To the Members of Archean Chemical Industries Limited
The Directors hereby presents the Fourteenth Annual Report (First
Annual Report post IPO) on the performance of the Company along with the Audited
Standalone and Consolidated Financial Statements for the Financial Year ended March 31,
2023.
Financial Performance
For financial year 2022-23, the standalone revenue from operations was
1,44,106.59 lakhs as against 1,13,043.71 lakhs during 2021-22, with an increase of
27.5%. Net Profit after tax for the year was 38,365.38 lakhs as against 18,861.39 lakhs
in the previous year.
The standalone financial highlights of the Company for the year are:
in Lakhs
| Particulars |
2022-23 |
2021-22 |
| Profit before depreciation and finance cost |
67,854.65 |
47,994.80 |
| Depreciation |
6,850.89 |
6,686.19 |
| Finance Cost |
9,695.89 |
16,166.86 |
| Profit before Tax |
51,307.87 |
25,141.75 |
| Tax expenses |
12,942.49 |
6,280.36 |
| Profit after Tax |
38,365.38 |
18,861.39 |
| Total comprehensive income |
38,393.90 |
18,871.26 |
| Earnings per share (Basic) |
34.76 |
18.26 |
| Earnings per Share (Diluted) |
34.69 |
18.26 |
Dividend and transfer to General Reserve
The Board has recommended a dividend of Rs. 2.50 per equity share for
the financial year ended 31st March 2023 subject to the approval of Members at the ensuing
Annual General Meeting of the Company.
The dividend recommended, subject to approval of members at the 14th
Annual General Meeting will
be paid to all the members whose name appear in the register of members
as on July 21st 2023 (being the record date fixed for this purpose).
The above recommendation of the dividend by the Directors is in
accordance with the "Dividend Distribution Policy" of the Company. The Policy is
available on the website of the Company under the link https://www.archeanchemicals.
com/wp-content/uploads/2023/06/Dividend- Distribution-Policy.pdf
During the year, the balance amount of Rs. 8,400 lakhs in Debenture
Redemption Reserve has been transferred to General reserves.
Share Capital:
As on 31st March 2023, the Authorised Share Capital of the Company
stood at 32,00,00,000 divided into 16,00,00,000 Equity Shares of 2/- each and the
Paid-up Share Capital of the Company increased from 19,26,66,810 divided into 9,63,33,405
Equity Shares of 2/- each to 24,61,05,978 divided into 12,30,52,989 Equity Shares of
2/- each.
• The Company issued 69,40,715 equity shares against 6,72,000
Compulsorily Convertible Debentures issued by the Company.
• The Company has issued 1,97,78,869 equity shares through Initial
Public Offer.
Initial Public Offer of Equity Shares The equity shares of the Company
were listed on November 21, 2022 in National Stock Exchange of India Limited
("NSE") and BSE Limited ("BSE") and pursuant to Initial Public
Offering ("IPO") of the Company by way of a Fresh Issue of 1,97,78,869 shares
and an Offer for Sale of 16,150,000 shares at a price of Rs.407/- including a premium of
Rs. 405/- and the issue proceeds were Rs. 80,500 lakhs and 65,730 lakhs respectively.
Net proceeds after deducting IPO expenses is Rs.76,832 lakhs and Rs.
67,995 lakhs have been utilised during 2022-23, in line with the objects of the offer.
Detailed Monitoring Agency Report for such utilization are received by the Company from
its Monitoring Agency on quarterly basis affirming no deviation in
utilisation of the issue proceeds from the object stated in offer documents and submitted
to Stock Exchanges in compliance with the aforesaid regulations. The Company confirms that
it has paid the Annual Listing Fees for 2022-23 to NSE and BSE.
Redemption of Non-Convertible Debentures:
Out of Rs. 84,000 lakhs Non-convertible debentures, the Company has
during the year repaid Rs.19,600 lakhs in various tranches from the internal accruals. The
Balance Rs. 64,400 lakhs was fully repaid to the Debenture holders on 19th November 2022
out of proceeds from initial public offer and thereby redeemed the entire Nonconvertible
Debentures. The said NCDs were delisted from BSE Limited on 2nd January 2023. Employee
Stock Option Scheme The Board had approved the "Archean Employee Stock Option Plan
2022 (ESOP 2022) for a maximum of 12,90,926 options and had also obtained necessary
approval of the members of the Company in the Extra Ordinary General Meeting held on 01st
February 2022. The said ESOP was ratified by the members on 26th March 2023, post listing.
