48th annual report 2013-14 · 2020. 4. 29. · lbs marg, bhandup (west) mumbai - 400 078 tel. no.:...

RHODIA SPECIALTY CHEMICALS INDIA LIMITED

48th ANNUAL REPORT2013-14

vakil

s

(` In Lakhs)

2013-14 2012-13 (15 months)

2011 2010 2009 2008 2007 2006 2005 2004

Share Capital 337.56 337.56 337.56 337.56 337.56 337.56 337.56 337.56 337.56 337.56

Reserves & Surplus 6479.29 7155.95 3548.64 4115.25 4483.83 6541.04 5225.46 5731.36 5706.45 5036.92

Shareholders Fund 6816.85 7493.51 3886.20 4452.81 4821.39 6878.60 5563.02 6068.92 6044.01 5374.48

Debt 4037.08 2796.23 5059.72 4271.04 3073.16 100.00 0 407.01 0 488.11

Debt Equity Ratio 0.59 0.37 1.30 0.96 0.64 0.01 0 0.07 0 0.09

Net Fixed Assets 4929.30 5258.72 5332.23 5912.98 6595.44 963.87 1143.49 1289.93 1339.91 1356.31

Investment 0.03 0.03 0.03 0.03 0.03 0.03 84.53 84.53 84.53 84.53

Net Current Assets 4350.17 3371.29 2972.50 2788.14 1293.39 1046.54 2571.75 4728.29 4492.32 4288.93

Net Turnover 26572.27 28097.18 25078.44 16108.90 9512.96 12866.20 12843.31 14008.26 14016.63 13333.83

Profit/(Loss) Before Tax (676.66) 3686.30 (566.61) (368.58) (2304.21) 1962.12 (365.66) 21.39 1301.03 938.83

Profit/(Loss) After Tax (676.66) 3686.30 (566.61) (368.58) (2057.21) 1374.82 (445.35) 24.81 881.23 574.43

Dividend 0 67.51 0 0 0 50.63 33.76 0 185.65 168.78

Tax on Dividend 0 11.48 0 0 0 8.61 5.73 0 26.04 23.67

Retained Earnings 0 3607.31 0 0 0 1315.58 0.00 24.81 669.53 381.98

Earnings Per Share (`) (20.05) 109.20 (16.79) (10.92) (60.94) 40.73 (12.79) 0.09 26.11 17.02

Dividend Per Share (`) 0 2.00 0 0 0 1.50 1.00 0 5.50 5.00

Book Value Per Share (`) 201.94 221.99 115.13 131.91 142.83 203.77 164.80 179.79 179.05 159.22

THE LAST TEN YEARS

Annual Report 2013-14 1

DIRECTORSD D Chopra Chairman Emeritus Suresh Talwar Chairman Michel Ybert (Alt. Guo Lin)Ian Brown (Alt. Ms. Quitterie Dupontreue De Pelleport)Sanjeev MukerjeeRanjit PanditYogesh TharPierre-Franck Valentin (Alt. Chen Pu)Prakash RamanManoj Khullar Managing Director

AUDIT COMMITTEEYogesh Thar ChairmanSanjeev MukerjeeSuresh Talwar w.e.f. 21st January 2014Manoj Khullar

LEGAL MANAGER & COMPANY SECRETARYNiranjan Ketkar

AUDITORSDelloitte Haskins & Sells

SOLICITORSCrawford Bayley & Co.

BANKERSState Bank of IndiaCorporation BankBNP Paribas

REGISTERED OFFICEPhoenix House, “A” Wing, 4th Floor462, Senapati Bapat MargLower Parel (West)MuMBAI - 400 013Tel. No.: 91-22-66637101

REGISTRARS & SHARE TRANSFER AGENTSLink Intime India Private LimitedC-13, Pannalal Silk Mills CompoundLBS Marg, Bhandup (West)MuMBAI - 400 078Tel. No.: 91-22-25963838

WORKSROHA - 402 116Dist. Raigad, Maharashtra

CINL24110MH1965PLC013331

ANNUAL REPORT 2013-14

C O N T E N T S

Notice 3

Directors’ Report 9

Corporate Governance Disclosures 13

Independent Auditors’ Report 23

Balance Sheet 26

Statement of Profit and Loss 27

Cash Flow Statement 28

Notes to financial statements 30

Annual Report 2013-142

Rhodia Specialty Chemicals India Limited

30000

25000

20000

15000

10000

5000

0

NET INCOME( Lakhs)`

2009 2010 2011 2012-13 2013-14

8000

7000

6000

5000

4000

3000

2000

1000

0

NET WORTH( )` Lakhs

2009 2010 2011 2012-13 2013-14

4500

3500

2500

1500

500

-500

-1500

-2500

PROFIT BEFORE TAX( Lakhs)`

2009 2010 2011 2012-13 2013-14

4500

3500

2500

1500

500

-500

-1500

-2500

( Lakhs)`

2009 2010 2011 2012-13 2013-14

PROFIT AFTER TAX

120

80

40

0

-40

-80

EARNINGS PER SHARE( )`

2009 2010 2011 2012-13 2013-14

60

50

40

30

20

10

0

RATE OF DIVIDEND(%)

2009 2010 2011 2012-13 2013-14

22500

22000

21500

21000

20500

20000

19500

19000

18500

1150

1050

950

850

750

650

550

450

350

MONTHLY AVERAGE OF BSE SENSEX AND SHARE PRICES

BS

E S

EN

SE

X

SH

AR

E P

RIC

ES

(in

)`

Apr. 13 May 13 Jun. 13 Jul. 13 Aug. 13 Sep. 13 Oct. 13 Nov. 13 Dec. 13 Jan14 Feb 14 Mar 14

BSE SENSEX

SHARE PRICE


NOTICENOTICE is hereby given that the Forty Eighth Annual General Meeting of the Members of Rhodia Specialty Chemicals India Limited will be held on Wednesday, 10th September 2014 at 12.00 noon at Convention Hall, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg, Nariman Point, Mumbai 400 021 to transact the following business:

ORDINARY BUSINESS:

1. To consider and adopt the audited financialstatement of the Company for the financial yearended 31st March 2014, the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Ian Brown (DIN-2427816), who retires by rotation and, being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. Michel Ybert (DIN-0319148), who retires by rotation and, being eligible, offers himself for re-appointment.

SPECIAL BUSINESS:

4. To consider and if thought fit, to pass with orwithoutmodification, as anOrdinary Resolution, the following:

“RESOLVED THAT subject to the provisions of Sections 139 and 142 and other applicable provisions, if any, of the Companies Act, 2013, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm registration number 117364W) be and are hereby appointed as Statutory Auditors toholdoffice for a termof Five (5) years subjectto ratification by members at every AnnualGeneral Meeting from the conclusion of this Annual General Meeting until the conclusion of the Fifty Third Annual General Meeting, at such remuneration as may be determined by Board of Directors of the Company from time to time.”

5. To consider and if thought fit, to pass with orwithoutmodification(s),asanOrdinary Resolution the following:

“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the

time being in force) read with Schedule IV to the Companies Act, 2013, Mr. Suresh Talwar (DIN-00001456), be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term up to31st March 2019.”

6. To consider and if thought fit, to pass with orwithout modification(s), the following Resolutionas an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for thetime being in force) read with Schedule IV to the Companies Act, 2013, Mr. Yogesh Thar (DIN-02687466), be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term up to31st March 2019.”


“RESOLVED THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for thetime being in force) read with Schedule IV to the Companies Act, 2013, Mr. Sanjeev Mukerjee (DIN-00369875), be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term up to31st March 2019.”


“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof,for the time being in force), the Cost Auditors appointed by the Board of Directors of the Company, to conduct the audit of the cost records of the Company for the financial year ending



31st March 2015, be paid the remuneration as set out in the Statement annexed to the Notice convening this Meeting;

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

9. To consider and if thought fit, to pass with orwithout modification(s), the following Resolutionas a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisions of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014 (including any statutory modification(s) or re-enactmentthereof, for the time being in force), the draft regulations contained in the Articles of Association be and are hereby approved and adopted in substitution, and to the entire exclusion, of the regulations contained in the existing Articles of Association of the Company.

“RESOLVED FURTHER THAT the Board be authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

By order of the BoardFor RHODIA SPECIALTY CHEMICALS INDIA LIMITED

Niranjan KetkarLegal Manager &

Company SecretaryMumbai, 24th July 2014

NOTES:

1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote on poll only instead of himself and a proxy need not be a member. The instrument appointing the proxy, in order to be effective, must be deposited at the Company’s Registered Office, duly completedand signed, not less than forty-eight hours before the meeting. Proxies submitted on behalf of limited companies, societies, etc., must be supported by appropriate resolutions/authority, as applicable. A person can act as proxy on behalf

ofMembersnotexceedingfifty(50)andholdinginthe aggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.

2. The register of members and the share transfer books of the Company will remain closed from 29th August 2014 to 5th September 2014 (both days inclusive).

3. Shareholders are requested to notify change of address, if any, and details of their bank account to the Registrar/Depository Participants.

4. For the convenience of shareholders, attendance slip is annexed to the proxy form. Shareholders are requested to affix their signatures at the spaceprovided therefore and hand over the attendance slip at the entrance of the place of meeting. Proxy/Representative of a shareholder should mark on the attendance slip as “Proxy” or “Representative” as the case may be. Shareholders are also requested not to bring with them any person who is not a shareholder.

5. As a measure of economy, copies of the annual report will not be distributed at the annual general meeting. Shareholders are, therefore, requested to bring their copies of the annual report at the meeting.

6. To facilitate easy and cheap transactions in its shares, the Company has dematerialised its shares. Majority of the shareholders have already availed of this facility and de-materialised their shareholdings. Shareholders who have not yet de-materialised their shareholdings are requested to avail of this facility and de-materialise their shareholdings at the earliest. In case any assistance is needed, shareholders are requested to get in touch with the Secretarial Department of the Company.

7. The Notice of the Annual General Meeting (AGM) along with the Annual Report 2013-14 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/Depositories, unless any Member has requested for a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are being sent by the permitted mode.

8. To support the ‘Green Initiative’, the Members who have not registered their e-mail addresses are requested to register the same with Registrar/Depositories.


ANNEXURE TO NOTICEI. Explanatory Statement under Section 102 of the

Companies Act, 2013

Item No. 4

The Company’s Auditors M/s. Deloitte Haskins & Sells (Firm registration number 117364W) have already completed one year as Statutory Auditors of the Company.

In accordance with provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, they can continue as Auditors for a further period of five years aftercommencement of Companies Act, 2013 i.e. upto 31st March 2019.

It is proposed to appoint them from conclusion of this Annual General Meeting till the conclusion of Fifty Third Annual General Meeting.

The Directors recommend the Resolution for approval of the shareholders.

None of the Directors is interested or concerned in the resolution.

Item No. 5Mr. Suresh Talwar is a Non-Executive Independent Director of the Company. He joined the Board of Directors of the Company as an Independent Director on 23rd August 2013. Mr. Talwar is member of the Audit Committee, and Nomination and Remuneration Committee, of the Board of Directors of the Company.

Mr. Talwar is a Bachelor of Commerce and Bachelor of Law. He is a solicitor and an Advocate by profession. Mr. Talwar was a partner in Crawford Bayley & Co., till 31st March 2006 and was a special advisor till 31st December 2006. He was a partner in Talwar Thakore & Associates, Mumbai till 31st March 2014.

Mr. Talwar specializes in various facets of Corporate Law, Corporate Tax, Foreign Exchange Laws, Competition Act, International Issue of Securities by Indian Companies, commercial documents and contracts, etc.

Mr. Talwar is holding directorship in the following Indian Companies:

Sr. No.

Name of Company

Position Held Committee Membership

1 FCI OEN Connectors Limited

Alternate Director

Audit Committee – Chairman

2 PZ Cussons India Private Limited

Alternate Director

Nil

3 Transwarranty Finance Limited

Alternate Director

Compensation Committee

4 Johnson and Johnson Limited

Alternate Director

Nil

5 uhde India Private Limited

Alternate Director

Nil

6 Armstrong World Industries (India) Private Limited

Director Nil

7 Merck Limited Director Audit Committee – Chairman

8 Sunshield Chemicals Limited

Chairman Audit CommitteeRemuneration Committee

9 Samson Maritime Limited

Director Remuneration Committee –Chairman

10 Sidham Finance & Investments Private Limited

Director Nil

11 Biocon Limited Director Audit Committee12 Blue Star Infotech

LimitedDirector Audit Committee

Remuneration CommitteeCompensation Committee

13 Chowgule and Company Private Limited

Director Nil

14 Chowgule Ports & Infrastructure Private Limited

Director Nil

15 Decagon Investments Private Limited

Director Nil

16 Elantas Beck India Limited

Director Audit Committee

17 Epitome Global Services Private Limited

Director Nil

18 ESAB India Limited

Director Nomination-cum Compensation Committee

19 India Value Fund Trustee Company Private Limited

Director Nil

20 IVF Trustee Company Private Limited

Director Nil



IntheopinionoftheBoard,Mr.SureshTalwarfulfillsthe conditions specified in the Companies Act, 2013and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Mr. Suresh Talwar as an Independent Director would be available for inspection without any fee by the members at the Registered Officeof theCompanyduringnormalbusinesshourson any working day, excluding Saturday.

