Tomorrow's Answers Today
An AkzoNobel Company
ICI India Limited
Performance Trends: 1998-2008
Sales
Profit before Tax from Operations
120
1200
109.0 109.1
219
1000
574
Rs cr
800
274
375
96.5
100
942
216
510
1062
80
69.4
774
290
Rs cr
547
65
640
600
60
60.3
49.4
502
400
200
286
299
308
54.3
40.5
40
411
49.6
47.1
340
20
0
0
98-99 99-00
2001-02
2003-04
Continuing Businesses
2005-06
2007-08
98-99 99-00
2001-02
2003-04
2005-06
2007-08
Discontinued Businesses
Employee Productivity
Asset Productivity
7.0
2500
2,022
2000
1,657
1500
1,107
1,223
961
1000
780
733
685
6.0
Sales / Net Operating Assets
Value added per employee (Rs 000)
6.8
2,070
753
500
5.3
5.0
4.6
4.0
3.8
3.0
2.0
3.2
2.1
2.3
2.5
2.3
2.5
1.0
0
0.0
98-99 99-00
2001-02
2003-04
2005-06
2007-08
Value added = Operating Profit + Depreciation + Manpower Costs
98-99 99-00
2001-02
2003-04
2005-06
2007-08
ICI India Limited
Annual Report 2007-08
CONTENTS
Page
ICI INDIA LIMITED
BOARD OF DIRECTORS
3
DIRECTORS' REPORT
4
CORPORATE GOVERNANCE REPORT
8
AUDITORS' REPORT
14
BALANCE SHEET
16
PROFIT & LOSS ACCOUNT
17
CASH FLOW STATEMENT
18
SCHEDULES TO THE ACCOUNTS
19
• SIGNIFICANT ACCOUNTING POLICIES
29
• NOTES TO THE ACCOUNTS
31
BALANCE SHEET ABSTRACT ETC.
43
STATEMENT REGARDING SUBSIDIARY COMPANY
44
CONSOLIDATED ACCOUNTS
45
NOTICE OF ANNUAL GENERAL MEETING
68
TEN YEARS AT A GLANCE
72
ATTENDANCE SLIP / PROXY FORM
Enclosed
Annual Report 2007-08 – ICI India Limited
1
Our commitment
As an organization, we are committed to:
helping our customers make their businesses
a success
providing the most competitive returns for our
shareholders
creating an attractive working environment for
our people
conducting all our activities in the most socially
responsible manner.
We strive to be:
• the first choice of customers, shareholders
and employees
• a respected member of society.
BOARD OF DIRECTORS
CHAIRMAN
Mr Aditya Narayan
MANAGING DIRECTOR
Mr Rajiv Jain
DIRECTORS
Mr Sandeep Batra (Wholetime Director)
Mr A J Britt (w.e.f. 12 May 2008)
Mr R Gopalakrishnan
Ms R S Karnad
Mr M R Rajaram
Mr A M Ransom (upto 28 April 2008)
Mr M V Subbiah
COMPANY SECRETARY
Mr R Guha
REGISTERED OFFICE
Geetanjali Apartment, 1st floor,
8-B, Middleton Street, Kolkata 700 071
Tel : 033-22267462 Fax: 033-22277925
CORPORATE OFFICE
10th Floor, DLF Plaza Tower
DLF Qutab Enclave, Phase-1
Gurgaon 122 002
Tel : 0124-2540400
Fax : 0124-2540849
WEBSITE
www.iciindia.com
KEY COMMITTEES OF THE BOARD
Audit Committee
Ms R S Karnad (Chairperson)
Mr A J Britt
Mr R Gopalakrishnan
Mr M V Subbiah
Remuneration and
Nominations Committee
Mr M V Subbiah (Chairman)
Mr A J Britt
Mr R Gopalakrishnan
Ms R S Karnad
Shareholders/Investors
Grievance Committee
Mr A J Britt (Chairman)
Mr Rajiv Jain
Mr M R Rajaram
AUDITORS
BSR & Associates
BANKERS
Citibank NA
Deutsche Bank AG
HDFC Bank Limited
Hongkong & Shanghai Banking Corpn.
Standard Chartered Bank
State Bank of India
REGISTRAR AND SHARE
TRANSFER AGENT
C B Management Services (P) Ltd
P-22, Bondel Road
Kolkata 700 019
Tel : 033-22806692-94
Fax : 033-22870263
Email : cbmsl1@cal2.vsnl.net.in
Annual Report 2007-08 – ICI India Limited
3
DIRECTORS' REPORT
Your Directors have pleasure in presenting their report for the
year ended 31 March 2008.
Appropriations
Transfer to General Reserve
(54.0)
BUSINESS ENVIRONMENT
Proposed Dividend
(30.7)
The business environment in India remained positive during
2007-08 with the GDP growing by nearly 9%, keeping up the
trend established in the recent years. However the global
slowdown, soaring international crude oil prices and spurt in
inflation rate in early 2008 dampened the growth momentum.
Tax on Dividend
Going forward, while the growth fundamentals of the Indian
economy continue to be intact, the rate of growth in 2008-09 is
likely to be tempered compared to the past few years.
During 2007-08 sales and profit from businesses on a comparable
basis grew by 19% and 26% respectively. However, due to
changes in the portfolio of businesses, the total income at
Rs 964 cr and PBIT from operations at Rs 109 cr were only
marginally higher than last year.
Exceptional items during the year amounting to a net charge of
Rs 18.7 cr consist mainly of refund of part of the purchase
consideration for Advanced Refinish business divested in March
2007, whereas the previous year had an exceptional income of
Rs 446 cr from divestments. Consequently, the Profit after tax of
Rs 60.2 cr for the year is not comparable with the previous year's
corresponding figure of Rs 448.4 cr.
Following its prudent dividend policy, the Board has
recommended a dividend of Rs 8.00 per share for the year 200708 (previous year: Rs 7.00 per share, plus an additional one off
special dividend of Rs 20.00 per share), which will paid after the
approval of the members at the forthcoming Annual General
Meeting.
The performance highlights for the year are:
2007-08
964.3
131.1
(22.5)
0.5
109.1
(Rs cr)
2006-07
954.3
133.8
(22.5)
(2.3)
109.0
–
(18.7)
90.4
(30.2)
60.2
31.1
446.1
586.2
(137.8)
448.4
The appropriations from the profit are as follows:
Balance in Profit & Loss Account
brought forward from previous year
Profit after tax for the year
Total available for appropriation
4
(5.2)
443.0
No fresh public deposits were accepted by the Company during the
year. Unclaimed deposits and unclaimed dividends amounting to
Rs 0.18 cr were remitted into the Investor Education and Protection
Fund of the Central Government as required under section 205C of
the Companies Act, 1956.
SHARE BUY BACK
FINANCE AND ACCOUNTS
Total income
Operating profit
Depreciation
Interest
Profit before tax from operations
Dividend from subsidiary company
prior to divestment
Exceptional items
Profit before tax
Tax
Profit after tax
Balance carried to Balance Sheet
472.7
60.2
532.9
Annual Report 2007-08 – ICI India Limited
The share buyback through market operations, which was
approved by the members through postal ballot on 12 July 2007,
was pursued during the year. Till 31 March 2008, a total of
24.91 lac shares have been bought back, constituting 6.1% of
the pre-buyback paid up capital of the Company, at an average
price of Rs 528 per share.
The premium paid over the face value of the shares bought back
and other costs of the buyback amounting to Rs 131.00 cr have
been adjusted against Share Premium (Rs 1.15 cr) and General
Reserve (129.85 cr). In addition, as required under the provisions
of the Companies Act 1956, a Capital Redemption Reserve has
been created to the extent of Rs 2.49 cr by adjustment to the
General Reserve.
SIGNIFICANT DEVELOPMENTS
With effect from 2 January 2008, AkzoNobel NV, Netherlands
has become the owner of the entire equity capital of Imperial
Chemical Industries, UK, the majority shareholder of your
Company, through a scheme of arrangement under section 425
of the UK Companies Act, 1985. Consequently, your Company
became an AkzoNobel company effective that date.
The Board had, at its meeting held on 28 March 2008,
recommended a proposal to divest the Adhesives business of the
Company; this has since been approved by the shareholders
through postal ballot on 17 May 2008. The initial consideration
of Rs 260 cr, including Rs 30 cr towards the Company's
shareholding in its subsidiary Polyinks Limited, has been received
subject to certain agreed adjustments for cash, debt and working
capital. The financial effect of this divestment will be reflected
in the Company's results on completion of the transaction.
MANAGEMENT DISCUSSION & ANALYSIS
Paints
Market conditions were, on the whole, good for the Paints
business and there was robust demand in most parts of the
country. Backed by the strong demand for its products, the
Paints business continued to grow aggressively and delivered
a much higher performance over the previous year.
DIRECTORS' REPORT
The Paints business initiatives in building the premium Dulux
portfolio, placement of in-store tinting machines, innovative
and new colour offers and a demand-generation initiative
with painters/contractors helped improve the Company's
channel relationships whilst achieving higher consumer
satisfaction.
In the Decorative segment, exteriors continued to be the
fastest growing range and the business further strengthened
its portfolio in this category. WeatherShield Max, a premium
exterior paints, was renovated to improve its water resistant
properties and the new formulation has gained wide
acceptance with trade and consumers. The Company now
has the full range of products and services in this category
and is poised to improve its position.
The Company has also maintained its focus on the interior
finishes. New products - low cost Acrylic Distemper, Primer
and Putty - were launched in this category. The Enamel
segment has been witnessing a slowdown for some years since
other materials on signboards, hoarding and the like are
replacing the enamel paint. Woodcare is emerging as an
attractive opportunity and the business renovated its products
to participate in this segment. The Company continues to
use its research and development base to bring to the
consumer new products with improved features and for
special applications.
The refinish business continued to do well. The market
continues to witness the trend of customer upgrading from
conventional refinish paints to PU based paints. Company's
PU based products viz. Eterna, Vektor and Duco PU have
found good acceptance with the dealers and users.
Overall, the outlook for 2008-09 appears positive. The
government's thrust on infrastructure and continuance of tax
incentives on home loans and reduced excise duties will have
a favourable impact on the paints industry. However, high
crude oil prices and inflation will impact input costs leading
to pressure on margins. The increase in interest rates could
adversely affect the housing sector. The automobile sector
too is expected to grow. While the reduction in excise duties
should promote growth, inflation and higher prices could
create negative pressures.
Chemicals / Others
The Adhesives, Polymer and Starch businesses performed
well with sales growing by 20%. The Adhesives business
grew by 19% with good growth in Tobacco and Wood
working segments. The Speciality Polymer group also grew
by 28% with excellent growth in the Elotex segment. The
food and pharmaceutical starch business growth was flat
during the year.
With customs duty nearing ASEAN levels, competition will
further intensify from imports as well as from low cost players.
To effectively counter these factors, the business intensified
its focus on value selling and leveraging its first mover
advantage to enhance its market position.
Your Company has entered into a contract with Henkel CAC
Private Limited, an affiliate of the Henkel Group, to divest
its Adhesives business. In line with the contract, the risk and
reward from the Business has been assumed by the purchaser
with effect from 3 April 2008.
RESPONSIBLE CARE - SECURITY, SAFETY, HEALTH,
ENVIRONMENT ('SSHE') AND CORPORATE SOCIAL
RESPONSIBILITY
Your Company continued to sustain its high standards of SSHE
performance, returning yet another year with no major injury or
incident. Extensive efforts were carried out to drive awareness
amongst all employees across the organisation on the basic
requirements of SSHE and engaging them personally in the SSHE
process through reporting of at least one learning incident per
person per month. Recognising that the use of two wheeler is a
major risk to the individuals, a new guideline for two wheeler
usage was put in place aiming to reduce risks on two wheeler
usage in the course of work.
Mohali Plant was awarded the 'Punjab State Safety Award' for
its outstanding SSHE performance.
No occupational illness was reported during the year.
CONSERVATION OF ENERGY,
DEVELOPMENT & INNOVATION
RESEARCH,
The Company's performance on energy and waste reduction
continued to improve ahead of targets. Particulars in respect of
Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo, pursuant to section 217(1)(e) of
the Companies Act, 1956, are given in Annexure I to this report.
INFORMATION TECHNOLOGY
The SAP system in Paints business was extended to cover more
areas of front-end operations like management of Colour Solution
Stores equipment, distribution of Point of Sale ('POS')
merchandise etc. The SAP system with the added facility to make
relevant information available on 'Anytime Anywhere' basis
through SMS on the mobile phones and the on-line business
tracker, has now been well ingrained in the blood stream of the
business. The business also introduced e-payment system for all
its vendors to enable direct credit of the amounts to the vendors'
bank accounts through electronic banking, thereby dispensing
with paper cheques altogether for vendor payment.
Similar initiatives were also pursued by the National Starch
business to improve operating efficiencies and internal controls
and deliver value to the customers.
HUMAN RESOURCES
Cordial relations with the employees prevailed at all the Company
locations during the year. The total number of employees on the
rolls of the Company, including its subsidiary, as at 31 March
Annual Report 2007-08 – ICI India Limited
5
DIRECTORS' REPORT
2008 was 952. A statement containing the particulars of
employees as required under section 217(2A) of the Companies
Act, 1956 is given in page 42.
INTERNAL CONTROL SYSTEMS
The Company has an effective Risk Management framework,
which helps the Board to monitor the exposure and state of
controls in the key business processes. Your Company has wellestablished procedures for internal control across its various
locations, commensurate with its size and operations. The
organization is adequately staffed with qualified and experienced
personnel for implementing and monitoring the internal control
environment. The internal audit function is adequately resourced
and reports to the Audit Committee of the Board.
During the year there was one instance of defalcation, resulting
in a loss of approx Rs 1 lac. Necessary actions have been taken
to strengthen the control system to prevent recurrence.
CORPORATE GOVERNANCE
The Company is in due compliance with the norms of Corporate
Governance as outlined in clause 49 of the Listing Agreements
with National Stock Exchange and Bombay Stock Exchange;
Annexure II to this report summarizes the details of such
compliance.
