The Directors have pleasure in presenting the Thirty-Ninth Annual
Report along with the Audited Financial Statements for the financial year ended March 31,
2023.
Financial Summary Standalone and Consolidated
Rs Crores
Particulars |
Stand-alone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Revenue from Operations and Other income |
2,222 |
2,045 |
5,021 |
5,949 |
Profit before interest, depreciation and
taxes |
332 |
660 |
548 |
1,254 |
Depreciation |
92 |
91 |
142 |
137 |
Interest |
23 |
136 |
154 |
322 |
Profit before share of Profit / (Loss) from
Joint Venture and associate and tax |
217 |
434 |
252 |
796 |
Profit / (Loss) before tax and exceptional
items |
217 |
434 |
252 |
796 |
Exceptional Items |
(50) |
- |
(81) |
- |
Profit / (Loss) before tax |
167 |
434 |
171 |
796 |
Tax Expenses |
(21) |
(54) |
(19) |
(147) |
Profit / (Loss) after tax |
146 |
379 |
152 |
649 |
Total Other Comprehensive Income for the year |
- |
126 |
1 |
135 |
Total Comprehensive Income for the year |
146 |
505 |
153 |
783 |
Basic and Diluted Earnings per share (equity
shares, par value Rs 5/- each) |
9.21 |
25.54 |
9.64 |
43.66 |
Financial Performance Standalone
On a stand-alone basis, the revenue from operations and other income
increased to Rs 2,222 Crores for FY 2022-23 from Rs 2,045 Crores in FY 2021-22. The
increase is primarily driven by higher volume of Speciality Paste PVC sales. items for FY
2022-23 Profit was Rs 217 Crores against Rs 434 Crores in FY 2021-22. The Company achieved
a revenue growth of 9% when compared of Paste to FY 2021-22. However, significant PVC and
Chloromethanes products coupled with a steep increase in fuel prices has adversely
affected the flow-through to Profit Before Tax.
Financial Performance Consolidated
On a consolidated basis, the revenue from operations and other income
stood at Rs 5,021 Crores for FY 2022-23 against Rs 5,949 Crores in FY 2021-22. The Profit
Before Tax and Exceptional items for FY 2022-23 was Rs 252 Crores against Rs 796 Crores in
FY 2021-22. The drop in revenue and profits at a consolidated drop in prices of Speciality
Paste PVC, Suspension PVC and Chloromethanes products, coupled with increase in fuel
prices.
Dividend and Transfer to Reserves
Considering the growth plans and the consequential need to conserve
resources, the Directors have decided not to recommend any dividend for the financial year
2022-23. The Directors also do not recommend any transfer to reserves.
Share Capital
The Company's paid-up equity share capital stood at Rs 79.06
Crores as on March 31, 2023, consisting of 15,81,09,574 equity shares of Rs 5/- each.
There is no change in the share capital of the Company.
Borrowings
The total borrowings, including interest accrued, on a consolidated
basis stood at Rs 1,007.97 Crores as on March 31, 2023 as against Rs 867.38 Crores as on
March 31, 2022.
Capacity Expansion
Leveraging the existing land and infrastructure facilities, the Company
is increasing capacity of Speciality Paste PVC production by 41,000 tonnes per annum at an
estimated outlay of Rs 360 Crores and setting up a multi-purpose facility
levelwasmainlydueto for Custom
Manufactured steep Chemicals in a phased manner at an overall
estimated outlay of Rs 680 Crores. The Speciality Paste PVC project at SIPCOT Industrial
Complex, Phase II, Cuddalore is expected to be commissioned in the second half of FY
2023-24 and phase I of the multi-purpose facility for Custom Manufactured Chemicals at
Berigai, Krishnagiri District, is expected to be commissioned by second quarter of 2023-24.
Further, during the year under review, the wholly owned subsidiary of
the Company, Chemplast Cuddalore Vinyls Limited, has completed its debottlenecking
project, adding 10% to its production capacity.
Statement of Company's Affairs
Chemplast Sanmar Limited (CSL) is a leading Speciality chemicals
manufacturer in India with focus on Speciality
Paste PVC resin and custom manufacturing of starting materials and
intermediates for pharmaceutical, agro-chemical and fine chemicals sectors. CSL is the
largest manufacturer of Speciality Paste PVC resin in India. In addition, CSL is also the
fourth largest manufacturer of Caustic Soda and the largest manufacturer of Hydrogen
Peroxide in South India and the oldest manufacturer of Chloromethanes in India.