4,91,400 shares were granted to its employees on 7th October 2022 with the vesting period
from 1 year to 5 years.
Directors and Key Managerial Personnel There is no change in
composition of the Board. During the year under review, Mr. G Arunmozhi has been appointed
as Company Secretary of the Company with effect from 12th May 2022 and Mr. R Raghunathan
has been appointed as Chief Financial officer of the Company with effect from 1st June
2022.
During the year under review, Mr. Abhishek Pandey, Company Secretary
resigned on 11th May 2022 and Mr. E Sai Ram, Chief Financial officer resigned on 31st May
2022.
Board of Directors and Committees The composition of the Board of
Directors and its Committees are in accordance with the Act and the SEBI (Listing
Obligations & Disclosure Requirements Regulations, 2015 ("SEBI LODR").
The Corporate Governance Report given in Annexure to this report
contains the composition of the Board of Directors of the Company and its Committees.
Management Discussion and Analysis
The Management Discussion and Analysis is attached as annexure I to
this report.
Consolidated Financial Statements
In accordance with the provisions of Section 129(3) of the Act, the
Consolidated Financial Statements, drawn up with the applicable Indian Accounting
Standards (Ind AS), forms part of this Annual Report.
The Consolidated profit after tax for the year 2022-23 was Rs.
38,255.92 lakhs and the Consolidated Net Worth is Rs. 1,43,101.99 Lakhs as on March 31,
2023 as against Rs.18,820.92 lakhs and Rs. 26,228.56 lakhs as on March 31, 2022,
respectively.
Subsidiary Company
Acume Chemicals Private Limited (Acume) is in the process of
commissioning the project. Refer Annexure-II to this report for statement containing the
salient features of the financial statements of the Subsidiary Company as per Form AOC-1.
Fixed Deposits
The Company has not accepted any deposit from the public within the
meaning of Section 76 of the Act, 2013, for the year ended 31st March 2023. Particulars of
Loans, Guarantees or Investments:
Particulars of Loans, Guarantees or Investments are provided in the
notes to the financial statements. Board Evaluation
Pursuant to the provisions of Section 134 (3) (p), Section 149(8) and
Schedule IV of the Act, and SEBI LODR, an annual performance evaluation of the Board, the
Directors as well as Committees of the Board have been carried out. The criteria for
evaluation of the Board at a separate meeting of Independent Directors were carried out in
accordance with the Nomination & Remuneration Policy adopted by the Board. The
evaluation was carried out, taking into consideration the
composition of the Board and commitment to good corporate governance
practices, adherence to regulatory compliance, grievance redressal mechanism, track record
of financial performance, existence of integrated risk management system to corporate
social responsibility.
Independent Directors:
The Company has received declarations from the Independent Directors to
the effect that they meet the criteria of independence as provided in Section 149 of the
Companies Act 2013.
In the opinion of the Board, the Independent Directors fulfil the
conditions specified in the Act & SEBI LODR and are independent of the Management. All
the Independent Directors have given a declaration that they meet the criteria of
independence as laid down under Section 149(6) of the Act and the SEBI LODR. They have
also confirmed compliance with Section 150 of the Act regarding registration with
Independence Directors databank maintained by the Indian Institute of Corporate Affairs.
Corporate Social Responsibility The Company has constituted Corporate
Social Responsibility Committee in accordance with the requirements of Section 135 of
Companies Act, 2013, and a Corporate Social Responsibility Policy containing the list of
CSR projects/ programmes to be undertaken were formulated and approved by the Board. The
policy is available on the website of the Company at www.archeanchemicals.com . The brief
outline of the Corporate Social Responsibility (CSR) policy of the Company and the
initiatives undertaken by the Company on CSR activities during the year are set out in
Annexure-III of this report in the format prescribed in the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
Risk Management
Your Company has constituted a Risk Management Committee and has
formulated a Risk Management Policy aligned with the requirements of the Companies Act,
2013 and the Listing Regulations. The details of the Committee and the terms of reference
are set out in the Corporate Governance Report forming part of the Report.