The Company will be vastly benefited from the professional capabilities and varied experience of Mr. Suresh Talwar. The Board, therefore, recommends his appointment as a Director of the Company.

Except Mr. Suresh Talwar, being an appointee, none of the Directors of the Company and their relatives is concernedorinterested,financialorotherwise,intheresolution set out at Item No. 5.

Item No. 6

Mr. Yogesh Thar is a Non-Executive Independent Director of the Company. He joined the Board of Directors of the Company on 9th June 2009 as an Independent Director. Mr. Thar is the Chairman of the Audit Committee, and member of Nomination and Remuneration Committee and Stakeholders Relationship Committee of the Board of Directors of the Company.

Mr. Thar is a Chartered Accountant and Tax Consultant. He is advising various Corporates on tax matters.

He is holding directorship in the following Indian Companies :

Sr. No.

Name of Company Position Held

Committee Membership

1. Lil Investment Limited Director Nil2. Kewal Kiran Clothing

Limited Director Nil

3. Sunshield Chemicals Limited

Director Audit Committee – ChairmanRemuneration Committee – Chairman

Mr. Thar does not hold by himself or for any other person onabeneficialbasis,anysharesintheCompany.

Mr. Thar is a director whose period of office isliable to determination by retirement of directors by rotation under the erstwhile applicable provisions of

Sr. No.

Name of Company

Position Held Committee Membership

21 L&T Metro Rail (Hyderabad) Limited


22 Larsen and Toubro Limited


23 Morgan Stanley India Capital Private Limited


24 Philip Finance and Investment Services India Private Limited


25 Rediffusion Dentsu Young and Rubicam Private Limited

Director Nil

26 Sandvik Asia Private Limited

Director Audit Committee - Chairman

27 Shrenuj and Company Limited

Director Nil

28 Snowcem Paints Private Limited

Director Nil

29 Sonata Software Limited

Director Remuneration Committee

30 Swiss Re-shared Services (India) Private Limited

Director Nil

31 Vidal Health TPA Private Limited

Director Nil

32 Warner Bros Pictures (India) Private Limited

Director Nil

33 Phillips Capital India Private Limited

Director Nil

Mr. Talwar does not hold by himself or for any other person on a beneficial basis, any shares in the Company.

As per the Companies Act, 2013, the Independent Director need not retire by rotation.

Mr. Talwar is a director whose period of office isliable to determination by retirement of directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956. The aforesaid provision no longer applies as per the provisions of the Companies Act, 2013. Hence, the appointment envisaged hereunder is like an extension of his term. In view of the above, it is not a case of appointment of new Independent Director and deposit of ` 1,00,000/- is not required to be paid.


the Companies Act, 1956. The aforesaid provision no longer applies as per the provisions of the Companies Act, 2013. Hence, the appointment envisaged hereunder is like an extension of his term. In view of the above, it is not a case of appointment of new Independent Director and deposit of ` 1,00,000/- is not required to be paid.

In the opinion of the Board, Mr. Thar fulfills theconditions specified in the Companies Act, 2013and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Mr. Thar as an Independent Director would be available for inspection without any fee by the members at the Registered Office ofthe Company during normal business hours on any working day, excluding Saturday.

The Company will be vastly benefited from theprofessional capabilities and varied experience of Mr. Thar. The Board therefore recommends his appointment as a Director of the Company.

Except Mr. Thar, being an appointee, none of the Directors of the Company and their relatives is concernedorinterested,financialorotherwise,intheresolution set out at Item No. 6.

Item No. 7

Mr. Sanjeev Mukerjee is a Non-Executive Independent Director of the Company. He joined the Board of Directors of the Company on 15th July 1998. Mr. Mukerjee is Chairman of Stakeholders Relationship Committee and member of the Audit Committee, and Nomination and Remuneration Committee of the Board of Directors of the Company.

Mr. Mukerjee has done B.A. Engineering from Cambridge university uK and is a Chartered Engineer uK Member-Institution of Production Engineers.

Mr. Mukerjee is holding directorship in the following Indian Companies:

Sr. No.



1 Heritage and Environment Protection Association

Director Nil

2 Magic Eye Private Limited

Director Nil

3 Partap Pandit Limited Director Nil

Sr. No.



4 Sunshield Chemicals Limited

Director Audit CommitteeInvestors Grievances Committee – ChairmanRemuneration Committee

5 The Industrial Leather Company Private Limited

Director Nil

Mr. Mukerjee holds 15 equity shares in the Company.

Mr. Mukerjee is a director whose period of office isliable to determination by retirement of directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956. The aforesaid provision no longer applies as per the provisions of the Companies Act, 2013. Hence, the appointment envisaged hereunder is like an extension of his term. In view of the above, it is not a case of appointment of new Independent Director and deposit of ` 1,00,000/- is not required to be paid.

In the opinion of the Board, Mr. Mukerjee fulfillsthe conditions specified in the Companies Act, 2013and rules made thereunder for his appointment as an Independent Director of the Company and is independent of the management. Copy of the draft letter for appointment of Mr. Mukerjee as an Independent Director would be available for inspection without any fee by the members at the Registered Office ofthe Company during normal business hours on any working day, excluding Saturday.

The Company will be vastly benefited from theprofessional capabilities and varied experience of Mr. Mukerjee. The Board, therefore, recommends his appointment as a Director of the Company.

Except Mr. Mukerjee, being an appointee, none of the Directors the Company and their relatives is concerned or interested,financialorotherwise, in the resolutionset out at Item No. 7.

Item No. 8

The Board, on the recommendation of the Audit Committee, has approved the appointment of M/s Kishore Bhatia & Associates, Cost Auditor to conduct the audit of the cost records of the Company for the financial year ending 31st March 2015 on a remuneration of ` 1,25,000/-.



In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to theCost Auditor has to be ratified by theshareholders of the Company.

Accordingly, consent of the members is sought for passing anOrdinary Resolution for ratification of theremuneration payable to the Cost Auditor for the financialyearending31st March 2015.

None of the Directors of the Company/their relatives is, inanyway,concernedor interested,financiallyorotherwise, in the resolution set out at Item No. 8 of the Notice.

Item No. 9The Articles of Association (“AOA”) of the Company as presently in force was amended from time to time since incorporation of the Company.With the coming into force of the Companies Act, 2013 (“the Act”) several regulations of the existing AOA of the Company require alteration or deletions in several articles. Given this position, it is considered expedient to wholly replace the existing AOA by a new set of Articles.

The new AOA to be substituted in place of the existing AOA are based on Table ‘F’ (Articles of Association meant for a Company limited by shares) of the Act.

The proposed new draft AOA is being uploaded on the Company’s website for perusal by the shareholders.

None of the Directors is, in any way, concerned or interested, in the Special Resolution set out at Item No. 9 of the Notice.

The Board commends the Special Resolution set out at Item No. 9 of the Notice for approval by the shareholders.

By Order of the Board of DirectorsFor RHODIA SPECIALTY CHEMICALS INDIA LIMITED

Niranjan KetkarLegal Manager &

Company Secretary

Mumbai 24th July 2014

Profile of the Directors being re-appointed

Particulars Mr. Ian Brown Mr. Michel YbertDate of Birth 19.05.1961 19.01.1951Date of Appointment 17.06.2011 29.05.2012Qualifications ACMA HEC GraduateExperienceinspecificfunctionalarea He is working as Finance

VicePresidentofSolvayAsiaPacific.

He has over 22 years of industrial experience. He has been working with Solvay Group of Companies in various capacities since 1999.

HeisinchargeofAsiaPacificOperations of Solvay.He has 38 years of industrial experience.He is working with Solvay Group since 2003.He has wide experience in areas of operations,marketing,financeandlegal.

Directorships held in other public companies (excluding foreign companies and Section 25 company)

Sunshield Chemicals Limited

Hindustan Gum and Chemicals Limited (Alternate Director)

Sunshield Chemicals Limited

Hindustan Gum and Chemicals Limited

Memberships/ Chairmanships of committees of other public companies and Shareholders/ Investors Grievance Committee

NIL NIL

Number of shares held in the Company NIL NIL


DIRECTORS’ REPORTWe present our report together with the audited accountsoftheCompanyforthefinancialyearendedon 31st March 2014.

(A) Financial Highlights*(` in Lakhs)

2013-14 2012-13*Net Sales & Processing charges 26,572 28,097Other Operating Income 157 344Other Income 382 547Total Income 27,111 28,988ProfitbeforeDepreciation,Exceptional item and Tax 917 1,095Depreciation 923 1,031Profit/(Loss)beforeexceptionalitems and Tax (6) 64Add:ProfitonTransferofrightsto

the land NIL 3,622Less: Customs duty (671) NILNetProfit/(Loss)afterTax (677) 3,686Add : Balance brought forward

from previous year 3,068 (263)Profitavailableforappropriation 2,391 3,423Less: Appropriations Proposed Dividend @ ` 2/-

per share (2012-13) NIL 68 Tax on Proposed Dividend

(2012-13) NIL 11 Transfer to General Reserve

(2012-13) NIL 276Balance carried to balance sheet 2,391 3,068

*Figures stated above are not comparable as financialstatements for the year 2013-14 and period 2012-13 were prepared for 12 months and 15 months respectively.

Total IncomeIncome from sales, processing charges and other income during the year amounted to ` 26,572 lakhs. The same was ` 28,097 lakhs for the previous period.

PerformanceThe Company made a loss before exceptional item of ` 6 lakhs as against a profit of` 64 lakhs during the previous period. Previous period’s profit was mainlyattributable to exceptional item of transfer of leasehold rights of Ambernath land. The situation during the current year was further worsened due to differential customs duty of ` 671 lakhs paid for the current year and previous periods.

DividendConsidering the loss incurred by the Company, the Directors are not in a position to declare any dividend forthefinancialyear2013-14.

Reserves and SurplusIn view of loss incurred by the Company no amount is transferred to General Reserve.

B) Management Discussion and Analysis

i) Industry structure and developments The Company operates in the business segment

of consumer chemicals. The Company manufactures specialized formulations to serve its customers who in turn further manufacture consumer goods for Home and Personal Care, Decorative Paints, Agrochemicals and various industrial formulations.

With the projected growth rate of India GDP in 2013 by various global and Indian economic agencies, the business climate in India has become more challenging for 2013. The slowdown in infrastructure, has added to the overall slowdown in various sectors of economy.

The Company is putting in its best efforts to overcome the slowdown, by means of increasing efficiencies across supply chain,and hence target higher capacity utilization at Roha. The Company is also planning to import and trade specialty formulations in the Indian market to differentiate its product offerings from the commodity market.

ii) Operating and Financial Performance of the Company

During the current year of April 2013 to March 2014, the sales amounted to ` 26,572 lakhs.

The Company is making efforts to increase the number of products whereby the Company will be in a position to increase the margin on sales.



Analysis of Operating Performance*(` in Lakhs)

2013-14 2012-13

1. Net sales/Income from operations 26,572 28,097

2. Total operating income 26,729 28,441

3. Total operating expense 26,939 28,464

4. Operating(Loss)/profit (210) (22)

5. Operating(Loss)/Profit(%) (0.79) (0.08)

6. Operating(Loss)/Profittocapital employed (%) (4.01) (0.38)

7. Inventory Turnover (Times) 7.9 8.6

8. Current ratio 1.7 1.9

9. Debt : Equity ratio 0.59 0.37

10. Production (MT) 66,034 79,138

11. Overall capacity utilization (%) 79.1 75.8

12. Value of sales per employee 139.04 148.43

Cash Flow Analysis*(` in Lakhs)

2013-14 2012-13Sources of Funds:Cash Flow from operations 210.89 1306.46Non-operation Cash Flows 14.19 10.66Increase in Bank Borrowings 1310.13 —Fixed deposits matured 19.61 299.99Sale of Fixed Assets 16.64 3711.63

1571.46 5328.74Utilisation of Funds:Capital Expenditure (including plant under construction)

534.40 1038.11

Interest Paid 180.06 460.01Dividend (Including dividend tax) 78.99 0.98Net change in working capital 888.45 1317.59Net Increase/(decrease) in cash and cash equivalents

(158.84) (461.29)

Decrease in Bank Borrowings — 2263.49Income tax payment 48.40 709.85

1571.46 5328.74Non-operatingcashflowincludesinterestincomereceivedon deposits with government utility companies.*Figures stated above are not comparable as financial

statements for the year 2013-14 and period 2012-13 were prepared for 12 months and 15 months respectively.

iii) Internal control systems and their adequacy

Duringtheyear,nosignificantinternalcontrolissue was identified. Internal checks andcontrols appropriate to the growing size of the Company’s business are being introduced. AnindependentfirmofCharteredAccountantis entrusted with the Internal Audit of the Company.

iv) Risks and concerns Slowdown in world economies may result in

reduction in demand.

v) Future Outlook The Company continues its efforts to increase

the utilization of its installed capacities, which will be crucial to achieve an improvement in the operational results. Priority is given to capitalize on the quality of its products and services as well as to optimise its industrial operations and to assure a competitive supply of raw materials. The Company is also taking efforts to increase the product line whereby the Company will be in a position to increase the margin on sales.