I. Spe ciality Chemicals
PVC Paste Resin
(FY = Financial Year and Q=Quarter)
The domestic demand for Speciality Paste PVC Resin in FY 2022-23
registered a strong growth of 17%, reaching 163kt, compared to 139kt in FY 2021-22. The
recovery in Auto sector and foot wear segment fuelled the growth in demand for Speciality
Paste PVC resin. In the recent past, downstream processing industry in the NCR region used
to face curtailed operations in
Q3 the spike in air pollution around this time used to trigger the
regulatory authorities into curtailing the use of coal. However, this year, with many of
the leather cloth units shifting to gas based fuel, operations could continue mostly
unhindered.
In contrast to India, the demand in US and Europe was weak due to high
inflationary pressures and rising interest rates while Chinese demand was also lower than
usual due to the country's Zero-Covid policy. Though China lifted Covid lock down
restrictions towards the end of 2022, the demand continued to be sluggish resulting in
China pushing more and more material to India. In this scenario, from the middle of Q1,
international prices started falling at regular intervals, thus pushing processers to buy
on "just in time" basis. The price reduction was also facilitated by ocean
freight rates reverting to near earlier levels. Prices fell by 29% during the course of
the year. This was compounded by the sharp increase in energy costs (both coal and natural
gas) resulting in a squeeze on margins.
The company recorded the highest ever production and sale of Speciality
Paste PVC resin during FY23.
Custom Manufactured Chemicals
The Custom Manufactured Chemicals business manufactures advanced
intermediates for global innovators and originators in Pharmaceutical and
Agrochemical markets. The Company markets and sell unique chemistry and
process capabilities to its customers based on which customers approach the Company with
projects for products that they wish to outsource. Therefore, unlike other chemical
companies, the Company does not have a catalogue of products to sell. The Company is well
renowned in the industry for its ability to handle various chemistries and chemicals.
Examples include Cyanation, Hydrogenation, Diazotisation, Mercaptans. Significant
expertise is available within the Chemplast ecosystem in processing and handling complex
chemicals such as Chlorine, Ethylene di chloride, Fluorine, Peroxides, Chlorosilanes and
Sodium Cyanide to name a few. Therefore, the Company offers a world-class research and
development capability combined with a broad range of chemical technologies at production
scale. In addition, the Company is also well known for its Environmental and Safety
stewardship. In fact, customers use this as a first criterion for screening before they
decide to work with a supplier. The Company is also unique in having access to many basic
starting materials important for this business such as Caustic, Chlorine, Hydrogen &
Chloromethanes and ability to handle gases like Ethylene.
The Company has long standing partnerships and relationships with
global innovator companies in the agro chemical and pharmaceutical space. In fact, many of
its customers have been with the Company for over a decade. It takes anywhere between 1 to
2 years to develop a product.
The Company focusses on engaging with its customers at an early stage
of the life cycle of a product to ensure this. Global innovator companies, are increasing
their outsourcing pie constantly. This together with China+1 strategy of the innovators,
is resulting in increased enquires for Indian players including Chemplast Sanmar. Due to
its efforts over the years in building relationships and partnerships, the Company has a
strong pipeline of products under various stages of development. Many of these will
require the Company to make investments in new capacity in the coming months and years.
The Company has already committed to invest Rs 680 Crores to set up a world class facility
to accommodate the new products in the pipeline.
Over the past 6 months, the Company has signed 2 Letters of Intent with
an agrochemical innovator to manufacture advanced intermediates.
II. Oth er Chemicals Chloromethanes
The year 2022-23 began amidst the backdrop of the less virulent
Omicron' strain of COVID-19 with marginal impact across various consumption
segments. Demand for Chloromethanes (CMP) began on a steady note, especially in the key
pharma sector. Offtake from the adhesive and foam sector continued to remain good as well.
Tight availability, coupled with lower import arrivals and high energy prices in Europe,
gave impetus to firm domestic prices in the early part of the financial year. New
capacities were set up by other companies during the year, to an extent of around 200ktpa.
Start-up and stabilisation issues kept the operating rates of the new plants low, thereby
supporting firm prices till the end of Q3.
