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Manali Petrochemicals Ltd
Industry :  Petrochemicals
BSE Code
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As on: Jun 02, 2023 07:05 AM


Management Discussion & Analysis Report to the Shareholders

The Directors present their 36th Annual Report on the business and operations of your Company and the Audited Financial Statements for the year ended 31st March 2022.

Financial Results

The highlights of the fina ncial results for the year are given below:

DESCRIPTION 2021-22 2020-21
Profit Before Interest, 539.18 302.72
Depreciation and Tax*
Interest 9.06 4.42
Depreciation 18.83 20.47
Profit Before Tax 504.60 257.08
Provision for Taxation 127.91 64.48
Profit After Tax 376.69 192.60
Total Comprehensive Income 375.00 192.21

Operational Highlights

Total Income during the year was Rs. 1461 crore, about 56% higher than the Rs. 935 crore in 2020-21. Continuing the previous years trend, the international and domestic market conditions were favourable till the third quarter of the year under review. The second wave of the pandemic during the beginning of the year was more intense. However, unlike in 2021, when almost all activities came to a grinding halt, the restrictions were measured, and so business operations continued. Nonetheless, owing to unsynchronized and localized lockdowns across the country, economic activities slackened to some extent. Sales volume and values of your Company dropped significantly during the first quarter vis a vis the preceding quarter but recovered during the following 2 quarters. During the last quarter of the year, the scenario changed with imports reaching almost the pre-pandemic levels, resulting in lower prices. Also, with the outbreak of Russia-Ukraine conflict, the volumes were also affected.

In sum, though the overall sales volume was relatively lower than the previous year, better product prices contributed to the historically highest sales and profits during the year.

During the year total additions to fixed assets was Rs. 40.68 crore, mainly comprising plant and equipment.

The project for capacity augmentation of Propylene Glycol is in progress. Out of the proposed additional capacity of 50,000 TPA, in the first phase 32,000

TPA would be added, within 18-21 months of receipt of the regulatory clearances for which applications have been filed. The project has been delayed due to longer than usual time for processing of environmental clearances.

The Company continues to source power from third parties besides the power supplied by TANGEDCO. However during the year due to shortage of coal, power supply by third parties was impacted significantly, resulting in lower savings.

R-LNG supplies to Plant 1 continued, but contrary to the expectations, supplies to Plant 2 did not commence during the year under review and now rescheduled to FY 2022-23. The delay is attributed to completing the pipeline for extending the supplies, which would pass through railway lines, highways and some private properties, requiring additional approvals.

Financial Review

During the year, the Company adopted Ind AS 116 for accounting the land lease for Plant 2.

This resulted in higher finance cost of Rs. 9.06 crore against Rs. 4.42 crore in the preceding year. Finance Cost on lease increased from Rs. 3.60 crore in FY 2020-21 to Rs. 6.63 crore. The actual interest and related payout for the year was only Rs. 2.42 crore against Rs. 0.82 crore in the previous year.

As in the earlier years, capital expenditure including for the PG Project are being met from internal sources and the Company has been operating without any long-term debt.

Credit Rating

During August 2021, Care Ratings Limited revised the ratings for banking facilities aggregating to Rs. 100 crore. For long term bank facilities of Rs. 50.00 crore, the rating has been revised upward from CARE A; Stable (Single A; Outlook: Stable) to CARE A+; Stable (Single A Plus; Outlook: Stable) and from CARE A1 (A one) to CARE A1+ (A One Plus) for short-term bank facilities of Rs. 50.00 crore.


The Company has an unbroken dividend track of 16 years till the last year and follows a consistent dividend policy to ensure that dividend payments are sustained even when the earnings are relatively lower. Following this principle, it may be recalled that though the net profits for 2019-20 was lower by 40% vis a vis the preceding year, dividend was maintained at the earlier level.

