With Management Discussion & Analysis
To,
The Members
Thirumalai Chemicals Limited
Your Directors are pleased to present to you the Fiftieth Annual Report
& Audited Statement of Accounts of the Company for the year ended March 31, 2023. The
Management Discussion and Analysis has also been incorporated into this report.
STANDALONE FINANCIAL RESULTS - Summary
(Rs In Lakhs)
Particulars |
Year Ended 31 Mar 2023 |
Year Ended 31 Mar 2022 |
Revenue from Operations |
1,84,727 |
1,43,809 |
Other Income |
4,426 |
1,473 |
Total Income |
1,89,153 |
1,45,282 |
Gross Profit/(Loss) before Interest, Finance
Charges and Depreciation (EBITDA) |
21,996 |
25,475 |
Interest and Finance Charges |
(3,362) |
(1,818) |
Profit/(Loss) before Depreciation and Tax |
18,634 |
23,657 |
Depreciation |
(3,003) |
(3,198) |
Profit/(Loss) before Tax (PBT) |
15,631 |
20,459 |
Provision for Tax |
(3,473) |
(4,929) |
Profit/(Loss) after Tax |
12,158 |
15,530 |
Provision for Deferred Tax |
(205) |
(299) |
Profit/(Loss)after Tax (PAT) |
11,953 |
15,231 |
The Net Revenue including Export Earning (FOB) during the year
was ' 20,706 Lakhs (Previous Year: ' 15,791 Lakhs).
CONSOLIDATED FINANCIAL RESULTS
(Rs In Lakhs)
Particulars |
Year Ended 31 Mar 2023 |
Year Ended 31 Mar 2022 |
Revenue from Operations |
2,13,224 |
1,99,819 |
Other Income |
3,015 |
1,159 |
Total Income |
2,16,239 |
2,00,978 |
Gross Profit/(Loss) before Interest, Finance
Charges and Depreciation (EBITDA) |
21,634 |
45,237 |
Interest and Finance Charges |
(3,125) |
(2,037) |
Profit/(Loss) before Depreciation and Tax |
18,509 |
43,200 |
Depreciation |
(5,568) |
(5,663) |
Profit/(Loss) before Tax (PBT) |
12,941 |
37,537 |
Provision for Tax |
(3,790) |
(9,208) |
Profit/(Loss) after Tax |
9,151 |
28,329 |
Add : Provision for Deferred Tax |
(168) |
(206) |
Profit/(Loss)after Tax (PAT) |
8,983 |
28,123 |
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 ' 1.50/- per share for the Financial Year 22-23 (previous year ' 2.50/-per share was
paid). This would result in an out flow of ' 1,536 Lakhs, if approved by the shareholders
at the Annual General Meeting.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The current global economic perspective
The entire chemical industry in India had seen robust economic growth
over the last five years including excellent performance during the pandemic. However, the
world economic outlook for growth has fallen from 3.4% in 2022 to under 2.0% in 2023.
There are already indications that most countries in European economies are entering
recessionary conditions. Despite these projections of low growth rates, India's
growth is expected to be resilient. After seeing a surge in market conditions and
manufacturing output, there have been signs of moderation in the second half of FY23
India remains one of the few economies which is expected to ride out
the over-all financial and economic stress with expectations of more than 6% growth rate.
The Indian government's initiatives, with respect to investment in infrastructure and
push towards increased private consumption are seen as factors that will drive improved
GDP. India's share in the global chemical sector is expected to grow significantly in
the next decade. The cost competitive scenario due to low capital and operating expenses
coupled with focus on profitability have contributed to the chemical industry generating
high performance results. In spite of obstacles like availability of raw materials and
dearth in R&D talent, India remains the most attractive investment geography for
global majors.
Business Performance
The first half of FY 22-23 saw a strong demand and healthy margins
leading to excellent results. This has contracted in the second half of the year. Rising
feedstock prices for our primary product Phthalic Anhydride resulted in reduced margins.
