ANNUAL REPORT 2014 15 Manali Petrochemicals Limited
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ANNUAL REPORT 2014 q 15 3ULQWHGDW&KHQQDL0LFUR3ULQW3K Manali Petrochemicals Limited %RDUGRI'LUHFWRUV $XGLWRUV Ashwin C Muthiah DIN: 00255679 Chairman Deloitte Haskins & Sells, Brig (Retd.) Harish Chandra Chawla DIN: 00085415 Director Chartered Accountants, Kulbir Singh DIN: 00204829 Director ASV N Ramana Towers G. Chellakrishna DIN: 01036398 Director 52, Venkatnarayana Road, T Nagar, Sashikala Srikanth DIN: 01678374 Director Chennai 600 017 T K Arun (Nominee of TIDCO) DIN: 02163427 Director &RVW$XGLWRU Muthukrishnan Ravi DIN: 03605222 Managing Director S Gopalan & Associates G. Balasubramanian DIN: 06874838 Whole-Time Director (Works) Cost Accountants F-1, Nethrambigai Apartments &RPSDQ\6HFUHWDU\ 15, Vembuli Amman Koil Street R. Kothandaraman K K Nagar West, Chennai 600 078 &KLHI)LQDQFLDO2IILFHU 6HFUHWDULDO$XGLWRU Anis Tyebali Hyderi Ms. B. Chandra, Company Secretaries, 5HJLVWHUHG2IILFH A2, Happy Home Apartments, SPIC HOUSE, 88 Mount Road No.9, 4th Main Road, Guindy, Chennai 600 032 United India Colony, Kodambakkam, Chennai - 600 024. &,1/713/& Telefax: 044-2235 1098 ,QWHUQDO$XGLWRUV Email: [email protected] Profaids Consulting Website: www.manalipetro.com Management Consultants 3ULQFLSDO2IILFH 3ODQW 206&RXUW/HYHO 1 Nathamuni Street, Ponneri High Road, Manali, Chennai 600 068 Off GN Chetty Road, T.Nagar, Chennai - 600 017. 3ODQW %DQNHUV Sathangadu Village, Manali, Chennai 600 068 State Bank of India State Bank of Hyderabad 5HJLVWUDUDQG6KDUH7UDQVIHU$JHQW 57$ Indian Bank &DPHR&RUSRUDWH6HUYLFHV/LPLWHG Punjab National Bank Subramanian Building, Corporation Bank State Bank of Bikaner and Jaipur 1 Club House Road, Chennai 600 002 CONTENTS 1. Directors` Report and Management Discussion & Analysis Report ............................. 2 2. Report on Corporate Governance ................................................................................ 5 3. Secretarial Audit Report................................................................................................ 11 4. Particulars as required under Rule 3 of the Companies (Accounts) Rules, 2014 ........ 12 5. Extract of the Annual Return as on 31st March 2015 ................................................... 13 6. Disclosures under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.............................................................................. 20 7. Annual Report on CSR Activities during the year 2014-15 .......................................... 22 8. Auditors` Report ............................................................................................................ 23 9. Balance Sheet ............................................................................................................... 26 6WDWHPHQWRI3UR¿WDQG/RVV ......................................................................................... 27 11. Cash Flow Statement .................................................................................................... 28 12. Notes to Financial Statements ...................................................................................... 29 'LUHFWRUV 5HSRUWDQG0DQDJHPHQW'LVFXVVLRQ $QDO\VLV5HSRUWWRWKH6KDUHKROGHUV The Directors present their 29th Annual Report on the business and Industry structure and developments operations of your Company and the Audited Financial Statements Your company specializes in propylene glycol, polyether polyol and for the year ended 31 st March 2015. RSHUDWHV LQ WKH 3RO\XUHWKDQHV 38 LQGXVWU\ 3RO\ROV ¿QG YDULHG Financial Results applications and caters to various industries such as automotive, (Rs. in crore) refrigeration, insulation etc. Your company also manufactures Description 2014-15 2013-14 propylene glycol for pharma, fragrance and industrial applications 77.56 53.22 DQG FRQWLQXHV WR SHUIRUP ZHOO LQ SKDUPD ÀDYRXU DQG IUDJUDQFH 3UR¿W%HIRUHLQWHUHVW GHSUHFLDWLRQ sectors. The off-take of PG for industrial applications was very low Interest 2.48 1.90 due to availability of alternate cheaper materials and unabated Depreciation 5.55 6.56 imports. Import of PG was also higher during the year opening up 3UR¿W%HIRUH7D[ 69.53 44.76 ¿HUFHFRPSHWLWLRQHVSHFLDOO\IURPPDMRU01&V Provision for Taxation 25.54 15.71 It may be recalled that the market became stagnant in 2013 due to various factors like overall economic slowdown, impact of global 3UR¿W$IWHU7D[ 43.99 29.05 HFRQRPLF FULVLV RQ ,QGLDQ PDQXIDFWXUHUV LQÀDWLRQDU\ SUHVVXUHV Operational Highlights etc. Some revival was seen towards the end of 2013-14 which The performance during the year was the best ever in the history continued during the year under review. Automobile, pharma and of the Company with turnover surpassing the Rs. 800 crore mark. refrigeration sectors