Manali Petrochemicals Limited SPIC House, 88, Mount Road, Guindy, Chennai - 600 032 Telefax : 044 - 2235 1098 Website : www.manalipetro.com CIN : L24294TN1986PLC013087 ' Ref: MPL J Sectl I BSE & NSE I E-2 & E-3 I 2018 z'" August 2018 The Manager, The Listing Department Listing Department, National Stock Exchange of India BSE Limited Limited Corporate Relationship Exchange Plaza, s" Floor, Department Plot No .C/11 G Block, 1st Floor, New Trading Ring, Bandra-Kurla Complex, Rotunda Building, P J Tower, Bandra (East) Dalal Street, Fort, Mumbai - 400 051 Mumbai - ~oo 001. Stock Code: MANALIPETC Stock Code: 500268 Dear Sir, Sub: Submission of Annual Report for the year 2017-18 - reg. Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 20151 we submit herewith the Annual Report for the year 2017-18 in pdf version We request you to kindly take above on record. Thanking you, Yours faithfully, For Manali Petrochemicals Limited R Kothandaraman Company Secretary Encl.: As above ISO 9001 REGISTERED ISO 14001 REGISTERED Factories: Plant - 1 : Ponneri High Road, Manali, Chennai - 600 068 (IQ Plant - 2 : Sathangadu Village, Manali, Chennai - 600 068 (IQ ~ MGMlSYS. ~ MGMlSYS. ~ RvACOL4 Phone : 044 - 2594 1025 Fax : 044 - 2594 1199 ~ RvACOt4 ONV Certification B.V., The Netherlands DNV Certification B.V.. The Netherlands E-mail: [email protected] ANNUAL REPORT 2017 - 18 Manali Petrochemicals Limited Board of Directors Auditors Ashwin C Muthiah DIN: 00255679 Chairman Brahmayya & Co. Brig (Retd.) Harish Chandra Chawla DIN: 00085415 Director Chartered Accountants Gangadharan Chellakrishna DIN: 01036398 Director 48, Masilamani Road, Sashikala Srikanth DIN: 01678374 Director Balaji Nagar, Govindarajan Dattatreyan Sharma DIN: 08060285 Director Royapettah, Thanjavur Kanakaraj Arun DIN: 02163427 Director Chennai - 600 014 Muthukrishnan Ravi DIN: 03605222 Managing Director C Subash Chandra Bose DIN: 06586982 Whole-Time Director (Works) Cost Auditor S Gopalan & Associates Company Secretary Cost Accountants R Kothandaraman F-1, Nethrambigai Apartments 15, Vembuli Amman Koil Street Chief Financial Officer K K Nagar West, Chennai 600 078 Anis Tyebali Hyderi Registered Office Secretarial Auditor SPIC HOUSE, 88 Mount Road B. Chandra Guindy, Chennai 600 032 Company Secretaries AG 3, Navin’s Ragamalika CIN: L24294TN1986PLC013087 26 Kumaran Colony Main Road Telefax: 044-2235 1098 Vadapalani Email: [email protected] Website: www.manalipetro.com Chennai - 600 026 Factories: Internal Auditors Plant - 1 Profaids Consulting Ponneri High Road, Manali, Chennai 600 068 Management Consultants OMS Court, Level 3, 1 Nathamuni Street Plant - 2 Off GN Chetty Road, T. Nagar Sathangadu Village, Manali, Chennai 600 068 Chennai - 600 017 Registrar and Share Transfer Agent (RTA) Bankers Cameo Corporate Services Limited Subramanian Building IDBI Bank Limited 1 Club House Road, Chennai 600 002 The Federal Bank Limited HDFC Bank Limited CONTENTS 1. Directors’ Report and Management Discussion & Analysis Report.................................................... 02 2. Report on Corporate Governance......................................................................................................... 09 3. Secretarial Audit Report......................................................................................................................... 16 4. Particulars as required under Rule 3 of the Companies (Accounts) Rules, 2014................................ 20 5. Extract of the Annual Return.................................................................................................................. 21 6. Annual Report on CSR Activities........................................................................................................... 25 7. Auditors’ Report on Standalone Financial Statements ....................................................................... 27 8. Standalone Balance Sheet.................................................................................................................... 32 9. Standalone Statement of Profit and Loss............................................................................................. 33 10. Standalone Statement of Changes in Equity ........................................................................................ 34 11. Standalone Statement of Cash Flows.................................................................................................... 35 12. Notes to Standalone Financial Statements......................................................................................... 37 13. Auditors’ Report on Consolidated Financial Statements.................................................................... 