(The statement in this report including Management’s Discussions & Analysis Report reflects Company’s projections, estimates, expectations or predictions. These may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, since the Company’s operations are influenced by many external and internal factors beyond the control of the Company.)

C) Directors

During the year, Mr. Ian Brown and Mr. Michel Ybert will retire by rotation at the ensuing Annual General Meeting. Resolutions are being proposed for their reappointment.

Mr. Suresh Talwar, Mr. Sanjeev Mukerjee and Mr. Yogesh Thar are being proposed to be appointed as Independent Directors of the Company as per the provisions of the Companies Act, 2013.


D) Directors’ Responsibility Statement To the best of our knowledge and belief

and according to the information and explanations obtained by us, we make the following statement in terms of Section 217(2AA) of the Companies Act, 1956:

1. that in the preparation of the annual accounts for the year ended 31st March 2014; the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

2. that the Directors had selected such accounting policies and applied them consistently and made judgements 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 31stMarch2014andof theprofitof theCompany for the year on that date;

3. that the Directors had taken proper and sufficientcareforthemaintenanceofadequateaccounting 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;

4. that the Directors had prepared the annual accounts on a ‘going concern’ basis.

E) Corporate Governance As required under Clause 49 of the Listing

Agreement, disclosures on the points relating to Corporate Governance are given in Annexure I to this report.

F) Energy Conservation, Technology Absorption and Foreign Exchange Earnings/Outgo

The information required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in the annexure to this report, marked Annexure II.

G) Health, Safety & Environment The Company recognises importance of health

and safety of its employees and its neighbourhood. Regular safety audits are being conducted by internal teams as well as external experts.

Safety and environmental impact standards are periodically reviewed and upgraded based on these studies. The Company is committed in ensuring a clean environment and makes efforts to ensure that not only its premises but also the neighbourhood is not affected adversely by its operations.

H) Employees As at 31st March 2014, the Company had 296

employees.

We place on record our high appreciation of the contribution of employees at all levels for their co-operation and for reduction of cost of operations, wherever possible.

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors’ Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The status of complaints received from female employees with regard to sexual harassment during the year is as under:

Number of Complaints of sexual harassment received during the period December 2013 to March 2014

Number of complaints disposed off during the period December 2013 to March 2014

Nature of action taken by the employer

NIL Not applicable Not applicable

I) Auditors Deloitte Haskins & Sells, Chartered Accountants,

Auditors of the Company, will retire at the conclusion of the 48th Annual General Meeting. They are eligible for reappointment and a resolution is being proposed for their re-appointment for approval of the members.



J) Cost Audit Cost Audit Report for the financial year 2012-13

wasfiledwiththeMinistryofCorporateAffairson15th August 2013 in XBRL format.

M/s. Kishore Bhatia & Associates, Cost Accountants, has been appointed as the Cost Auditor of the Company under Section 233B of theCompaniesAct, 1956 for thefinancial year2013-14. Cost Audit Report for the year 2013-14 shall be submitted with the Ministry of Corporate Affairs within six months from the closure of the financialyeari.e.onorbefore30th September 2014.

K) Delisting of Equity Shares The equity shares of the Company will be

delisted from BSE records w. e. f. Wednesday, 28th May 2014. Exit Option will be kept open by

the Acquirer-Solvay SA to the remaining public shareholders for a period of one year from the date of delisting at the rate of ` 1,200 /- (Rupees One Thousand Two Hundred only) per equity share, being the exit price determined.

L) Acknowledgement We acknowledge the support of our shareholders,

suppliers, customers and banks enjoyed by the Company and look forward to their continuing patronage.

For and on behalf of the Board of Directors

Mumbai S. N. Talwar23rd May 2014 Chairman


Annexure ICORPORATE GOVERNANCE DISCLOSURES

In terms of the Clause No. 49 of the Listing Agreement (“the said Clause”) on Corporate Governance, the Company has been complying with the requirements of the said Clause to the extent and in the manner stated hereunder;

(A) Company’s Philosophy on Corporate Governance:

The Company’s philosophy on Corporate Governance envisages the attainment of transparency, accountability and equity in all facets of its operations, and in all its interactions with its stakeholders.

(B) Board of Directors:

The Board of Directors comprises of nine Directors (excluding Alternate Directors). Out of nine directors, four directors are non-executive directors namely – Mr. Suresh Talwar, Chairman, Mr. Sanjeev Mukerjee, Mr. Ranjit Pandit and Mr. Yogesh Thar.

Mr. Ranjit Pandit who was originally appointed as a Promoter Director was categorised as an Independent Director w.e.f. 31st October 2013. On implementation of the Companies Act, 2013 Mr. Pandit was re-categorised as non-executive director w.e.f. 23rd May 2014.

TheBoardmetfive timesduring2013-14on the followingdatesand therewas less than fourmonths’gapbetween any two meetings:

27th May 2013, 9th August 2013, 31st October 2013, 9th November 2013 and 31st January 2014.

The Composition of the Board of Directors and related information as at 31st March 2014:

Name of the Director Category No. of Board meetings attended

Attendance at last AGM

No. of Membership in Boards of other

Companies*

No. of Membership

in Board Committees**

Mr. Suresh Talwar Independent Non-Executive Director

5 Yes 14 9 (includes 3 Chairmanships)

Mr. Michel Ybert Non-Executive Director

Nil No 2 Nil

Mr. Ian Brown Non-Executive Director

1 No 2 Nil

Mr. Ranjit Pandit Non-Executive Director

3 Yes 1 Nil

Mr. Sanjeev Mukerjee Independent Non-Executive Director

4 Yes 2 2

Mr. Yogesh Thar Independent Non-Executive Director

4 Yes 3 2

Mr. Manoj Khullar Managing Director 4 No 1 2



Name of the Director Category No. of Board meetings attended

Attendance at last AGM

No. of Membership in Boards of other

Companies*

No. of Membership

in Board Committees**

Mr. Pierre-Franck Valentin

Non-Executive Director

Nil No 2 Nil

Mr. Prakash Raman Non-Executive Director

2 No Nil Nil

Mr. Chen Pu Alternate to Pierre-Franck Valentin

Nil No 1 Nil

Ms. Quitterie Dupontreue de Pelleport

Alternate to Mr. Ian Brown

Nil No Nil Nil

Mr. Guo Lin Alternate of Mr. Michel Ybert

Nil No Nil Nil

* excludes Directorships in Private Limited Companies, Foreign Companies and Companies under Section 25 of the Companies Act, 1956 and Alternate Directorships.

** includes chairmanship/membership of only Audit Committees and Shareholders’ / Investors’ Grievance Committees constituted under Clause 49 of the Listing Agreement with the Stock Exchange.

Key information such as annual operating plans, budgets (capital and revenue), monthly and quarterly working results, minutes of Audit Committee and other committees are made available to the Directors. The Board is informedofallmaterialfinancialandcommercialdecisions inwhichanyDirectorhaspersonal interestorwherethereisanypotentialconflictofinterest.

(C) Audit Committee:

At present the Committee comprises of four members viz. Mr. Yogesh Thar, Mr. Sanjeev Mukerjee, Mr. Manoj Khullar and Mr. Suresh Talwar. It has three independent directors viz. Mr. Yogesh Thar, Mr. Sanjeev Mukerjee and Mr. Suresh Talwar as members. Mr. Yogesh Thar is the Chairman of the Committee.Mr.YogeshTharbeingaPracticingCharteredAccountanthasextensivefinancialandaccountingknowledge. The other members of the Audit Committee also have long experience in business and are well-conversantwithbusiness andfinance.TheLegalManager&CompanySecretaryacts as theSecretaryof the Committee. SBS Country Accounting Manager, Solvay Group, along with the Statutory Auditors and the Internal Auditors are invitees to the meetings of the Committee. The quorum for a committee meeting is two Directors.

Mr. Suresh Talwar, Chairman of the Company, was appointed as a member of the Audit Committee w.e.f. 21st January 2014.

The Committee held four meetings 27th May 2013, 9th August 2013, 31st October 2013 and 31st January 2014.

The Committee’s powers and role are as stipulated under Clause 49 of the Listing Agreement.

The Company has complied with all the applicable Accounting Standards in the preparation and presentation of itsannualaccountsasprescribedunderCompanies (AccountingStandards)Rules,2006.ACertificate tothis effect by the Managing Director and Chief of Finance is submitted to the Audit Committee and the Board at the time of consideration of the accounts.


(D) Remuneration Committee:

The Company has a Remuneration Committee which consists of three Independent Directors viz. Mr. Yogesh Thar, Mr. Sanjeev Mukerjee, and Mr. Suresh Talwar.

The Committee held one meeting on 27th May 2013 and the meeting was attended by all the members. Directors’ Remuneration for the year ended 31st March 2014: Mr. Manoj Khullar – Managing Director

Particulars Amount (` in lakhs)

Salary 108.33

Value of perquisites 0.45

Total Remuneration 108.79

Non-Executive Indian Directors:

Name Sitting Fees (`)

Mr. Sanjeev Mukerjee 1,80,000

Mr. Yogesh Thar 1,80,000

Mr. Suresh Talwar 1,40,000

Mr. Ranjit Pandit 60,000

Total 5,60,000

Shareholding by Directors:

Name of Director No. of shares held

Mr. Sanjeev Mukerjee 15

Other than whatever stated above, none of the other Directors hold any shares in the Company.

Mr. Manoj Khullar, Managing Director has a service contract of three years from 1st January 2013, with a notice period of three months by either party.

The Company has no Stock Option Scheme for any of its Directors.

(E) Code of Conduct: The Company has adopted a Code of Conduct for its Directors and Senior Management Personnel. All of

them have affirmed their compliance with the Code during the year 2013-14. The Managing Director’sdeclaration to this effect is given as Appendix 1 to this report.

(F) Shareholders’/Investors’ Grievance Committee:

Mr. Sanjeev Mukerjee, Non-Executive Director, and Mr. Manoj Khullar, Managing Director are the members of the Committee.

TheLegalManager&CompanySecretaryistheComplianceOfficerappointedbytheBoardofDirectors.

The Committee held one meeting during the year 2013-14 on 27th May 2013 and was attended by all the members of the Committee.



(G) General Meetings: Particulars of General Meetings held are given below:

Date of previous Annual General Meetings

Timing of Annual General Meetings

Venue

23.08.2013 10.30 a.m. The Convention Hall, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg, Nariman Point, Mumbai-400 021



All the resolutions set out in the respective notices were passed by the members. Special resolution related to revision of salary of Mr. Manoj Khullar w. e. f. 1st January 2013 was passed by

requisite majority in the last Annual General Meeting.

Resolutions passed through Postal Ballot during 2013-14: On 19th December 2013, members passed special resolution approving the proposed delisting of the Equity

Shares from the BSE Limited in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.

(H) Disclosures:

(1) Related party transactions:

Transactions with related parties, as per requirement of Accounting Standard-18, are disclosed elsewhere in the Annual Report.

(2) Statutory Compliance: The Company has complied with the requisite regulations relating to capital markets. There were no

penalties or strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

(I) Means of Communication:

Quarterly Financial Results are taken on record by the Board of Directors and submitted to the Stock Exchange in terms of the requirements of Clause 41 of the Listing Agreement.

Quarterly Financial Results are normally published in Free Press Journal and Nav Shakti.

The Company does not send quarterly/half-yearly results to the members.

The Company has its website viz. www.solvayindia.in. The Company regularly updates the website with details of quarterly results, shareholding patterns and Annual Report etc.

The Company has not made any presentations to institutional investors or to the analysts.

As regards Management Discussion and Analysis, please refer to the relevant paragraph on the subject in the Directors’ Report.

(J) General Information: (1) Annual General Meeting Date and Time: 10th September 2014 at 12:00 noon.


(2) Venue: Convention Hall Y. B. Chavan Centre Gen. Jagannath Bhosale Marg Nariman Point Mumbai - 400 021

(3) Financial Calendar The results for every quarter are declared as per the provisions of the listing agreement.

(4) Date of Book Closure 29th August 2014 to 5th September 2014 (both days inclusive)

(5) Listing on stock exchanges The Company's equity shares are listed on BSE. Following the successful closure of delisting offer, the

shares will be de-listed from BSE w.e.f. 28th May 2014.

(6) Stock code 506230

(7) Market price data(High/Low)Company’sSharePriceduringeachmonthinthefinancialyear2013-14and performance in comparison to the BSE Sensex.

Share Price Vs Sensex for 2013-14 Share Price BSE SensexMonth High Low Variation

%High Low Variation

%April, 2013 399.85 372.05 -6.95 19622.68 18144.22 -7.53May 415.00 325.10 -21.66 20442.62 19451.26 -4.85June 459.50 361.00 -21.44 19860.19 18467.16 -7.01July 415.00 380.00 -8.43 20351.06 19126.82 -6.02August 412.85 375.00 -9.17 19569.2 17448.71 -10.84September 419.00 365.90 -12.67 20739.69 18166.17 -12.41October 500.00 390.05 -21.99 21205.44 19264.72 -9.15November 711.90 490.00 -31.17 21321.53 20137.67 -5.55December 843.40 657.00 -22.10 21483.74 20568.70 -4.26January, 2014 830.00 685.00 -17.47 21409.66 20343.78 -4.98February 849.00 665.00 -21.67 21140.51 19963.12 -5.57March 1170.00 725.00 -38.03 22467.21 20920.98 -6.88

(8) Registrar & Share Transfer Agents Link Intime India Pvt. Ltd. C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai - 400 078 Tel: +91-22-2596 3838 Fax: +91-22-25962691/25946969 Email: [email protected]

(9) Share Transfer System Physical transfer of shares is processed by the Share Transfer Agents. Transfer of shares is effected and

the sharecertificatesare sent to the transfereeswithin30days from thedateof receipt,provided therelevant documents are complete in all respects.