In this regard, parameters for distribution of dividend have been outlined in the Dividend Distribution Policy, approved by the Board pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, as amended (the Regulations). The policy can be accessed on the website of the Company in the link: https://www.manalipetro.com/investors/policies/ As regards the distribution for the year under review, to determine the amount that could be paid out to the shareholders as dividend, the Directors have followed the guidelines enumerated in the said policy and also considered other relevant factors, such as plans for long term deployment of the funds - including projects under implementation, drastic changes in the domestic and global market scenario - throwing up questions on the sustenance of the sales, pricing and higher margins and similar facts. Albeit these, your Directors have viewed it appropriate to reward the shareholders additionally with due consideration for the highest ever profits during the year. In the light of the said factors and also the other parameters specified in the aforementioned Policy, your Directors have opined that an additional dividend of 20% be considered over and above the 30% paid for the year 2020-21. Accordingly, your Directors are happy to recommend a dividend of 50% i.e., two rupees and fifty paise per equity share of Rs. 5/- each fully paid-up, for the year 2021-22, aggregating to Rs. 43.00 crore, subject to applicable withholding tax.

Industry Structure and Development

Your company operates in the Polyurethanes (PU) industry. In chemical terms PU is a polymer containing carbamate or urethane linkage formed by reaction of Isocyanates with polyol. It is a mixture of compounds containing urethane, urea, Isocyanates, allophanates etc.

PU, a combination of both soft and hard parts such as the said urethane and urea, is a versatile plastic polymer available in various forms right from rigid foam, flexible foam to strong and hard elastomers.

PU can be customized in various combinations and structures for applications in a wide range of products for improving energy efficiency and improved physical and chemical properties. This helps PU to be used in wide variety of consumer and industrial applications such as thermal insulation in buildings, refrigerators, household furniture, shoes, packaging plastics etc.

PU offers unique properties like good abrasion and wear resistance, elongation, resilience, ibility, scratch resistance, mechanical strength, adhesion, low temperature, thermal insulation, electrical insulation etc. Owing to these, PU can be moulded to any shape to enhance its industrial applications by providing comfort, style and convenience to one?s needs. Due to wider range of properties and forms, it find s applications in rigid and ible foam, fibre, film, composites, elastomers, coatings, adhesives and mainly caters to industries like Automotive, Appliances, Building & Construction, Energy, Defence, Paints and Coatings, Soft furniture, etc. PU is becoming popular in construction and infrastructure activities owing to its characteristics such as durability, low thermal conductivity, ability to withstand external impacts, etc. Increasing expectations of high performance, lightweight interior components and cushion foams in automotive parts to achieve energy saving also contribute for further polyurethane market growth.

Products of MPL

Your Company specializes in manufacture of Propylene Glycol, Polyether Polyol and related substances. Your Company is the only domestic manufacturer of Propylene Glycol. Also, it is the first and largest Indian manufacturer of Propylene Oxide, the input material for the aforesaid derivative products.

Polyols are made in four grades, viz., Flexible Slabstock, Flexible Cold Cure, Rigid and Elastomers.

These find application in the automobile, refrigeration and temperature control, adhesive, sealant, coatings, furniture and textile industries. Use of Polyols is gaining popularity in footwear and roofing applications in India.

Propylene Glycol (PG) is a colourless, clear, nearly odourless, viscous liquid with a faint sweet taste chemical produced by reaction of propylene oxide with water. It is chemically neutral and so does not react with other substances.

PG when mixed with water, chloroform and acetone can form a homogenous mixture and it tends to absorb moisture from air. PG remains without affecting the properties of the substances that are required to react. Thus, it is useful in mixing contrasting elements and is also consumed as solvent in a wide variety of applications.

PG is used most commonly as drug solubilizer in tropical, oral and injectable medications, stabilizer for vitamins and also as a water miscible co solvent. The Food and Drug Administration (FDA) has recognized PG as a safe additive for human consumption, especially for pharmaceutical and food formulations. In addition to the above, PG is also used as moisturizer in cosmetic products and as a dispersant in fragrances. PG also has industrial applications like manufacture of resins and other products.

PG is widely utilized in pharmaceuticals, food

& flavour and fragrance industries and also for manufacture of polyester resins, carbonless paper and automobile consumables like brake flui d and anti-freeze liquid. Some of the major applications of PG include medicines, canned food, body sprays, perfumes, cosmetics, soaps and detergents. The off take of PG for industrial purposes is generally low due to availability of alternate cheaper materials. MPL supplies more of food and pharmaceutical grade PG to the Indian market, which like the Polyols is dominated by imports. In addition to PG, the by- products such as DPG are also bought by smaller players for food, flavours and related applications mainly as preservatives.