DIRECTORS
Mr Rajiv Jain was re-appointed as the Managing Director of the
Company for a period of five years with effect from 1 April 2008,
subject to approval of the shareholders in the forthcoming Annual
General Meeting. The Company has received a notice under
Section 257 of the Companies Act, 1956 proposing Mr Jain's
reappointment.
Mr A M Ransom resigned from the Board vide his letter dated
28 April, 2008. The Board placed on record its deep appreciation
of the valuable services rendered by Mr Ransom during his tenure
as Director of the Company. The Board also placed on record its
appreciation of the valuable contribution of Mr D R Carter during
his tenure as Alternate Director to Mr Ransom.
Mr A J Britt was appointed as a Director with effect from
12 May 2008 in the casual vacancy caused by the resignation of
Mr A M Ransom.
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of
–
the state of affairs of the Company as on 31 March 2008
and
–
the profit for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the
assets of the Company and for preventing and detecting fraud
and other irregularities; and
d) they have prepared the annual accounts on a going concern
basis.
Cautionary Statement
Some of the statements in this report, describing the Company's
objectives and expectations expressed in good faith, may
constitute 'forward looking statements' within the meaning of
applicable laws and regulations. Actual results might differ
materially from those, in the event of changes in the assumptions/
market conditions.
SUBSIDIARY COMPANY
The statement of particulars relating to the Company's subsidiary
Polyinks Limited ('Polyinks'), pursuant to Sec 212 of the
Companies Act, 1956, is given in page 44.
The Company has obtained the approval of the Central
Government for not attaching the full accounts of Polyinks to its
annual accounts. A summary of the Balance Sheet of Polyinks
as on 31 March 2008 and its performance for the year ended on
that date is given in page 44.
CONSOLIDATED RESULTS
As required under the Listing Agreement, audited consolidated
financial results provided in the Annual Report include the
performance of Polyinks. A summary of the consolidated financial
performance is given below:
2007-08
(Rs cr)
2006-07
Total income
973
1057
Profit before tax from operations
109
117
90
603
60
463
Total Assets Employed
765
871
Total Shareholder Funds
763
870
Mr A Narayan and Mr R Gopalakrishnan, Directors, will retire
by rotation at the forthcoming Annual General Meeting and are
eligible for reappointment.
AUDITORS
Profit before tax
Profit after tax
M/s BSR & Associates retire as the Auditors of the Company at
the conclusion of the forthcoming Annual General Meeting and
being eligible have offered themselves for reappointment.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors confirm that:
a) in the preparation of the Annual Accounts, the applicable
accounting standards have been followed;
6
Annual Report 2007-08 – ICI India Limited
The current year's figures are not comparable with those of the
previous year on account of acquisition and divestment of
businesses in the previous year.
DIRECTORS' REPORT
ACKNOWLEDGMENT
The Directors wish to convey their gratitude and appreciation to all the employees of the Company for their valuable contribution
during the year. They also wish to place on record their appreciation to the Company's customers, shareholders, investors, bankers,
agents, suppliers, distributors and other business associates for their cooperation and support.
On behalf of the Board
Gurgaon
20 May 2008
A NARAYAN
Chairman
ANNEXURE I
– Cost savings through process improvements and
substitution of raw materials.
DISCLOSURE OF PARTICULARS WITH RESPECT TO
CONSERVATION
OF ENERGY,
TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
OUTGO PURSUANT TO SECTION 217(1)(e) OF THE
COMPANIES ACT, 1956
(c)
R&D efforts of your Company will continue to focus on
development of new products and applications, efficiency
improvements, waste reduction, saving in energy consumption
and introduction of environment friendly products.
A) CONSERVATION OF ENERGY
1. Power & fuel consumption
2007-08
(a) Electricity
(i) Purchased
Unit
Total cost
Rate
(ii) Own Generation
Units
Units / KL of diesel oil
Cost / unit
(b) Fuel Oil
Quantity
Total cost
Average rate
(d) Expenditure on R&D
2006-07
mwh
Rs lacs
Rs / kwh
11426
510
4.46
11249
482
4.28
mwh
kwh
Rs / kwh
1076
7271
11.42
447
4109
8.83
kl
Rs lacs
Rs / kl
1405
391
27829
1659
446
26683
Electricity (kwh per te/kl)
Paints
Uniqema
National Starch
Catalysts
99
–
140
1584
103
138
143
1529
Fuel Oil (kl per te/kl)
Paints
Uniqema
National Starch
Catalysts
–
–
0.01
0.53
0.01
0.04
0.01
0.60
(Rs lacs)
1.
Research & Development (R&D)
2007-08
2006-07
30
382
412
25
277
302
0.4%
0.3%
(i) Capital
(ii) Recurring
(iii) Total
(iv) Total R & D expenditure
as a percentage of turnover
2.
Technology Absorption, Adaptation and Innovation
(a) Efforts & Benefits
– New and innovative products in response to changing
customer needs, like Polyputty, Hi-endurace exterior
emulsions and Weathershield Clear for alternate surfaces
were launched.
– Based on customer feedback, some products in the
woodcare range were renovated and re-launched.
– Usage of raw materials in some product lines were
optimized.
2. Consumption per unit of production
B) ABSORPTION OF TECHNOLOGY
Future plan of action
(b) Particulars of technology imported in the last 5 years from
the beginning of the financial year
Technology
imported
Polymerization
Technology
C)
Year of
import
Has the
technology
been fully
absorbed?
If not fully
absorbed,
reasons and
future plan of
action
2005
No
Technology
absorption is
in progress
FOREIGN EXCHANGE EARNINGS AND OUTGO
(a)
Total Foreign Exchange earned and used
(Rs lacs)
(a) Specific areas in which R&D is carried out by the Company
2007-08
The Company's R&D activities concentrated on development
of new products and applications, efficient use of resources
and improving environment friendliness of the products.
(b) Benefits derived as a result of the above R&D
The businesses achieved sales growth ahead of market and
improved their profitability through:
– Launch of new and innovative products; and
Earned
Used
(b)
2006-07
6,86
11,02
148,10
184,12
Future Plans
Use innovation and R&D strengths to achieve further
process improvements and development of new products
and applications.
Annual Report 2007-08 – ICI India Limited
7
ANNEXURE II
REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy on Code of Corporate Governance
Your Company remains strongly committed to sound Corporate
Governance practices in order to achieve the highest standards
of management and business integrity and to give sustainable
long term returns to all its stakeholders.
2. Board of Directors
Composition
The Board composition is in conformity with the provisions of
the Companies Act, 1956 and the Listing Agreement. The
composition of the Board and details of directorship in
companies including ICI India Limited are as follows:
Name of
Directors
Category of
Directorship
in ICI India
Directorships in Membership
other companies1 in specified
Public Private / Committees2
Foreign /
limited by
guarantee
Mr A Narayan
Non Executive
Chairman
1
1
2
Mr Rajiv Jain3
Managing
Director
–
1
1
Mr Sandeep Batra
Wholtime
Director
1
1
–
Mr A J Britt4
Non Executive
–
3
2
Mr R Gopalakrishnan Non Executive
Independent
9
3
4
Non Executive
Independent
13
5
5
Mr M R Rajaram
Non Executive
2
2
2
Mr A M Ransom5
Non Executive
–
–
2
Mr M V Subbiah
Non Executive
Independent
4
2
2
Ms R S Karnad
1
2
3
4
5
Excludes Alternate Directorships
Specified Committees - Audit, Shareholder/Investor Grievance
Re-appointed w.e.f. 1 April 2008
Appointed w.e.f. 12 May 2008
Resigned w.e.f. 28 April 2008
Meetings & Attendance
Given below is the consolidated list of meetings of the Board
and specified Committees held during 2007-08 and attendance
details of Directors:
Meeting details during April 2007 to March 2008
Name of the meeting
Annual General
Meeting (AGM)
Board
Audit Committee
Shareholders/Investors
Grievance Committee
(SHIGC)
Remuneration &
Nominations
(R&N) Committee
8
Dates on which meetings were held
19 July 2007
16 May, 26 May, 19 July, 26 October,
2007, 24 January and 28 March 2008
16 May, 19 July, 26 October 2007 and
24 January 2008
26 October 2007 and 24 January 2008
16 May 2007
Annual Report 2007-08 – ICI India Limited
Attendance details at meetings during April 2007 to March 2008
No. of meetings held
AGM Board Audit SHIGC R&N
1
6
4
2
1
Mr A Narayan
1
6
NA
NA
NA
Mr Rajiv Jain
1
5
NA
2
NA
Mr Sandeep Batra
1
5
NA
NA
NA
NA
Mr M R Rajaram
1
6
NA
2
Mr A M Ransom
1
4
4
2
1
Mr R Gopalakrishnan
1
3
3
NA
1
Ms R S Karnad
–
5
3
NA
1
Mr M V Subbiah
1
3
3
NA
–
NA-signifies not a member of the relevant committee.
All information in terms of Listing Agreement are shared with the
Board through periodic reports and statements and discussions in
Board/Committee meetings.
Directors to be appointed/re-appointed
In terms of the Articles of the Association of the Company,
Mr Aditya Narayan and Mr R Gopalakrishnan will retire by rotation
in the forthcoming Annual General Meeting and, being eligible,
have offered themselves for re-appointment.
Mr Rajiv Jain was re-appointed as the Managing Director with effect
from 1 April 2008 for a further period of five years. Mr Jain's reappointment as the Managing Director and his remuneration are to be
approved by the members in the forthcoming Annual General Meeting.
Mr A J Britt, who was appointed as a Director of the Company with
effect from 12 May 2008 in the casual vacancy caused by the resignation
of Mr A M Ransom, will continue in office till the date on which Mr
Ransom would have retired in the normal course.
A brief resume of each of the above directors, as required under
clause 49(VI) of the Listing Agreement, is given below. Though Mr
Britt is not liable to retire and seek re-election at the forthcoming
Annual General Meeting, his resume is also being included hereunder
for information of the members.
i. Mr Rajiv Jain
Mr Rajiv Jain joined the ICI Group in 1974 and was
appointed to the Board of the Company in 1997. He had
held a number of senior positions in Corporate Finance,
Information Technology and headed the Specialty Chemicals,
Rubber Chemicals, Catalysts and Explosives businesses.
He was appointed Chief Financial Officer in December
1997 and Chief Operating Officer of the Company in
February 2000. He was appointed Managing Director and
CEO Paints in April 2003 for a term of 5 years and has
since been re-appointed w.e.f. 1 April 2008. Mr Jain, born
in January 1951, has done his B Tech (Hons) in Chemical
Engineering from IIT Kharagpur and MBA from USA.
Apart from ICI India Limited, Mr Jain is the Chairman of
ICI India Research & Technology Centre and a Director of
CIC Paints Pvt Ltd, Colombo.
ii. Mr Aditya Narayan
Mr Aditya Narayan was appointed Chairman of the Board
in April 2003. Starting as a management trainee in 1973, he
worked in diverse functions and has held several senior
positions including those of the Chief Executive of Fertilizer
and Explosives businesses. He served as the Managing
Director of the Company from August 1996 to April 2003,
CORPORATE GOVERNANCE
during which period he played a key role in reshaping the
Company's business portfolio. Just before becoming the
Managing Director, he served as the Corporate Planning
Manager at the ICI Group headquarters in London.
Mr Narayan, born in January 1952, is a B Tech from IIT,
Kanpur. He also holds formal qualifications in Law,
Multidisciplinary Sciences and Strategic Management.
Apart from ICI India Limited, Mr Narayan is a Director of
the following companies:
1. Hindustan Unilever Limited
2. BHP Billiton Marketing Services India Pvt Ltd
iii. Mr R Gopalakrishnan
Mr R Gopalakrishnan is a Non-Executive Director of the
Company since May 1999.
Mr Gopalakrishnan, born in December 1945, is a graduate in
Physics from Calcutta University and in Engineering from
IIT, Kharagpur. In 1967 he joined Hindustan Lever as a
Management Trainee and went on to become a member of
Hindustan Lever's Management Committee as Executive
Director (Exports) in mid 1980s. In 1991, he was appointed
Chairman, Unilever Arabia, based in Jeddah to establish and
manage Unilever's consumer products business in the GCC
countries. Upon return to India in 1995, he became the
Managing Director of Brooke Bond Lipton India Limited,
Unilever's foods and beverages company in India. After the
merger of that company with Hindustan Lever Ltd, he was
appointed Vice-Chairman of the merged entity. After 31 years
with Levers, he joined Tata Sons in August 1998 as an
Executive Director.
Apart from ICI India Limited, Mr Gopalakrishnan is a
Director in the following companies:
1. Rallis India Ltd
2. Tata Chemicals Ltd
3. Tata Sons Ltd
4. Tata Motors Ltd
5. Tata Power Co. Ltd
6. Tata Teleservices Ltd
7. Tata AutoComp Systems Ltd
8. Tata Technologies Ltd
9. Castrol India Ltd
10. ABP Pvt Ltd
11. IMACID S.A.
12. Advinus Therapeutics Pvt Ltd
iv. Mr Anthony J Britt
Mr Anthony J Britt joined the Board of the Company as a
Non Executive Director w.e.f. 12 May 2008, in the casual
vacancy caused by the resignation of Mr A M Ransom.
Born in Sydney in 1960, Mr Britt is currently the Chief
Executive Officer, Decorative Paints Asia for AkzoNobel,
prior to which he held various general management positions
in both the Decorative Paints and Marine and Protective
Coatings businesses with AkzoNobel.
Currently based in Singapore, Mr Britt has extensive
international experience. He spent six years from 1998 in
New Jersey as the Global Director, Yacht Coatings with
AkzoNobel. Whilst based in Brisbane, he was the General
Manager, Marine Coatings and later became the General
Manager, Decorative Paints, Central Europe. During this
period he held various directorship roles in Korea, Japan,
Australia and Germany.
Mr Britt holds a Bachelor of Engineering (Chemical),
Honors degree from Sydney University and MBA from
Macquarie University.