The real impact of additional capacities were felt during the last
quarter of the year as full operating levels, coupled with limited export order book with
local producers, led to a sharp fall in prices of both Methylene DiChloride (MDC) and
Chloroform. The demand slump was more pronounced in Carbon Tetra Chloride (CTC) with
synthetic pyrethroids segment witnessing a much sharper drop in demand from the end of Q3,
as their exports to major markets in Latin America and Europe were severely impacted by
the drought conditions. Though addition of certain new customers did result in some
positive offtake of CTC, this could only marginally mitigate the impact of the severe
contraction in consumption from the DV acid segment.
Overall domestic demand for MDC grew by 7% from 345kt to 370kt during
the year, driven by the Pharma sector which remains as the single largest consumption
sector.
Chloroform demand grew by 17% from 155kt to 181kt during the year,
driven by PTFE demand. CTC demand contracted by 19% from 27kt to 22kt during the year.
The Company's production of Chloromethanes stood at 34,971 mt,
while sales, excluding captive consumption, were 32,826 mt during the year.
Caustic Soda
Being a very basic alkali with a strong correlation between consumption
and economic activity, Caustic
Soda witnessed a steady demand at the start of the new financial year.
However, by the end of Q1, higher yarn prices, and lower export orders from the European
Union, forced several small and mid-sized textile processors in South India to cut down
operating levels or shut plants due to unviable cost economics. Hence demand from this
sector started witnessing a downward trend whilst other segments like Paper and Pulp,
Alumina and ETPs exhibited a steady demand for the product.
The year also saw stabilisation of new capacity set up in FY 2021-22,
and the commissioning of additional capacity in the western part of the country. Drought/
energy crisis in Europe gave an opportunity for domestic producers (especially in the
West) to book huge export orders during the period between Aug-Oct'22 which supported
firm domestic prices availability became tighter. Prices started softening again from the
beginning of the last quarter on account of reduced export order book.
The Company's production of Caustic Soda was 1,03,032 MT while
sales, excluding captive consumption, stood at 98,677 mt during the year.
Hydrogen Peroxide
During the year under review, the Company gradually enhanced sales of
Hydrogen Peroxide to Textile and Paper and Pulp sectors. Domestic availability was limited
in the second and third quarter due to curtailed production from other domestic producers
on account of restricted supply of gas, in addition to lower imports from Bangladesh (due
to a safety incident at their container terminal). These factors had a positive impact
which enabled us to achieve higher volumes on a monthly basis and finally culminated in
highest monthly sale of 2,528 MT in December 2022. However, production was moderated in
the fourth quarter based on the overall economics of the caustic chain. The Company's
production of Hydrogen Peroxide was 25,284 MT while the sale was 25,316 MT during the
year.
Performance of Subsidiary:
Chemplast Cuddalore Vinyls Limited (CCVL)
The Company's wholly owned subsidiary CCVL earned a profitbefore
tax of Rs 35.48 Crores (before exceptional items) for the year ended March 31, 2023 as
compared to Rs 361.93 Crores for 2021-22. The profit after tax for 2022-23 was Rs 6.74
Crores, as against a profit Rs 269.18 Crores in 2021-22.
Management Discussion and Analysis Report
Pursuant to Regulation 34 of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing
Regulations"), the Management Discussion and Analysis Report for the year under
review, is presented in a separate section as Annexure A, forming part of the
Annual Report.
Corporate Governance Report
The report on corporate governance along with a certificate from the
Practising Company Secretary as required under the Listing Regulations is annexed to this
Report as Annexure B.
The Managing Director and the Chief Financial Officer have submitted a
certificate to the Board regarding the financial statements and other matters as required
under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations which is
annexed to the report on corporate governance.
The Board and senior management personnel have affirmed that they have
complied with the Code of Conduct of the Company. A declaration from Mr Ramkumar
Shankar, Managing Director, as required under Regulation 34(3) and Schedule V (D) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 to this effect is
annexed to the report on corporate governance.
Business Responsibility and Sustainability Report
In terms of Regulation 34 (2) (f) of the Listing Regulations, a
Business Responsibility and Sustainability Report is presented in a separate section,
forming part of this
Director's Report as Annexure C.
Safety and Environment
The Company continues to place great importance on protecting the
environment and managing natural resources responsibly. These principles have been
incorporated in all its operational systems, with stringent solid and hazardous waste
management processes followed at all plants.
