 60th Annual Report together with the AuditedStatement of Accounts for the Year ended March 31 2017.
These Financial Statements are the first Financial Statements of the Company underIndian Accounting Standards.
1. Financial performance of the Company
| || ||( Rs. in Lakhs) |
|Particulars ||12 months ended 31.03.2017 ||15 months ended 31.03.2016 |
|Sales (Gross- including excise duty) ||101986.16 ||118813.11 |
|Profit before tax ||3628.77 ||5026.61 |
|Less: Tax expenses (incl. deferred tax) ||(1180.73) ||(935.52) |
|Profit after tax ||2448.04 ||4091.09 |
|Profit from discontinued operations (Net of tax expenses) ||- ||1845.85 |
|Total profit for the period ||2448.04 ||5936.94 |
|Add: Balance brought forward from previous period ||52360.56 ||91614.53 |
|Amount available for appropriation ||54808.60 ||97551.47 |
|Appropriations : || || |
|Interim dividend ||- ||37325.04 |
|Final dividend ||2308.18 ||- |
|Corporate Tax on dividend ||469.90 ||7463.04 |
|Transfer for equity instruments through Other comprehensive income (OCI) ||(1187.10) ||- |
|Other comprehensive income (OCI) ||73.98 ||(65.26) |
|Utilised for buyback expenses ||- ||302.75 |
|Depreciation adjustment on account of change in useful life of assets ||- ||165.34 |
|Balance carried forward to the balance sheet ||53143.64 ||52360.56 |
2. Review of operations
The operational performance for the current year is not strictly comparable with thatof the previous period in view of the previous period being that for 15 months. TheCompany's continuing operations reported sales for the year ended March 31 2017 stood atRs. 101986.16 Lakhs as against Rs. 118813.11 Lakhs for the previous 15 months period endedMarch 31 2016. However on a like to like period for the 12 months Company recorded asales growth of 7.8%. Of the total sales revenue for the year under review 21% iscontributed by exports. The Company's continued focus on sales growth effective rawmaterial management and cost control measures helped in improving the Company'soperational PBDIT (excluding other income) to Rs. 6713.22 Lakhs (6.6% of sales) againstRs. 6432.77 Lakhs (5.4% of sales) during the previous 15 months period ended March 312016. The Company remains committed and focused on its drive for sustainable growth in allsegments it operates through better material and cost management targeting new marketsand introducing innovative products.
The Board of Directors are pleased to recommend a final Dividend of Rs. 25/- per share(250%).
The final dividend together with tax thereon entails cash outflow of Rs. 6945.20 Lakhsand a payout of 227% of the total comprehensive income for the year ended 31 March 2017.
The total dividend for the period under review amounts to Rs. 25 per share (250%) ascompared to Rs. 150 per share (1500%) paid for the previous year. (previous year includesfinal dividend of Rs. 10 per share & interim dividend of Rs. 140 per share based onthe exceptional income arising from the sale of Kolshet land).
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.comand also annexed as "Annexure A".
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 all stakeholders. Asstipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 Report on Corporate Governance Management Discussion and Analysis as well asAuditor'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 2017 the Company does not have any subsidiary.
8. Details of Directors and Key Managerial Personnel
During the year under review the Board of Directors at their meeting held on January28 2017 appointed Mr. Adnan Ahmad as Executive Director of the Company effective fromApril 3 2017 and further as Vice-Chairman and Managing Director effective from June 12017 in place of Dr. Deepak Parikh who will step down as the Vice-Chairman and ManagingDirector of the Company effective from closing of working hours of May 31 2017consequent to his appointment as Head of Region North America within the Clariant Group.
Notice as required under Section 160 of the Companies Act 2013 have been receivedfrom one of the members proposing the candidature of Mr. Adnan Ahmad as Executive Directorof the Company effective from April 3 2017 and further as the Vice-Chairman &Managing Director effective from June 1 2017.
The Board placed on records its sincere appreciation to Dr. Deepak Parikh for hisexcellent leadership in steering the overall growth and development of the Company and thecontributions made during his tenure.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Alfred Muench retires by rotation at the ensuing AnnualGeneral Meeting and being eligible he offers himself for re-appointment.
The above appointment and re-appointment forms part of the Notice of the 60th AnnualGeneral Meeting and the respective Resolutions are 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.
During the year under review Mr. Sanjay Ghadge was appointed as the Chief FinancialOfficer in place of Ms. Raksha Kamdar Interim Chief Financial Officer with effect fromMay 20 2016.
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 5 times on May 20 2016August 12 2016 December 1 2016 January 28 2017 and February 10 2017.
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 2017 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 withCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour Company has constituted a Corporate Social Responsibility ("CSR")Committee. Effective from June 1 2017 the Committee 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 attached as "AnnexureC" forming part of this report.
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 attached 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 Section is attached 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 2017 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;
(ii) The Directors had 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 2017 and of the profitand loss of the Company for that period;
(iii) The Directors had 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 had prepared the annual accounts on a going concern basis;
(v) The Directors had 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 had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
17. Statutory Auditor & Audit Report
In accordance with Section 139 of the Companies Act 2013 M/s. Price WaterhouseChartered Accountants LLP (Firm Regn. No 012754N/ N500016) were appointed as StatutoryAuditors by the members of the Company for a period of 4 years from the conclusion of 58thAnnual General Meeting subject to ratification by the shareholders at every subsequentAnnual General Meeting. The Statutory Auditors being eligible offer themselves forreappointment. Your Directors recommends the ratification of their appointment asStatutory Auditors of the Company from the conclusion of this Annual General Meeting tillthe conclusion of next Annual General Meeting.
The Auditor's in their report have commented that the back up of the books of accountsand other books and papers maintained in electronic mode has not been maintained onservers physically located in India. The Company would like to clarify that the Company'sSAP is centralized in Global Data Centers outside India where the backup storage ismaintained. The Company is reviewing the maintenance of backup of SAP data in India asrequired under Rule 3 of the Companies (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 "Dyes" for the Financialyear 2017-18 subject to approval of Central Government if any. The cost audit report forthe 15 months ended March 31 2016 has been filed on due date.
19. Secretarial Audit Report
Pursuant to provisions of Section 204 of the Companies Act 2013 and Rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhas appointed Mr. V. V. Chakradeo Practising Company Secretary as Secretarial Auditor tocarry out the secretarial audit for the Financial year 2016-17.
The Secretarial Audit Report is annexed herewith an "Annexure F". TheSecretarial Auditors Report does not contain any qualification reservation or adverseremark and 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" tothis report.
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 Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has framed a Policy on MaterialRelated Party Transactions which is available on Company's website at www.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) ofCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 in the FormAOC-2 is attached as "Annexure H" to this report.
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 has been one instance of an allegation ofSexual Harassment which is under investigation.
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 ||Dr. Deepak Parikh |
|Chairman ||Vice-Chairman & Managing Director |
|DIN (00056826) ||DIN (06504537) |
|Navi Mumbai May 23 2017 || |