Apart from ICI India Limited, Mr Britt is a Director in the
following companies:
1. ICI Swire Paints (Shanghai) Ltd
2. ICI Swire Paints (China) Ltd
3. ICI Swire Paints Ltd
3. Audit Committee
The Audit Committee comprises only NEDs and is chaired by
Ms R S Karnad. The Managing Director, Director in charge of
Finance, the Internal Auditors and Statutory Auditors are
permanent invitees to the meetings of the Committee, with the
Company Secretary acting as its Secretary. The members of the
Committee are eminent professionals with necessary knowledge
in financial, accounting and business matters. Any other person/
executive, when required, also attend the meetings of the
Committee. Minutes of the Audit Committee meetings are
circulated to the Board members.
The terms of reference of this Committee are in line with the
norms specified in Clause 49 of the Listing Agreement and
Section 292A of the Companies Act, 1956.
For details of meetings of the Committee held during the year
and attendance therein, please refer para (2) above.
4. R&N Committee
The purpose of the Committee is to assist
nomination of members to the Board and
performance of the Executive Directors and
recommendations as to their remuneration,
approved by the shareholders.
the Board in the
in evaluating the
make appropriate
within the limits
The R&N Committee comprises only NEDs and is chaired by
Mr M V Subbiah. The Chairman of the Board is a permanent
invitee to the meetings of the Committee.
For details of meetings of the Committee held during the year
and attendance therein, please refer para (2) above.
Remuneration of Directors
While remuneration of Executive Directors is recommended by
the R&N Committee, the remuneration to the NEDs is approved
by the Board. The NEDs, other than Mr A M Ransom or his
Alternate Director, are paid sitting fees @ Rs 10,000 per meeting
for attending Board/Committee meetings, where they have been
nominated as members, and Commission as approved by the
Board/Shareholders from time to time.
The details of remuneration paid to the Directors during the
year 2007-08 are given below:
Figures in Rs lacs
Managing /
Wholetime
Directors
Mr Rajiv Jain
Mr Sandeep Batra
Total
Non-Executive
Directors
Mr A Narayan
Mr R Gopalakrishnan
Ms R S Karnad
Mr M R Rajaram
Mr M V Subbiah
Total
Total
Remuneration
a
(a = b + c)
239.06
82.18
321.24
5.60
5.70
5.90
5.80
5.60
28.60
Fixed
Performance
component linked payments
b
c
Salary,
Performance
Allowances &
Pay
Perquisites
159.30
79.76
62.49
19.69
221.79
99.45
Sitting Fees
0.60
0.70
0.90
0.80
0.60
3.60
Commission
5.00
5.00
5.00
5.00
5.00
25.00
Annual Report 2007-08 – ICI India Limited
9
CORPORATE GOVERNANCE
Notes:
a) The service contracts with the Managing/Wholetime Directors are for a period of five years terminable at six months notice on
either side. Extracts of such contracts are communicated to the shareholders as required under law.
b) Performance linked payments are made to the Managing/Wholetime Directors based on pre-agreed parameters and taking into
account the recommendations of the R&N Committee.
c) In case of NEDs, fixed component of remuneration represents sitting fees paid to them for attending Board/Committee meetings.
The criteria for payment of Commission to the NEDs are outlined in para 10(vi) below.
d) Presently, the Company does not have any stock option scheme.
5. Shareholders/Investors Grievance Committee
The SHIGC of the Company was headed by Mr A M Ransom, NED, who has since been replaced by Mr A J Britt. The other members
are Mr Rajiv Jain and Mr M R Rajaram. The Company Secretary functions as the Secretary to this Committee and has been nominated
as the Compliance Officer.
There were no complaints received from the shareholders during 2007-08. Routine queries/service requests received from the shareholders
were addressed/resolved within 7 days of receipt of such communication. No share transfers arising out of the financial year in question
were pending beyond the normal service time.
For details of meetings of the Committee held during the year and attendance therein, please refer para (2) above.
6. General Body Meetings
i.
Details of the last three Annual General Meetings of the Company are given below:
Date of AGM
Time
Place
19 July 2007
2.00 pm
Bharatiyam Complex
IB 201, Salt Lake
Kolkata - 700106
26 July 2006
2.00 pm
- do 5 August 2005
2.00 pm
- do ii.
One special resolution was passed in AGM during the past three years, for de-listing the Company's shares from Calcutta Stock
Exchange, which was approved by requisite majority in the AGM held on 19 July 2007.
iii.
One special resolution was passed during 2007-08 through postal ballot for buyback of its own shares by the Company, which
was approved by 99.9% of the votes polled. The postal ballot was conducted in accordance with the procedure prescribed under
the Companies Act 1956, with Mr A R Das, Chartered Accountant, Kolkata, acting as the scrutinizer.
There is no proposal pending as on date for approval as a special resolution through postal ballot.
7. Disclosures
i.
There was no materially significant related party transactions entered into by the Company with its Promoters, Directors or the
Management, their subsidiaries or relatives etc, that may have potential conflict with the interests of the Company at large. The
Directors periodically disclose their interest in different companies, which are noted by the Board. The Register of Contracts
containing the transactions with companies in which Directors are interested is placed before the Board regularly for its approval.
ii.
None of the NEDs had any materially significant pecuniary relationship or transaction vis-à-vis the Company, which may have
a potential conflict with the interest of the Company at large. Mr A Narayan and Mr M R Rajaram receive pension and other
benefits from the Company for the past services rendered as the Company's employees. Mr A M Ransom was entitled to
remuneration and other benefits for his role and responsibilities in Imperial Chemical Industries Ltd, the holding company.
Mr A J Britt is entitled to remuneration and other benefits for his role and responsibilities in AkzoNobel NV, the ultimate holding
company.
iii.
All NEDs have confirmed that they do not hold any shares in the Company.
iv.
Disclosures, as required under the relevant Accounting Standards, have been incorporated in the Accounts.
v.
A declaration by the Managing Director on the adoption, dissemination and compliance of the Company's code of Business
Conduct is attached to this report.
vi.
There were no strictures or penalties imposed on the Company by Stock Exchanges or Securities Exchange Board of India or any
statutory authority for non-compliance of any matter related to capital markets, during the last three years.
vii.
The Company has adopted a Whistle Blower Policy as part of its Code of Business Conduct. It is affirmed that no personnel has
been denied access to the Audit Committee.
8. Means of Communication
Description
Status/remarks
i.
Quarterly Results
The quarterly results of the Company are published and advised to the Stock
Exchanges where the Company's shares are listed.
ii.
Newspapers wherein results
are normally published
Business Standard (English), Aajkal (Bengali)
10 Annual Report 2007-08 – ICI India Limited
CORPORATE GOVERNANCE
iii.
iv.
Any website, where displayed.
Yes, the results, press releases and other relevant information are
Whether it also displays official news
displayed on the Company's website www.iciindia.com. The financial results
releases.
and shareholding pattern are also posted on SEBI's EDIFAR website.
Presentations made to institutional
investors or to the analysts
Normally no such presentations are made.
9. General Shareholder Information
Subject
i.
AGM: date, time and venue
ii.
iii.
iv.
v.
Financial year
Date of Book Closure
Dividend payment date(s)
Listing on Stock Exchange
vi.
Stock Code
Details
17 July 2008 at 1400 hours at Bharatiyam Complex, IB 201, Salt Lake,
Kolkata - 700106
April to March
1 July 2008 to 17 July 2008 (both days inclusive)
On or around 21 July 2008 (after approval at the AGM)
The Company's shares are listed in BSE and NSE and can be traded under the
'Permitted Category' in CSE. The Company's shares have been delisted from
Calcutta Stock Exchange with effect from 15 April 2008. Listing fees for the
period 1 April 2008 to 31 March 2009 have been paid to BSE and NSE.
Bombay Stock Exchange (BSE)
: 500710
National Stock Exchange (NSE)
: ICI EQ
Calcutta Stock Exchange (CSE)
: 10000015
ISIN
: INE133A01011
vii. Market Price data and stock performance during 2007-08
Month
ix. Registrar and Share :
Transfer Agent
M/s C B Management
Services (P) Ltd., Kolkata
High
(Rs/share)
Low
(Rs/share)
Volume
(000 nos.)
BSE + NSE
April-07
476
415
247
May-07
564
425
286
June-07
559
500
195
July-07
600
487
539
August-07
558
492
759
September-07
590
491
1351
October-07
541
495
625
November-07
599
493
319
December-07
640
501
424
January-08
584
475
533
February-08
590
482
158
5,001-50,000
38
590
1.5
March-08
689
500
299
50,001-10,00,000
15
5,217
13.6
10,00,001 and above
6
28,959
75.5
40,131
38,379
100.0
viii.
x.
Share Transfer System :
All requests for share transfers
are processed and approved by
the Seal and Share Transfer
Committee, which normally
meets twice a month for this
purpose. Share transfers are
registered and returned within 30
days from the date of lodgment
of complete documents.
xi. Distribution of Shareholding as on 31 March 2008
Range
(No. of shares)
Performance in comparison to BSE Sensex from March
2005 to March 2008
No. of
share
(000's)
% to
total
issued
capital
1-50
25,305
491
1.3
51-500
13,652
1,969
5.1
501-5,000
1,115
1,153
3.0
TOTAL
xii.
No. of
shareholders
Dematerialization of
shares and liquidity
: The Company’s equity shares have
been notified for trading only in
demat form w.e.f. 17 January 2000.
As of 31 March 2008, 91% of the
Company's equity shares (other
than shares held by ICI UK) have
been dematerialized (No. of Demat
accounts : 15187).
The Company has entered into
agreements with NSDL & CDSL
for smooth operation of demat
mode of shareholding.
Annual Report 2007-08 – ICI India Limited 11
CORPORATE GOVERNANCE
xiii Outstanding GDRs / : None issued / outstanding
ADRs / Warrants or
any convertible
instruments, conversion
date and likely impact
on equity
xiv
Plant locations
xv
Address for
correspondence
Shareholders correspondence are
to be addressed to:
1. C B Management Services
(P) Ltd, P-22, Bondel Road,
Kolkata 700 019
OR
: The Company's plants are
located at Hyderabad (Andhra
Pradesh), Thane (Maharashtra)
and Mohali (Punjab)
2. The Company Secretary
ICI India Ltd, DLF Plaza
Tower, 10th floor, DLF Qutab
Enclave, Phase-1,
Gurgaon 122 002, Haryana.
10. All the mandatory requirements of the clause 49 of the Listing Agreement have been complied with by the Company. The status visà-vis the non mandatory requirements is as follows:
i
Description
Status as on 31 March 2008
a) Non Executive Chairman's
office and expenses
The non Executive Chairman has been provided an office at the
Company's corporate office in Gurgaon. All expenses incurred by
him in the performance of his official duties are borne by the
Company.
b) Tenure of Independent Directors
None of the Independent Directors on the Company's Board have
served more than 9 years each, from the date when the new clause 49
has become effective (1 January 2006). However, Mr R Gopalakrishnan
and Mr M V Subbiah have completed 9 years as Directors of the
Company and continue to serve on the Board as Independent Directors.
ii
Remuneration Committee
Refer para 4 above.
iii
Sending of half yearly declaration of financial
performance including summary of the
significant events during the past six months
to each household of shareholders
As the Company's quarterly results are published in leading
newspapers and major developments are covered in the press
releases, which are posted on the Company's website, sending the
half yearly financial results to the shareholders is not considered
necessary.
iv
Audit qualifications
There is no audit qualification in the current year.
v
Training of Board members in the
business model of the Company etc.
The Executive Directors are covered by the Company's training
programmes for its employees.
The NEDs are briefed about business operations from time to time and
during discussions at Board meetings.
vi
Mechanism for evaluating NEDs
The NEDs' contribution to the Company is mainly in the areas of
general management and good corporate governance. They also serve
as a 'bouncing board' for the operating strategies of the Company,
besides bringing in an external perspective to the Company's growth
plans. The NEDs are therefore remunerated in the form of sitting fees
for participating in the Board and Committee meetings and a
Commission (subject to a maximum of Rs 10 lacs per Director per
annum) as a token of recognition of their contribution, with the
approval of the Board.
vii
Whistle Blower Policy
Refer para 7(vii) above.
Certification by the Auditors
As required under Clause 49 of the Listing Agreement, the auditors of the Company have examined the compliance of the Corporate
Governance norms by the Company. Their report is appended.
On behalf of the Board
Gurgaon
20 May 2008
12 Annual Report 2007-08 – ICI India Limited
A NARAYAN
Chairman
CORPORATE GOVERNANCE
Declaration by the CEO
Sub: Code of Conduct - Declaration under Clause 49(I)(D)
This is to certify that:
1.
In pursuance of the provisions of Clause 49(I)(D) of the Listing Agreement, a Code of Business Conduct for the Company has been
approved by the Board in its meeting held on 21st January 2002, which was subsequently amended at the Board meeting of 23 January
2004 to incorporate the Whistle Blower policy.
2.
The said Code of Business Conduct has been posted on the website of the Company and has also been circulated to the Board members
and all the employees of the Company.
3.
All Board members and senior management personnel have affirmed compliance with the said Code of Business Conduct, for the year
ended 31st March 2008.
20 May 2008
Rajiv Jain
Gurgaon
Managing Director
AUDITORS' CERTIFICATE ON COMPLIANCE WITH CLAUSE 49 OF THE LISTING AGREEMENT
To the Members of ICI India Limited
We have examined the compliance of conditions of corporate
governance by ICI India Limited ('the Company') for the year
ended 31 March 2008, as stipulated in clause 49 of the Listing
Agreement of the Company with the stock exchanges.
The compliance of conditions of corporate governance is the
responsibility of the management. Our examination was limited
to procedures and implementation thereof, adopted by the
Company for ensuring the compliance of the conditions of
corporate governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
We have been explained that no investors' grievances are pending
for a period exceeding one month, as on 31 March 2008, against
the Company as per the records maintained by the Company.
We further state that such compliance is neither an assurance as
to the future viability of the Company nor efficiency or
effectiveness with which the management has conducted the
affairs of the Company.
For BSR & Associates
Chartered Accountants
In our opinion and to the best of our information and according
to the explanations given to us, we certify that the Company has
complied with the conditions of corporate governance as
stipulated in the abovementioned Listing Agreement.
