The Directors are pleased to present the 56th annual report and
audited statement of accounts for the year ended December 31,2012.
The financial performance of the Company for the year ended December
31, 2012 is summarized below:
Sales (Gross- including excise duty) 1145,99.32 1015,85.85
Net sales 1071,22.57 956,08.12
Profit before exceptional items & tax 133,11.00 154,07.71
Add: Exceptional items 9,20.47 241,33.20
Profit before tax 142,31.47 395,40.91
Less: Tax expenses (incl. deferred tax) 41,01.43 91,37.01
Profit after tax 101,30.04 304,03.90
Add : Balance brought forward from
previous year 126,30.48 38,37.85
Amount available for appropriation 227,60.52 342,41.75
General reserve 10,13.00 30,40.39
Interim dividend 26,66.07 79,98.22
Proposed dividend (final) 46,65.63 79,98.22
Tax on dividend (interim, final
proposed & incl. previous period) 11,89.38 25,74.44
Balance carried forward to balance sheet 132,26.44 126,30.48
Review of operations
The business sentiments, confronted with the challenges of market
conditions and slowdown in global demand, remained extremely
challenging and the recessionary economic conditions led initial
slowdown in sales growth. Thanks to the sustained efforts of the
marketing team, improved marketing performance of the second half
resulted into record sales and growth. The performance in terms of net
working capital was affected by built-up of inventory and the
profitability is significantly impacted by inflation led cost push in
most of the operating areas. Directors are pleased to inform that in
spite of challenging conditions, your Company has registered best ever
performance in terms of sales growth over previous year.
The Company registered sales ofRs. 1071.23 crores as compared to Rs.
956.08 crores registering a record growth of 12.0 percent sales. Out of
the total sales revenue of the Company for the year, 25.3 percent is
contributed by exports. The increased cost of raw materials and
inflationary rise in other expenses resulted into lowering of PBDIT
margin before exceptional items from 17.7 percent to 14.6 percent. Net
profit after accounting for exceptional items and tax is lower over the
previous year. The Company remains focused to improve its core business
and look for higher market share in the business segments in which it
In view of prolonged litigation, the Company could not implement its
project for manufacturing of Masterbatches at Ambernath, the site
acquired by the Company in 2008 from MIDC.
During the year, your Directors had declared an interim dividend of Rs.
10/- per share (100%) and the same was paid in August 2012. Based on
the performance for the year and the policy for distribution of profits
to the shareholders adopted by the Company, the Board of Directors is
pleased to recommend a final dividend ofRs. 17.5/- per share (175%).
The total dividend for the year under review amounts to Rs. 27.5/- per
share (275%) as compared to Rs. 60/- per share (600%) paid for the
previous year, including special dividend attributable to exceptional
income. The dividend together with tax thereon for the year entails
cash out flow of Rs. 85,31.08 Lakhs (previous year Rs. 185,91.46 Lakhs)
and pay out of 84% of the net profit for the year.
Sale of Businesses
Clariant AG Switzerland, the ultimate Holding Company has announced
that USA based SK Capital has agreed to purchase the business units
textile chemicals, paper specialties and business line emulsions from
Clariant and that this will include the transfer of the whole R&D,
applications, sales and marketing organisation along with production
plants and sites worldwide.
Clariant Chemicals (India) Ltd. has production facilities for
manufacture of textile chemicals and produces paper specialties and
emulsion products at its Roha plant. The textile chemicals, paper
specialties and emulsion businesses, included in dyes and specialty
chemicals segment, together contribute about 35% of the net sales of
the Company. The decision to sell the businesses including a
manufacturing plant for textile products situated at Roha and other
assets dedicated to the businesses under divestment, at a value to be
arrived at by the professional valuers, will be considered by the Board
and approval of shareholders will be sought at appropriate time in
accordance with the requirements of the Companies Act, 1956. The
Directors would like to assure its shareholders that given the present
market conditions prevailing for the businesses under sale, the
decision will be in the best interest of the Company and its
The Company did not accept any fixed deposits during the year under
review. There were no overdue or unclaimed deposits outstanding as on
December 31, 2012.
Management Discussion and Analysis Report
In accordance with Clause 49 of the listing agreements, the Management
Discussion & Analysis Report forms a part of this report.
The Company has always strived to maintain applicable standards of good
corporate governance and the commitment to good corporate governance is
embodied in its vision, mission and corporate values. The Company aims
to be the leader in specialty chemicals, adopting functional excellence
as part of its culture and its corporate values to foster a shared and
common set of behaviors amongst all the employees, to help Clariant to
realise its goal of sustainable value creation. The report on corporate
governance as stipulated under Clause 49 of the listing agreements
forms part of this report. The requisite certificate from the auditors
of the Company confirming compliance with the conditions of corporate
governance as stipulated under the said clause is attached to this
Particulars of Employees
The particulars of employees required to be furnished under section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 as amended, forms part of this report.
However, as per provisions of section 219 (1) (b) (iv) of the Companies
Act, 1956, the report and accounts are being sent to all the
shareholders, excluding the statement of particulars of employees. Any
shareholder interested in obtaining a copy of this statement, may write
to the Company Secretary at the registered office of the Company.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Diwan A. Nanda and Dr. H.
Schloemer will retire by rotation at the forthcoming Annual General
Meeting, and being eligible, offer themselves for re-appointment. The
Directors recommend their re-appointment.
Details of the Directors seeking re-appointment are provided in the
Corporate Governance Report forming part of this report, as required
under Clause 49 of the listing agreements with the stock exchanges.
Directors'' Responsibility Statement
In terms of section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that -
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(b) they have selected such accounting 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 December 31, 2012 and of the profit of the Company
for that year;
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis.
Conservation of Energy, Research and Development, Technology
Absorption, Foreign Exchange Earnings and Outgo
Information pursuant to section 217(l)(e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, is annexed hereto and forms part of
M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the
conclusion of the ensuing Annual General Meeting and being eligible,
offer themselves for re-appointment.
The Board of Directors, in pursuance of an order under section 233B(2)
of the Companies Act, 1956, appointed M/s. R. Nanabhoy & Co., Cost
Accountants, as cost auditors of the Company to carry out the audit of
the cost accounts relating to dyes and pigments of the Company for the
financial year 2013.
The Board of Directors wish to place on record its sincere appreciation
for the support received from its stakeholders including shareholders,
bankers, distributors, suppliers and business associates. The Directors
recognize and appreciate the sincere and hard work, loyalty, dedicated
efforts and contribution of all the employees that ensured sustained
performance in a challenging business environment.
The Directors also express their appreciation of the assistance and
unstinted support received from Clariant group companies.
For and on behalf of the Board of Directors
R. A. Shah
Mumbai, February 28, 2013 Chairman