The other products of your Company include Propylene Glycol Mono Methyl Ether (PGMME), an environment-friendly solvent used in paints and coatings and electronics industries.

Indian Market Scenario

Prior to the pandemic, over the years Indian PU industry has been having a steady growth thanks to rapid urbanization, higher disposable incomes and flexible financing options. In the present age, refrigerators, mattresses and similar life style goods have come to be considered as essentials.

PU is a preferred material in the coatings segment on account of its superiority and other advantages over similar products. Thus, there has been major growth in the demand, but the Indian market has been dominated by imports.

Indian PG market also has all along been dominated by imports, except during the pandemic period, as there were logistics issues in transportation and also one of the major exporters, China was focusing on European supplies.

During the year under review, for most part, demand for Polyols and PG continued to be robust, almost reaching the pre-pandemic levels. As mentioned previously, the checkered lockdowns across the country during the beginning of the year impacted the off take, but the price realizations continued to be encouraging. The condition improved in the following two quarters, but decline was seen in the last quarter which has continued to impact the sales and margins during the FY 2022-23 also. The downturn is attributed to higher inflation, weakening rupee, etc., arising from the Russia-Ukraine stand-off, pandemic related stricter lockdowns in China, etc.

Opportunities and Threats

Polyurethane materials, due to their versatility, perform extremely well as part of any application that is subject to dynamic stress. They provide many advantages including resilience, high tear resistance, low heat build-up. Polyurethane can be used for varied applications like building insulations, refrigeration, furniture, footwear, automotive, coatings and adhesives, sealants etc. The development of polyurethane materials is still evolving, and new applications are regularly being created. It is a polymer that helps in smart designing and achieving more with less. So, its popularity has been on the raise for the past several years with infinite opportunities.

Increasing demand for lightweight and durable products in the automotive, construction, and electronics industries and PU applications for insulation purposes in various end-use industries are the major factors aiding the growth of PU market. It has been reported that the global PU market size valued at US$ 72.82 billion in 2021 would grow at a CAGR of about 4.3% from 2022 to 2030. It may be pertinent that the earlier estimates were CAGR of 3.8% in 2021 to 2028. The higher estimates could be set to denote more than expected recovery of the international market faster.

Reports mention that the construction applications led the global PU market with 25% share in 2021. Many governments across the globe have proposed to increase infrastructure spend, to counter the economic impact of the pandemic in the recent times. Polyurethane foams are being utilized as extremely effi cient insulation materials, leading to greater energy savings. Thus, the developments in construction industry for greener buildings are expected to propel the growth for PU.

It has been observed that Asia-Pacific region continued to be the highest market with 40%. On the products side, rigid foam continued to dominate the world market with 30% share. Reports suggest that China, India and Indonesia lead the surge in demand for rigid foam, due to rapid industrialization and focus on infrastructure developments to reach the rural areas.

In India, PU Market and application developments continue to be dominated by automotive, whitegoods, furniture and insulation segments. Potentials exist in the footwear and building segments, but these are yet to mature fully. So, Indian PU market would continue to be dependent more on the traditional segments and it may take a few more years for the other sectors to go for higher PU usage.

The major threat to your Company has been lower margins due to imports. Though unprecedented higher prices and margins were seen since the 2nd quarter of 2020-21, factors explained above have resulted in reversal of the trend since the beginning of 2022. So, sustenance of the higher margins could be difficult in the coming periods.

To overcome the problems posed by imports, options for imposition of Anti-Dumping Duty on imports from certain countries has been resorted to. However, there had been little relief as the suppliers manage to bear the additional burden themselves. The Company continues with the actions for cost reduction and product development, but these have inherent limitations and hence it may take a longer time to reap the benefits.

Risk Management Policy and Process

The Company has established a structured frame work for addressing business risk management issues. A risk management plan has been framed, implemented and monitored by the Board through the Risk Management Committee of Directors (RMC).