KAUSHAL KISHORE
Gurgaon
20 May 2008
Partner
Membership No. 090075
Annual Report 2007-08 – ICI India Limited 13
Auditors’ Report
Statement, dealt with by this report, are in agreement with the books
of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement dealt with by this report, comply with the
accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956, to the extent applicable;
(e) on the basis of written representations received from the directors of
the Company as on 31 March 2008 and taken on record by the Board
of directors, we report that none of the directors is disqualified as on
31 March 2008 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
and
(f) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, 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 31 March 2008;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
TO THE MEMBERS OF ICI INDIA LIMITED
1.
2.
3.
4.
We have audited the attached Balance Sheet of ICI India Limited ('the
Company') as at 31 March 2008 and also the Profit and Loss Account
and the Cash Flow Statement of the Company for the year ended on
that date, annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 ('the
Order'), issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956 ('the Act'), we
enclose in the Annexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, 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 appears from our examination
of those books;
(c) the Balance Sheet, Profit and Loss Account and the Cash Flow
For BSR & Associates
Chartered Accountants
Gurgaon
20 May 2008
Annexure referred to in paragraph 3 of the Auditors' Report
to the Members of ICI India Limited on the accounts for the
year ended 31 March 2008
(i)
(a)
(b)
(c)
(ii)
(a)
(b)
(c)
(iii)
(a)
The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
As explained to us, the fixed assets are physically verified by the
management in accordance with a phased programme designed to
cover all items of fixed assets over a period of three years, which, in
our opinion, is reasonable having regard to the size of the Company
and nature of its fixed assets. In accordance with the programme,
fixed assets at certain locations have been physically verified by
the management during the year and no material discrepancies were
noticed on such verification.
During the year, the Company has not disposed off a substantial
part of its fixed assets.
According to the information and explanations given to us,
physical verification has been conducted by management at
reasonable intervals during the year in respect of inventory of
raw materials, stores and spare parts, work-in-process and finished
goods in the Company's possession. The existence of stocks lying
with third parties as at 31 March 2008 has been confirmed based
on confirmations or statements of account received from such
third parties. In our opinion, the frequency of physical verification
is reasonable.
In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventories
followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
On the basis of our examination of the records of inventories, we
are of the opinion that the Company is maintaining proper records
of inventories. The discrepancies noticed on physical verification
of inventories as compared to book records were not material
and have been properly dealt with in the books of account.
The Company has granted a loan to its subsidiary company which
is covered in the register maintained under Section 301 of the
Companies Act, 1956. The maximum amount outstanding during
the year was Rs 647 lacs and the year-end balance of such loan
was Rs 641 lacs.
14 Annual Report 2007-08 – ICI India Limited
(b)
(iv)
(v)
(vi)
KAUSHAL KISHORE
Partner
Membership No.: 090075
In our opinion, the rate of interest and other terms and conditions
on which the loan has been granted to the subsidiary listed in the
register maintained under Section 301 of the Companies Act,
1956 are not, prima facie, prejudicial to the interest of the
Company.
(c)
In the case of the loan granted to the subsidiary listed in the
register maintained under Section 301 of the Companies Act,
1956, the borrower has been regular in repaying the principal
amounts as stipulated and in the payment of interest.
(d) There are no overdue amounts of more than Rs 1 lac in respect of
the loan granted to the subsidiary listed in the register maintained
under Section 301 of the Companies Act, 1956.
(e)
The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraphs 4 (iii) (e) to 4 (iii) (g) of the Order are
not applicable.
In our opinion and according to the information and explanations given
to us, there is an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventories and fixed assets and with regard to the sale of
goods and services. Further, on the basis of our examination and
according to the information and explanations given to us, we have
neither come across nor have been informed of any incidence of major
weaknesses in the aforesaid internal control system.
(a)
In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred
to in section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section
301 of the Companies Act, 1956, and exceeding Rs 5 lacs in
respect of any party during the year have been made at prices
which are reasonable having regard to prevailing market prices
at the relevant time.
In our opinion, and according to the information and explanations given
to us, the Company has complied with the provisions of Section 58A,
Section 58AA or other relevant provisions of the Companies Act, 1956
and the rules framed there-under/ the directives issued by the Reserve
AUDITORS' REPORT (Contd.)
Bank of India (as applicable) with regard to deposits accepted from the
public. Accordingly, there have been no proceedings before the Company
Law Board or National Company Law Tribunal (as applicable) or
Reserve Bank of India or any Court or any other Tribunal in this matter
and no order has been passed by any of the aforesaid authorities.
(vii) In our opinion and according to the information and explanations given
to us, the Company has an internal audit system commensurate with its
size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where pursuant to the rules made by
the Central Government, the maintenance of cost records has been
prescribed under section 209(1)(d) of the Companies Act, 1956 and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of such records with a view to determine whether they are
accurate or complete.
(ix) (a)
According to the information and explanations given to us and
on the basis of our examination of the records of the Company,
amounts deducted/ accrued in the books of account in respect of
(b)
undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty, Cess and other material statutory dues have generally
been regularly deposited during the year by the Company with
the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund,
Investor Education and Protection Fund, Employees' State
Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs
duty, Excise duty, Cess and other material statutory dues were in
arrears as at 31 March 2008 for a period of more than six months
from the date they became payable.
According to the information and explanations given to us and
the records of the Company examined by us, there are no dues of
Income tax, Sales tax, Wealth tax, Service tax, Customs duty,
Excise duty and Cess which have not been deposited with the
appropriate authorities on account of any dispute, except as
mentioned below:
(Amount in Rs lacs)
Name of the Statute
Income Tax Act, 1961
Nature of the
dues
Income tax
Central Excise Act, 1944
Excise duty
Central Sales Tax Act, 1956
Amount of
dispute *#
32,83
Amount paid
under protest
–
Period to which
the amount relates
1995-96 to 2004-05
(Assessment year)
1991-92 to 2005-06
2004-05 and 2005-06
4,99
7
–
–
Sales tax
11,90
1,38
West Bengal Sales
Tax Act, 1994
Sales tax
5,17
–
Uttar Pradesh Trade
Tax Act, 1948
Sales tax
5,47
–
Delhi Sales Tax Act, 1975
Sales tax
79
–
The Kerala General
Sales Tax Act, 1963
Rajasthan Sales Tax Act, 1994
Bihar Sales Tax Act, 1959
The Madhya Pradesh General
Sales Tax Act, 1958
Orissa Sales Tax Act, 1947
Various other State
Sales Tax Acts
Sales tax
67
–
Sales tax
Sales tax
Sales tax
71
2,17
2,15
–
47
70
1998-99, 2003-04
1992-93 to 1999-00
1982-83 to 1999-00
Sales tax
Sales tax
1,71
4
1,65
–
1995-96 to 1999-00
2000-01 to 2004-05
Forum where dispute is pending
Commissioner of Income Tax
Customs, Excise and Service Tax Appellate Tribunal
Commissioner Appeals of Central Excise and
Service Tax
1982-83 to 2004-05
Sales Tax Officer / Sales Tax Revision Board /
Deputy Commissioner / Deputy Commissioner
Appeal / Appellate Tribunal
1995-96,1997-98,1998-99, Sales Tax Officer/ Sales Tax Revision Board /
1999-00,2002-03,2003-04 Deputy Commissioner/ Deputy Commissioner
Appeal / Additional Commissioner / Appellate
Tribunal / High Court
1976-77,1979-80,1980-81,
1986-87,1987-88,1988-89,
1989-90,1992-93,2000-01,
2003-04, 2004-05
1985-86,1986-87,1987-88,
2003-04,2004-05
2000-01,2001-02,2002-03
* Including disputed dues of Rs 931 lacs which have been stayed.
# Excluding the demands the proceedings of which have been set aside or remanded for reassessment by the appropriate authorities.
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year and
in the immediately preceding financial year.
According to the information and explanations given to us, the Company
has not defaulted in repayment of dues to its bankers. The Company
did not have any outstanding dues to any financial institutions or
debenture-holders during the year.
According to the information and explanations given to us, the Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
According to the information and explanations given to us, the Company
is not a chit fund or a nidhi/ mutual benefit fund/ society.
According to the information and explanations given to us, the Company
is not dealing or trading in shares, securities, debentures and other
investments.
According to the information and explanations given to us, the Company
has not given any guarantees for loans taken by others from banks or
financial institutions during the year.
According to the information and explanations given to us, the Company
did not have any term loans outstanding during the year.
According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we are of the
opinion that the funds raised on short-term basis have not been used for
long-term investments.
(xviii) The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) We have been informed that a salesman of the Company had
misappropriated funds amounting to around Rs 1 lac collected from
dealers and though the same is not significant, it has been appropriately
dealt with. Based on the audit procedures performed and according to
the information and explanations given to us, no other fraud on or by
the Company has been noticed or reported during the year.
For BSR & Associates
Chartered Accountants
Gurgaon
20 May 2008
KAUSHAL KISHORE
Partner
Membership No.: 090075
Annual Report 2007-08 – ICI India Limited 15
BALANCE SHEET
As at 31 March 2008
As at 31 March 2007
(Rs lacs)
(Rs lacs)
Schedule
I)
SOURCES OF FUNDS
1.
2.
Shareholders’ funds
a) Share capital
b) Reserves and surplus
1
2
Deferred tax liability (net)
17 (21,25)
38,38
724,59
Total
II)
762,97
40,87
828,78
869,65
9,48
8,10
772,45
877,75
APPLICATION OF FUNDS
1.
Fixed assets
a) Gross block
b) Less : Accumulated depreciation
c)
d)
3
311,57
178,32
Net block
Capital work-in-progress
133,25
10,47
2.
Investments
4
3.
Current assets, loans and advances
a) Inventories
b) Sundry debtors
c) Cash and bank balances
d) Loans and advances
5
6
7
8
Less: Current liabilities and provisions
a) Current liabilities
b) Provisions
9
10
285,69
155,93
143,72
129,76
3,53
692,60
825,72
123,95
104,00
16,99
54,43
132,15
164,65
13,90
44,46
299,37
355,16
265,97
97,27
234,04
202,38
363,24
133,29
436,42
Net current assets / (liabilities)
(63,87)
(81,26)
Total
772,45
877,75
Significant accounting policies
Notes to the accounts
16
17
The accompanying schedules form an integral part of the financial statements.
As per our report attached.
For BSR & Associates
Chartered Accountants
For ICI India Limited
KAUSHAL KISHORE
Partner
Membership No: 090075
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
Gurgaon
20 May 2008
16 Annual Report 2007-08 – ICI India Limited
S BATRA
Wholetime Director
R GUHA
Company Secretary
PROFIT AND LOSS ACCOUNT
Schedule
Income
Gross sales
Less : Excise duty
Net sales
Other income
Total income
Expenditure
Materials consumed, etc.
Other expenditure
Depreciation (net)
Interest (net)
11
12
13
14
Profit before taxation from operations *
Exceptional items [gain / (loss)] *
Profit before taxation *
Provision for taxation : *
– Current tax
– Deferred tax
– Fringe benefit tax
Profit after taxation
Balance brought forward
Balance available for appropriation
Appropriations
General reserve
Proposed dividend
Corporate dividend tax
15
Balance carried to the Balance Sheet
Basic and diluted earnings per equity share (in Rs.) 17 (19)
* Information on discontinuing business
17 (3,26)
Adhesives business
Profit before taxation from operations
Income tax expense related to the above
* Information on discontinued business
Uniqema business
Profit before taxation from operations
Income tax expense related to the above
Profit on disposal of discontinued business (pre tax)
Income tax expense related to the above disposal
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
1062,36
132,22
930,14
34,19
964,33
1007,05
118,83
888,22
66,10
954,32
551,68
281,50
22,51
(50)
855,19
109,14
(18,73)
90,41
533,09
256,36
22,47
2,29
814,21
140,11
446,12
586,23
26,60
7
3,53
60,21
472,69
532,90
140,00
(4,94)
2,75
448,42
220,37
668,79
54,00
30,70
5,22
89,92
442,98
15.16
67,00
110,35
18,75
196,10
472,69
109.72
15,28
5,78
11,41
4,76
–
–
–
–
11,63
3,82
250,85
51,86
Significant accounting policies
16
Notes to the accounts
17
The accompanying schedules form an integral part of the financial statements.
As per our report attached to the Balance Sheet.
For BSR & Associates
Chartered Accountants
For ICI India Limited
KAUSHAL KISHORE
Partner
Membership No: 090075
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
Gurgaon
20 May 2008
Annual Report 2007-08 – ICI India Limited 17
CASH FLOW STATEMENT
A.
109,14
140,11
22,51
16
(37)
–
12
1,12
(10,80)
(10,30)
(50)
Operating profit before working capital changes
Changes in :
Trade and other receivables
Inventories
Trade payables and other creditors
Cash generated from operations
Income tax paid
Exceptional items (relating to outflow on account of
voluntary retirement scheme payments, additional
contribution to employee retiral funds and other provisions)
Net cash flow from operating activities (A)
C.
For the
year ended
31 March 2007
(Rs lacs)
Cash flow from operating activities
Profit before taxation and exceptional items
Adjusted for :
Depreciation
Loss on write-off of fixed assets
Provisions/liabilities no longer required written back
Other provisions made during the year
Bad debts and advances written off
Provision for doubtful debts and advances (net)
Investment income (including dividend from subsidiary)
Profit on sale/maturity of current investments
Interest (net)
B.