Internal Financial Control System
The Management is responsible for establishing & maintaining
internal controls for financial reporting. The Statutory Auditors have evaluated the
system of internal controls of the Company and also reviewed their effectiveness and have
reported that the same are adequate & commensurate with the size of the Company and
the nature of its business.
They have also reviewed the internal controls pertaining to financial
reporting of the Company to ensure that financial statements of the Company present a true
and fair view of the state of affairs of the Company. In addition, Auditors in their
report have also opined that the Company has in all material respects adequate internal
financial control systems over financial reporting and the same were operating effectively
as on 31st March 2023.
Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy on Vigil Mechanism in
accordance with the provisions of the Companies Act, 2013 and Regulation 22 of the Listing
Regulations, which provides a formal mechanism for all Directors, Employees and other
Stakeholders of the Company to report to the management, their genuine concerns or
grievances about unethical behaviour, actual or suspected fraud and any violation of the
Companys Code of Business Conduct and Ethics. The Code also provides a direct access to
the Chairman of the Audit Committee to make protective disclosures about grievances or
violation of the Companys Code.
Directors Responsibility Statement Pursuant to Section 134(5) of the
Companies Act, 2013, the Directors confirm:
a) that in the preparation of the annual financial statements, the
applicable IndAS have been followed along with proper explanation relating to material
departures, if any;
b) that such accounting policies as mentioned in the financial
statements have been selected and applied consistently and judgement and estimates have
been made that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at March 31, 2023 and of the profit of the Company for the
year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the Act, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d) that the annual financial statements have been prepared on a going
concern basis;
e) that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively; and
f) that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
Related Party Transactions
The Company has formulated a policy on Related
Party Transactions (RPT) and approved by the
Board. The policy on RPT is available on the
Companys website at www.archeanchemicals. com.
All Related Party transactions that were entered into by the Company
during the financial year 2022-23, were in the ordinary course of business and on arms
length basis. The Company did not enter into any material transaction with related parties
under Section 188 of the Act and the Rules framed thereunder. There are no
"Material" contracts or arrangement or transactions at arms length basis and
hence disclosure in form AOC-2 is not applicable.
All Related Party transactions were placed before the Audit Committee
for their prior approval in accordance with the requirements of the SEBI LODR. The
transactions entered into pursuant to such approval are placed periodically before the
Audit Committee for its review.
Significant and material orders passed by the regulators or courts
There were no significant material orders passed by the Regulators /
Courts which would impact the going concern status of the Company and its future
operations.
Employees and details of remuneration:
| Sl. No. |
Name of the Director/KMP |
Designation |
Ratio to Median Remuneration |
% increase in the remuneration in the
financial year |
| 1 |
Mr. P Ranjit |
Managing Director |
>100.41:1 |
13.5% |
| 2 |
Mr. S Meenakshisundaram |
Non- Executive Director |
1.72:1 |
NA |
| 2 |
Mr. C G Sethuram |
|
1.31:1 |
NA |
| 3 |
Mrs. Padma Chandrasekharan |
Independent Director |
1.58:1 |
NA |
| 4 |
Mr. K M Mohandass |
|
1.58:1 |
NA |
| 5 |
Mr. E Sai Ram |
Chief Financial Officer (upto 31st May 2022) |
3.52:1 |
10.0% |
| 6 |
Mr. Abhishek Pandey |
Company Secretary (upto 11 May 2022) |
0.17:1 |
20.0% |
| 7 |
Mr. G Arunmozhi |
Company Secretary (From 12th May 2022) |
4.31:1 |
NA |
| 8 |
Mr. R Raghunathan |
Chief Financial Officer (From 1st June 2022) |
11.27:1 |
NA |
There were 265 numbers of permanent employees in the Company as on 31st
March 2023
The median remuneration of employee of the Company during the financial
year was Rs.5,50,992/- and percentage increase in the median remuneration of employee in
the financial year is 19.7%.
Average percentile increase to non-managerial employees is 14.0% and a
managerial employee is 14.5%.
It is affirmed that the remuneration paid or payable to Directors/KMPs
and other median employees are as per the remuneration policy of the Company.