The Company has two employee-level Committees viz., a sub-committee and an Apex Committee, headed by the Wholetime Director (Operations) to review and assess the risks that could affect the Company?s business. The Sub-Committee brings out the matters that could affect the operations and the Apex Committee, determines the issues that could become business risks. The mitigation actions are also suggested by the Committees and the report of the Head of the Apex Committee is submitted to the RMC. The RMC meets periodically, reviews the reports, recommends and monitors actions to be taken in this regard.

During the year based on market capitalisation as on 31st March 2021, it became mandatory for the Company to have a Risk Management Committee under the Regulation. The RMC constituted by the Board already fulfils the requirements and so there was no need for changing the composition of then existing Committee. The details of the composition of the Committee, meetings and other relevant information are furnished in the Corporate Governance Report (CGR) annexed to this Report. As per the amended Regulations, a Risk Management Policy has been framed and the roles and responsibilities of the Committee is as prescribed under the Regulations.

As required under Section 177 of the Act, the Audit Committee also reviews the risk management process periodically.

Risks and Concerns

Barring a few quarters in 2021 and 2022, the Indian Polyol and PG markets have always been dominated by imports. High-capacity composite PU plants established by major players like DOW, Sadara, BASF, across the world enjoy subsidies from the local governments. They have been offering Polyols to Indian market at very low prices. Imposition of Anti-Dumping Duties has not been very effective, as the MNCs either supply the materials from places not covered under ADD or able to bear the additional cost continue the dumping.

The PU industry is concentrated globally, and a major portion of the supplies are controlled by smaller number of producers. Across the globe, the top manufacturers control over 60% of the total PU production giving them enormous control over product pricing and other strategies. Such major multinationals enter into strategic alliances across countries to ensure that they have an upper hand in select regions. These arrangements jeopardize the interest of the smaller, domestic players in the industry with modest facilities.

The domestic refi ners have been mulling proposals for tie-up with MNCs to enter the Polyol segment. If these plans are implemented, the product availability would go up further and create more pressure on the margins, unless demand increases, and imports also get curtailed.

In addition to the market threats, the chemical and petrochemical segments face issues from frivolous actions with ulterior motives by the self-styled environment protectors. Without understanding the ground realities and the economic contributions that these units bring in for overall growth of the country, sensational reports are released which gain attention through social media propaganda. Some of them go to the extent of opposing the applications of the industries for environment clearance without any basis. This delays the process as the applicants are burdened with the task of disproving something which do not exist.

Unworkable suggestions, like ZLD processes are mooted, which could actually endanger the industries due to huge and unviable capital outlays and operating cost.

In view of the above, the Company is unable to enhance the capacity of the feedstock for the derivative plants and hence there could be stagnation of the production capacity, giving room for more imports. This could affect the pricing power of the Company in the medium and long run. To overcome this, the Company has been exploring possibilities to make Polyols without PO for which it is taking up a polyester polyol project and also signed up with Econic, UK to explore the possibility for polyol production.

of switching over to CO2

The new and improved process for effluent treatment developed by the Company continues to meet the stipulated norms for marine discharge. Being biological based, sustainability in the long run could be an issue, though the Company is closely monitoring the developments in this area. Further, the norms are upgraded periodically by the Regulators, imposing tougher conditions. The Company would have to be very watchful on these developments and may be required to allocate additional resources to meet exigencies arising therefrom.

The case filed with the Southern Zonal Bench

(SZB) of the National Green Tribunal (NGT) against the marine disposal of the treated effluent by an association of fish ermen was disposed off by the Bench in February 2022. The allegations of the petitioner were not substantiated, but the Bench, citing higher COD/BOD values in the past ordered the Company to pay Rs. 2 crore as interim environment compensation and also made certain other directions, which have been duly complied with.

Based on some unverified news reports about stack emission violations by industries in Ennore – Manali area, the NGT-SZB has file d a Suo Moto application on certain industries, including on the Company.

The Company filed its statement to prove that the allegations are wrong and sought discharge from the case based on facts. Further the report of an independent agency commissioned by the Bench as also shown that the Company is in compliance with the emission norms.