For the
year ended
31 March 2008
(Rs lacs)
1,94
22,47
–
(3)
1,25
15
1,68
(46,06)
(6,61)
2,29
111,08
(4,90)
8,20
8,88
12,18
123,26
(37,27)
(5,17)
(24,86)
115,25
(24,04)
(34,79)
54,49
(4,34)
110,91
(155,97)
(6,91)
80,82
(51,97)
(33,11)
–
(3,20)
63,23
–
2,10
(2,30)
–
50,00
10,30
3,45
–
13,32
103,79
(26,91)
(66,07)
(3,21)
332,06
320,00
4,78
(74)
5
50,00
6,61
45
31,10
15,97
664,09
Cash flow from financing activities
Borrowings during the year
Borrowings repaid during the year
Buyback of shares
Dividend paid
Corporate dividend tax
Interest paid
50,00
(50,00)
(133,49)
(109,45)
(18,75)
(2,95)
–
–
–
(24,54)
(3,44)
(2,95)
Net cash flow from financing activities (C)
(264,64)
(30,93)
Net changes in cash and cash equivalents (A+B+C)
(80,03)
581,19
Cash and cash equivalents - opening balance
Cash and cash equivalents - closing balance
779,02
698,99
197,83
779,02
Cash flow from investing activities
Purchase of fixed assets
Investment in subsidiary
Inter corporate deposit to subsidiary company
Sale of businesses *
Sale of investment in subsidiary company
Sale of properties (including advance received)
Payments relating to divested businesses
Sale of other fixed assets
Redemption of capital gains bonds
Profit on maturity / redemption of Fixed Maturity Plans
Interest received
Dividend income from subsidiary
Income from investments
Net cash flow from investing activities (B)
18 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE ACCOUNTS
Cash and cash equivalents comprise :
Cash in hand
Cheques in hand
Bank balance in current accounts
Fixed deposits held as margin money **
Bank balance in unclaimed dividend account **
Investments in fixed maturity debt Mutual Funds
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
31
2
13,46
29
2,91
682,00
698,99
30
46
10,86
27
2,01
765,12
779,02
Notes :
1. The above cash flow statement has been prepared under the indirect method set out in Accounting Standard 3 "Cash Flow Statement"
specified in the Companies (Accounting Standards) Rules, 2006.
2. * Relates to dues from sale of businesses.
3. ** Fixed deposits held as margin money and bank balances in unclaimed dividend account are not available for use by the Company.
4. The above cash flow statement includes cash flows from discontinued business (refer to note 26, Schedule 17).
As per our report attached to the balance sheet.
For BSR & Associates
For ICI India Limited
Chartered Accountants
KAUSHAL KISHORE
A NARAYAN
Partner
Chairman
Membership No: 090075
Gurgaon
20 May 2008
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
SCHEDULES TO THE ACCOUNTS
As at 31 March 2008
As at 31 March 2007
SCHEDULE 1 : CAPITAL
(Rs lacs)
(Rs lacs)
Authorised
4,16,90,000 equity shares of Rs. 10 each
41,69
41,69
(2006-07 : 4,16,90,000 equity shares)
Issued, Subscribed and Paid up
3,83,79,950 equity shares of Rs. 10 each fully paid up
38,38
40,87
(2006-07 : 4,08,70,612 equity shares)
1. Of the above equity shares :(a) 85,32,667 were allotted as fully paid up bonus shares by capitalisation of share premium and reserves (2006-07 : 85,32,667 shares)
(b) 29,68,824 were issued on part conversion of debentures. (2006-07 : 29,68,824 shares)
(c) 89,18,121 were issued as fully paid up otherwise than for cash, issued pursuant to a contract. (2006-07 : 89,18,121 shares)
(d) 2,07,76,213 shares are held by the holding company Imperial Chemical Industries Limited, England. (2006-07 : 2,07,76,213
shares). On 2 January 2008, AkzoNobel N.V. has become the owner of the entire equity share capital of Imperial Chemical
Industries Limited, which makes it the ultimate holding company (refer to note 1, Schedule 17)
2. During the year 24,90,662 shares were bought back (2006-07 : nil). The shares have been extinguished and face value thereof of
Rs 249 lacs has been adjusted against share capital (refer to note 2, Schedule 17)
SCHEDULE 2 : RESERVES AND SURPLUS
Capital reserve
Capital redemption reserve (a)
Share premium (a)
Revaluation reserve (b)
General reserve (a,c)
Profit and Loss Account
Total
Previous year
As at
31 March 2007
23,92
–
1,15
1,48
329,54
472,69
828,78
510,46
Additions
Deductions
–
2,49
–
–
56,53
60,21
119,23
515,42
–
–
1,15
1
132,34
89,92
223,42
197,10
(Rs lacs)
As at
31 March 2008
23,92
2,49
–
1,47
253,73
442,98
724,59
828,78
(a) In respect of shares bought back during the year, Rs 115 lacs have been adjusted against Share premium and Rs 12,985 lacs have been adjusted
against General reserve. Face value of shares bought back Rs 249 lacs have been reduced from General Reserves and adjusted to Capital Redemption Reserve (refer to note 2, Schedule 17)
(b) Adjustment against Revaluation reserve of Rs 1 lac is in respect of depreciation on revalued assets (2006-07 : Rs 1 lac)
(c) Adjustment to General reserve of Rs 253 lacs is relating to adjustment as per transitional provisions of AS 15, net of deferred tax, in respect of
retirement benefit plans (refer to note 25 (a), Schedule 17)
Annual Report 2007-08 – ICI India Limited 19
SCHEDULES TO THE ACCOUNTS
SCHEDULE 3 : FIXED ASSETS
Particulars
(Rs lacs)
Gross block
Book value Additions
at cost or
at cost
revalued
amounts
as at
31 March
2007
Depreciation
Disposals/
adjustments
Book value
at cost or
revalued
amounts
as at
31 March
2008
Upto Depreciation
31 March
for the
2007
Year
Net block
In respect
Upto
of disposals/ 31 March
adjustments
2008
As at
31 March
2008
As at
31 March
2007
Tangible assets
Land
(refer to note 1 below)
– leasehold
93
–
–
93
42
1
–
43
50
51
5,17
–
–
5,17
–
–
–
–
5,17
5,17
54,65
1,85
(2)
56,48
15,33
1,39
(2)
16,70
39,78
39,32
Plant and machinery
131,05
6,54
–
137,59
87,72
8,39
(1)
96,10
41,49
43,33
Plant and machinery under operating lease
56,88
16,50
(14)
73,24
28,60
9,33
(6)
37,87
35,37
28,28
34
–
–
34
32
–
(1)
31
3
2
9,60
37
(11)
9,86
5,17
54
(1)
5,70
4,16
4,43
22,22
91
(2)
23,11
15,81
2,37
(2)
18,16
4,95
6,41
4,85
–
–
4,85
2,56
49
–
3,05
1,80
2,29
285,69
26,17
(29)
311,57
155,93
22,52
(13)
178,32
133,25
311,51
22,28
(48,10)
285,69
166,20
22,48
(32,75)
155,93
– freehold
Buildings
(refer to note 1 below)
Rolling stock, motor
vehicles, etc.
Furniture, fittings and
equipment
Data processing
equipment
Intangible assets
Patents, trademarks,
knowhow, etc.
Previous year
Capital work-in-process (including capital advances)
129,76
10,47
3,53
143,72
133,29
Notes :
(1)
Land and buildings at certain locations were revalued in 1983.
(2)
Gross depreciation for the year includes depreciation on revalued assets of Rs. 1 lac (2006-07 : Rs. 1 lac), charged against Revaluation reserve.
(3)
Disposals/adjustments in gross block for the previous year include assets transferred on divestment of Uniqema and Paints Advanced Refinish
('2K') businesses aggregating Rs. 3509 lacs and Rs. 1117 lacs respectively. [Refer to note 14(b,c), Schedule 17].
(4)
Disposals/adjustments in depreciation for the previous year include Rs. 2473 lacs and Rs. 692 lacs being accumulated depreciation on assets
transferred on divestment of Uniqema and Paints Advanced Refinish ('2K') businesses respectively. [Refer to note 14(b,c), Schedule 17]
20 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE ACCOUNTS
SCHEDULE 4 :INVESTMENTS
(At cost less write offs/provisions)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
500,000
10
9,03
9,03
750,000
205
10
100
74
74
1
86,000
110
19
100
1,000
1
5,98,50,000
57,918
10
21
21
5
144
100
250
523
100
62,247
100
62
62
15,000
10,000
–
15,00
15,000
10,000
–
15,00
5,000
10,000
–
5,00
15,000
10,000
–
15,00
–
1,50,00,000
10
–
15,00
–
1,00,00,000
10
–
10,00
2,50,00,000
–
10
25,00
–
(A) LONG TERM INVESTMENTS
(i)
Investment in subsidiary
Equity shares - unquoted
– Polyinks Limited
500,000
(Refer to note 3, Schedule 17)
(ii) Trade Investments
Equity shares - unquoted
Nitrex Chemicals India Limited
750,000
Adyar Property Holding Company Limited
105
(100 shares transferred during the year )
(Book value Rs. 6,825 (2006-07: Rs.13,325);
paid-up Rs.65 per share)
Debentures - unquoted
5% Woodlands Research Foundation - non-redeemable
1
(Book value Rs 28,001)
0.5% Woodlands Research Foundation (Book value Re 1) 110
6.5% Bengal Chamber of Commerce and Industry
19
(Book value Rs 19,000)
PMC Rubber Chemicals India Private Limited
1
(Refer to note 15, Schedule 17) (Book Value Rs Nil)
(iii) Non-trade Investments
Equity shares - quoted
ICICI Bank Limited
57,918
Equity shares - unquoted
Kohinoor Mills Limited (Book value Rs 1,300)
5
Maneck-Chowk & Ahmedabad Manufacturing Co. Limited 144
(Book Value Re 1)
Debentures - unquoted
6% Sholapur Spinning & Weaving Co. Limited
523
(in Liquidation) (Book Value Re 1)
Government of India Securities - unquoted
6.75% Government of India Tax free bonds
62,247
Capital Gains Bonds - unquoted
5.00% National Bank for Agriculture and
–
Rural Development
(15,000 units redeemed during the year)
5.10% National Housing Bank
–
(15,000 units redeemed during the year)
5.00% Small Industries Development Bank of India
–
(5,000 units redeemed during the year)
5.15% Rural Electrification Corporation Limited
–
(15,000 units redeemed during the year)
(B) CURRENT INVESTMENTS
(i) Non-Trade Investments #
Investment in Fixed Maturity Plans of Mutual
Funds - unquoted
ABN AMRO Mutual Fund
(FTP Series 1 - Regular Growth)
(redeemed during the year)
ABN AMRO Mutual Fund
(FTP Series 2 - 13 months Growth)
(redeemed during the year)
ABN AMRO Mutual Fund
(FTP Series 8 - Yly Plan A Growth)
(invested during the year)
contd..
Annual Report 2007-08 – ICI India Limited 21
SCHEDULES TO THE ACCOUNTS
SCHEDULE 4 :INVESTMENTS (Contd.)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
2,50,00,000
–
10
25,00
–
–
50,00,000
10
–
5,00
1,50,00,000
1,50,00,000
10
15,00
15,00
Birla Sun Life Mutual Fund
(FTP - Quarterly Series 9 - Dividend)
(redeemed during the year)
–
6,00,00,000
10
–
60,00
DWS Mutual Fund
(Fixed Term Fund Series 5 - Growth)
(redeemed during the year)
–
30,00,000
10
–
3,00
DWS Mutual Fund
(Fixed Term Fund Series 21 - Inst. Plan)
2,00,00,000
2,00,00,000
10
20,00
20,00
DWS Mutual Fund
(Fixed Term Fund Series 24 - Inst. Plan)
50,00,000
50,00,000
10
5,00
5,00
DWS Mutual Fund
(Fixed Term Fund Series 28 - Dividend)
(redeemed during the year)
–
2,00,00,000
10
–
20,00
6,00,000
6,00,000
1,000
60,00
60,00
–
50,00,000
10
–
5,00
1,00,00,000
1,00,00,000
10
10,00
10,00
–
50,00,000
10
–
5,00
HDFC Mutual Fund
(FMP 18M October 2006 - Wholesale Growth)
3,00,00,000
3,00,00,000
10
30,00
30,00
HDFC Mutual Fund
(FMP 16M January 2007 (3) - Wholesale Growth)
1,50,00,000
1,50,00,000
10
15,00
15,00
HDFC Mutual Fund
(FMP 14M March 2007 (3) - Wholesale Growth)
2,00,00,000
2,00,00,000
10
20,00
20,00
HDFC Mutual Fund
(FMP 370 days March 2008 (VII)- 2 - Wholesale
Growth) (invested during the year)
50,00,000
–
10
5,00
–
HSBC Mutual Fund
(Fixed Term Series 4 - Growth)
(redeemed during the year)
–
50,00,000
10
–
5,00
HSBC Mutual Fund
(Fixed Term Series 9 - Growth)
(redeemed during the year)
–
2,00,00,000
10
–
20,00
4,00,00,000
4,00,00,000
10
40,00
40,00
Birla Sun Life Mutual Fund
(Fixed Term Plan-Institutional-Series X
Yearly Plan-Growth) (invested during the year)
Birla Sun Life Mutual Fund
(FTP - Series E - Growth)
(redeemed during the year)
Birla Sun Life Mutual Fund
(FTP - Series P - Growth)
DSP Merrill Lynch Mutual Fund
(FTP Series 3E - Growth Inst.)
Franklin Templeton Mutual Fund
(Fixed Tenure Fund Series V 13 months - Growth)
(redeemed during the year)
Franklin Templeton Mutual Fund
(Fixed Horizon Fund Series 1
15 months Inst Growth)
HDFC Mutual Fund
(FMP 13M March 2006 (1) - Wholesale Growth)
(redeemed during the year)
HSBC Mutual Fund
(Fixed Term Series 22 Institutional Growth)
22 Annual Report 2007-08 – ICI India Limited
contd..