73 14. Consolidated Balance Sheet................................................................................................................. 76 15. Consolidated Statement of Profit and Loss.......................................................................................... 77 16. Consolidated Statement of Changes in Equity .................................................................................... 78 17. Consolidated Cash Flow Statement...................................................................................................... 79 18. Notes to Consolidated Financial Statements....................................................................................... 81 19. Form AOC-1............................................................................................................................................. 116 Directors’ Report and Management Discussion & Analysis Report to the Shareholders The Directors present their 32nd Annual Report on the ` 77,223 billion in March 2018, registering a y-o-y growth business and operations of your Company and the Audited of 8.2% against 7.3% in the previous year. Credit off-take Financial Statements for the year ended 31st March 2018. by industries sector recorded a growth of 0.70% vis-à-vis decline of 1.90% in 2016-17. However, the Petrochemical Financial Results sector posted a decline of 23.7% against increase of During the year the Company has adopted the Indian 38.8% in the preceding year. Accounting Standards (IndAS) in compliance in the The interest rates hovered between 10% and 11% and Companies (Indian Accounting Standards) Rules, 2015. no major changes were noticed during the year. The The highlights of the financial results for the year are given weighted average lending rates of the Public Sector banks below: was 10.75% in March 2017 and it reduced to 10.12% at the (` in crore) end of 2017-18. The WALR of private banks, foreign banks and other scheduled commercial banks were also in the DESCRIPTION 2017-18 2016-17 same range, signifying that the interest rates were stable Profit Before interest, depreciation & Tax 94.92 73.52 during the year under review. Interest 2.82 1.86 Depreciation 8.25 9.19 During the year 2017-18, additional working capital Profit Before Tax 83.85 62.47 facilities were sanctioned to the Company by new banks, Provision for Tax 28.98 20.20 providing flexibility to manage the funding requirements Profit After Tax 54.87 42.27 and also meet the capital initiatives, resulting in marginal increase in the finance cost. Operational Highlights The Company has been reaffirmed with ratings of CARE Net revenue from operations during the year was about A- signifying ‘low credit risk’ for long-term bank facilities ` 634 crore against ` 577 crore during the year 2016-17, and CARE A1 signifying ‘lowest credit risk’ for short-term registering an increase of about 10%. The margins were bank borrowings upto ` 100 crore. better during the year under review compared to the Dividend previous year which had been affected by demonetization Your Company has been following a consistent dividend and inventory reduction at the year-end by major policy, ensuring that the dividend payments are sustained players on account of the imminent GST implementation even when the conditions are not favourable. You would scheduled from 1st July 2017. be happy to note that the Company has an unbroken During the year under review earnings before interest dividend track of 12 years till the last year. and depreciation was about 15% Vis a Vis 12% in 2016-17, In line with the above, your Directors recommend resulting in significant increase in net profits. a dividend of 10% i.e. fifty paise per equity share of ` 5/- each fully paid-up, for the year 2017-18, aggregating The bio mass Captive Power Plant was not operated to ` 8.60 crore, excluding dividend distribution tax. during the year, as it was more economical to use the Industry structure and development furnace oil based energy. The Company continues Your Company operates in the Polyurethanes (PU) to source power from third parties besides the power industry. PU is one of the most versatile polymers available supplied by TANGEDCO. in many forms, ranging from soft foams to very rigid and During the year, additions to fixed assets was about tough materials. This provides opportunity for almost ` 36 crore including for debottlenecking of the Polyol infinite applications, which are evolving continuously. facilities which facilitated higher productivity and also It mainly caters to industries like Automotive, Appliances, revamp of the effluent treatment facilities. Building & Construction, Energy, Defence, Paints and Coatings, Soft furniture, etc. While the usage levels are Financial Review advanced in the Europe, North America and Far East, in The