Though the company's H-2 performance has been impacted by the slowdown, demand
continues to be strong. Initiatives taken to improve reliability and reduce cost have
ensured that we were able to weather the downturns.
Various challenges faced in plant operations in both Ranipet and Dahej
resulted in some cost increases. However,we were able to address major reliability
problems and long pending plant refurbishment and process improvements
which will result in better efficiencies, productivity and capacity utilisation in the
medium and long term.
The summary of the quarterly performance is given below.
Sl. No. |
Quarter |
Total Income in Lakhs |
EBITDA in Lakhs |
PBT in Lakhs |
1 |
Q1 FY22-23 |
48,694 |
6,432 |
5,210 |
2 |
Q2 FY22-23 |
50,088 |
6,158 |
4,819 |
3 |
Q3 FY22-23 |
46,109 |
4,197 |
2,368 |
4 |
Q4 FY22-23 |
44,262 |
5,209 |
3,234 |
The third quarter saw a decline due to reduction in demand from the
user segments. The demand from the organic pigments industry reduced due to fall in
capacity utilisation. However, Q4 FY23 saw a general improvement in the market of all our
products. Through all of these challenges we have managed to evacuate the entire volume
produced during this period. Logistics costs that had seen increases in the past 2 years
have started coming down and, in some areas, have gone back close to pre-pandemic levels.
Overall Business and the Individual Units/ Products
On the whole, considering the economic slowdown, your company has
managed to bounce back from the slide in Q3 FY23 and stabilize operations. Travel channels
having reopened post pandemic, our marketing and operations staff have been able to
connect in person and establish stronger relationships with customers and suppliers.
Phthalic Anhydride (PAN)
Our main commodity business, Phthalic Anhydride (PAN) has faced some
hindrances by way of regulatory actions on the downstream products in China and United
States, resulting in performance decline in Q3. Towards the second half of Q4, the market
recovered. We expect demand recovery and margin improvement to take place in the near
future.
On the market side, there are capacity expansions and a customer who
has started his own PAn production. These additional capacities including that from our
subsidiary in Dahej are expected to come on stream in FY 23-24. These capacity additions
are expected to satisfy the increased Indian demand. India has been importing more than
one third of its consumption of Phthalic anhydride. Along with replacing most of these
import volumes, the 6 - 8% annual growth in the market for PAn will ensure that these
capacities will be fully consumed in the next 2 years.
Your company has always been strong leader in its sustainable
manufacturing, in key parameters like greenhouse gas emission, water consumption, zero
discharge, recovery of valuable products from waste streams and reduction of inputs. The
company has continued its initiatives in waste reduction and water use. The investments in
this area in the past couple of years has resulted in improved efficiencies in water
recycling. These programs continue with a strong focus on improvement. We have also
initiated collection of packaging from customers for reuse and also, reusing the packaging
supplied to internal customers. More information about our sustainable manufacturing
initiatives is given in our sustainability report.
Fine Chemicals and Food Ingredients
The Food Ingredients Business of your company posted sterling
performance in 2022-23 with the highest ever volume, revenues and profitability.
After a sluggish 2020-21 in the food ingredients market due to the
global impact of the pandemic, the demand saw a quick recovery with most end of our
consumers in India and overseas returning to full production.
Your company implemented several improvements in the food ingredients
plants and operating rates are at full capacities. These initiatives also resulted in
steady operations, higher volumes which helped us improve penetration of the US and
European markets. We now serve hundreds of customers in these geographies.
The Ukraine war increased the cost of energy for manufacturers in
Europe and North America and resulted in high prices in these markets. Your company was
able to take advantage of these factors. Positioning of sales personnel in these markets
offering real time services to customers, new customer acquisitions, real time feedback on
the market demand and prices helped the business substantially. The team was able to close
many annual contracts in the beginning of the year to new customers.
Consequently, the absolute margins increased substantially for this
business resulting in better profitability.
Human Resources and Strengthening the Organization
The company has been able to bring in many improvements in HR and
People policies. Adoption of best practices from industry is being actively pursued by Mr.