SCHEDULES TO THE ACCOUNTS
SCHEDULE 4 :INVESTMENTS (Contd.)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
50,00,000
–
10
5,00
–
Kotak Mahindra Mutual Fund
(FMP Series 14 - Growth)
(redeemed during the year)
–
1,00,00,000
10
–
10,00
Kotak Mahindra Mutual Fund
(FMP 3M Series 12 - Dividend)
(redeemed during the year)
–
2,50,00,000
10
–
25,00
Kotak Mahindra Mutual Fund
(FMP 13M Series 1 Inst - Growth)
1,50,00,000
1,50,00,000
10
15,00
15,00
Kotak Mahindra Mutual Fund
(FMP 12M Series 1 Inst - Growth)
(invested during the year)
2,50,00,000
–
10
25,00
–
–
2,51,17,176
10
–
25,12
Lotus India Mutual Fund
(FMP - 14 months - Series I - Inst. Growth)
1,00,00,000
1,00,00,000
10
10,00
10,00
Lotus India Mutual Fund
(FMP - 375 Days - Series I - Inst. Growth)
(invested during the year)
2,50,00,000
–
10
25,00
–
Principal Mutual Fund
(PNB FMP-27 - 385 Days -Series II)
(redeemed during the year)
–
50,00,000
10
–
5,00
Principal Mutual Fund
(PNB FMP-38 - 91 Days -Series IX)
(redeemed during the year)
–
50,00,000
10
–
5,00
4,00,00,000
4,00,00,000
10
40,00
40,00
–
70,00,000
10
–
7,00
Prudential ICICI Mutual Fund
(FMP Series-34 - Sixteen Months Growth)
1,50,00,000
1,50,00,000
10
15,00
15,00
Prudential ICICI Mutual Fund
(FMP Series-34 - Fifteen Months)
5,00,00,000
5,00,00,000
10
50,00
50,00
–
3,00,00,000
10
–
30,00
Reliance Mutual Fund
(Fixed Horizon Fund IV Series 5 Growth)
(invested during the year)
3,50,00,000
–
10
35,00
–
Reliance Mutual Fund
(Fixed Horizon Fund VII Series 4)
(invested during the year)
1,50,00,000
–
10
15,00
–
SBI Mutual Fund
5,20,00,000
(Debt Fund Series - 13 Months -March 07- Growth)
5,20,00,000
10
52,00
52,00
ING Mutual Fund
(ING Long Term FMP - I Institutional Growth)
(invested during the year)
Lotus India Mutual Fund
(India FMP - 3 months - Series III - Inst. Dividend)
(redeemed during the year)
Principal Mutual Fund
(PNB FMP-36 460 days-Series III March 07)
Prudential ICICI Mutual Fund
(FMP Inst. Cumulative - XXVIII)
(redeemed during the year)
Reliance Mutual Fund
(Fixed Horizon Fund II Quarterly Plan Series
VI-Inst. Dividend) (redeemed during the year)
contd..
Annual Report 2007-08 – ICI India Limited 23
SCHEDULES TO THE ACCOUNTS
SCHEDULE 4 :INVESTMENTS (Contd.)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
SBI Mutual Fund
(Debt Fund Series - 90 Days -March 07- Dividend)
(redeemed during the year)
–
80,00,000
10
–
8,00
Standard Chartered Mutual Fund
(Fixed Maturity - 20th Plan - Growth)
(redeemed during the year)
–
50,00,000
10
–
5,00
Standard Chartered Mutual Fund
(Grindlays Fixed Maturity - 22nd Plan - Growth)
(redeemed during the year)
–
50,00,000
10
–
5,00
Standard Chartered Mutual Fund
(FMP - Qtly Sr. 6 - Dividend)
(redeemed during the year)
–
2,50,00,000
10
–
25,00
Sundaram BNP Paribas Mutual Fund
(Fixed Term Plan D Inst. Growth)
(invested during the year)
1,00,00,000
–
10
10,00
–
Sundaram BNP Paribas Mutual Fund
(Fixed Term Plan E Inst. Growth)
(invested during the year)
1,00,00,000
–
10
10,00
–
Tata Mutual Fund
2,50,00,000
(Fixed Horizon Fund Series 7 - Scheme A -Growth)
2,50,00,000
10
25,00
25,00
Tata Mutual Fund
3,00,00,000
(Fixed Horizon Fund Series 6 - Scheme C-Growth)
3,00,00,000
10
30,00
30,00
2,50,00,000
–
10
25,00
–
UTI Mutual Fund
(UTI Fixed Term Income Fund - Series 1 Plan 18 - Q3 Growth) (redeemed during the year)
–
1,50,00,000
10
–
15,00
UTI Mutual Fund
(UTI Fixed Maturity Plan yearly Series
YFMP/0507- Growth) (invested during the year)
2,50,00,000
–
10
25,00
–
692,60
825,72
Tata Mutual Fund
(Fixed Horizon Fund Series 13 - Scheme
A-IG-Growth) (invested during the year)
Note : Investment in shares are fully paid up, except where indicated.
# For investments purchased and sold during the year, refer to note 17, Schedule 17
As at 31 March 2008
Quoted investments
Unquoted investments
– Fixed Maturity Plans of Mutual Funds
– Others
Market Value/
Net Asset Value ##
Aggregate
Book Value
Market Value/
Net Asset Value ##
(Rs lacs)
(Rs lacs)
(Rs lacs)
(Rs lacs)
21
4,46
21
4,94
682,00
10,39
747,22
765,12
60,39
776,53
692,60
##
As at 31 March 2007
Aggregate
Book Value
In case of mutual funds
24 Annual Report 2007-08 – ICI India Limited
825,72
SCHEDULES TO THE ACCOUNTS
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
26
1,77
25,96
1,74
1,65
94,34
34,65
1,99
1,53
92,21
123,95
132,15
23
5
28
15
82
97
5,25
8,69
13,94
8,69
5,25
97,71
4,17
7,57
11,74
7,57
4,17
95,52
76
–
76
8,79
55,20
63,99
104,00
164,65
SCHEDULE 5 : INVENTORIES
Stores and spare parts (at cost or under)
Stock in trade (at lower of cost and net realisable value)
–
–
–
–
Raw materials
Packing materials
Work-in-process
Finished products
SCHEDULE 6 : SUNDRY DEBTORS
Secured - considered good
– Debts outstanding over six months
– Other debts
Unsecured
– Debts outstanding over six months
Considered good
Considered doubtful
Less : Provision for doubtful debts
Other debts - considered good *
Dues relating to sale of businesses - unsecured, considered good ###
– Debts outstanding over six months
– Other debts
*
###
Include amounts aggregating Rs 141 lacs (2006-07 : Rs 86 lacs) due from bodies corporate under the same management as defined in Section
370(1B) of the Companies Act, 1956. For details refer to note 28, Schedule 17
Refer to note 6, Schedule 17
SCHEDULE 7 : CASH AND BANK BALANCES
Cash in hand
Cheques in hand
Balances with scheduled banks :
Current accounts
Fixed deposits held as margin money
Unclaimed dividend accounts
SCHEDULE 8 : LOANS AND ADVANCES
(Unsecured and considered good unless otherwise stated)
Loans and advances recoverable in cash or in kind or for value to be received :
Considered good *
Considered doubtful
Less : Provision for doubtful advances
Balances with Customs, Port Commissioners, Railways, Excise Authorities etc.
Other Deposits
Inter Corporate Deposit with subsidiary (Polyinks Limited) #
Taxation (net of provision)
Interest accrued on investments
31
2
30
46
13,46
29
2,91
16,99
10,86
27
2,01
13,90
31,81
28
32,09
28
31,81
3,64
3,78
6,41
8,77
2
54,43
31,02
28
31,30
28
31,02
2,46
3,60
3,21
1,63
2,54
44,46
Annual Report 2007-08 – ICI India Limited 25
SCHEDULES TO THE ACCOUNTS
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
4,81
4,40
* Include :
(a) Housing loans given to employees, against which the
employees have submitted property title papers or other
assets/documents as envisaged under the housing loan scheme
(b)
Due from Directors
Maximum amount due at any time during the year
1,10
1,11
78
89
(c)
Due from Officer
Maximum amount due at any time during the year
14
15
15
15
#
Maximum amount due from subsidiary company (Polyinks Limited)
at any time during the year
6,47
3,37
31,42
30,22
SCHEDULE 9 : CURRENT LIABILITIES
Acceptances
Sundry creditors - micro and small enterprises **
- others ***
Unclaimed dividends ***
Other liabilities
25
–
221,13
190,48
2,91
2,01
10,26
11,33
265,97
234,04
30,70
110,35
5,22
18,75
7,62
12,79
** Refer to note 7, Schedule 17
*** Refer to note 8, 9 and 14(b), Schedule 17
SCHEDULE 10 : PROVISIONS
Proposed dividend
Corporate dividend tax
Voluntary Retirement Scheme liability
Retirement benefits
10,77
12,34
Others ##
42,96
48,15
97,27
202,38
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
–
1,65
7,04
3,73
12,42
29
1,82
6,49
3,18
11,78
–
31,10
9,47
1,33
10,30
37
30
21,77
10,39
4,57
6,61
3
1,62
54,32
34,19
66,10
##
Refer to note 22, Schedule 17
SCHEDULE 11 : OTHER INCOME *
From businesses
Insurance claims received
Commission
Lease rentals
Miscellaneous receipts
Other operating items
Dividend income from subsidiary (Quest International India Limited)
Income on sale of non trade investments
–
current
–
long term
Profit on maturity/ redemption of Fixed Maturity Plans (current, non-trade)
Provisions / liabilities no longer required written back
Miscellaneous receipts
* Refer to note 10, Schedule 17
26 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE ACCOUNTS
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
SCHEDULE 12 : MATERIALS CONSUMED AND MOVEMENT IN FINISHED GOODS AND WORK-IN-PROCESS.
Opening stock
Raw materials
34,65
30,28
Packing materials
1,99
1,42
Work-in-process
1,53
2,37
Finished products
92,21
85,93
130,38
120,00
Add : Purchases
Raw materials
382,95
387,30
Packing materials
59,44
58,10
Finished products
102,45
120,25
544,84
565,65
Less : Inventory adjustments in respect of divested businesses#
Raw materials
–
5,91
Packing materials
–
10
Work-in-process
–
74
Finished products
–
17,60
–
24,35
Less : Closing stock
Raw materials
25,96
34,65
Packing materials
1,74
1,99
Work-in-process
1,65
1,53
Finished products
94,34
92,21
123,69
130,38
Add : Excise duty adjustment for movement in finished goods inventory
(including duty on inventory of divested businesses)
15
2,17
Materials consumed, etc.
Refer to note 14(b,c), Schedule 17
SCHEDULE 13 : OTHER EXPENDITURE
Stores and spare parts
Repairs to buildings
Repairs to plant and machinery
Power and fuel
Salaries, wages and bonus
Contributions to provident and other funds
Workmen and staff welfare
Travelling
Rates and taxes
Rent
Communication
Insurance
Freight and transport
Selling commission
Publicity and sales promotion
Royalty and technical fees
Cash discount on sales
Bad debts / advances written off
Less : Provision for doubtful debts and advances (adjusted)
Provision for doubtful debts and advances
Loss on write-off of fixed assets
Research and development
Directors' sitting fees
Sundries (include consultancy, godown running cost, data processing costs, etc.)
551,68
533,09
4,49
17
2,40
5,83
44,90
4,28
2,13
10,55
5,28
9,06
4,10
1,50
33,11
2,85
61,51
6,51
44,88
4,68
42
2,63
6,13
42,04
5,17
2,38
10,10
7,33
7,52
4,36
1,83
30,27
2,77
50,09
3,76
38,96
#
12
12
–
1,24
16
3,82
4
32,69
281,50
15
15
–
1,83
–
2,77
2
31,30
256,36
Annual Report 2007-08 – ICI India Limited 27
SCHEDULES TO THE ACCOUNTS
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
Interest expense on acceptances, etc.
2,95
2,95
Less : Interest income from banks and others *
3,45
66
Net interest
(50)
2,29
2,10
4,99
SCHEDULE 14 : INTEREST
* Refer to note 10, Schedule 17
SCHEDULE 15 : EXCEPTIONAL ITEMS [gain / (loss)]
Profit on sale of properties #
Compensation paid against sale of Paints Advance Refinish ('2K') business.
(20,83)
–
Profit on sale of Paints Advanced Refinish ('2K') business
–
32,20
Charge for voluntary retirement scheme expenses
–
(37)
Profit on sale of Uniqema business
–
250,85
–
158,45
(18,73)
446,12
Profit on sale of investment in subsidiary Quest International India Limited
#
##
Refer to note 14(a), Schedule 17
Refer to note 14(b), Schedule 17
28 Annual Report 2007-08 – ICI India Limited
##
SCHEDULES TO THE ACCOUNTS
SCHEDULE 16 : SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation of financial statements
The financial statements are prepared on accrual basis under the historical cost convention, in accordance with applicable Accounting Standards
("AS") specified in Companies (Accounting Standards) Rules, 2006 and presentational requirements of the Companies Act, 1956.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in India (GAAP) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements and the result of operations during the year. Differences between actual
results and estimates are recognised in the year in which the results are known or materialised. Examples of such estimates are
estimated useful life of assets, provision for doubtful debts, etc. Actual results could differ from those estimates. Any revision to
accounting estimates is recognised prospectively in current and future periods.
Fixed assets / Depreciation
Fixed Assets are stated at cost or at revalued amounts less accumulated depreciation. Cost of fixed assets includes all incidental
expenses and interest costs on borrowings, attributable to the acquistion of the assets, upto the date of commissioning of the assets.
Depreciation for the year is computed on the straight line method, as per the rates derived from useful lives of fixed assets as
estimated by the management, or as prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher. Accordingly plant
and machinery under operating lease are being depreciated over six years. Additional charge of depreciation on amount added on
revaluation is adjusted against revaluation reserve.
Intangible assets comprising Patents, Trademarks and Knowhow, arising from acquisition of businesses are amortised on a straight
line method in line with AS 26 "Intangible assets".
Leasehold land is amortised over the period of the lease. Leasehold improvements are amortised over the remaining period of lease,
or the derived useful lives of assets as prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher.
Fixed assets individually costing less than Rs 5,000 are fully depreciated in the year of purchase.
Fixed assets are reviewed for impairment on each Balance Sheet date, in accordance with AS 28 "Impairment of Assets".
Revenue recognition
• Revenue from sale of products is recognised when the products are despatched against orders from customers in accordance with
the contract terms, which coincides with the transfer of risks and rewards .
• Sales are stated inclusive of excise duty and net of rebates, trade discounts and sales tax.
• Dividend or other income from mutual fund investments is recognised on declaration of dividend or on redemption, as the case may be.
Income from sale of properties
Income from the sale of properties is accounted on transfer of the risk and benefits in the property to the purchaser.