1. Pr ocess Safety Management
All the Mettur plants have started implementing a Process Safety
Management programme. Each plant in Mettur is working on critical safety risk reduction
through Barrier Health Management study.
2. Beh aviour Based Safety
All the plants in the Company have commenced a Behaviour Based Safety
programme to further enhance and reinforce the safety-oriented work culture.
3. British Safety Council Occupational Health &
Safety Specification
Our manufacturing facilities have been audited by British Safety
Council on implementation of the latest Occupational Health and Safety specifications.
FIVE STAR rating has been awarded to all our plants at Mettur and
Karaikkal.
4. Pr ocess Hazard Analysis & safety studies
The Company completed the following safety studies in the plants, as
listed below.
Mettur, Plant 2 Fire risk assessment and HAZOP revalidation
Mettur, Plant 4 Quantitative Risk Assessment Mettur, Coal Based Power
Plant Hazardous Area Classification and Lighting Protection study
5. IS 14489 Statutory Audit
IS 14489 statutory audit was conducted at Mettur, Plant 4 and the
recommendations are under implementation.
IS 14489 statutory audit was conducted at Karaikkal plant and the
recommendations are under implementation.
6. Inte grated Management System Audit
Mettur Plant 4 obtained Integrated Management System Certificationfor
ISO14001 and ISO 45001, certified by Bureau Veritas.
7. A wards and Rewards
A. The following awards have been received from
The Indian Chemical Council
(a) ICC EVONIK Award for Excellence in Management of Environment Che
mplast Sanmar Limited, Mettur (b) A ward for the Best Nicer Globe User company
Che mplast Sanmar Limited (c) A ward for the Best Logistics Service
Provider Murugan Oil Corporation Logistic (MOC) Che mplast Sanmar Limited (d) A ward for
the Best Three drivers i) M.Swaminathan Murugan Oil also Corporation (Operating for
Chemplast Sanmar) ii) M.K umar Velliangiri
Thunai (VAT) Transport (Operating for Chemplast Sanmar) B. The
following awards have been from The National Safety Council Tamil
Nadu Chapter.
CSL Plant 1 & 2 received Star Award
Berigai plant received Appreciation award for Occupational Health and
Safety Award, 2020 from National Safety Council, Tamil Nadu Chapter.
C. The Company received award for Carbon Reduction from one of its key
customers of Custom Manufactured Chemicals.
Finance
The Company has established a good track record with the Bankers and
Financial institutions, thereby enjoying their full confidence In the first week of April
23, CRISIL Ratings has reaffirmed Chemplast Sanmar Limited's and its wholly owned
subsidiary Chemplast Cuddalore Vinyl Limited's credit ratings to AA- (long term),
signifying a high degree of safety. CRISIL has also reaffirmed short term rating of A1+,
whichisthehighestrating possible. areas of operations. All
Dividend Distribution Policy
The Company forms part of the List of top 500 listed entities based on
market capitalisation as on March 31, 2023. In view thereof, pursuant to the provisions of
Regulation 43A of the Listing Regulations, 2015, as amended, the Board of Directors has
approved the Dividend Distribution Policy and the said Policy is available in the
following link https:// www.chemplastsanmar.com/downloads/investor-relations/
csl-policies/dividend-distribution-policy.pdf
Change in the Nature of Business
There was no change in the nature of business of the Company during the
financial
Risk Assessment and Management
The Company has a well-defined Risk Management System. The Board of
Directors had constituted a Risk Management Committee to monitor and oversee the Risk
Management System. The Composition of the Risk Management Committee, terms of reference
and number of committee meetings held during the year under review are
givenintheCorporateGovernance deficiencies in the design or operation Report.
The Risk Management Policy of the Company as recommended by the Risk
Management Committee and approved by the Board of Directors of the Company can be accessed
in the Company's website using the link https://www.chemplastsanmar.com/downloads/
investor-relations/csl-policies/risk-management- and policy.pdf. The Risk Management
System of the Company ensures that all risks that the organisation faces including
strategic, financial, credit, operational, market, liquidity, security, property, legal,
regulatory, IT, reputational and other risks are identified and the impact assessed.
Mitigation plans are then drawn up and these plans are effectively reviewed and
implemented.