During the year 2017, the period of lease relating to Plant 2 expired. Though the Company filed its request for extension well in advance with the Government of Tamilnadu, the same is yet to be renewed.


The update to World Economic Outlook released in July 2022 presents a gloomy picture. The baseline global forecast for the year 2022 was 3.6% growth against the estimated 6.1% in 2021. This has been further moderated to 3.2% in the revised forecast. The major reasons are stated to be the continuing

Russia-Ukraine conflict which has led to fuel price increases, and the resultant hard to control inflationary trends in most of the countries. The lockdowns and other restrictive measures imposed by China to control the surging of the new variant of the COVID-19 has further worsened the situation. The purchasing power has shrunk and across countries people spend more for the routine needs.

Food inflation is also ever increasing, and the governments are forced to spend more on food and fuel subsidies.

In the case of India, after a contraction of 6.6% in 2020, the GDP growth for 2021 was 8.7%. The April 2022 WEO projected a growth of 7.2% in 2022 followed by 6.1% in the succeeding year. Citing the above factors, the growth has been cut short by 0.8% for both the years. Though this would still mean that the country will be one of the very few fastest growing economies, the inflation and credit tightening measures to tame the situation could diminish the industrial growth further. However, Reserve Bank of India, in its July 2022 Bulletin has stated that the inflation has started moderating and so the situation could improve in the coming months.


The Company has one Wholly Owned Subsidiary (WOS) and two Step Down Subsidiaries (SDS), all of which are incorporated outside India. The financials of all these subsidiaries have been consolidated and the financial and other information have been furnished in the Consolidated Financial Statement (CFS) attached to this Report.

AMCHEM, Singapore

AMCHEM Speciality Chemicals Private Limited, Singapore, set-up by the Company in 2015-16, to expand its global footprint, holds the foreign assets of the Company. The Company invested US$ 16.32 million (` 110.32 crore) in the WOS to part fund the acquisition of Notedome Limited, UK and also for further exploratory work.

During the year 2016-17 the WOS set up AMCHEM Speciality Chemicals UK Limited as its WOS which acquired Notedome Limited. Thus, AMCHEM, UK and Notedome are the SDS of MPL.

During the year under review, the total income of AMCHEM, Singapore was

US$ 20.22 million (` 153.31 crore) and the profit for the year was US$ 0.43 million (` 3.22 crore). AMCHEM, Singapore continues to explore further opportunities for acquisition of overseas facilities for enhancing MPL?s global presence, and also has interests in trading, transaction facilitations, business and project consultancy.


AMCHEM Speciality Chemicals UK Limited, UK was established in September 2016 by AMCHEM Singapore as its WOS which completed the acquisition of Notedome Limited effective 1st October 2016 through the equity contributions from its holding company and bank loans. AMCHEM, UK at present continues to be the holding company of Notedome Limited, UK. The total income of AMCHEM UK was ? 0.12 million (` 1.19 crore) and profit ? 0.01 million (` 0.13 crore).

AMCHEM, UK has informed that based on professional advice, under a scheme of Group reorganization it has stopped activities from 1st April 2022 and on due liquidation later during FY 2022-23, its Net Assets will be transferred to AMCHEM, Singapore. Once this is done Notedome will become the direct subsidiary of AMCHEM, Singapore but there will be no change in the control of MPL over Notedome in view of AMCHEM, Singapore continuing to be the direct WOS of MPL.

Notedome Limited, UK

Notedome, established in 1979, is a System House with more than 30 years? experience, manufacturing

Neuthane Polyurethane Cast Elastomers catering to customers across 45 countries. Neuthane polyurethanes are used in diverse range of industries and applications, in the automotive sector for anti-roll bar, suspension and shock bushes for buses, trucks and other high-performance vehicles, limit or bump stops, material handling etc. and in the agriculture sector for Rollers, Harvester components and idler wheels on track laying tractors. The total revenue of Notedome for the year was ? 8.98 million (` 89.37 crore) and profit ? 0.15 million (` 1.49 crore).