Investments
• Long term investments are stated at cost less amount written off, where there is a permanent diminution in value.
• Current investments are stated at lower of cost and fair value.
• In respect of fixed income securities, premium paid, if any, on purchase of securities is amortised over the period of the investment.
Current assets
(a) Inventories
• Stores and spare parts are valued at cost or under, computed on a weighted average basis.
• Raw materials, packing materials and work-in-process are carried at cost, computed on a weighted average basis, after providing for
obsolescence. In case there is a decline in replacement cost of such materials and the net realisable value of finished products in
which they will be used is expected to be below cost, the value of such materials and work in process is appropriately written down.
• Each item of finished products is valued at lower of cost (computed on weighted average basis) and net realisable value. Cost
includes an appropriate portion of manufacturing and other overheads, where applicable. Excise duty on finished products is
included in the value of finished products inventory.
(b) All other items of current assets are stated at cost after adequate provisions for any diminution in the carrying value.
Foreign currency transactions
• Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary
foreign currency assets and liabilities are converted at the exchange rates prevailing at the date of the balance sheet. All exchange
differences are dealt with in the profit and loss account.
• In case of forward exchange contracts, the premium is amortised over the period of the contract. Any profit or loss arising on the
cancellation or renewal of a forward exchange contract is recognised as income or expense for the year.
• Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange
rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding
foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting
Annual Report 2007-08 – ICI India Limited 29
SCHEDULES TO THE ACCOUNTS
date. Such exchange differences are recognised in the profit and loss account in the reporting period in which the exchange rates
change.
Lease Transactions
• Operating Lease
The assets given under operating lease are shown in the balance sheet under fixed assets and depreciated on a basis consistent
with the depreciation policy of the Company. The net lease income is recognised in the profit and loss account on a straight line
basis over the period during which the benefit is derived from the leased assets.
• Finance Lease
Assets given under finance lease are recognised as receivables at an amount equal to the net investment in the leased assets.
Income on finance lease transactions is recognised so as to produce a constant periodic rate of return on the net investment
outstanding in the lease in accordance with the AS 19 "Accounting for Leases". Initial direct costs of negotiating and arranging a
lease are expensed at the commencement of the lease term.
Employee benefits
a) Short term employee benefits
All employee benefits payable /available within twelve months of rendering the service are classsified as short-term employee
benefits. Benefits such as salaries, wages and bonus etc., are recognised in the profit and loss account in the period in which the
employee renders the related service.
b) Post -employment benefits
Defined contribution plans
Defined contribution plans are provident fund scheme and part of the pension fund scheme for eligible employees.The Company's
contribution to defined contribution plans are recognised in the profit and loss account in the financial year to which they relate.
The Company makes specified monthly contribution towards employee provident fund and pension fund to respective trusts
administered by the Company. The minimum interest payable by the provident fund trust to the beneficiaries every year is notified
by the Government. The Company has an obligation to make good the shortfall, if any, between the return on investments of the
trust and the notified interest rate.
Defined benefit plans
Liability for funded post retirement gratuity and pension and unfunded post retirement medical benefit is accrued on the basis of
actuarial valuation as at the date of the balance sheet. The obligation is measured at the present value of the estimated future cash
flows. Actuarial gains and losses are recognised immediately in the profit and loss account. In case of funded schemes, differential
between fair value of plan assets of trusts and the present value of obligation as per acturial valuation is recognised as an asset or
liability.
c) Other long term employee benefits
Entitlements to annual leave and sick leave are recognised when they accrue to employees. All leave entitlements can only be
encashed at the time of retirement/ termination of employment subject to a restriction on the maximum number of accumulation
of leave entitlement days. The Company determines the liability for such accumulated leave entitlements on the basis of actuarial
valuation as at the year end.
Research and development
Revenue expenditure on research and development including contribution to research associations is charged to profit and loss
account. Capital expenditure on tangible assets for research and development is shown as additions to fixed assets.
Taxation
Income tax expense comprises current tax, deferred tax charge or credit and fringe benefit tax. Current tax provision is made
based on the tax liability computed after considering tax allowances and exemption under the Income Tax Act, 1961.
The deferred tax charge or credit and the corresponding deferred tax liability and assets are recognised using the tax rates that
have been enacted or substantially enacted on the balance sheet date.
Deferred tax assets arising from unabsorbed depreciation or carry forward losses are recognised only if there is virtual certainty
of realisation of such amounts. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation
in future. Deferred tax assets are reviewed at each balance sheet date to reassess their realisability.
Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation as a result of a past event and it is more likely than not that
there will be a outflow of resources embodying economic benefits to settle such obligations and the amount of such obligation can
be reliably estimated. Provisions are not discounted to their present value and are determined based on the management's estimation
of the obligation required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect current management estimates.
Contingent liabilites are disclosed in respect of possible obligations that have arisen from past events and the existence of which
will be confirmed only by the occurence or non-occurrence of future events not wholly within the control of the Company.
30 Annual Report 2007-08 – ICI India Limited
NOTES TO THE ACCOUNTS
SCHEDULES 17 : NOTES TO THE ACCOUNTS
1.
Change of name of holding company
Effective 2 January 2008, AkzoNobel N.V. has become the owner of the entire share capital of Imperial Chemical Industries PLC, the holding
company of ICI India Limited, and has, thus, become the ultimate holding company of ICI India Limited. From the same date, Imperial Chemical
Industries PLC, being no longer a public company in England, has been renamed Imperial Chemical Industries Limited.
2.
Share buyback
The shareholders had approved on 12 July 2007, a proposal of the Company to buy back its own shares in accordance with applicable regulations,
at a price not exceeding Rs 575 per share. The scheme will remain open till 11 July 2008, unless terminated earlier.
Under this scheme, the Company has till 31 March 2008, bought back and extinguished 24.91 lacs shares. Total amount paid consists of
aggregate consideration of Rs 131.82 cr and related expenses of Rs 1.67 cr. This total amount of Rs 133.49 cr has been accounted as follows :
–
The nominal value of shares purchased i.e. Rs 2.49 cr has been adjusted against the share capital.
–
The difference between consideration paid (including related expenses) and nominal value of shares aggregating Rs 131.00 cr, has been
adjusted against Share Premium (Rs 1.15 cr) and General Reserve (Rs 129.85 cr).
–
Rs 2.49 cr have been reduced from General Reserve and credited to Capital Redemption Reserve, in accordance with the provisions of the
Companies Act, 1956.
Following the above share buyback, the holding of Imperial Chemical Industries Limited in the Company, as on 31 March 2008 is 54.13%.
No shares were bought back under the earlier scheme approved by the shareholders on 14 September 2006, which was superceded by the current
scheme approved on 12 July 2007.
3.
Divestment of Adhesives Business
The Company has entered into an agreement with Henkel CAC Private Limited on 18 April 2008 for the sale of :
–
Adhesives business for a consideration of Rs 230 cr; and
–
the Company's 67% shareholding in its subsidiary company Polyinks Limited ('Polyinks'), for a consideration of Rs 30 cr.
Both the above consideration amounts are subject to certain agreed adjustments for working capital and cash/debt balances.
The sale, recommended by the Board of Directors at its meeting held on 28 March 2008, has since been approved by the shareholders through
postal ballot. As per terms of the business transfer agreement, the risks and rewards of the business will be to the purchaser's account from
3 April 2008. The completion of the transaction awaits certain regulatory approvals and will be accounted on receipt of these approvals.
Accordingly :
4.
–
results of the Adhesives business for the current year, and carrying amount of assets and liabilities as at the end of the year have been shown
under 'discontinuing business' (previously included under 'Chemicals' segment) (refer to note 26).
–
Profit on divestment of the Adhesives business and sale of shareholding in Polyinks will be accounted on completion of the transaction.
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
2,16
1,82
Capital commitment
Estimated amount of contracts remaining to be executed on capital account
(net of advances).
5.
Contingent liabilities not provided for:
(a) Liabilities in respect of third party claims
1,18
1,18
(b) Sales tax matters under appeal
8,59
6,42
(c) Excise matters in dispute / under appeal
2,25
2,30
(d) Industrial relations and other matters under dispute
20
20
(e) Income tax matters in dispute / under appeal *
*The Income tax assessments for the Company have been completed up to the financial year ended 31 March 2004. Arising from the
completed assessments and appellate orders, the total demand / liability is Rs 8626 lacs (2006-07 : Rs 6832 lacs), excluding interest and the
total refund is Rs 5370 lacs (2006-07 : Rs 4976 lacs) excluding interest. The Company as well as the Income tax department have gone on
further appeals on these matters. Pending decision in the appeals, neither the refunds nor the liability for the demands have been recognised
in the accounts.
6.
Dues relating to sale of businesses (Sundry Debtors - Schedule 6), consist of :
–
Due from Nitrex Chemicals India Limited, towards balance consideration
–
Due from PMC Rubber Chemicals India Private Limited, towards working capital settlement *
–
Due from Givaudan (India) Private Limited, towards balance consideration settlement
–
Due from Asian PPG Industries Ltd towards balance consideration and working capital settlement
76
–
–
–
4,25
4,54
50,97
4,23
76
63,99
* Private company in which a Director of the Company is a Director
Annual Report 2007-08 – ICI India Limited 31
NOTES TO THE ACCOUNTS
As at 31 March 2008
(Rs lacs)
7.
Disclosures as required under the Micro, Small and Medium Enterprises Development Act,
2006 in respect of micro and small suppliers based on the information available with the Company:
(i)
the principal amount remaining unpaid to any supplier as at the end of the year
(ii) the interest due on the principal remaining outstanding as at the end of the year
(iii) the amount of interest paid under the Act, along with the amounts of the payment made
beyond the appointed day during the year
(iv) the amount of interest due and payable for the period of delay in making payment (which
have been paid but beyond the appointed day during the year) but without adding the
interest specified under the Act
(v) the amount of interest accrued and remaining unpaid at the end of the year
(vi) the amount of further interest remaining due and payable even in the succeeding years,
until such date when the interest dues as above are actually paid to the small enterprise,
for the purpose of disallowance as a deductible expenditure under the Act
As at 31 March 2007
(Rs lacs)
22
3
–
–
–
–
–
3
–
–
–
–
8.
Sundry creditors - others (Schedule 9) include unclaimed matured fixed deposits from public amounting to Rs 5 lacs (2006-07 :Rs 7 lacs)
9.
As on 31 March 2008 there are no amounts due to be deposited with the Investor Education and Protection Fund, in respect of unclaimed matured
fixed deposits and unclaimed dividends.
10.
Income from investments, interest and others are stated at gross amounts. The amount of income tax deducted thereon is Rs. 29 lacs (2006-07 :
Rs 1 lac).
11.
Gain on account of foreign exchange fluctuations for the year is Rs. 223 lacs (2006-07 : Rs 3 lacs).
12.
Sales exclude sale of equipment at cost amounting to Rs. 52 lacs (2006-07: Rs 185 lacs).
13.
(A)
(B)
Directors' remuneration *#
Salaries and allowances
Commission
Perquisites
Computation of maximum remuneration payable to Directors during the year
Profit before depreciation, taxation and exceptional items
Add : Directors' remuneration
Directors' sitting fees
Provision for doubtful debts and advances (net)
2007-08
(Rs lacs)
2006-07
(Rs lacs)
3,05
25
16
3,46
2,24
20
20
2,64
131,65
3,46
4
1,39
4,89
162,58
2,64
2
1,68
136,54
Less : Depreciation as per section 350
Voluntary retirement scheme expense
Profit on sale of investment
Net profit under section 198 of the Companies Act, 1956
Maximum remuneration payable to Directors :
–
Managing / Wholetime directors @ 10% of net profit
–
Directors not in wholetime employment @ 1% of net profit
22,51
–
10,30
32,81
4,34
166,92
22,48
1,21
6,61
30,30
103,73
136,62
10,37
1,04
13,66
1,37
11,41
15,03
* The above amounts do not include provisions for / contribution to employee retirement / post retirement and other employee benefits
which are based on actuarial valuations carried out on an overall Company basis rather than separately for Directors.
# Does not include sitting fees paid to Directors Rs 4 lacs (2006-07 : Rs 2 lacs)
14.
Exceptional items in Profit and Loss Account (Schedule 15)
(a)
Income from sale of property of Rs 2.10 cr is in respect of sale of land at Chennai. (The corresponding income of Rs. 4.99 cr in the previous
year was from sale of residential flats in Kolkata).
(b)
On 16 March 2007, the Company sold its Paints Advanced Refinish business ('2K') to Asian PPG Industries Limited ('APPG') for a
consideration of Rs 51.80 cr, subject to adjustments for working capital as on date of transfer, and this resulted in a profit of Rs 32.20 cr
(shown as an exceptional item in 2006-07).
As per terms of the sale agreement with APPG, the acquisition of Imperial Chemical Industries PLC (refer to note 1) by Akzo Nobel N.V.
has given rise to a payment to APPG of Rs 1.10 cr per month from the date of change of control upto July 2009. Accordingly, during the
year, Company has accrued Rs 20.83 cr as its obligation arising out of the above acquisition and the amount has been shown as an
exceptional item in the Profit and Loss account. Tax adjustment on this charge has also been accrued and netted off from current tax charge
for the year. The amount still outstanding for 16 months and payable as at year end is Rs. 17.56 cr.
32 Annual Report 2007-08 – ICI India Limited
NOTES TO THE ACCOUNTS
15.
(c)
On 2 September 2006, the Company sold its 'Uniqema' chemicals business to Croda Chemicals (India) Private Limited for a consideration
of Rs 286.83 cr (including Rs 6.83 cr for working capital adjustments as on date of transfer), and this resulted in a profit of
Rs 250.85 cr (shown as an exceptional item in 2006-07).
(d)
On 2 March 2007, the Company sold its entire shareholding in its subsidiary Quest International India Limited to Givaudan (India) Private
Limited, for a consideration of Rs 370.97 cr, and this resulted in a profit of Rs 158.45 cr (shown as an exceptional item in 2006-07).