(10) Insider Trading Regulations The Company has established procedures for prohibition and regulation of insider trading in its shares,

in accordance with the directions of the Securities & Exchange Board of India. Mr. Niranjan Ketkar, LegalManager & Company Secretary is the ComplianceOfficer for the purpose. The Company hascomplied with the requirements in this regard.

(11) Distribution of Shareholding as on 31st March 2014

Shareholding Level No. of Shareholders

No. of shares held

% of Shareholding

up to 500 1460 105509 3.1256

501 to 1000 18 13623 0.4036

1001 to 2000 13 17487 0.5180

2001 to 3000 3 7657 0.2268

3001 to 4000 1 3915 0.1160

4001 to 5000 0 0 0

5001 to 10000 0 0 0

Above 10000 4 3227409 95.6099

TOTAL 1499 33756000 100.00

(12) Shareholding Pattern as on 31st March 2014

Category code

Category ofshareholder

Number of shareholders

Total numberof shares

Percentage of shareholding

(A) Shareholding of Promoter and Promoter Group

(1) Indian

(a) Individuals/Hindu undivided Family 0 0 0

Sub-Total (A)(1) 0 0 0

(2) Foreign

(a) Bodies Corporate 2 3082826 91.33

Sub-Total (A)(2) 2 3082826 91.33

Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+(A)(2)

2 3082826 91.33

(B) Public shareholding

(1) Institutions

(a) Financial Institutions/Mutual Funds/Banks 3 120 0


Category code

Category ofshareholder

Number of shareholders

Total numberof shares

Percentage of shareholding

(b) Foreign Venture Capital Investors 0 0 0Sub-Total (B)(1) 3 120 0

(2) Non-institutions(a) Bodies Corporate 50 14634 0.43(b) Individuals –

i. Individual shareholders holding nominal share capital up to ` 1 lakh

1404 126047 3.73

ii. Individual shareholders holding nominal share capital in excess of ` 1 lakh

0 0 0

iii. Clearing Members 28 5014 0.15iv. Non Resident Indians (Repat) 3 154 0v. Non Resident Indians (Non Repat) 6 1242 0.04vi. Foreign Companies 0 0 0vii. Directors & Relatives of Directors 1 980 0.03viii. Escrow Account 2 144583 4.28Sub-Total (B)(2) 1494 292654 8.67Total Public Shareholding (B)=(B)(1)+(B)(2) 1497 292774 8.67TOTAL (A)+(B) 1499 3375600 100.00

(13) Dematerialization of shares and liquidity: Based on SEBI directive, Company’s shares are traded in dematerialized form. About 98.75% of total

Equity Capital is held in dematerialized form with NSDL and CDSL as on 31st March 2014.

(14) There are no outstanding GDRs/ADRs/Warrants or any convertible instruments.

(15) Plant Location: Roha Plant: MIDC Industrial Estate, Dhatav, Dist. Raigad, Maharashtra, PIN-402 116. (16) Address for Correspondence: Shareholders’ correspondence should be addressed to the Company’s Registrars & Transfer Agents at the

address mentioned herein above at Sr. No. 8. ShareholdersmayalsocontacttheLegalManager&CompanySecretaryattheRegisteredOfficeofthe

Company at the address mentioned below: Rhodia Specialty Chemicals India Limited Phoenix House, A Wing, 4th Floor 462, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013 Tel: +91-22-6663 7101 Fax: +91-22-2495 2834 (17) Whistle-blower Policy: The Company has not adopted the “whistle-blower” policy. (18) Certificate of compliance of mandatory stipulations of Corporate Governance: The certificate issued by Messrs Alwyn D’souza & Co, Company Secretaries, regarding compliance

of mandatory stipulations of corporate governance in terms of the listing agreement with the Stock Exchange is attached as Appendix 2 to this report.

(19) The Company has presently not adopted the non-mandatory requirements set out in Annexure-1D to the Corporate Governance Code.



Appendix 1 to Corporate Governance Disclosures for the year 2013-14The Company has adopted a Code of Conduct for all its Directors and Senior Management Personnel, in compliance of the provisions of Clause 49 of the Listing Agreement.

All theDirectors and SeniorManagement Personnel have affirmed their compliancewith the aforesaidCodeofConduct during the year 2013-14.

Mumbai Manoj Khullar23rd May 2014 Managing Director

Appendix 2 to Corporate Governance Disclosures for the year 2013-14CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

ToThe MembersRhodia Specialty Chemicals India LimitedMumbai

We have examined all relevant records of Rhodia Specialty Chemicals India Limited (the Company) for the purpose of certifying compliance of the conditions of Corporate Governance under Clause 49 of the Listing Agreement with BSELimitedforthefinancialyearended31st March 2014. We have obtained all the information and explanations tothebestofourknowledgeandbeliefwerenecessaryforthepurposeofthiscertification.

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination waslimitedto theprocedureandimplementationthereof.Thiscertificate isneitheranassuranceas to the futureviabilityoftheCompanynoroftheefficacyoreffectivenesswithwhichthemanagementhasconductedtheaffairsof the Company.

On the basis of our examinations of the records produced explanations and information furnished, we certify that:

(a) the Company has complied with all the mandatory conditions of the said Clause 49 of the Listing Agreement and;

(b) has not complied with the non-mandatory requirements of the said Clause 49 of the Listing Agreement.

Alwyn D’souza & Co. Company SecretariesPlace: MumbaiDate: 23.05.2014

OfficeAddress:Annex-103, Dimple ArcadeAsha Nagar, Kandivli (E),Mumbai - 400 101

(Alwyn D’souza FCS 5559)(Proprietor)

CertificateofPracticeNo.5137


ANNEXURE IIConservation of Energy & Technology Absorption

A. CONSERVATION OF ENERGY: Energy conservation measures include de-bottlenecking to enhance plant capacity; planned production at

optimum levels; regular monitoring of electricity and fuel consumption and corrective steps where required; utilization of by-product steam; and wet scrubbers to recover heat.

Form A Disclosure of particulars with respect to Conservation of Energy

Power and Fuel Consumption 2013-14 2012-131. Electricity: (a) Purchased unit in 000 KWH 8069 8901 Total Amount ` in Lakhs 606.33 684.86 Rate/unit (`) 7.51 7.69 (b) Own Generation through Diesel Generator units in KWH 35427 72620 units per Litre of diesel oil 2.90 2.65 Cost/unit (`) 23.44 17.562. Furnace Oil etc. (a) Quantity (K Litres) 2 393 Total Amount ` in Lakhs 75 162.83 Average Rate `/K Litre 42,680 41,506 C9/Kerosene/Slop Oil etc. (b) Quantity (M.T.) 683 505 Total Amount ` in Lakhs 309.10 204.21 Average Rate `/K Litre 45,224 40,442Consumption per unit of production Electricity

KWH/MT 2013-14 2012-13

Fuel (Ltrs./MT)

2013-14 2012-13Products1. Sulphuric Acid 39 33 5.3# 2.762. Linear Alkyl Benzene Sulphonic Acid 44 47 — —3. Surfactants 215* 250 240 250

#Increased due to frequent shutdowns. *Reduced due to increase in production and product mix.

B. TECHNOLOGY ABSORPTION: RESEARCH AND DEVELOPMENT (R&D) 1. Specific Areas in which R&D carried out by the Company: — 2. Benefits derived as a result of above R&D: — 3. Future Plan of Action: Continual improvement in quality, cleaner environment and new product development based on corporate

strategy, reduce waste generation. Being part of Solvay Group, the Company has access to Solvay’s technical assistance.



4. Expenditure on R&D (` in Lakhs):

2013-14 2012-13i Capital – –ii Recurring – –iii Total – –iv Total R&D Expenditure as a percentage of total turnover – –

TECHNOLOGY ABSORPTION AND INNOVATION: As part of Solvay’s global operation, the Company has access to Solvay’s technical support in its research efforts.

This is adapted to suit local operations for product and process development as well as qualify improvement.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Please refer Notes 34 & 35 to the Accounts.



TO THE MEMBERS OFRHODIA SPECIALTY CHEMICALS INDIA LIMITEDReport on the Financial StatementsI. We have audited the accompanying financial statements

of RHODIA SPECIALTY CHEMICALS INDIA LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements2. The Company's Management is responsible for the

preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15 / 2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility3. Our responsibility is to express an opinion on these

financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion5. In our opinion and to the best of our information and

according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

6. As required by the Companies (Auditor's Report) Order, 2003 (“the Order”) issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

(i) As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15 / 2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

(e) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

For DELOITTE HASKINS & SELLSChartered Accountants

(Firm's Registration No.: 117364W)

Ketan Vora Mumbai Partner23rd May, 2014 (Membership No.: 100459)

INDEPENDENT AuDITORS’ REPORT



24


(i) In our opinion and according to the information and explanations given to us, the nature of the Company's business / activities during the year are such that clauses (xiii), (xiv) and (xvi) of paragraph 4 of the Order, are not applicable to the Company. In respect of the other clauses, we report as under:

(ii) In respect of its fixed assets: (a) The Company has maintained proper records

showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories: (a) As explained to us, the inventories except

goods in transit and stock lying with third parties were physically verified during the year by the Management at reasonable intervals. For stock lying with third parties at the year end, confirmations have been obtained by the Company.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control

system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such is in excess of ` 5 Iakhs in respect of any party, having regard to our comments in paragraph (v) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, other than certain purchases which are of a special nature for which comparable quotations are not available and in respect of which we are, therefore, unable to comment if the transactions have been carried out at prices having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

(viii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained and are being made up. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

Annexure to the Independent Auditors’ Report(Referred to in paragraph 6 under ‘Report on Other Legal and Regulatory Requirements' section of our report of even date)



(xi) The Company does not have any accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial period.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company did not have any loan from any financial institutions and has not issued any debentures.

(xiii) In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks and financial institutions.

(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xvi) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xvii) The Company has not issued any debentures and hence, the question of creation of security does not arise.

(xviii) The Company has not raised any money by public issue during the year.

(xix) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLSChartered Accountants

(Firm's Registration No.: 117364W)

Ketan Vora Mumbai Partner23rd May, 2014 (Membership No.: 100459)

Annexure to the Independent Auditors’ Report (Continued)(Referred to in paragraph 6 under ‘Report on Other Legal and Regulatory Requirements' section of our report of even date)

Name of Statute Nature of Dues

Forum where Dispute is Pending Period to which the Amount Relates

Amount Involved

(` in ’000)

The Income Tax Act, 1961 Income Tax Commissioner of Income Tax (Appeals) 2008-2009 10,219

The Central Excise Act, 1944 Excise Duty Central Excise and Service Tax Appellate Tribunal 1996-2006 14,016

Commissioner of Central Excise (Appeals) 1999-2012 1,508

Additional Commissioner of Central Excise 2000-2006 3,761

Assistant Commissioner of Central Excise 2000-2002 2,640

The Custom Act, 1962 Custom Duty Commissioner of Customs (Appeals) 2004-2010 20,317

Assistant Commissioner of Customs 2008-2010 1,984

The Finance Act, 1994 Service Tax Central Excise and Service Tax Appellate Tribunal 1999-2009 31

Central Excise and Service Tax Appellate Tribunal 2005-2008 124

Assistant Commissioner of Central Excise 2010-2011 75

Assistant Commissioner of Central Excise 2012-2013 116

Madhya Pradesh Sales Tax Act, 1994

Sales Tax Deputy Commissioner of Sales Tax (Appeals) 1998-1999 91

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2014 on account of disputes are given below:



26

See accompanying notes to the financial statements

In terms of our report attached For and on behalf of the Board of Directors

For Deloitte Haskins & SellsS. N. Talwar Yogesh TharChartered AccountantsChairman Director

Ketan Vora Manoj Khullar Niranjan KetkarPartner Managing Director Legal Manager &

Company Secretary

Mumbai MumbaiDate: 23rd May 2014 Date: 23rd May 2014

Balance Sheet as at 31 March 2014

(Currency Rupees thousands)

Note No. As at 31 March 2014 As at 31 March 2013

I. EquITY AND LIABILITIES(1) Shareholders’ funds

(a) Share capital 3 33,756 33,756 (b) Reserves and surplus 4 647,929 715,595

681,685 749,351 (2) Non-current liabilities

(a) Other long-term liabilities 5 205 252 (b) Long-term provisions 6 18,690 17,360

18,895 17,612 (3) Current liabilities

(a) Short-term borrowings 7 403,708 279,623 (b) Trade payables 8 537,257 307,850 (c) Other current liabilities 9 54,491 55,108 (d) Short-term provisions 10 11,714 17,185

1,007,170 659,766 TOTAL 1,707,750 1,426,729

II. ASSETS(1) Non-current assets

(a) Fixed assets 11Tangible fixed assets 492,930 525,872 Capital work-in-progress 19,403 25,088