Internal Control Systems
Adequate internal controls, systems, and checks are in place,
commensurate with the nature of the Company's business and size. The management
exercises financial control on the operations through a well-defined budget monitoring
process and other standard operating procedures.
Internal audit for the year 2022-23 was carried out by R.G.N. Price
& Co, Chartered Accountants covering all significant observations of the Internal
Auditors are placed before the Audit Committee together with corrective actions. The
Internal Auditors monitor and evaluate the efficacy and adequacy of internal control in
the Company, and compliance with operating systems, accounting procedures and policies at
all locations of the
Company. Based on the reports of Internal Auditors, the management
undertakes appropriate corrective action in their respective areas.
Internal Financial Control over Financial Reporting
The Company has in place adequate internal financial controls with
reference to the Financial Statements. Such controls have been assessed during the year .
taking into consideration the essential components of internal controls stated in the
Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by
The Institute of Chartered Accountants of India. Based on the results of such assessment
carried out by management with the help of the internal auditors, no reportable material
weakness or of significant internal financial controls were observed.
Deposits
During the year under review, the Company has not accepted any public
deposit within the meaning of the provisions of Companies Act, 2013 and Companies
(Acceptance of Deposits) Rules, 2014 and as on March 31, 2023, the Company did not have
any outstanding public deposit.
Particulars of loans, guarantees or investments under Section 186 of
the Companies Act, 2013
Particulars of investments and guarantees under
Section 186 of the Companies Act, 2013 are given in the Notes forming
part of the Financial Statements for the year ended March 31, 2023.
The Company has not given any loans under the provisions of Section 186
of the Companies Act, 2013.
Consolidated Financial Statements
Consolidated Financial Statements are prepared by the Company in
accordance with the applicable and Material Orders passed by
Indian Accounting Standards (Ind AS) issued by the Ministry of
Corporate Affairs and the same together with Auditors' Report thereon form part of
the Annual
Report. The financial statementshavebeenprepared and material orders
passed as per Division II of Schedule III issued by the Ministry of Corporate Affairs vide
its Notification dated April 06, 2016 as amended from time to time.
Subsidiary
Chemplast Cuddalore Vinyls Limited continues to be the wholly-owned
subsidiary of the Company. The details on operations / performance of the said subsidiary
during the year under review are given hereinabove.
Pursuant to the requirements of Regulation 34(3) read with Schedule V
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the
details of investments made in the subsidiary and the details of guarantees issued by the
Company to the lenders of the wholly-owned subsidiary Company have been furnished in the
Notes forming part of the Accounts.
A statement containing the salient features of the financial statements
of the Company's wholly-owned subsidiary company under the provisions of Section
129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014
has been annexed in prescribed Form AOC 1 as Annexure 6. The Audited financial
statements of the wholly-owned subsidiary Company are placed on the Company's website
www.chemplastsanmar.com
The Company does not have any joint venture or
Associate Company during the year or at any time after the closure of
the year and till the date of the report.
Related Party Transactions
There are no contracts / arrangements / transactions with related
parties which are not at arm's length basis and there are no material contracts /
arrangements / transactions which are at arm's length basis. Accordingly, particulars
of contracts or arrangements with related parties referred to in Section 188 (1) along
with the justification for entering into such contract or arrangement in Form AOC 2 does
not form part of the report.
The Policy on Related Party Transactions as approved by the Board is
uploaded on the Company's websitehttps://www.chemplastsanmar.com/
downloads/investor-relations/csl-policies/related-party-transaction-policy.pdf
Significant
Regulators or Courts or Tribunals impacting the going concern status of
the Company
There were no significant by the Regulators or Courts or Tribunals
which would impact the going concern status of the Company and Company's operations
in future.
Material Changes and Commitment affecting the financial position of the
Company that occurred afterMarch 31, 2023
There were no material changes and commitments affecting the financial
position of the Company, which have occurred between the end of the financial year to
which the Financial Statements relate and on the date of this report.
Directors and Key Managerial Personnel
Dr Amarnath Ananthanarayanan, Non-Executive Non-Independent Director
resigned from the Board with effect from May 09, 2023. The Board of Directors place on
record the valuable services rendered by him during his tenure as Director of the Company.