Sanjay Sinha, CEO and Mr. S. Raghavan, President Manufacturing. Consequently, improvements
in safety, productivity, capacity utilisation, induction of new systems and processes are
gathering pace. The many younger professionals who were hired in the last 3-5 years have
contributed significantly to improvement in operations and project execution. The
company's policy to induct and train new professionals has resulted in a basket of
very good talent, who would also be to handle responsibility in the future.
Our long-term policy of hiring and intensely training new recruits from
reputed colleges means that the average age of the organisation is under 35 years.
However, like many other industries, your company has also seen a
higher rate of employee turnover this year.
The new performance management system introduced in the company has
resulted in removing subjectivity in evaluations and also brought on the requirement of
training need identification by middle and senior managers. The subsidiary in Dahej has
inducted senior management including the managing director, construction manager, project
managers and support teams. The multiple locations of operations within the group in south
India, western India, Malaysia and now in the US provide good growth opportunities and
roles to aspiring young, middle and senior management.
New investments &Projects
Dahej Project
The project in Dahej through our subsidiary TCL Intermediates Private
Limited for manufacture of Phthalic Anhydride and fine chemicals and derivatives is well
on its way. All needed regulatory approvals are in place. Construction is well under way.
All the major equipment's and materials have been ordered and many have already
arrived on site. The commissioning of this plant is expected late this year. The team is
working very hard to drive this project fast in spite of delays because most equipment
suppliers and contractors are overloaded by the India growth story.
US Project and US Subsidiary Activities
Work on the project in the US is at the initial phases of civil
construction. Many of the equipment packages have been shipped out by global vendors and
have already arrived at the site. More are expected to be delivered soon.
70 % of the plant is being constructed modularly in India; this is well
underway at TCL Technology and Engineering (SEZ) Division in India and is progress is
good. The equipment, piping, instruments, electricals and other components of the modular
units are being assembled at the site in specifically designed structurals. These will be
tested and shipped out in modules directly to the US site by of Q3 & Q4 of FY 2023-24.
Logistics and transporting methodologies are being optimized for cost
and construction time lines. Detailed discussions are ongoing with contractors to ensure
that the construction and commissioning in the US goes smoothly. TCLS LLC expects to
commission the plant by end CY 2024.
Our Subsidiary in the Netherlands TCL Global BV
The European subsidiary TCL Global BV completed its second year of
operations. After Covid restrictions were removed, we were able to position a resident
manager for the subsidiary in The Netherlands. Who has extensive experience in the
marketing and sales of food ingredients and fine chemicals for the European market.
The unit was able to increase sales to direct accounts and generate
substantial new business for the group's products. Revenues increased by over 30%
resulting in higher absolute operating margins for the subsidiary.
Our Subsidiary in Malaysia
After an excellent performance in FY 22, Optimistic Organic Sdn Bhd.
Continued with adecent performance in H1 of FY 2023. However,business was severely
impacted in H-2 due to a sharp drop in Maleic Anhydride demand and prices in the Far East
and Asia. They took this opportunity to schedule extended plant shutdowns required for
mandatory inspection as required by regulations once in three years. The re-catalyzation
in one train was also undertaken. Due to these scheduled shutdowns, production in FY 2023
was lower.
The Company continued to implement several improvement programmes to
improve efficiencies and reliability. It continued its efforts to widen its geographical
spread of the customers to minimise regional variations and risks arising from volatility
in the markets. In spite of overall pressure of Maleic Anhydride demand during this year,
the company has sold all its production. The company has also undertaken several
initiatives during the year to strengthen its SHE performance. The company is also
evaluating increasing its downstream portfolio to improve performance.
STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)
(USD in Mn)
S. No |
Particulars |
Year Ended 31-Mar-23 |
Year Ended 31-Mar-22 |
1 |
Revenue from Operations |
50.68 |
81.29 |
2 |
Other Income |
0.86 |
0.05 |
3 |
Total Revenue |
51.54 |
81.34 |
4 |
Gross Profit / (Loss) before Interest, Finance
Charges and Depreciation (EBITDA) |
3.03 |
27.34 |
5 |
Interest and Finance Charges |
-0.2 |
-0.17 |
6 |
Profit/(Loss) before Depreciation and Tax |
2.83 |
27.17 |
7 |
Depreciation |
-3.06 |
-3.38 |
8 |
Profit/(Loss) before Tax (PBT) |
-0.23 |
23.79 |
9 |
Provision for Tax |
-0.16 |
-5.76 |
10 |
Profit/(Loss) after Tax |
-0.4 |
18.03 |
11 |
Provision for Deferred Tax |
- |
- |
12 |
Profit/(Loss) after Tax (PAT) |
-0.4 |
18.03 |
Finance and Accounts
Following through on the strong financial position that your company
has established and cash reserves over the last few years, this year saw the deployment of
cash to the new subsidiaries for investment in the projects. This is after a major project
- plant replacement carried out in 2018-19 with internal accruals. The cash reserves that
were built also helped your company smoothly handle increased raw material costs, reduced
margins and working capital increase in Q3. Your company continued to utilize its internal
accruals for all fund based working capital requirements.
A lot of the accounting processes have been strengthened in line with
the complexities of the group and investments and operations in multiple locations.
Additional financial controls and risk mitigation measures have been brought in based on
advice by risk consultants and the risk management committee.
The huge inflationary increase in the United States and consequent
increase in FED rates impacted interest rates in India too. Your company has seen the
result of these increased financial costs during the year. The company continues to work
with various financial institutions to look for opportunities in reducing cost of
financing for the project. The general opinion is that the US FED rates will remain the
same or increase marginally over the next 12-month period, with a consequent firm US
dollar. Your company has a robust and conservative foreign currency policy to manage these
fluctuations and uncertainties.
Looking forward to FY 2023-24
The post COVID period between FY 21- FY23, saw a tremendous growth in
volumes and margins of all products. The chemical industry in India had performed
extremely well on the back of increased spending by consumers. This boom has started
evening out and in Q3 & Q4, the industry saw reduction in industrial output and
growth. The demand for all our products continues to remain strong in India, however,
margins were rationalized due to increased feed stock prices, without a corresponding
increase in the prices of end product. This situation is expected to continue in the near
term.
The demand in our user segments for our main product Phthalic anhydride
continues to remain strong. The implementation of large growth plans by our customers,
especially in the paint,polymer and construction industries started in early 2023, ensures
that the growth for our products will be significant. The ongoing investment in
infrastructure by the Indian government gives rise to many opportunities for
Petro-Chemicals and Fine Chemicals.
The recession in Europe does affect the company's export margins
in this region. The economic situation in Europe is expected to remain weak for the
foreseeable future. While continuing supply to long term and contract customers in
Europe, your company started on a program to look at North American and
other markets about 3 years ago for these food ingredients and fine chemicals, especially
in preparation for the US investment.
The entire senior management team has been monitoring the global
economic situation and is making sure that the company is nimble and able to shift
strategies very quickly. The strong performance of the company in spite of reduced margins
is a testament to the ability of the teams to be flexible and their preparedness to handle
fast fluctuating market and this was proven during the pandemic and the ongoing Ukraine
war. Our new investments will help us meet growing Indian demand and the very healthy
international markets for food ingredients and fine chemicals.
New business
During the year FY23, we have set up a separate team under our Group
CEO Mr. CG. Sethuram, to look at new initiatives, products and businesses for the medium
term and develop of pipe line that will help us go further in the longer term.
India's attractiveness and the global situation is changing fast. Our manufacturing
position in India and in the ASEAN along with the new investment in the resource rich and
high volume North American market, presents us with significant opportunities in product
range in addressable market segments. This will also focus on growth in specialties and
fine chemicals in these regions. We hope to see the initial results of this initiative in
the next couple of years.
People
In addition to our regular development and training programs, we
implemented a wide range of initiatives to upskill our employees. We conducted technology/
equipment related training program for our operations teams so that they are familiar with
the latest developments in industry practices. The best practices in each company within
the group are also shared through visits and training.