The information as per Rule 5(2) and Rule 5(3) of the Companies
(Appointment and Remunaration of Managerial Personnel) Rules, 2014 forms part of this
Report. However, as per first proviso to Section 136(1) of the Act and Second Proviso to
Rule 5 of the Rules, the report and financial statements are being sent to the members of
the Company excluding the statement of particulars of employees under Rule 5(2) and Rule
5(3) of the Rules. Any member interested in obtaining a copy of the said statement may
write to the Company Secretary at the Registered office of the Company. The said statement
is also available for inspection by the members at registered office of the Company during
office hours till the date of Annual General meeting.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has in place the Anti Sexual Harassment policy in line with
requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition &
Redressal) Act 2013. Internal complaints committee has been set up to redress complaints
received regarding Sexual Harassments. The following is a summary of sexual harassments
complaints received and
disposed off during the financial year:
| Sl. No |
Particulars |
Action Taken |
| 1 |
Number of complaints received in the year |
Nil |
| 2 |
Number of Complaints disposed off during the year |
Nil |
| 3 |
Number of cases pending for more than 90 days |
Nil |
| 4 |
Number of workshops or awareness programmes carried out |
3 |
| 5 |
Nature of action taken by the employer or distinct officer |
Nil |
Corporate Governance
In accordance with the provisions of SEBI LODR, the Corporate
Governance Report is given in Annexure-IV and forms part of this Report.
Statutory Auditors
As per section 139 of the Companies Act 2013, read with the Companies
(Audit and Auditors) Rules, 2014, the members of the Company in 12th AGM approved the
appointment of PKF Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration
Number: 003990S/S200018), as
Statutory Auditors of the Company for a term of Five (5) years i.e from
the conclusion of 12th AGM till the conclusion of the 17th AGM of the Company, to be held
in the year 2026 at such remuneration in addition to applicable taxes, out of pocket
expenses, travelling and other expenses as may be mutually agreed between the Board of
Directors of the Company and the Auditors.
Cost Auditor
Pursuant to Section 148 of the Companies Act 2013 read with the amended
rules thereof, the Board of Directors on the recommendation of the Audit Committee has
appointed Mr. G Sundaresan, Cost Accountant as Cost Auditor of the Company for the
financial year 2023-24. The Board has recommended the remuneration payable to the
above cost auditor for ratification of shareholders at the ensuing
Annual General Meeting.
Pursuant to section 148 of the Companies Act 2013, the Company is
required to maintain the cost records and the Company is accordingly maintaining such
accounts and records.
Secretarial Auditor
M/s. HVS & Associates, Practicing Company Secretaries were
appointed as Secretarial Auditors of the Company for the financial year 2022-23 as
required under Section 204 of the Companies Act 2013 and the rules made thereunder.
Further, in terms of Regulation 24A of the SEBI LODR, the secretarial
audit report of the Company for the financial year ended March 31, 2023 are given in the
Annexure-V and forms part of this report.
Comments on Auditors Report
There were no qualifications, reservations or adverse remarks or
disclaimers made by the
Statutory Auditor and Secretarial Auditor in their reports,
respectively. During the year, there have been no incidents of fraud reported to the Audit
Committee in terms of Section 143(12) of the Act.