Environment and Safety

Your Company has laid down clear policies for quality, environment and safety and has set-up various teams and committees to monitor and improve observance of the said policies. Besides periodical in-house reviews and audits, surveillance audits of ISO 9001 and ISO 14001 have been done regularly, ensuring proper adherence to the quality, environment and safety requirements. World Environment Day is celebrated and to mark the occasion tree planting and similar activities are undertaken. The Company has also taken up a project for planting about 10,000 trees in and around Manali area, under the social afforestation programme of the Government.

Your Company pays special attention to safety of men and material and various competitions are held during the Safety Week to create awareness among the employees about the need to adhere to safe manufacturing practices. Training is provided to the employees in safety related matters and first aid and mock drills are conducted to ensure that the systems and processes are in place to meet any eventualities. In addition to strictly adhering to all the prescribed safety standards, your Company has, Suo Moto, taken additional safety measures for handling hazardous chemicals like chlorine at a cost of about Rs. 1.50 crore.

Audit Committee

The details about the Committee are furnished in the CGR. All the recommendations of the Committee were accepted by the Board.

Vigil Mechanism

As required under Section 177 of the Act and Regulation 22 of the Regulations, the Company has established a vigil mechanism for directors and employees to report their genuine concerns through the Whistle Blower Policy is available on the website of the Company. As prescribed under the Act and the Regulations, provision has been made for direct access to the Chairperson of the Audit Committee in appropriate/exceptional cases.

Human Resources

Your Company believes that achievement of its goals is reliant on the ability of its workforce to convert the plans into actions. Therefore, every effort is taken to retain talent and also introduce newer ideas from the younger generation, for the success story to continue.

Various HR initiatives are taken to enhance the competency of the employees through inclusive decision-makingprocessbydelegation,recognition, leadership development, etc. Your Company imparts need based training to its employees with special focus on youngsters, stimulating them to play an important role in shaping the Company?s future.

The industrial relations have generally been cordial, except in relation to a wage dispute with the workmen from 2001, being contested earlier in the Supreme Court and now in the Madras High Court. The Management?s efforts to settle the issue through dialogue have succeeded largely with firmed most of the workmen barring a very few accepting the offer. The minority workmen are persisting with the case which is pending before the Madras High Court.

In order to protect the health and safety of the employees, the Plants are operated strictly adhering to all the standard operating procedures including the COVID prevention protocol. COVID infection has been included in the Group Insurance Cover to employees and their families Vaccination camps were organized for the employees including contract workmen and almost all of them have been duly vaccinated.

As on 31st March 2022, your company had 330 employees on its roll at different locations including Executive Directors, Senior Management Personnel, Engineers, Technicians and Trainees.

Related Party Transactions

During the year under review, there were no transactions not at arms? length within the meaning of Section 188 of the Act. The policy on related party transaction is available on the website of the Company viz., https://www.manalipetro.com/wp-content/uploads/2022/02/RPT-Policy-2022.pdf

As required under Regulation 23(2) of the Listing Regulations, approval of the Members was obtained for transactions with Tamilnadu Petroproducts Limited during the year 2021-22 at the 35th Annual General Meeting. To comply with the amended provisions of the Regulations prescribing prior approval, consent of the Members for transactions with the above entity for FY 2022-23 was obtained in March 2022 through postal ballot. Based on professional advice and for administrative convenience, it has been proposed that such prior approvals could be for 12 months from October to September and hence a fresh proposal seeking prior approval of the Members for the same is being placed for consideration of the Members at the ensuing AGM.

Board of Directors and related disclosures

As on the date of the Report, the Board comprises of 10 directors including two-woman directors. There are six Independent Directors, and all of them have furnished necessary declaration under Section 149(7) of the Act and under Regulation 25(8) of the Regulations. As per the said declarations, they meet the criteria of independence as provided in Section 149(6) of the Act and the Regulations. All of them have con that they have registered themselves with the Indian Institute of Corporate Affairs under Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended and all of them have been exempted from or passed the proficiency test.

The Board met six times during the year under review and the relevant details are furnished in the CGR.