Ongoing skill enhancement initiatives are conducted for employees who
work in the project teams. The company is very proud to say that the project teams have
performed extremely well under a high pressure environment in all areas of project
execution.
Each and every employee has played an important role in the
company's success. Our employees are the cornerstone upon which our organization is
built. Without their dedication, commitment and active support our achievements would not
have been possible. In this period of growth of your company, it will be these employees
and many more, who will make it possible to be a successful organization with excellent
values and culture.
Public Initiatives
Your company believes that social responsibility is an integral part of
doing business. In line with this thought we continue to be actively involved in social
initiatives in the fields of health care, education and community development.
Apart from the general health initiatives, the company contributed
towards setting up specialized dialysis centers for Hepatitis B patients. The company
continues to be involved with orgnisations providing education for Tribal and
underprivileged children and economic development of the community. The orgnisations
funded by the company continuously look to increase their reach in the community for
education and healthcare initiatives.
Your company plays an active role in industry associations like the
Indian Chemical Council, Confederation of Indian Industry, CPMA and CIA. Through these
associations the company also participates in Industry initiatives and government
interactions to represent various issues of the industry to relevant authorities.
Improvement in trade policy, international trade negotiations and tariff concession for
the industry are some of the key areas of engagement during the year.
One of the new initiatives that your company is involved in along with
other chemical companies in the region is the training and skill development of chemical
engineers fresh out of college. The course acts as bridge between undergraduate education
and industry needs.
Overall, your company remains dedicated to fostering positive change
through various initiatives, partnerships, and contributions aimed at improving public
welfare, healthcare, education and industry development.
OUR ASSOCIATES
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.
BOARD AND MANAGEMENT
The Board of your Company consists of
The Chairman & Managing Director - Mr. R. Parthasarathy
Managing Director & Chief Financial Officer - Mrs. Ramya
Bharathram
Seven Independent Non-Executive Directors:
? Mr. R. Ravi Shankar
? Mr. Raj Kataria
? Mr. Dhruv Moondhra
? Mr. Arun Ramanathan
? Mr. Rajeev M Pandia
? Mrs. Bhama Krishnamurthy
? Mr. Arun Alagappan
Two Non-Executive Director:
? Mr. R. Sampath - Chairman - Ultramarine and Pigments Ltd.
? Mr. P. Mohana Chandran Nair
(Ceased to be a Whole-time Director from 3rd October 2022)
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,Mr. P. Mohana Chandra Nair (DIN: 07326079)
ceased to be a Whole-time Director from 3rd October 2022 on attaining his age
of 70 years in accordance with the provisions of Sec 196(3)(a) of the Companies Act, 2013.
He will be a Non-Executive and Non-Independent Director of the Company from 3rd October
2022.
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 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.
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.
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, 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, 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 2,000 students, out of whom 70% are from rural
families.
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 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 ' 37,624 Lakhs on Gross
Sales of about ' 1,73,704 Lakhs (Previous Year ' 31,316 Lakhs on Gross Sales
of about ' 1,42,368 Lakhs).
Contribution to the Exchequer is about 20% of your
Company's Sales.
Exports:
Calculated on FOB basis, Exports amounted to ' 20,706 Lakhs (previous
year ' 15791 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.
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 Indian
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 composition of the Committee is given below:
Sr. No. |
Name of member |
Category |
1. |
Mr. Rajeev M. Pandia |
Independent Director & Chairman |
2. |
Mr. Dhruv Moondhra |
Independent Director |
3. |
Mrs. Ramya Bharathram |
Managing Director |
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
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:
Sr. No. |
Name of member |
Category |
1. |
Mr. Arun Ramanathan |
Independent Director & Chairman |
2. |
Mrs. Bhama Krishnamurthy |
Independent Director |
3. |
Mr. R. Sampath |
Director (Promoter) |
A detailed note is given in the Corporate Governance report.
Total Expenditure on Corporate Social Responsibility (CSR) as
percentage of profit after tax (%):
The Company's total spending on CSR is 2% of the average
profit after taxes in the previous three Financial Years towards Health and Sanitation
Programmes.