512,333 550,960 (b) Non-current investments 12 3 3 (c) Deferred tax assets (net) 13 – –(d) Long-term loans and advances 14 156,935 159,640

669,271 710,603 (2) Current assets

(a) Inventories 15 384,969 280,289 (b) Trade receivables 16 537,187 323,857 (c) Cash and cash equivalents 17 795 18,692 (d) Short-term loans and advances 18 114,903 91,546 (e) Other current assets 19 625 1,742

1,038,479 716,126 TOTAL 1,707,750 1,426,729



Statement of Profit and Loss for the year ended 31 March 2014


Note No. For the year ended 31 March 2014

For the period 1 January 2012 to 31 March 2013

IncomeRevenue from operationsSale of products (gross) 20(a) 2,865,524 3,013,559 Less: Excise duty 222,046 226,236 Sale of products (net) 2,643,478 2,787,323 Processing charges [net of excise duty ` 17,126(000), Previous Period ` 6,985(000)] 20(b) 13,749 22,395 Other operating income 21 15,667 34,437

2,672,894 2,844,155 Other income 22 38,228 54,642 Total revenue 2,711,122 2,898,797 ExpensesCost of materials consumed 23(a) 1,637,340 1,668,123 Purchases of stock-in-trade 23(b) 458,273 457,872 Change in inventories of finished goods, work-in-progress and stock-in-trade 23(c) (40,088) 48,945 Employee benefits expense 24 173,551 181,189 Finance costs 25 17,774 49,441 Depreciation and amortisation expense 11 92,262 103,098 Other expenses 26 372,574 383,684 Total expenses 2,711,686 2,892,352 Profit / (Loss) before exceptional items and tax (564) 6,445 Exceptional Items: Customs duty 44 (67,102) –Profit on transfer of lease rights of land (net of expenses) – 362,185 Profit / (Loss) after tax (67,666) 368,630 Loss from continuing operations before tax (67,666) (10,770)Less: Income tax expense – –Loss from continuing operations after tax (67,666) (10,770)Profit from discontinuing operations before tax – 379,400 Less: Income tax expense Current tax : MAT for the year / period – 71,000 MAT credit entitlement – (71,000) Deferred tax (net) 13 – –

– – Profit from discontinuing operations after tax – 379,400 Profit / (Loss) after tax (67,666) 368,630 Earnings per equity share from total operations [nominal value of share ` 10 (Previous period ` 10)]

40

Basic and diluted (20.05) 109.20 Earnings per equity share from continuing operations [nominal value of share ` 10 (Previous period ` 10)]

40

Basic and diluted (20.05) (3.19)

See accompanying notes to the financial statements




Company Secretary




28

Cash Flow Statement for the year ended March 31, 2014 (Contd.)


Year ended 31 March 2014

Period ended 31 March 2013

Cash flow from operating activitiesNet Profit / (Loss) before tax (67,666) 368,630 Adjustments for non-cash items / items required to be disclosed separately: Depreciation and amortisation expense 92,262 103,098 Interest expenses 17,774 49,441 (Profit) on sale / write off of fixed assets (net) (1,664) (368,176) Unrealised foreign exchange gain (net) (15,065) (1,018) Write back of provision for doubtful debts – (3,841) Liabilities / provisions no longer required written back (3,409) (30,015) Interest income (1,143) (1,393)

88,755 (251,904)

Operating profit before changes in working capital 21,089 116,726 Adjustments for changes in Working Capital and Provisions: Adjustments for (increase) / decrease in operating assets: Trade receivables and other receivables (234,023) (9,212) Inventories (104,680) 88,644

(338,703) 79,432 Adjustments for increase / (decrease) in operating liabilities: Trade and other payables 245,814 (200,037) Short and long term provisions 4,044 5,165

249,858 (194,872)(88,845) (115,440)

Cash generated / (used in) operations (67,756) 1,286 Income-tax paid (net of refunds) (4,840) (70,985)

A. Net cash used in operating activities (72,596) (69,699) Cash flow from investing activities Capital expenditure on fixed assets, including

capital advances (53,440) (103,811) Proceeds from sale of fixed assets 1,664 371,163 Earmarked balances 45 – Fixed deposits matured 1,961 29,999 Interest received 1,419 1,066

B. Net cash (used in) / from investing activities (48,351) 298,417



Cash Flow Statement for the year ended March 31, 2014 (Contd.)


Year ended 31 March 2014

Period ended 31 March 2013

Cash flow from financing activities Increase / (Decrease) in short term borrowings 131,013 (226,349) Interest paid (18,006) (48,569) Dividend paid (6,796) (98) Dividend tax paid (1,148) –

C. Net cash from / (used in) financial activities 105,063 (275,016)

Net decrease in cash and cash equivalents (A+B+C) (15,884) (46,298)

Cash and cash Equivalents at the beginning of the year / period 16,412 62,710

Cash and cash Equivalents at the end of the year / period 528 16,412

Notes:(1) The above cash flow statement has been prepared

under the ‘Indirect Method'.

As at March 31, 2014

As at March 31, 2013

(2) Reconciliation of cash and cash equivalents with the Balance Sheet

Cash and cash equivalents (Refer note 17) 521 16,412 Add: Effect of exchange differences on reinstatement

of foreign currency cash and cash equivalents 7 –

Net cash and cash equivalents (as defined in AS 3 Cash Flow Statements) included in note 17 528 16,412




Company Secretary




30

Notes forming part of the financial statements for the year ended 31 March 2014 (Contd.)

1. Company Overview Rhodia Specialty Chemicals India Ltd is a Public Limited Company incorporated under the Companies Act,

1956. It is a subsidiary of Rhodia UK Ltd (holding 72.93%). The Company is primarily engaged in manufacturing surfactants for serving markets in home, personal care and agrochemical markets. It also manufactures chemicals used in industrial formulations, paints and coatings as well as for oil fields. It also sources some trading products from overseas group companies and markets in India.

2. Significant accounting policies (a) Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General Circular 15 / 2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act / 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous period.

(b) Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

(c) Fixed assets – Tangible Assets Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. Cost includes all

inward freight, duties, taxes and incidental expenses, any directly attributable expenditure on making the asset ready for its intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

(d) Depreciation and Amortization Lease hold land is amortised over the period of lease. Depreciation on other fixed assets is provided pro-rata for the period of use, on Straight Line Method (SLM).

The estimated useful lives of the assets are:

ParticularsBuilding and Roads – Factory 10 YearsBuilding and Roads – Other than Factory 20 YearsPlant and Machinery 10 years / 8

years / 6.67 yearsComputers 3 YearsFurniture and Fittings 10 YearsVehicles 5 Years

Assets individually costing ` 5,000 or less are depreciated fully in the year when the assets are put to use.




2. Significant Accounting Policies (Continued)

(e) Impairment of Assets

Management periodically assesses using external and internal sources whether there is an indication that an asset may be impaired. Impairment occurs where the carrying value exceeds the recoverable amount. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the assets net selling price or present value of future cash flows expected to arise from the continuing use of the assets and its eventual disposal.

(f) Inventories

Inventories are valued at lower of cost and net realisable value except for by-products which are valued at net realisable value. Cost is determined on the moving / monthly moving weighted average basis except that of goods in transit which is ascertained on specific identification basis, and includes where applicable, appropriate manufacturing overheads. The cost in the case of work-in-process comprises direct material cost and finished goods comprise direct materials, labour, utilities and appropriate cost of conversion. The cost of traded finished goods is determined on moving weighted average basis.

Raw materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

Non inclusive method of accounting is consistently followed for Cenvat under the Central Excise Act, 1944, with regard to inventories, purchases and consumption.

(g) Employee benefits

(i) Short Term Employee Benefits: All employee benefits payable wholly within twelve months of rendering the service are classified as

short-term employee benefits. These benefits include compensated absences such as paid annual leave and sickness leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period.

(ii) Post Employment Benefits: a. Defined Contribution Plans The Company's liability for superannuation scheme, which is a defined contribution scheme, is

funded through a scheme administered by Life Insurance Corporation of India (LIC). Contributions payable under this scheme are charged to Statement of Profit and Loss as incurred.

Contributions to the recognized statutory Provident Fund, which is a defined contribution scheme, are charged to the Statement of Profit and Loss in the period in which the liability is incurred and when services are rendered by the employees.

b. Defined Benefit Plans Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation

carried out by an independent actuary at the balance sheet date and is funded through a scheme administered by the LIC. The actuarial valuation is performed annually by a qualified actuary using the ‘Project Unit Credit Method'. The discount rates used for determining the present value of the defined benefit obligation, are based on the market yields on Government securities as at the balance date. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.



32


2. Significant Accounting Policies (Continued) (iii) Other Long-term employment benefits Compensated absences which are not expected to occur within twelve months after the end of the

period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date. The obligation is measured on the basis of independent actuarial valuation using the ‘Project Unit Credit Method'. The discount rates used for determining the present value of the defined benefit obligation are based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

(h) Revenue recognition

Revenue from sale of goods and processing charges is recognised on transfer of all significant risks and rewards of ownership to the buyer which generally coincides with the despatch of goods. The amount recognized as sales is exclusive of sales tax / value added tax and trade discounts.

Indenting commission is accounted for on receipt of intimation of supply from foreign suppliers.

Dividend income is recognised when the right to receive payment is established.

Interest income is recognised on a time proportion basis.

(i) Foreign exchange transactions

Transactions denominated in foreign currency are recorded at exchange rate prevailing on the date of transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the closing exchange rate on that date and the resultant exchange differences are recognised in the Statement of Profit and Loss. In respect of transactions covered by forward exchange contracts which are not intended for trading or speculation purposes, premiums or discounts are amortised as expense or income over the life of the contracts. Exchange differences on such contracts are recognised as expense or as income in the Statement of Profit and Loss in the year in which the exchange rates change. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or as expense for the year.

(j) Leases

Lease rentals in respect of assets acquired under operating lease are charged off to the Statement of Profit and Loss as incurred.

(k) Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with income tax laws) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that the assets can be realized in future; however when there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised.




2. Significant Accounting Policies (Continued) Minimum Alternate Tax In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India (‘lCAl') on

accounting for credit available in respect of Minimum Alternate Tax (MAT) under the Income Tax Act, 1961, the Company recognises MAT credit as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

(l) Earnings per share

Basic and diluted earnings per share are computed by dividing the net profit / (loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

(m) Provisions and contingencies

The Company creates a provision where there is present obligation as a result of past events that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation as a result of past events that may, but probably will not, require an outflow of resources and the amount can be reasonably estimated. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

(n) Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.



34

Notes forming part of the financial statements as at 31 March 2014(Currency Rupees thousands)

As at 31 March 2014

As at 31 March 2013

3 Share capital Authorised: 4,000,000 (Previous period: 4,000,000) equity

shares of ` 10/- each 40,000 40,000 1,000,000 (Previous period: 1,000,000)

unclassified shares of ` 10/- each 10,000 10,000

50,000 50,000

Issued, Subscribed and Paid-up 3,375,600 (Previous period: 3,375,600) equity

shares of ` 10/- each fully paid-up 33,756 33,756

(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year / period Equity shares As at

31 March 2014As at

31 March 2013No. of shares in ` ’000 No. of shares in ` '000

Opening Balance 3,375,600 33,756 3,375,600 33,756 Add: Fresh issue during the year / period – – – –

Closing Balance 3,375,600 33,756 3,375,600 33,756

(b) Terms / Rights attached to equity shares The Company has only one class of shares referred to as equity shares having a par value of ` 10 per share.

Accordingly, all equity shares rank equally with regard to dividend and share in the Company's residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all the preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

During the year, the amount of per share dividend recognised as distributable to equity share holder is ` Nil (Previous period ` 2 per share).

(c) Shares held by the Holding / ultimate Holding Company and / or their Subsidiaries at the end of the year / period

As at 31 March 2014

As at 31 March 2013

No. of shares No. of shares Rhodia UK Limited (Holding Company) 2,461,974 2,461,974 Solvay Participations, France (Subsidiary of the

ultimate Holding Company Solvay SA, France) 620,852 –

(d) Shareholders holding more than 5% equity shares in the Company as at the end of the year / periodAs at

31 March 2014As at

31 March 2013 Name of the shareholder No. of shares % holding No. of shares % holding 1. Rhodia UK Limited 2,461,974 72.93% 2,461,974 72.93% 2. Taj Performance Fund (Mauritius) Limited – – 225,507 6.68% 3. Solvay Participations, France 620,852 18.39% – –



Notes forming part of the financial statements as at 31 March 2014 (Contd.)

(e) BSE Limited (BSE) vide its letter dated 15 May 2014 has informed the Company that the equity shares of the Company will be delisted from BSE records w.e.f. Wednesday, May 28, 2014.

Exit Option will be kept open by the Acquirer-Solvay SA to the remaining public shareholders for a period of one year from the date of delisting at the rate of ` 1,200/- (Rupees One Thousand Two Hundred only) per equity share, being the exit price determined.