Managing Director / Chief Financial Officer Certificate
A compliance certificate by Managing Director and Chief Financial
Officer as stipulated under regulation 17 (8) of SEBI (Listing Obligations and Disclosure
Requirements), 2015 is given in Annexure-VI and forms part of the Directors Report.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo:
The information on Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo stipulated under Section 134(3) of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014 are under:
a. Conservation of energy:
| (i) |
the steps taken or impact on conservation of energy |
On water conservation, Company harvested the rainwater
aggregating to 1.8 Mn m3 and consumed in plant wherever possible instead of Raw Water. |
|
|
Also, Company took a few initiatives to conserve water based
on 3R quality tool which was the major milestone in water conservation. A few important
ideas implemented are as listed below: |
|
|
- Domestic process water consumption was replaced with
industrial water. |
|
|
- In Bromine plant, process water used for washing Bromine
Bottles was replaced with low TDS water. |
|
|
- In Brine field, industrial water used for washing Pumps was
replaced with low TDS water. |
| (ii) |
the steps taken by the Company for utilizing alternate
sources of energy. |
Company is in discussion with solar energy system providers
for installation of solar panels in the factory. The Company has also obtained necessary
approvals for setting up a transmission line to draw power from the grid. This will also
facilitate the Company to do power trading with renewable power production units, which is
its primary focus. Project is in progress |
| (iii) |
the capital investment on energy conservation equipments |
NIL |
b. Technology absorption:
| (i) |
the effort made towards technology absorption |
NIL |
| (ii) |
the benefits derived like product improvement cost reduction
product |
NIL |
|
development or import substitution |
|
| (iii) |
in case of imported technology (imported during the last
three years reckoned |
NIL |
|
from the beginning of the financial year) and its details |
|
| (iv) |
the expenditure incurred on Research and Development |
NIL |
c. Foreign exchange earnings and outgo:
(Amount in Rs Lakhs)
| Particulars |
Financial Year ended 31st March 2023 |
Financial Year ended 31st March 2022 |
| Foreign Exchange Earnings |
1,04,502.79 |
79,488.00 |
| Foreign Exchange Outgo |
17,301.61 |
81,13.00 |
Business Responsibility and Sustainability Report:
The Company practices various business responsibility initiatives as
per the Business Responsibility and Sustainability policy laying down the broad principles
guiding the Company in delivering various responsibilities to its stakeholders. The
Business Responsibility and Sustainability Report in terms of Regulation 34(2) of SEBI
LODR as applicable to the Company for the year 2022-23 is given in Annexure-VII and forms
part of this report.
Annual Return
The Annual Return pursuant to provisions of section 92 read with rule
12 of The Companies (Management and Administration) Rules, 2014 is hosted in Companys
website www.archeanchemicals.com.
Secretarial Standards
The Company has complied with secretarial standards issued by the
Institute of Company Secretaries of India (ICSI) as per Section 118(10) of the Act.
Proceedings under Insolvency and Bankruptcy Code
No application has been made or any proceedings pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company during the year
under review.
Change in the nature of business, if any There was no change in the
nature of business activities during the year under review.
Details in respect of frauds reported by the Auditors
During the year under review, there were no instances of fraud in the
Company. This was also evidenced by the report of the Statutory Auditors of the Company as
no fraud has been reported in their audit report for the financial year ended 31st March
2023.
Companys policy relating to directors appointment, payment of
remuneration and discharge of their duties
Nomination and Remuneration Policy was adopted by the Board on 29th
January 2022 relating to directors appointment, payment of remuneration and discharge of
their duties.
Transfer to Reserves
Company has transferred Rs. 84 crores from the Debenture Redemption
Reserve during the year under review.
Material changes and commitments, if any, affecting the financial
position of the Company which has occurred during the financial year of the Company to
which the financial statements relate and to the date of this report
There were no material changes and commitments affecting the financial
position of the Company occurred during the financial year ended, i.e. 31st March 2023 to
which these financial statements relate and to the date of this report.
Transfer of Unclaimed Dividend to Investor Education & Protection
Fund
The provisions of Section 125(2) of the Companies Act, 2013 do not
apply as there was no dividend declared in the earlier years.
Dematerialization of Equity Shares
As on 31st March 2023, 12,30,52,989 equity shares representing 100% of
the paid-up share capital of the Company are in Dematerialized mode.
Opinion of the Board about the Independent Directors appointed during
the year
No independent directors were appointed during the year and hence,
Opinion of the Board about the Independent Directors appointed during the year does not
arise.
Code of Conduct
The Company has formulated a Code of Conduct for the Board members and
Senior Management Personnel. All the Board members and Senior Management personnel have
affirmed compliance with above code.
Details of difference between amount of the valuation done at the time
of one time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof
The Company has not done any one time settlement during the year under
review with banks or financial institutions and therefore, this clause is not applicable.
Acknowledgments
The Directors wish to thank Banks & financial institutions for
their continued support. The Company wishes to thank its customers, suppliers and the
communities around its plants for their continued support. The Company continues to have
the full co-operation of all its employees.
|
For and behalf of the Board of
Directors |
|
P Ranjit |
S Meenakshisundaram |
| Date: 26th May 2023 Place: Chennai |
Managing Director DIN: 01952929 |
Director DIN: 01176085 |
+91-9892691696