The CSR report is set out in the Annexure A to the Directors' report.
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 and Sustainability Report:
Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended,
interalia, 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 and Sustainability Report(BRSR Report).
Your Company is in the top 1000 listed entities as on 31st March,
2023. The Company, has presented its BRSR Report for the Financial Year 2022-23, which is
part of this Annual Report.
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 the 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 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 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. 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 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.
Internal Auditors
The Internal Auditors M/s. M.S. Krishnaswamy & Co, Chartered
Accountants, have played an important role in strengthening the internal controls within
the Company. The Internal Auditors M/s CNK & Associates LLP also contributed
significantly.
Cost Auditors
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 2022-23. The Cost Audit Report was filed with the
MCA, Government of India, by the Company on August 10, 2022, well before the due date of
filing for the Financial Year 2021-22.
Secretarial Audit
The Board appointed M/s. R.M. Mimani& Associates LLP, Company
Secretaries, to conduct Secretarial Audit for the Financial Year 2022-23. The Secretarial
Audit Report for the Financial Year ended March 31, 2023 is attached to this Report. The
Secretarial Audit Report does not contain any qualifications, or reservations or adverse
remarks.
Web link of Annual Return
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, 2023 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 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) 121: 1
2. Mrs. Ramya Bharathram (Managing Director and CFO*) 72: 1
3. Mr. P. Mohana Chandran Nair (Whole time Director#) 5: 1
#Ceased to be a Whole-time Director from 3rd October 2022
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):0%
Mr. T. Rajagopalan - (Company Secretary): 16% *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: 12%
d) The number of permanent employees on the rolls of the Company: 526
e) The explanation on the relationship between average increase in
remuneration and Company performance:
The Company's PAT has decreased from '15,231 Lakhs to '11,953
Lakhs, a decrease of 22% against which the average increase in remuneration is 7%;
f) Comparison of the remuneration of the Key Managerial Personnel
against the performance of the Company:
Name |
Designation |
Remuneration Rs in Lakhs* |
% Increase in Remuneration |
PAT Rs in Lakhs* |
% decrease in PAT |
Mr. R. Parthasarathy |
Managing Director |
528 |
NIL |
|
|
Mrs. Ramya Bharathram |
Managing Director and CFO |
316 |
NIL |
11,953 |
22% |
Mr. T.Rajagopalan |
Company Secretary |
46 |
16 |
|
|
* It consists of Salary/Allowances & Benefits.
The remuneration of the Chairman and Managing Director, Mr. R.
Parthasarathy includes the commission of ' 250 Lakhs, which works out to
approximately 2.09% to the net profit for the Financial Year ended March 31,2023.
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
(Rs In Lakhs) |
31.03.2022 |
102,388,120 |
266.00 |
14.88 |
17.88 |
2,72,352 |
31.03.2023 |
102,388,120 |
171.85 |
11.67 |
14.72 |
1,75,954 |
Increase /(Decrease) |
NA |
(94.15) |
(3) |
(3) |
(96,398) |
% of Increase/(Decrease) |
NA |
(35.39%) |
(22) |
(18) |
(35) |
Issue Price of the share at the last Public
Offer (IPO) |
|
1 |
|
|
|
Increase in market price as on 31.03.2023
as compared to Issue Price of IPO |
|
170.85 |
|
|
|
Increase in % |
|
17,085% |
|
|
|
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 15% for Employees other than
Managerial Personnel & 28% 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 up to 3rd
October, 2022), 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.
Details of significant changes (i.e. change of 25% or more as compared
to the immediately previous financial year) in key financial ratios, along with detailed
explanations therefor.
The details form part of Note No. 36 of Notes to standalone financial
statements.
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.
Acknowledgments
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
R. Parthasarathy |
R. Ravi Shankar |
Managing Director |
Director |
(DIN:00092172) |
(DIN:01224361) |
Place: Chennai |
Place: Chennai |
Date: 17th May, 2023 |
Date: 17th May, 2023 |
|