As at 31 March 2014 As at 31 March 2013

4 Reserves and surplus Capital reserve Subsidy under the special capital incentive

scheme 2,500 2,500 Profit on reissue of forfeited shares 11 11 Securities premium account At the commencement and end of the

year / period31,658 31,658

General reserve At the commencement of the year / period 374,649 347,001 Amount transferred from Surplus in

Statement of Profit and Loss – 374,649 27,648 374,649 Surplus / (Deficit) in statement of profit and loss At the commencement of the year / period 306,777 (26,306) Profit / (Loss) after tax for the year / period (67,666) 368,630 Less: Proposed equity dividend [` Nil per share (Previous period ` 2 per

share)] – 6,751 Tax on proposed equity dividend – 1,148 Transfer to general reserve – 27,648 Balance as at the end of the year / period 239,111 306,777

647,929 715,595

5 Other long-term liabilities Deposits received from customers 205 252

205 252

6 Long-term provisions Provision for employee benefits – Compensated absences 15,344 14,164 – Gratuity 3,346 3,196

18,690 17,360

7 Short-term borrowings Secured Repayable on demand from banks – From Banks (Refer note 7A) – 7,406 Unsecured – From Banks (Refer note 7B) 303,708 172,217 – Loans and advances from related party

(Refer note 7C) 100,000 100,000 403,708 279,623



36

Notes forming part of the financial statements as at 31 March 2014 (Contd.)

A. As at 31 March 2013, secured by hypothecation of inventories including raw materials, semi finished goods, stock in process, finished goods, book debts, bills receivable and all other recoverable, both present and future.

Cash credit and overdraft facilities from bank carry interest ranging between 2.7% p.a. and 15.2% p.a. B. Secured by a corporate guarantee from Rhodia SA France, a subsidiary of the ultimate holding company and

carries interest rate ranging between 2.13% p.a. and 11.5% p.a. C. Carries an interest rate ranging from 9.25% p.a. to 10.25% p.a.



8 Trade payables – Total outstanding dues of micro and small

enterprises (Refer note 29) 10,513 468 – Total outstanding dues other than micro and

small enterprises 526,744 307,382

537,257 307,850

9 Other current liabilities Interest accrued but not due on borrowings 641 872 Unclaimed dividend (*) 124 169 Advance from customers 3,871 5,581 Other payables: – Statutory dues payable – TDS payable 6,666 5,532 – Service tax payable 344 406 – WCT payable 35 81 – Excise liability on closing stock of finished

goods 17,129 11,958 Payables on purchase of fixed assets 13,173 16,930 Employee Liability 10,368 10,585 Others 2,140 2,994

54,491 55,108

* There is no amount due and outstanding to be paid to the Investor Education and Protection Fund as at the year / period end.

These amounts shall be paid to the fund as and when they become due.

10 Short-term provisions Provision for employee benefits – Compensated absences 3,077 3,363 – Provision for gratuity 3,000 – Other provisions – Proposed equity dividend – 6,751 – Tax on proposed equity dividend – 1,148 – Provision for current tax 5,637 5,923 [Net of advance tax ` 109,062(000)

Previous period ` 108,776(000)]11,714 17,185



11 Fixed AssetsGross Block (At cost) Depreciation / Amortisation Net Block

Description As at 1 April

2013

Additions Disposals As at 31 March

2014

As at 1 April 2013

For the year

Deductions As at 31 March

2014

As at 31 March

2014Tangible fixed assetsFreehold Land 570 – – 570 – – – – 570

(570) (570) – – – – (570)Leasehold Land 3,815 – – 3,815 864 47 – 911 2,904

(4,616) – (801) (3,815) (1,341) (67) (544) (864) (2,951)Buildings 194,162 2,496 – 196,658 93,448 16,448 – 109,896 86,762

(194,092) (13,502) (13,432) (194,162) (85,344) (19,346) (11,242) (93,448) (100,714)Plant and equipment 860,660 52,059 600 912,119 458,814 72,341 600 530,555 381,564

(808,509) (65,415) (13,264) (860,660) (391,115) (80,610) (12,911) (458,814) (401,846)Office equipments 13,308 4,283 20 17,571 5,561 1,790 20 7,331 10,240

(9,445) (7,456) (3,593) (13,308) (7,979) (1,022) (3,440) (5,561) (7,747)Furniture and fixtures 14,286 482 – 14,768 2,767 1,400 – 4,167 10,601 (2,299) (12,361) (374) (14,286) (1,418) (1,689) (340) (2,767) (11,519)Vehicles 2,411 – – 2,411 1,886 236 – 2,122 289 (2,812) – (401) (2,411) (1,923) (364) (401) (1,886) (525)Total 1,089,212 59,320 620 1,147,912 563,340 92,262 620 654,982 492,930 Previous year (1,022,343) (98,734) (31,865) (1,089,212) (489,120) (103,098) (28,878) (563,340) (525,872)

Previous period figures are in brackets


12 Non-current investments (At cost) Non-trade investment : unquoted Investment in equity instruments 3 3 Investment in 100 equity shares (Previous period

100 equity shares) of ` 25 each fully paid up in Roha Industries Association's Sahakari Grahak Bhandar

3 3 Aggregate book value of unquoted non-current

investment 3 3

13 Deferred tax assets (net) Deferred tax liability On difference between book balance and tax

balance of fixed assets 31,126 33,495

Deferred tax assets Provision for compensated absences 5,977 5,687 Provision for Gratuity 2,059 1,037 Disallowance under section 43 (B) of Income Tax

Act 1961 2,382 1,891

Voluntary retirement compensation – 2,080 Brought forward unabsorbed Business losses 21,747 21,383 Unabsorbed depreciation carried forward 34,122 10,055

66,287 42,133 Restricted to 31,126 33,495

– –

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax net off of other balances constituting deferred tax asset.

Notes forming part of the financial statements as at 31 March 2014 (Contd.)(Currency Rupees thousands)



38



14 Long-term loans and advances Secured, considered good Vehicle loans to employees 2,895 2,582 Unsecured, considered good Capital advances 1,645 5,597 Security deposits 24,878 23,917 Advance income-tax [net of provision of

` 153,327(000) Previous period ` 153,327(000)] 41,437 36,882 MAT credit entitlement 71,000 71,000 Balances with Government authorities – VAT refund receivable 15,080 13,146 – Custom authorities – 6,516

156,935 159,640

15 Inventories (Valued at lower of cost and net realisable value) Raw materials 100,545 60,552 Raw materials in transit 26,028 126,573 1,508 62,060

Packing materials 4,932 2,957 Work-in-progress (Sulphur) 2,314 684 Finished goods 167,743 111,009 Stock-in-trade (includes goods in transit

` 20,734(000) [Previous period ` 18,979(000)] 48,509 66,785 Stores and spares 34,898 36,794

384,969 280,289

16 Trade receivables Trade receivables outstanding for a period

exceeding six months from the date they were due for payment

– Unsecured, considered good 369 3,346 – Considered doubtful – – Less: Provision for doubtful trade receivables – 369 – 3,346

Other trade receivables – Secured, considered good – – – Unsecured, considered good 536,818 536,818 320,511 320,511

537,187 323,857





17 Cash and cash equivalents Cash and cash equivalents – Cash on hand 188 167 – Cheques, drafts on hand – 16,233 – Balances with banks On current account 333 12 In other deposit accounts # 150 671 2,111 18,523

In earmarked account – Unpaid dividends 124 169

795 18,692

Of the above, the balances that meet the definition of Cash and cash equivalents as per AS 3 Cash Flow Statements 521 16,412

# Balance with banks include ` 150(000) [Previous period ` 1,099(000)] deposit against lien with government authorities having maturity within 12 months from the balance sheet date.

18 Short-term loans and advances Current portion of long-term loans and advances Secured, considered good – Vehicle loan 1,338 1,090 Other short-term loans and advances Unsecured, considered good Advance to suppliers for goods and services 25,231 11,497 Loans and advances to employees 684 385 Security deposits 757 757 Prepaid expenses 8,205 6,647 Balance with government authorities – Cenvat credit receivable 970 1,955 – Service tax credit receivable 2,955 3,162 – Excise duty receivable 56,979 49,547 – Custom authorities 5,807 – – Others 11,977 16,506

114,903 91,546

19 Other current assets Accruals – Interest accrued on deposits 561 837 Others – Export incentive receivable 64 905

625 1,742



40

Notes forming part of the financial statements for the year ended 31 March 2014 (Contd.)(Currency Rupees thousands)

For the year ended 31 March 2014

For the period from 1 January 2012 to 31 March 2013

20(a) Sale of Products – Finished goods 2,260,787 2,367,494 – Traded goods 604,737 646,065

Sale of products (gross) 2,865,524 3,013,559

Less: Excise duty 222,046 226,236

Sale of products (net) (Refer note 32)

2,643,478 2,787,323

20(b) Sale of services Processing charges (gross) 30,875 29,380 Less: Excise duty 17,126 6,985

Processing charges (net) 13,749 22,395

2,657,227 2,809,718

21 Other operating income Indenting commission 7,779 10,619 Export incentives 4,413 7,968 Scrap sales [net of excise duty ` 163(000),

(Previous period: ` 359(000))] 2,300 4,989 Sales tax refunds – 619 Write back of provision for doubtful debts – 3,841 Cash discount 1,006 – Insurance claim 169 6,401

15,667 34,437

22 Other income Interest on deposits

(on term deposits with banks and deposits with government authorities) 1,143 1,393

Service fees 29,730 22,514 Net Profit on Foreign currency transactions

and translation 629 – Profit on sale of fixed assets (net) 1,664 – Liabilities / provisions no longer required

written back 3,409 30,015 Miscellaneous income 1,653 720

38,228 54,642






23(a) Cost of materials consumed Raw materials consumed

(Refer note 30) Opening stock of raw materials 62,060 111,723 Add: Purchases 1,619,707 1,547,036

1,681,767 1,658,759 Less: Closing stock of raw materials 126,573 62,060

Raw materials consumed 1,555,194 1,596,699 Packing materials consumed Opening stock of packing materials 2,957 3,220 Add: Purchases 84,121 71,161

87,078 74,381 Less: Closing stock of packing materials 4,932 2,957

Packing materials consumed 82,146 71,424

1,637,340 1,668,123

23(b) Purchases of stock-in-trade (Refer note 31) 458,273 457,872

23(c) Change in inventories of finished goods, work-in-progress and Stock-in-trade

Finished goods Opening stock 111,009 118,251 Less: Closing stock 167,743 111,009

(56,734) 7,242 Stock-in-trade Opening stock 66,785 106,397 Less: Closing stock 48,509 66,785

18,276 39,612 Work-in-progress Opening stock 684 2,775 Less: Closing stock 2,314 684

(1,630) 2,091 (40,088) 48,945

24 Employee benefits Salaries, wages 150,067 155,639 Contribution to provident and other funds

(Refer note 39) 13,817 12,974 Staff welfare expenses 9,667 12,576

173,551 181,189



42




25 Finance cost Interest expense on – Borrowings 1,829 45,835 – Trade Payable (Refer note 29) 73 – – Others 13,656 165 Other borrowing costs 2,216 3,441

17,774 49,441

26 Other expenses Consumption of stores and spare parts 25,495 32,132 Power and fuel 98,297 112,176 Rent [net of recovery ` 117,83(000), Previous

period ` 9,281(000)] (Refer note 37) 25,389 33,595 Repairs and maintenance – Buildings 2,888 10,047 – Plant and machinery 19,076 29,700 – Others 3,205 25,169 10,059 49,806 Insurance 5,832 5,627 Rates and taxes 6,054 5,770 Excise duty (Refer note 41) 4,912 (848) Sub-contract charges 16,671 18,072 Water charges 4,188 4,514 Travelling and conveyance 20,235 18,108 Legal and professional fees 28,278 18,757 Communication 6,559 5,874 Printing and stationery 2,379 2,538 Computer maintenance and software 43,809 3,566 Directors' sitting fees 560 680 Payment to statutory auditors (Net of service tax)* – As Auditors 800 1,100 – Other services (includes ` 300(000) paid to

previous auditors) 446 300 – Out of pocket expenses (includes ` 31(000)

paid to previous auditors) 31 1,277 44 1,444 Bank charges 4,539 13,153 Sales commission 784 1,325 Freight and forwarding expenses (net) 28,975 30,437 Advertising and sales promotion 506 1,821 Recruitment expenses 2,746 257 Loss on sale / write off of fixed assets (net) – 1,568 Bad Debts written off – 1 Net loss on Foreign currency transactions

and translation – 1,559 Miscellaneous Expenses 19,920 21,752

372,574 383,684

* Previous period column is fees paid to earlier auditor. Current year column is for payment to current auditor and previous auditor for Q1 Limited review and

certification work.