The Board has approved a Remuneration Policy as recommended by the Nomination and Remuneration Committee (NRC), which inter alia contains the criteria for determining the positive attributes and independence of a director as formulated by the NRC. The policy on remuneration to directors is disclosed in the CGR annexed to this Report. There have been no changes in the Key Managerial Persons after the last Annual General Meeting (AGM). The following changes took place in the composition of the Board since the last AGM held on 28th September 2021: a. Mr. T K Arun [DIN: 02163427], earlier a Non-Executive Non-Independent Director, was appointed as Non-Executive, Independent

Director with effect from 29th September 2021 and consent of the members for the same was obtained through Postal Ballot on 5th November firmed

2021. In the opinion of the Board, he possesses adequate expertise and experience and has impeccable integrity to be an Independent Director. b. Ms. Vandana Garg, IAS, (DIN: 09205529) nominee of TIDCO resigned with effect from 2nd May 2022. The Board places on record its appreciation for the invaluable services rendered during her association with the Company. c. Ms. R Bhuvaneswari, [DIN: 06360681] the new nominee of TIDCO was appointed as an Additional Director on 24th May 2022, in the category of Non-Independent, Non-Executive

Director. Though she would have held office till the ensuing Annual General Meeting (AGM), in order to comply with the requirements of Regulation 17(1C) of the Regulations, she has been appointed as a Director of the Company by the Members under section 160 of the Act through postal ballot on 30th June 2022. d. Mr. M Karthikeyan [DIN: 08747186] WTD (Operations), retires by rotation and being eligible offers himself for re-election.

Annual Evaluation of the Board, Committees and Directors

The formal evaluation of the Board was done taking into account the various parameters such as the structure, meetings, functions, risk evaluation, management of conflict of interests, stakeholder value & responsibility, corporate culture & value, facilitation to the Independent Directors to function impartially and other matters. The evaluation of the Committees was done based on the mandate, composition, effectiveness, structure and meetings, independence and contribution to the decisions of the Board.

The evaluation of the individual directors, including the independent directors was done taking into account their qualification, experience, competency, knowledge, understanding of their respective roles (as a Director, Independent Director and as a Member of the Committees of which they are Members/Chairpersons), adherence to Codes and ethics, conduct, attendance and participation in the meetings, etc.

In compliance with the requirements of Schedule IV to the Act and the Regulations, a separate meeting of the Independent Directors was held during the year under review.

Directors? Responsibility Statement

Pursuant to the requirement of sub-sections 3(c) and 5 of Section 134 of the Act it is hereby con that a. in the preparation of the annual accounts for the financial year ended 31st March 2022, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review. c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. the Directors had prepared the accounts for the financial year ended 31st March 2022 on a "going concern" basis. e. the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details of Unclaimed Share Certificates

In accordance with the requirements of Clause 5A of the erstwhile Listing Agreement, during the year 2012-13 shares remaining unclaimed even after 3 reminders have been transferred and held in a separate demat account. As per the information provided by the Registrars and Transfer Agent, out of the 95,774 shares, which remained unclaimed by 412 shareholders at the beginning of the year, 1800 shares were released to 10 shareholders during the year. Further, 11,325 shares relating to 53 shareholders were transferred to the Investor Education and Protection Fund in compliance with the requirements of Section 126(6) of the Act. As at the end of the year 82,609 shares remained unclaimed by 349 shareholders. As specified under the Regulations, the voting right on the above shares remain frozen.


Brahmayya & Co., Chartered Accountants, Chennai were appointed as the Auditors of the Company at the 31st Annual General Meeting held on

25th July 2017 and in the first term they hold office for a period of five years, viz. till the ensuing AGM.

Audit Committee has recommended reappointment of Brahmayya & Co., as the Auditors for a second term. Pursuant to Section 139 of the Act they will hold offi ce for five years till the AGM to be held in the year 2027. The proposal is placed for approval of the Members at the ensuing AGM.

Maintenance of Cost Records & Cost Audit

The Company is required to maintain cost records as specified by the Central Government under

Section 148(1) of the Act and is also covered under Cost Audit, which are duly complied with.