The Board of Directors on the recommendation of Nomination and
Remuneration Committee, approved the appointment of Mr Vikram Taranath Hosangady (DIN:
09757469) as Non-Executive Non-Independent
Director of the Company in the casual vacancy caused by the resignation
of Dr Amarnath Ananthanarayanan Non-Executive Non-Independent Director, at its meeting
held on May 16, 2023 subject to the approval of shareholders of the Company.
The Company has received notice from of the Company a member for
under Section 160 of the Companies Act, 2013 proposing the appointment of Mr Vikram
Taranath Hosangady as Non-Executive Non-Independent Director of the Company liable to
retire by rotation. Pursuant to the provisions of Section 152, 160, 161 and other
applicable provisions of the Companies Act, 2013 approval of shareholders of the Company
is required for the appointment Mr Vikram Taranath Hosangady as Non-Executive
Non-Independent Director, liable to retire by rotation.
Mr Chandran Ratnaswami, Director, is liable to retire by rotation
pursuant to Section 152 (6) of the Companies Act, 2013. Being eligible, he offers himself
for reappointment. His re-appointment was recommended by the Nomination and Remuneration
Committee of Directors at its meeting held on May 16, 2023 and will be placed before the
members for approval at the ensuing 39th Annual General Meeting.
The Independent Directors have submitted declarations stating that they
meet the criteria of independence as provided in Section 149(6) of the Companies Act,
2013. Based on the declarations received from all the Independent Directors and in the
opinion of the Board, all the Independent Directors possess integrity, expertise,
experience and proficiency and are independent of the management. Pursuant to the
provisions of Section 203 of the Companies Act, 2013 read with the rules thereunder, the
Key Managerial Personnel (KMP) of the Company are Mr Ramkumar Shankar, Managing Director,
Mr N Muralidharan, Chief Financial Officer and Mr M Raman, Company Secretary. They are
also the KMPs of the Company's wholly-owned subsidiary company, Chemplast Cuddalore
Vinyls Limited.
Directors' Responsibility Statement
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors make the following statements
in terms of Section 134(3)(c) of the Companies Act, 2013. (a) In the preparation of the
annual accounts the year ended March 31, 2023, the applicable accounting standards have
been followed by the Company.
(b) The Directors have selected such 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 as at March the 31, 2023
and of the profit Overview
year ended on that date. (c) The Directors have taken proper and
sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting Financial Statements fraud and other irregularities.
(d) The Directors have prepared the annual accounts of the Company on a
going concern basis.
(e) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
(f) The Directors have laid down internal financial controls to be
followed and confirms that such internal financial controls were adequate and operating
effectively.
Number of Board Meetings
During the year, the Board of Directors met five times as per details
furnished in the Corporate Governance Report.
Audit Committee
Composition of Audit Committee
The composition of the Audit Committee is as under and is in compliance
with the provisions of Section 177 of the Companies Act, 2013 read with the rules there
under and Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations"). The scope of the
activities of the Audit Committee is set out in the Corporate Governance Report.
Name of the Members |
Category |
Mr Sanjay Vijay Bhandarkar-
Chairman |
Independent Director |
Mr Prasad Raghava Menon |
Independent Director |
Mr Vijay Sankar |
Non-Executive Director |
During the year under review, all the recommendations made by the Audit
Committee were accepted by the Board.
The Members of the Audit Committee met five times during the financial
year under review, as per the details stated in the Corporate Governance Report.
Nomination and Remuneration Committee
The Members of the Nomination and Remuneration Committee met three
times during the financial year under review. The details of the constitution of the
Nomination and Remuneration Committee, terms of reference and the meetings held during the
financial year have been stated in the Corporate Governance Report.
The Policy on formal Annual Evaluation by the Board can be
accessed through the following link https://www.chemplastsanmar.com/downloads/
investorrelations/csl-policies/nomination-remuneration-policy-and-board-evaluationpolicy.pdf
Stakeholders Relationship Committee
The Members of the Stakeholders Relationship Committee met once during
the financial year under review. The details of the constitution of the Stakeholders
Relationship Committee, terms of reference and the meetings of the Committee held during
the financial year have been stated in the Corporate Governance Report.
Risk Management Committee
The Members of the Risk Management Committee met twice during the
financial year under review. The details of the constitution of the Risk Management
Committee, terms of reference and the meetings of the Committee during the financial year
have been stated in the Corporate Governance Report.