As at 31 March

2014

As at 31 March

2013

` ‘000 ` '000

27 Contingent Liabilities not provided for in respect of: A. Claims against the Company not acknowledged as debt: (a) Excise matters in respect of : – Matters relating to undervaluation of assessable value 17,508 17,508 – Non payment of duty on clearance of goods meant for

export by the customer 5,815 5,815

– Availment of modvat credit 1,508 784

24,831 24,107 (b) Customs matters in respect of: – Matters relating to differential custom duty rate on product 22,301 22,301 (c) Income tax (including fringe benefit tax) matters – In respect of matters such as addition to the value of

closing stock under the provisions of Section 145 A of the Income Tax Act, 1961, disallowances of certain expenditure as revenue expenditure, etc. in respect of which the Company / Income tax department is in appeal with the first / higher appellate authority

24,244 24,244

– In respect of matters where the Company has received favorable order / partial relief from the first appellate authority but the Income Tax Department is pursuing further with the higher appellate authority

1,595 1,595

(d) Sales Tax – Matters relating to certain sales considered as exempt sales

and sales tax on discounts given to customers 174 174

(e) Employee related matters: – Matters pending with the Labour Court for the

reinstatement of services of certain ex-employees 700 800

– Matters pending with the Assistant Labour Commissioner for the permanent employment of casual workers

Not ascertainable

Not ascertainable

(f) Matters pending with the High Court / Civil Court relating to counter claim / claim against the Company for the alleged breach of marketing arrangement / non-payment for supplies made respectively.

7,991 7,991

(g) Service Tax 346 134 B. Bank Guarantees – In respect of differential custom duty on products – 949 – VAT Registration under Section 84 of Uttarakhand

VAT Act and Central Sales Tax Act 50 50

– Under Section 33A of Water (P&CP) Act 1974 and u / s 31A of the Air (P&CP) Act

100 100

Note: Future ultimate outflow of resources embodying economic benefits in respect of matters stated under 27 A(a) to 27 A(g) above is uncertain as it depends on the final outcome of judgements / decisions on the matters involved.




28 Capital Commitments (to the extent not provided for) The estimated amount of contracts remaining to be executed on capital account (net of capital advances) and

not provided for, is ` 3,202(000) [Previous period ` 15,358(000)].

29 The suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) as given in Note 8 - Trade payables regarding the Micro and Small Enterprises has been determined based on the details regarding the status of the suppliers obtained by the Company. This has been relied upon by the auditors.

Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006As at

31 March 2014

As at 31 March

2013

` ‘000 ` '000 (i) Principal amount remaining unpaid to any supplier as at the end of

the accounting year / period 10,513 468 (ii) Interest due thereon remaining unpaid to any supplier as at the end

of the accounting year / period 73 – (iii) The amount of interest paid along with the amounts of the

payment made to the supplier beyond the appointed day – – (iv) The amount of interest due and payable for the year / period 73 – (v) The amount of interest accrued and remaining unpaid at the end

of the accounting year / period 73 – (vi) The amount of further interest due and payable even in the

succeeding year, until such date when the interest dues as above are actually paid – –

For the year ended

31 March 2014

For the period from 1 January

2012 to 31 March 2013

` ‘000 ` '00030 Raw Materials Consumed Lauryl Alcohol Ethoxilate 432,692 292,896 Lauryl Alcohol 309,469 472,919 Alfa Olefin 183,510 188,168 Linear Alkyl Benzene 183,165 193,373 Sulphur 122,781 167,783 Others 323,577 281,560

1,555,194 1,596,699

Raw Materials Imported 415,435 596,401 Indigenous 1,139,759 1,000,298

1,555,194 1,596,699

31 Purchases of traded items Surfactants 458,273 457,872



Opening Stock as at March 31,

2013

Closing Stock as at March 31,

2014

Net Sales during the

year (#)Value Value Value` ‘000 ` ‘000 ` ‘000

32 Inventories and Sales of Finished Goods Manufactured items: 1,064 2,299 104,338 Sulphuric acid (3,127) (1,064) (160,906) Linear alkyl benzene sulphonic acid 27,499 16,517 219,305

(20,551) (27,499) (220,874) Surfactants 69,871 135,448 1,543,061

(94,573) (69,871) (1,550,098) Contract manufactured items 12,575 13,479 172,037

(19,705) (12,575) (209,380) Total of manufactured items 111,009 167,743 2,038,741

(137,956) (111,009) (2,141,258) Traded items: Surfactants 66,785 48,509 604,737

(86,692) (66,785) (646,033) By-products – – –

(–) (–) (32) Total of Traded items 66,785 48,509 604,737

(86,692) (66,785) (646,065)

Total of manufactured and traded items 177,794 216,252 2,643,478 (224,648) (177,794) (2,787,323)

# Net of excise duty Figures in bracket are for the previous period ended 31 March, 2013.

For the year ended

31 March 2014


2012 to 31 March 2013

` ‘000 ` ‘00033 Value of imports calculated on CIF basis Raw Materials 491,215 569,717 Traded Goods 280,997 285,146 Stores and Spares 2,902 2,720

34 Expenditure in Foreign Currency (subject to deduction of tax where applicable)

Travelling 4,583 3,085 Export Commission 38 327 Computer maintenance and software 42,426 626 Professional fees 19,561 3,944

35 Earnings in Foreign Currency FOB Value of Exports of Goods 342,175 334,864 Indenting commission 7,779 10,619




36 Segment information (a) Primary business segment The Company is engaged in manufacture of organic chemicals. As the Company is engaged only in one

business segment, the Balance Sheet and the Statement of Profit & Loss Account for the period pertains to one business segment.

(b) Secondary geographical segmentYear ended

31 March 2014Year ended

31 March 2014Year ended

31 March 2014India Outside India Total

` ‘000 ` ‘000 ` ‘000Revenue by geographical market 2,294,611 362,616 2,657,227

(2,462,167) (347,551) (2,809,718)Carrying amount of segment assets 479,660 57,527 537,187 (Gross) (255,847) (68,010) (323,857)Capital expenditure 53,635 – 53,635

(115,038) – (115,038) Notes : (1) Revenue is segregated into two segments namely India (Sales to customers within India) and Other

countries (sales to customers outside India) on the basis of geographical segments. (2) Figures for the previous period are for fifteen months from 1 January 2012 to 31 March 2013 and are

shown in brackets.

For the year ended

31 March 2014


2012 to 31 March 2013

` ‘000 ` ‘00037 ThespecifieddisclosuresforOperatingLeasesasrequired

by Accounting Standard 19 – ‘Leases’ are given below: Disclosures in respect of agreement for residential flats / Office Premises

(along with furniture, fixtures etc. therein) taken on lease: (i) Lease payments recognised in the Statement of Profit and Loss for

the year / period 25,389 33,595

(ii) Future minimum lease payments under non-cancellable operating lease :

Not later than one year 32,772 34,021 Later than one year but not later than five years 44,160 94,357 Later than five years – – (iii) Significant leasing arrangements 1. Under the agreements, refundable interest free deposits / advance rent have been given. 2. The agreements contain provision for renewal. 3. The period of agreement ranges between 36 months to 60 months. 4. Under certain agreements, the Company is entitled to permit certain specified parties the use or sharing

of the premises. 5. The lease agreements provide for an increase in the lease payments by 15% from the 34th month till

the 59th month when it expires automatically.





38 Related Party Disclosures Related Party Disclosures in accordance with the Accounting Standard 18 - ‘Related Party Disclosures' are

given below: (a) Parties where Control exists: Solvay S.A. is the ultimate holding company. Rhodia UK Ltd. holds 72.93% of the equity share capital in the

Company and is a step down subsidiary of Solvay S.A. (b) Names of the related parties with whom the Company had transactions during the year / period (i) Fellow Subsidiaries:

Solvay Inc. USA Rhodia Operations S.A.S., FranceRhodia Nicca Ltd. Rhodia Poliamida E Especialidades LTD A, BrazilRhodia Polyamide Co. Ltd., Korea P.T. Solvay ManyarSolvay (China) Co. Ltd. Solvay Asia Pacific Co. Ltd., BangkokSolvay Specialty Chemicals Asia Pacific Pte. Ltd. Rhodia Polymers & Specialties India Pvt. Ltd.Rhodia Feixiang Specialty Chemicals Co. Ltd. Solvay (ZHENJIANG) Chemicals Co. Ltd.Zhuhai Solvay Specialty Chemicals Co. Ltd. Solvay (Zhangjiagang) Specialty Chemicals Co. Ltd.Solvay Hengchang (Zhangjigang) Specialty Chemical Co. Ltd.

Rhodia Korea Co. Ltd.

Sunshield Chemicals Ltd. Solvay Specialities India Private LimitedRhodia Mexico SA DA CV Solvay (Bangpoo) Specialty Chemicals Ltd.

Note: The above have been identified on the basis of the information available with the Company. (ii) Key Management Personnel: Mr. Manoj Khullar, Managing Director Mr. Thomas Leutner (upto 31.12.2012) (c) Transactions with the Related Parties are for the year / period

For the year ended

31 March 2014


2012 to 31 March 2013

` ‘000 ` ‘000 (i) Fellow Subsidiaries Sales of goods: Rhodia Operations S.A.S.,France 60,823 140,313 Solvay Specialty Chemicals Asia Pacific Pte. Ltd. 53,039 39,624 Solvay Inc. USA 49,647 36,566 Solvay (ZHENJIANG) Chemicals Co. Ltd. 13,386 2,550 Rhodia Poliamida E Especialidades LTD A, Brazil 7,259 18,127 Rhodia Nicca Ltd. 2,393 4,458 Rhodia Mexico SA DA CV 1,422 8,660 Sunshield Chemicals Ltd. 3,924 –

191,893 250,298 Purchase of goods: Solvay Specialty Chemicals Asia Pacific Pte. Ltd. 160,414 214,995 Rhodia Feixiang Specialty Chemicals Co. Ltd. 66 6,997 Solvay (ZHENJIANG) Chemicals Co. Ltd. 62,594 21,570 Zhuhai Solvay Specialty Chemicals Co. Ltd. 4,600 1,137 Sunshield Chemicals Ltd. 22,193 – Solvay (Bangpoo) Specialty Chemicals Ltd. 36,152 36,328

286,019 281,027



38 Related Party Disclosures (Continued) (c) Transactions with the Related Parties are for the year / period (Continued)

For the year ended

31 March 2014


2012 to 31 March 2013

` ‘000 ` ‘000 (i) Fellow Subsidiaries (Continued) Rendering of services: Rhodia Polymers & Specialties India Pvt. Ltd. 13,436 21,626 Solvay Specialty Chemicals Asia Pacific Pte. Ltd. 23,025 10,827 Solvay (Bangpoo) Specialty Chemicals Ltd. 180 190 Solvay (Zhangjiagang) Specialty Chemicals Co. Ltd. 7 163 Rhodia Polyamide Co. Ltd., Korea – 1,543 Solvay Hengchang (Zhangjigang) Specialty Chemical Co. Ltd. 34 64 P.T. Solvay Manyar 12 13 Rhodia Korea Co. Ltd. 4,468 1,543 Sunshield Chemicals Ltd. 18,772 2,472 Solvay Specialities India Private Limited 3,895 4,457 Solvay Inc. USA – 593 Solvay Zhengiang Chemicals Co. Ltd. 181 65

64,010 43,556

Receiving of services: Solvay Specialty Chemicals Asia Pacific Pte. Ltd. 33,846 2,568 Solvay (China) Co. Ltd. 18,582 3,161 Solvay Asia Pacific Co. Ltd., Bangkok 2,541 – Rhodia Operations S.A.S., France 8,888 –

63,857 5,729

Inter corporate loan taken: Solvay Specialities India Private Limited 100,000 100,000 Interest expense on inter corporate loan taken: Solvay Specialities India Private Limited 9,785 8,836

(ii) Key Management Personnel Remuneration: Mr. Thomas Leutner (upto 31.12.2012) – 3,208 Mr. Manoj Khullar * 10,879 3,424

10,879 6,632

* The above amount does not include gratuity and compensated absence payable which is actuarially determined on an overall basis for the Company as a whole and individual information in respect of director is not available.





38 Related Party Disclosures (Continued)As at

31 March 2014As at

31 March 2013` ‘000 ` ‘000

(d) Balances Outstanding as at year / period end: Amount Payable: Fellow subsidiaries Solvay Asia Pacific Pte. Ltd., Singapore 58,023 29,615 Solvay (ZHENJIANG) Chemicals Co. Ltd. 5,228 3,880 Zhuhai Solvay Specialty Chemicals Co. Ltd. 961 582 Solvay (Bangpoo) Specialty Chemicals Ltd. 12,193 12,090 Rhodia Operations S.A.S., France 8,839 – Solvay Asia Pacific Co. Ltd., Bangkok 2,475 – Solvay (China) Co. Ltd. 17,981 –

105,700 46,167

Loan outstanding: Solvay Specialities India Private Limited 100,601 100,833

(Includes interest of ` 601(000), Previous period ` 833(000)

Amount Receivable: Fellow subsidiaries Solvay Specialty Chemicals Asia Pacific Pte. Ltd. 10,653 12,760 Rhodia Poliamida E Especialidades LTD A, Brazil 1,017 3,540 Rhodia Operations S.A.S., France 2,925 19,966 Solvay Inc. USA 3,045 5,278 Solvay (ZHENJIANG) Chemicals Co. Ltd. 13 32 Solvay Hengchang (Zhangjiagang) 6 78 Rhodia Polymers & Specialties India Pvt. Ltd. 1,719 6,675 Rhodia Korea Co. Ltd. 1,032 1,543 Sunshield Chemicals Ltd. 4,935 1,572 Solvay Specialities India Private Limited 417 280 Rhodia Mexico SA DA CV – 7,993 Rhodia Nicca Ltd. – 4,278 Solvay (Bangpoo) Specialty Chemicals Ltd. 86 66

25,848 64,061

(e) Short-term loan from bank (Note 7) of ` 303,708(000) [Previous period ` 172,217(000)] is secured by a corporate guarantee from Rhodia SA France, a subsidiary of the ultimate holding company.