M Krishnaswamy & Associates, Cost Accountants, Chennai were appointed as the Cost Auditors of the Company for the financial year 2021-22 on a remuneration of Rs. 2.50 lakh plus applicable taxes and reimbursement of out-of-pocket expenses which was ratified by the Members through postal ballot on 4th November 2021.

Based on the recommendation of the Audit Committee, Board has reappointed the said Firm as the Cost Auditors for the year 2022-23 to hold office till 30th September 2023 or submission of the report for the year 2022-23, whichever is earlier. The remuneration will be Rs. 3.00 lakh, subject to ratification of the Members at the ensuing AGM.

Adequacy of Internal Financial Controls

Your Company has in place adequate internal financial control systems combined with delegation of powers and periodical review of the process. The control system is also supported by Internal Audit and management review with documented policies and procedures. In the past the system was also reviewed by an external agency, and no major weaknesses were reported. To ensure effective operation of the system, periodical reviews are made by the Internal Auditors and their ings discussed by the Audit Committee and with the Statutory Auditors. The Statutory Auditors of the

Company have also furnished certificates in this regard, which are attached to their Reports.

Corporate Governance

Your Company has complied with the requirements of Corporate Governance stipulated under the Regulations. A Report on Corporate Governance is given in Annexure A. Declaration of the CEO on compliance with the Code of Conduct of the Board and Senior Management and compliance certificate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance are given in Annexure B.

Secretarial Audit Report

As required under Section 204 of the Act, the Secretarial Audit Report issued by Ms. B Chandra, Company Secretary in Practice is annexed to this Report as Annexure C.

Disclosures under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a. The ratio of remuneration of Wholetime Director to the median remuneration of other employees of the Company was 15.83. b. The increase in remuneration of Wholetime Director, Company Secretary and Chief Financial

Officer during the year was 20.44%, 21.85% and 9.19% respectively.

c. The increase in the median remuneration of the employees was 7.25%. d. As at the year-end there were 318 permanent employees, including MD and WTD and excluding trainees.

. During the year, the average increase in the salaries other than managerial remuneration was 21.19% and the increase in managerial remuneration was 20.44%.

Considering the performance of the Company and respective individuals during the year under review, the increases in managerial and other remuneration are deemed reasonable which have been determined based on the appraisal process adopted by the Company.

f. Information stipulated under Rule 5(2) are given in Annexure D to this Report.

g. The remuneration paid to the employees are as per the remuneration policy of the Company. Note: Wages to workmen covered under the page settlements have not been considered for (c) and (e) above.

Other disclosures

a. Information on conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, to the extent applicable are given in Annexure E.

b. Pursuant to Section 92(3) of the Act, the Annual

Return filed during the year under review has been uploaded on the website of the Company under the link https://www.manalipetro.com/ annual-return/

c. The Company has not accepted any deposits from the public during the year under report.

d. The information under Section 186 of the Act relating to investments, loans, etc. as at the year – end has been furnished in Notes to the Financial Statements.

e. The annual report on CSR is given in Annexure F.

f. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No cases were filed under the said Act.

g. The Company has complied with the requirements of all the applicable Secretarial Standards.

h. Significant changes in key financial ratios

During the year under review, net margin improved by 25%. The current ratio and inventory turnover ratio improved by about 75% and 52% respectively. The Return on Net worth improved from 30.27% in 2020-21 to 38.22% in the year under review. All these were as a result of better price realizations during the year.


Your Directors express their sincere gratitude to the Government of India, the Government of Tamilnadu, the Promoters and the Banks for the assistance, co-operation and support extended to the Company. The Directors thank the Shareholders for their continued support. The Directors also place on record their appreciation of the consistent good work put in by all cadres of employees and especially for raising up to the occasion and ensuring sustained operations during the year, in spite of the challenges during the pandemic periods.


The Management Discussion and Analysis contained herein is based on the information available to the Company and assumptions based on experience in regard to domestic and global economy, on which the Company?s performance is dependent. It may be materially influenced by changes in economy, government policies, environment and the like, on which the Company may not have any control, which could impact the views perceived or expressed herein.

For and on behalf of the Board
Ashwin C Muthiah
Singapore DIN: 00255679
August 09, 2022 Chairman