Corporate Social Responsibility Committee
The Members of the Corporate Social Responsibility Committee met once
during the financial year under review. The details of the constitution of the CSR
Committee and the Committee meetings held during the financial year
have been stated in the Corporate Governance Report.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013, the Board has
carried out evaluation of its own performance, the directors individually and evaluation
of working of the committees of the Board during the financial year 2022-23 as per the
criteria laid down by Nomination and Remuneration Committee. The evaluation process
contained various aspects of the functioning of the Board and its committees, number of
committees and their roles, frequency of meetings, level of participation, and
independence of judgement, performance of duties and obligations.
The Board expressed its satisfaction on the performance of all the
directors, Board and its committees which reflected the overall engagement of the
directors, the Board and its committees of the Company.
Familiarisation Programme for the Independent Directors:
The details with respect to familiarisation programme for the
Independent Directors are furnished in the Corporate Governance Report.
Personnel
Industrial relations with employees remained cordial during the year.
Human Resource Development activities continued to receive considerable attention.
The emphasis was on imparting training and developing the skill set of
employees to enable them to face the challenges in an increasingly complex work
environment.
Particulars of employees
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure
3.
Statement containing particulars of employees drawing remuneration in
excess of limits prescribed under Section 197 (12) of the Act read with Rule 5 (2) and 5
(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014
is provided in the Annexure forming part of this report. In terms of proviso to Section
136 (1) of the Act, the Report and Accounts are being sent to the Shareholders excluding
the aforesaid Annexure. The said Statement is also open for inspection. Any member
interested in obtaining a copy of the same may write to the Company Secretary.
Disclosure under Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013
The Company has complied with the provisions of
Section 4 of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, in regard to constitution of an internal Committee
as prescribed. During the year, there were no cases filedpursuant to the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism Policy to deal with an instance of
fraud or mismanagement, if any. The Directors are pleased to report that during the year
under review, no untoward or fraud case of material nature was reported.
The Company has adopted an ethical code of conduct for the highest
degree of transparency, integrity, accountability and corporate social responsibility. Any
actual or potential violation of the Code would be a matter of serious concern for the
Company. This policy has been formulated with a view:
T o provide a mechanism for employees of the Company and other
persons dealing with the Company to report to the Chairman of the Audit Committee, any
instance of unethical behaviour, actual or suspected fraud or violation of the
Company's Ethics Policy. T o safeguard the confidentialityand interest of such
employees / other persons dealing with the Company against victimisation, and T o
appropriately communicate the existence such mechanism, within the organisation and to
outsiders.
T o ensure that no personnel is denied access the Chairman of the
Audit Committee in respect of reporting any of above instances.
Corporate Social Responsibility
The Company has all along attached utmost importance to sustainable
development. As mandated by the Companies Act, 2013 and the rules framed thereunder, the
Company has formulated a Policy on CSR and has constituted a CSR Committee to recommend
and monitor expenditure on CSR. Details of CSR Expenditure are given in the prescribed
format and forms part of this Report and is enclosed as Annexure 2.
Statutory Auditors
BSR & Co. LLP, Chartered Accountants (Firm Registration No
101248W/W-100022) was appointed as the Statutory Auditors of the Company for a period of 5
years, from the conclusion of 38th Annual General Meeting to 43rd Annual
General Meeting of the Company, that is, for the Financial Years 2022-23 to 2026-27.
Internal Auditors
RGN Price & Co. LLP, Chartered Accountants are the Internal
Auditors of the Company.
Cost Records, Audit and Auditor
Pursuant to Section 148(1) of the Companies Act, 2013 and rules
thereunder, the Company is required to maintain cost records/ accounts as specified
therein in respect of its products and the Company maintains cost records/ accounts in the
prescribed format. As per provisions of Section 148 of the Companies Act, 2013 read with
the Companies (Cost Records and Audit) Amendment Rules 2014, the cost audit records
maintained by the Company in respect of the products of the Company are required to be
audited. The Company has appointed N. Sivashankaran & Co, Cost & Management
Accountants, Chennai (Firm Registration No. 100662) as cost auditors to audit the cost
accounts of the Company for the financial year 2022-23.
The Cost Auditors have given a Certificate to the effect that the
appointment, if made, will be within the prescribed limits specified under Section 141 of
the Companies Act, 2013.