(f) No amounts have been written off / provided for or written back in respect of amounts receivable from or payable to the related parties.




39 DetailsofEmployeeBenefitsasrequiredbytheAccountingStandard15‘EmployeeBenefits’are as follows:

For the year ended

31 March 2014

For the period from

1 January 2012 to 31 March 2013

` ‘000 ` ‘000 1. Defined Contribution Plans During the year, the Company has recognised the following

amounts in the Statement of Profit and Loss. — Employers' contribution to Provident Fund and Family Pension

Fund6,770 6,316

— Employers' contribution to Superannuation Fund 1,462 2,776

The above amounts are included in ‘Contribution to provident and other funds' under ‘Employee benefits expense' in Note 24.

2. Defined Benefit Plan (Funded) (a) A general description of the Employees Benefit Plan: The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering

eligible employees. The plan provides for lumpsum payment to vested employees at retirement, death while in employment

or on termination of the employment. In case of vested non management staff, gratuity is calculated in accordance with the provisions of the Payment of Gratuity Act,1972. Further, in case of retirement or superannuation after the completion of more than 20 years of service, additional gratuity of 20% of the amount of the gratuity calculated in accordance with the provisions of the Payment of Gratuity Act, 1972 is also payable. In case of vested management staff, gratuity benefit is an amount equivalent to 15 / 30 days salary depending upon the terms of appointment for each completed year of service subject to a maximum of 30 months salary. Vesting occurs upon the completion of five years of service.

(b) Details of defined benefit plan – As per Actuarial Valuation:

For the year ended

31 March 2014

For the period from


` ‘000 ` ‘000GratuityParticularsI. Components of employer expense 1. Current Service cost 2,603 2,586 2. Interest Cost 1,832 2,312 3. Expected return on Plan Assets (1,921) (2,266) 4. Actuarial Losses / (Gains) 3,500 1,036 5. Past Service cost 6. TotalexpenserecognisedintheStatementofProfitand

Loss (included in ‘Contribution to provident and other funds' under ‘Employee benefits expense' in note 24)

6,014 3,668



For the year ended

31 March 2014

For the period from


` ‘000 ` ‘000II. Actual Contribution and Benefits Payments for the

year / period 1. Actual Benefits Payments (2,600) (2,224) 2. Actual Contributions 2,864 3,095

III. Net asset / (liability) recognised in the Balance Sheet 1. Present Value of Defined Benefit Obligation 30,931 25,444 2. Fair Value of Plan Assets 24,585 22,248 3. Funded Status [Surplus / (Deficit)] (6,346) (3,196) 4. Net (liability) / asset recognised in the Balance Sheet (6,346) (3,196)

IV. Change in Defined Benefit Obligation during the year/period

1. Present value of Defined Benefit Obligation as at the beginning 25,444 22,615

2. Current Service Cost 2,604 2,586 3. Interest Cost 1,832 2,312 4. Actuarial Losses / (Gains) 3,651 155 5. Benefits paid (2,600) (2,224) 6. Past Service cost 7. PresentvalueofDefinedBenefitObligationsasat

end of the year / period 30,931 25,444

V. Change in Fair Value of Plan Assets during the year/period 1. Plan Assets as at the beginning 22,248 19,993 2. Expected return on Plan Assets 1,921 2,266 3. Actuarial Gains / (Losses) 152 (882) 4. Actual Company Contributions 2,864 3,095 5. Benefits paid (2,600) (2,224) 6. Plan Assets as at the end of the year / period 24,585 22,248

VI. Actuarial Assumptions 1. Discount Rate 9.30% 7.95% 2. Expected Return on plan assets 9.00% 9.00% 3. Salary Escalation Rate 8.00% 7.00% 4. Attrition 21-44 years 12% p.a. 12% p.a. 45 & above 2% p.a. 2% p.a. 5. Mortality tables LIC (2006-08)

Ult.LIC (2006-08)

Ult. 6. Estimated amounts of contribution in the immediate

next year. 3,000 2,864




VII. The expected rate of return on the plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations. The actual return on plan asset is ` 2,073(000) [Previous period ` 1,384(000)]

VIII. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors.

For the year ended

31 March 2014

For the period from


` ‘000 ` ‘000IX. The major categories of Plan Assets as a percentage of the

total plan assets

Insurer Managed Funds 100% 100%

The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). The Company does not have the details of the composition of the plan assets, by category, from the LIC for the current and the previous period and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.

For the year ended 31

March 2014

For the period from

1 January 2012 to 31

March 2013

Year ended 31

December 2011

Year ended 31

December 2010

Year ended 31

December 2009

` ‘000 ` ‘000 ` ‘000 ` ‘000 ` ‘000

X. Experience Adjustments

1. Present Value of Defined Benefit Obligation as at the Balance Sheet date

30,931 25,444 22,615 20,507 14,108

2. Fair Value of Plan Assets as at the Balance Sheet date 24,585 22,248 19,993 14,496 8,821

3. Funded Status [Surplus / (Deficit)] (6,346) (3,196) (2,622) (6,011) (5,287)

4. Experience adjustment on Plan Liabilities 4,396 (289) 421 2,314 (1,772)

5. Experience adjustment on Plan Assets 152 (882) 254 143 117





40 Earnings Per Share

For the year ended

31 March 2014


2012 to 31 March 2013

(a) Weighted average number of equity shares of ` 10 each outstanding as at the Balance Sheet date Nos. 3,375,600 3,375,600

(b) Nominal value of share ` 10 10 (c) Net Profit / (Loss) earning per share (Total operations) ` in ‘000 (67,666) 368,630 (d) Earnings per share (basic and diluted) (Total operations) ` (20.05) 109.20 (e) Net Profit / (Loss) earning per share

(Continuing operations) ` in ‘000 (67,666) (10,770)(f) Earnings per share (basic and diluted)

(Continuing operations) ` (20.05) (3.19)

41 (a) Excise duty paid and collected from customers is shown separately and deducted from the Gross sales and Processing charges in the Statement of Profit and Loss.

(b) Excise duty appearing under Other expenses (Note 26) represents (i) the difference between the excise duty included in the closing stock and that in the opening stock of manufactured finished goods ` 5,170(000) (Debit)[Previous period: ` 1,963(000) (Credit)] and (ii) the excise duty on rejections, etc. ` 258(000) (Credit) [Previous period ` 1,115(000) (Debit)].

42 Foreign Currency exposures: Unhedged Exposures

Particulars Amount in Foreign Currency

Equivalent Amount inIndian Currency

(` ‘000)Trade & other payables USD 4,077,061 247,396

(1,271,799) (69,389)Euro 324,701 27,226

(157,205) (11,000)Buyers' credit USD 3,248,724 197,133

(Nil) (Nil) Euro 83,881 7,033

(Nil) (Nil) Packing credit USD 767,473 45,649

(493,390) (26,548)Trade receivable and other receivables USD 926,299 55,097

(1,077,822) (58,558)Euro 13,752 1,126

(17,091) (1,189) Note : The figures in brackets represent previous year's figures.

43 Discontinuing Operation The operation of the Phosphate Business becoming commercially unviable, the Company has suspended its

operations of Ambarnath unit from July 2008. The information relating to discontinuing operation as required under Accounting Standard 24 (AS 24)

“Discontinuing Operations” is given here under:

(a) The initial disclosure event for the discontinuing operation, as defined in Accounting Standard 24 (AS 24) “Discontinuing Operations” occurred during 2007.



(b) As at 31 March 2014, the carrying amount of (i) the total assets to be disposed of was ` Nil [Previous period ` 4,078(000)] and (ii) the total liabilities to be settled was ` Nil [Previous period ` 2,141(000)]. The carrying value of fixed assets held for disposal included in total assets was ` Nil [Previous period ` Nil].

(c) The revenue and expenses in respect of the ordinary activities attributable to the discontinuing operation during the year ended 31 March 2014:

For the year ended31 March 2014

For the period from 1 January 2012 to 31 March

2013

` ’000 ` ’000 ` ‘000 ` ‘000IncomeNet Sales – –Other Income – 411,817

– 411,817 ExpenditureEmployee benefits expense – 2,309 Other expenses – 29,588 Depreciation and amortisation – 520

– 32,417

Profit / (Loss) before tax – 379,400 Current tax : MAT for the period – 71,000 MAT credit entitlement – (71,000)

Profit/(Loss)aftertax – 379,400

Note: Other income comprises of profit on sale of fixed assets at Ambarnath ` Nil [Previous period ` 367,367(000)],

Liabilities no longer required written back ` Nil [Previous period ` 44,450(000)]

(d) The amounts of net cash flows attributable to the operating, investing and financing activities of the discontinuing operation for the year ended 31 March 2014:

As at 31 March

2014

As at 31 March

2013

` ’000 ` ‘000

(i) Net cash from / (used in) operating activities – (74,821)

(ii) Net cash from / (used in) investing activities – 370,025

44 Exceptional item: Customs duty differential was payable for the year and previous periods in respect of one of the products as per

the interaction with Customs authorities.





45 Amounts remitted in foreign currency during the year on account of dividend:

Dividend Related to the period ended 1 January 2012 to

31 March 2013Name of Party Number of shares ` ‘000Rhodia UK Ltd. 2,461,973 4,924 Solvay Participation France 620,852 1,242 Total 3,082,825 6,166

46 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchange The Company has not given any loans and advances in the nature of loans to subsidiaries, associates and

firms / companies in which directors are interested.

47 Prior Year Comparatives The current period financial statements are for twelve months from 1 April 2013 to 31 March 2014 as against

previous period of fifteen months from 1 January 2012 to 31 March 2013. In view of this, the figures for the current period are not strictly comparable to those of the prior period of fifteen months.

48 Previous period figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

For and on behalf of the Board of Directors

S. N. Talwar Yogesh TharChairman Director

Manoj Khullar Niranjan KetkarManaging Director Legal Manager &

Company Secretary

MumbaiDate: 23rd May 2014

RHODIA SPECIALTY CHEMICALS INDIA LIMITED

48th ANNUAL REPORT2013-14

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RHODIA SPECIALTY CHEMICALS INDIA LIMITEDCIN: L24110MH1965PLC013331

Phoenix House, “A” Wing, 4th Floor, 462 Senapati Bapat Marg, Lower Parel (West), Mumbai-400 013 Phone: +91-22-66637101· Fax: +91-22-24952834

Website: www.solvayindia.in · email: [email protected]

PROXY FORMRegistered Folio No. / DP ID & Client ID: Name of the member(s) : Registered address : E-mail ID : Folio No/Client Id: DP ID : I/We, being the member(s) of ____________________________________ shares of Rhodia Specialty Chemicals India Limited, hereby appoint:1. Name: ______________________________________________________________________________________ Address: _____________________________________________________________________________________ Email ID: ________________________________ Signature _______ ____________________or failing him/her,2. Name: ______________________________________________________________________________________ Address: _____________________________________________________________________________________ Email ID: ________________________________ Signature ____________________________or failing him/her,3. Name: ______________________________________________________________________________________ Address: _____________________________________________________________________________________ Email: ___________________________________ Signature ___________________________________________

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Forty Eight Annual general meeting of the Company, to be held on Wednesday 10th September, 2014 at 12:00 noon at Convention Hall, Y. B. Chavan Centre, Gen. Jagannath Bhosale Marg, Nariman Point, Mumbai-400 021 and at any adjournment thereof in respect of such resolutions as are indicated on the reverse of this page:

RHODIA SPECIALTY CHEMICALS INDIA LIMITEDCIN: L24110MH1965PLC013331

Phoenix House, “A” Wing, 4th Floor, 462 Senapati Bapat Marg, Lower Parel (West), Mumbai-400 013 Phone: +91-22-66637101· Fax: +91-22-24952834

Website: www.solvayindia.in · email: [email protected]

ATTENDANCE SLIP48TH ANNUAL GENERAL MEETING ON 10TH SEPTEMBER, 2014

Folio No. : No. of Shares : Name of the Person attending the Meeting : Classification : First Holder / Joint Holder / ProxyName of First Holder (in case joint : holder / proxy is attending)

Signature :

Resolution No. Resolutions Optional

Ordinary Business For Against

1 Adoption of Financial Statements, Directors' Report and Auditors' Report for the year ended 31st March, 2014

2 Appointment of Mr. Ian Brown as Director of the Company, who is retiring by rotation

3 Appointment of Mr. Michel Ybert as Director of the Company, who is retiring by rotation

Special Business4 Appointment of Statutory Auditors – Deloitte Haskins & Sells

5 Appointment of Mr. Suresh Talwar as an Independent Director

6 Appointment of Mr. Yogesh Thar as an Independent Director

7 Appointment of Mr. Sanjeev Mukerjee as an Independent Director

8 Approval of remuneration of cost auditors

9 Adoption of Articles of Associations

Signed this day of 2014.

Signature of shareholder Signature of Proxy holder(s)

Note:This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

Affix Revenue

Stamp

48th annual report 2013-14 · 2020. 4. 29. · lbs marg, bhandup (west) mumbai - 400 078 tel. no.:...

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