registered substantial growth at 8.68%, 9% The export sales increased from Rs. 17.58 crore to Rs. 33.67 crore DQGUHVSHFWLYHO\7KHPDUNHWIRU03/¶VSURGXFWVDOVRJUHZE\ KLJKHVWHYHUUHFRUGHGE\WKH&RPSDQ\7KHQHWSUR¿WIRUWKH\HDU about 10% which helped improved performance of your Company. was higher by about 51% at Rs. 43.99 crore against Rs. 29.05 crore 'XULQJWKH\HDU03/¶VSHUIRUPDQFHZDVLPSUHVVLYHZLWKLQFUHDVHG in the previous year. production, turnover and margins. However, the ever increasing import of polyol into India continues to be a major concern for Availability of bio mass fuel for the Captive Power Plant (CPP) domestic manufacturers. continued to be limited and the input cost also went up substantially Opportunities and Threats due to demand from other core industries such as paper mills. Alternate fuels for the CPP were used to ensure operations at Polyurethane materials, due to their versatility, perform extremely optimum load, but with the cost becoming higher than the alternate well as part of any application that is subject to dynamic stress. power, the CPP was shut down during December 2014. The They provide many advantages including: resilience, high tear Company went in for purchase of power through energy exchanges resistance, low viscosity and low heat build-up. Polyurethane can be and third parties to meet the short-fall. used for varied applications like building insulations, refrigeration, furniture, footwear, automotive, coatings and adhesives, sealants The bulk storage facility at Ennore Port became operational during etc. The development of polyurethane materials is still evolving and the year under review thereby ensuring uninterrupted availability new applications are regularly being created. The Indian PU market of input material for the derivative plants. Import of PO during the is rapidly growing which has registered double digit growth during year was about 10,000 MT which helped in better production and achieving highest ever turnover. WKHSDVW¿YH\HDUVDQGLVH[SHFWHGWRGRXEOHHYHU\IRXU\HDUVLQ the coming decade. This has thrown open excellent opportunity for Financial Review 03/WRLPSURYHWKHRSHUDWLRQVIXUWKHU The year 2014-15 witnessed moderate changes in interest rates The Make in India initiative is also likely to give a thrust to local and the bank rate came down from 9% in March 2014 to 8.5% in manufacturing to be achieved in the next 2-3 years which will also March 2015. There was decline in the overall bank credit growth SURYLGHIXUWKHURSSRUWXQLWLHVWR03/WRLPSURYHLWVSHUIRUPDQFH DQG DOVR DJJUHJDWH RI EDQN GHSRVLWV7KH LQÀDWLRQ DOVR GHFOLQHG 2QWKHQHJDWLYHVLGHWKH,QGLDQ38PDUNHWLVÀRRGHGZLWKLPSRUWRI sharply mainly on account of lower crude oil prices and other steps )OH[LEOH6ODEVWRFN3RO\ROZKLFKLVDPDMRUSURGXFWRI03/'XULQJ taken by the regulators. the year under review, the FSP imports were close to 70,000 MT, 7KH&RPSDQ\KDVEHHQUHDI¿UPHGZLWKUDWLQJVRI&$5($VLJQLI\LQJ 30% more than the previous year. The PG imports also continued `low credit risk` for long-term bank facilities and CARE A1 signifying to be higher in the range of over 54000 MT. `lowest credit risk` for short-term bank facilities. With the major capacity additions by the competitors in Thailand Dividend for PG and in Singapore for Polyol becoming fully operational the The Company is in the process of taking up capital expenditure imports into India are set to go up further, which could result in a price war and affect the margins of the Company. SODQV WR LPSURYH WKH VDOHV DQG SUR¿WDELOLW\ IXUWKHU DQG QHHGV WR SORXJK EDFN WKH SUR¿WV IRU WKH VDPH WR DYRLG LQWHUHVW EXUGHQ ,Q Market Scenario the light of this, your Directors recommend a 10 % dividend i.e. During the year under review, the Indian PU market performed better ¿IW\SDLVHIRUHYHU\HTXLW\VKDUHRI5VHDFKIXOO\SDLGXSIRU WKDQWKHSUHYLRXV\HDU7KRXJKLPSRUWVFRQWLQXHGWRÀRRGWKHGRPHVWLF the year 2014-15, aggregating to Rs. 8.60 crore, excluding dividend market, your Company achieved a turnover of Rs. 814.13 crore distribution tax. It may be noted that your Company has been against Rs. 618.51 crore in FY 2013-14, higher by about 32%. Export declaring dividend continuously for the past ten years, in spite of the sales during the year increased by 91% over last year. The improved downturn in the economy experienced globally and in India during performance was mainly on account of foraying into new markets and adding new customers. The margins also improved through various the earlier years. actions taken for higher productivity and better pricing strategies. 2 Risk Management Policy These are expected to help the Company in facing the tough The Company has over the years developed a frame work for competition from MNCs in a better way. As a way forward the risk management and laid down procedures to inform Board Product Development team