As required under the Companies Act, 2013, the remuneration payable to
the Cost Auditor is placed before the Members for their ratification
Secretarial Audit
The Board of Directors had appointed B Ravi & Associates, Company
Secretaries in Practice, Chennai to carry out the Secretarial Audit of the Company for the
financial year 2022-23. The Report of the Secretarial Auditor is annexed herewith as Annexure
4 and forms part of this Report.
Pursuant to Regulation 24A of the Listing Regulations, the Secretarial
Audit Report issued by B Ravi & Associates, Company Secretaries in Practice, Chennai
to the Company's material unlisted subsidiary Chemplast Cuddalore Vinyls Limited is
also annexed herewith as Annexure 5.
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the
Board of Directors have appointed B Ravi & Associates, Company Secretaries in
Practice, Chennai to carry out the Secretarial Audit of the Company for the financial year
2023-24.
Explanations or comments on the qualification, reservation, adverse
remark or disclaimer made by the Statutory Auditors or by the Company Secretary in
Practice in their report.
For the year under review, there is no qualification, reservation or
adverse remark or disclaimer made by the Statutory Auditor or Secretarial Auditor of the
Company. The report of the Statutory Auditors forms part of the
financial statement.
During the year under review, there were no material or serious
instances of fraud falling within the purview of
Section 143(12) of the Companies Act 2013 and rules made there under by
officers or employees reported by the Statutory Auditors of the Company during the course
of the audit conducted.
The Managing Director and the Chief Financial Officer have submitted a
certificate to the Board regarding the financial statements and other matters as required
under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations.
Secretarial Standards
The Board confirms compliance with the Secretarial Standards notified
by the Institute of Company Secretaries of India, New Delhi and applicable to the Company.
Annual Return
Draft Annual return in Form MGT 7 as on March 31, 2023 is available in
the Company's website https:// www.chemplastsanmar.com/annual-report.php.
Green initiative
Your Directors would like to draw your attention to Section 20 of the
Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, as
may be amended from time to time, which permits paperless compliances and also service of
notice/documents (including annual report) through electronic mode to its members. To
support this green initiative of the Central Government in full measure, the Company
appeals to all those members who have not registered their e-mail addresses so far, to
register their e-mail address in respect of electronic holdings with their concerned
Depository Participants and / or with the Company.
Further, the Company will also send the Annual Report for the Financial
Year 2022-23 to all the shareholders only through electronic means as per the relaxations
provided by MCA Circular dated May 05, 2020, January 13, 2021, December 14, 2021 May 05,
2022 and December 28, 2022 and SEBI Circular dated May 12, 2020, January 15, 2021, May 13,
2022 and January 05, 2023 which enhances the Green initiative measures taken by the
Company.
Other disclosures
During the year under review, there were no: a) Issues of Equity Shares
with differential voting rights, dividend or otherwise as per Section 43(a) (ii) of the
Companies Act 2013. b) Issues of shares including Sweat Equity Shares to the employees of
the Company under any scheme as per provisions of Section 54 (1) (d) of the Companies Act,
2013. c) Inst ances of non-exercising of voting rights in respect of shares purchased
directly by employees under a scheme pursuant to Section
67 (3) of the Companies Act, 2013 and d) Re visions to the financial
statements during the year under review.
Other Particulars
Additional information on conservation on energy, technology
absorption, foreign exchange earnings and outgo as required to be disclosed in terms of
section 134(3)(m) of the Companies Act, 2013, read with Rule 9 of the Companies (Accounts)
Rules 2014 is set out in Annexure 1 and forms part of this Report.
Acknowledgements
The Board of Directors thank the customers, vendors, bankers,
regulatory and Government authorities, stock exchanges, business associates and all other
stakeholders for their assistance, support and cooperation extended. The Directors also
thank theShareholders for reposing faith on the Company's performance. The Board of
Directors places on record its appreciation for the committed service of all the employees
of the Company.
Cautionary Statement
Statements made in the report, including those stated under the caption
"Management Discussion and Analysis" describing the Company's plans, and
expectations may constitute, "forward looking statements" within the meaning of
applicable laws and regulations. Actual results may differ materially from those either
expressed or implied.
For and on behalf of the Board
|
Vijay Sankar |
Chennai |
Chairman |
May 16, 2023 |
DIN: 00007875 |
|