During 2005-06, the Company had sold its Rubber Chemicals business to PMC Rubber Chemicals India Private Limited ('PMC-RC').In respect
of the optionally convertible debenture of face value of Rs 5,98,50,000 which the Company had received as part of the sale consideration, the
Company had exercised the option last year to convert into equity shares. During the year, the Company has withdrawn the option exercised
earlier, and intends to transfer the debentures to PMC Group International Inc, USA ('PMC') or its nominee.
As per the sale agreement with PMC-RC, the Company was also entitled to receive consideration as 'earn outs' if the performance of PMC-RC
during the year exceeded certain agreed parameters. In respect of this, no earn out was earned during the year.
16.
In the absence of any progress in the matter and continuing outstanding obligation of the Company, the provision of Rs 1500 lacs made during the
year 2002-03 in respect of probable land cost liability while determining the profit on sale of Catalyst business continues to be carried forward in
the current year's accounts (as on 31 March 2007 : Rs 1500 lacs).
17.
During the year the Company invested the temporary surplus funds in liquid / cash schemes and fixed maturity plans of mutual funds. These
investments which were made and redeemed during the year are as under:
Non Trade (Current Investments)
Liquid/Cash Mutual Fund Schemes
ABN Amro Money Plus - IP (Daily Dividend Reinvestment)
AIG India Treasury Plus Fund Super Institutional (Daily Dividend Reinvestment)
Birla Sun Life Liquid Plus - Institutional (Daily Dividend Reinvestment)
DWS Money Plus Fund - IP - (Daily Dividend Reinvestment)
DSP Merrill Lynch Liquid Plus - IP - (Daily Dividend Reinvestment)
Fidelity Liquid Plus Fund - Super IP - (Daily Dividend Reinvestment)
HDFC Cash Management Fund Saving Plus Plan - Wholesale (Daily Dividend Reinvestment)
HSBC Liquid Plus Fund - IP - (Daily Dividend Reinvestment)
ICICI Prudential Institutional Liquid Plan - Super Institutional (Daily Dividend Reinvestment)
ING Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
JP Morgan India Liquid Plus Fund - IP-(Daily Dividend Reinvestment)
Lotus India Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
Reliance Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
Standard Chartered Liquidity Manager Plus - (Daily Dividend Reinvestment)
Sundaram BNP Paribas Liquid Plus Super Inst. (Daily Dividend Reinvestment)
UTI Liquid Plus Fund - IP - (Daily Dividend Reinvestment)
Fixed Maturity Plans
ABN Amro Fixed Term Plan - Sr. 6 Quarterly plan D (Dividend)
ABN Amro Fixed Term Plan - Sr. 7 Quarterly plan D (Dividend)
Birla Sun Life Quarterly Interval - Series 2 (Dividend)
DWS Fixed Term Fund - Series - 37 (Dividend)
HDFC Quarterly Interval Fund - Plan A - Wholesale (Dividend)
Kotak FMP 3M Series 15 (Dividend)
Reliance Monthly Interval Fund Series II (Dividend)
Reliance Monthly Interval Fund Series II (Dividend)
Reliance Interval Fund Quarterly Plan Series I (Dividend)
Standard Chartered Fixed Maturity Plan Quarterly Series -14 (Dividend)
Standard Chartered Fixed Maturity Plan - Quarterly Series 8 (Dividend)
Templeton Quarterly Interval Plan - Plan A (TQIP-A) Institutional (Dividend)
UTI Fixed Maturity Plan Quarterly Series QFMP/0407 II Institutional (Dividend)
18.
Payment to Auditors
(i)
(ii)
(iii)
(iv)
(v)
Statutory audit fee
Tax audit fee
Limited review fee
Certification fee / other matters
Reimbursement of expenses / service tax
Number
of units
Purchase value
(Rs lacs)
5,28,06,087
3,33,20,832
8,32,03,171
6,78,31,868
50,064
2,50,41,214
99,74,761
5,00,99,393
2,70,22,193
65,68,864
2,05,94,927
3,35,77,088
3,31,739
1,00,040
13,29,95,359
2,34,809
52,81
33,35
83,32
67,93
5,01
25,04
10,01
50,13
27,02
6,57
20,61
33,63
33,21
10,01
133,45
23,59
1,00,00,000
1,50,00,000
1,50,00,000
1,00,00,000
99,65,321
1,00,00,000
1,99,91,404
99,95,502
49,99,200
50,00,000
1,50,00,000
50,00,000
1,00,00,000
10,00
15,00
15,00
10,00
10,00
10,00
20,00
10,00
5,00
5,00
15,00
5,00
10,00
2007-08
(Rs lacs)
2006-07
(Rs lacs)
20
5
12
3
9
49
20
5
12
1
9
47
Annual Report 2007-08 – ICI India Limited 33
NOTES TO THE ACCOUNTS
19.
20.
Earnings per share
(a) Calculation of weighted average number of equity shares of Rs 10 each
Number of equity shares at the beginning of the year
Less : equity shares bought back during the year *
Total number of equity shares outstanding at the end of the year
Weighted average number of shares
(b) Net profit after tax available for equity shareholders (Rs lacs)
(c) Basic and diluted earnings per share (Rs)
* Refer to note 2.
(a)
Particulars in respect of goods manufactured
Unit
Adhesives and Polymers
Tonnes
Licensed
Capacity
2007-08
2006-07
4,08,70,612
24,90,662
3,83,79,950
3,97,13,728
60,21
15.16
4,08,70,612
–
4,08,70,612
4,08,70,612
448,42
109.72
Installed
Capacity
Actual Production
meant for sale
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
N.A.
N.A.
8,500
5,000
8,071
7,404
Catalysts (see footnote 6 below)
Tonnes
N.A.
N.A.
2,480
2,480
–
–
Paints-Liquid
KL
N.A.
N.A.
67,540
63,040
60,419
53,035
Paints-Stiff
Tonnes
N.A.
N.A.
6,000
10,000
3,994
5,577
Textile Auxiliaries & Surfactants
(see footnote 7 below)
Tonnes
N.A.
N.A.
–
–
–
6,045
Thinners
KL
N.A.
N.A.
4,460
4,460
3,336
3,158
Footnotes :
1. N A - Not Applicable.
2. Production meant for sale is after adjustment of shortages, handling losses, quantity internally consumed and excludes quantity manufactured by thirdparties on
behalf of the Company.
3. Licensed and installed capacity in respect of intermediates, used entirely for captive consumption, have not been furnished.
4. All items are delicensed.
5. Installed capacities are as certified by the management.
6. Installed capacity of Catalysts is utilised for toll conversion operations undertaken on behalf of Johnson Matthey Chemicals India Private Limited and, therefore,quantity
processed has not been included in actual production.
7. Production of Textiles auxilliaries and Surfactants (of the Uniqema business) in 2006-07 was for the period 1 April 2006 to 1 September 2006 [ Refer to note 14(c )]
20.
(b) Particulars in respect of sales, opening and closing stocks of finished goods
Unit
Sales
Quantity
Value
(Rs lacs)
Opening Stock
Quantity
Value
(Rs lacs)
Closing Stock
Quantity
Value
(Rs lacs)
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
6,75
6,87
1,192
809
7,71
6,75
Adhesives and Polymers
Tonnes
12,284
10,289
153,71
125,47
809
1,024
Paints * - Liquid
K Litres
59,430 }
55,538 }
954,36
855,72
7,903 }
6,625 }
Paints - Stiff
Tonnes
20,135 }
12,358 }
Textile auxiliaries & Surfactants *
Tonnes
–
6,111
–
66,47
–
731
–
6,08
–
–
–
–
Thinners
K Litres
3,240
3,102
36,08
35,36
320
264
2,32
1,79
425
320
3,00
2,32
Others
Various
Less : Rebates
77,92
66,35
1,243 }
861 }
14,07
11,12
7,859 }
7,903 }
78,92
77,92
1,828 }
1,243 }
5,21
4,84
4,71
5,22
92,21
85,93
94,34
92,21
95,85
87,09
1062,36
1007,05
* Includes stock transferred on divestment of Uniqema business and Paints Advanced Refinish ('2K') business during the year 2006-07, Current
year : nil. [ Refer to note 14 (b ) and (c)]
34 Annual Report 2007-08 – ICI India Limited
NOTES TO THE ACCOUNTS
20.
20.
(c) Particulars in respect of purchase of finished products
Unit
Quantity
Value (Rs lacs)
2007-08
2006-07
2007-08
2006-07
Adhesives and Polymers
Tonnes
2,798
2,670
31,84
30,14
Paints-Liquid
K.Litres
4,826
3,781 }
59,01
65,34
Paints-Stiff
Tonnes
10,870
7,163 }
Textile Auxiliaries &
Surfactants
Tonnes
–
Others
Various
438
–
2,68
11,60
22,09
102,45
120,25
(d) Details of raw materials consumed
Unit
Quantity
Value (Rs lacs)
2007-08
2006-07
2007-08
2006-07
Pigments, Tinters, Extenders
Tonnes
21,529
19,188
46,91
36,73
Latex, Monomers
Tonnes
11,279
9,026
53,75
42,26
Resins
Tonnes
13,698
13,300
87,98
73,33
Solvents
Tonnes
8,649
8,296
40,44
37,93
Titanium Dioxide
Tonnes
6,393
6,037
Others
Various
58,89
58,15
103,67
128,62
391,64
377,02
Raw materials consumed are after adjustments including shortage / excess, provision for losses and adjustment on account of divestment of
businesses.
20.
(e) Value of raw materials, stores and spare parts consumed
Raw Materials
2007-08
(Rs lacs)
2006-07
(Rs lacs)
Stores & spare parts incl. packing materials
2007-08
(%)
2006-07
(%)
2007-08
(Rs lacs)
2006-07
(Rs lacs)
2007-08
(%)
2006-07
(%)
Imported
122,80
129,66
31
34
–
–
–
–
Indigenous
268,84
247,36
69
66
64,18
62,11
100
100
391,64
377,02
100
100
64,18
62,11
100
100
Raw materials, stores and spare parts consumed are after adjustments including shortage/excess, provision for losses and adjustment on
account of divestment of businesses.
20.
(f) Earnings in foreign exchange:
Export of goods (FOB basis)
20.
5,66
8,96
86
1,82
Other
34
24
Raw materials
88,83
144,04
Capital goods
94
54
44,57
34,29
Royalty and technical fees
6,13
2,30
Professional and consultation fees
7,24
2,60
39
35
2007-08
(Rs lacs)
2006-07
(Rs lacs)
56,10
–
–
12,47
(g) Value of imports (CIF basis):
(h) Expenditure in foreign currencies (on payment basis; net of tax where applicable):
Others
20.
2006-07
(Rs lacs)
Direct sales commission
Other items (including finished goods)
20.
2007-08
(Rs lacs)
(i) Remittance in foreign currencies on account of dividends on equity shares:
Dividend relating to
No. of Non-Resident
No. of Shares
the year
Share holders
2006-07
2005-06
1
1
2,07,76,213
2,07,76,213
Annual Report 2007-08 – ICI India Limited 35
NOTES TO THE ACCOUNTS
21.
Details of Deferred tax liability (net)
(Rs lacs)
Deferred Tax Liability
Deferred Tax Assets
Timing differences on account of:
2007-08
2006-07
2007-08
2006-07
22,36
24,22
1,13
–
23,49
24,22
9,48
8,10
Accelerated depreciation
Surplus payments to retiral trusts (refer to note 25)
Expenditure deferred under section 43B of Income Tax Act, 1961
18
63
3,05
2,67
90
1,55
Liability for leave encashment and retirement benefit provision
3,66
4,03
Other provisions relating to divested businesses, etc.
6,22
7,24
14,01
16,12
Provision for doubtful debts and advances
Voluntary retirement scheme liability
Total
Net deferred tax liability
22.
Details of Other Provisions (refer to Schedule 10)
Indirect
Taxes
12,79
(42)
–
–
12,37
Balance as on 31 March 2007
Payments against provisions
Provisions written back
Adjustments
Closing balance as on 31 March 2008 *
Divested
Businesses
32,11
(1,40)
(1)
(2,77)
27,93
Others
3,25
(47)
(36)
24
2,66
(Rs lacs)
Total
48,15
(2,29)
(37)
(2,53)
42,96
* Notes
(a) Provisions relating to indirect taxes are in respect of proceedings of various sales tax, excise duty, customs duty and other indirect tax cases,
including those relating to discontinued businesses. Outflows in all these cases, including their timing and certainty, would depend on the
developments/outcome in these cases.
(b) Provisions relating to divested businesses (other than any indirect tax cases relating to such businesses) include Rs 1500 lacs as referred to in
note 16. Other provisions, amounting to Rs 1293 lacs are in respect of existing / anticipated costs arising from divestment of businesses
(Synetix, Explosives, Rubber Chemicals, Uniqema and Paints Advanced Refinish) and subsidiary (Quest International India Limited). Outflows
in these cases will depend upon settlement of demands/claims.
(c) Other provisions are relating to litigation matters in respect of sale of properties, demand for past arrears in respect of electricity and a possible
shortfall in retiral trust arising out of non recovery of dues, which the Company may have to make good.
(d) The provisions under (b) and (c) above are expected to be substantially utilised over the next two years.
23. Operating lease
(a) The Company has given colour solution machines under operating leases to various dealers and customers. These have been disclosed under 'Plant
and machinery - under operating lease' in Schedule 3 (Fixed Assets). The future lease rentals receivable in respect of these assets are as under :
Amount receivable
Total future minimum lease rentals
Total future minimum lease rentals
receivable as on 31 March 2008
receivable as on 31 March 2007
(Rs lacs)
(Rs lacs)
Within one year
Later than one year and not later than five years
Later than five years
Total
6,09
5,86
6
6,02
5,85
5
12,01
11,92
(b) Obligation on long term non-cancellable operating leases
The Company has taken office space on operating leases. The lease rental charge during the year and maximum obligations on long term
non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows:
2007-08
2006-07
(Rs lacs)
(Rs lacs)
–
Lease rentals charged during the year
–
Lease obligations
97
Total future minimum lease rentals
payable as on 31 March 2008
(Rs lacs)
Within one year
Later than one year and not later than five years
Later than five years
Total
36 Annual Report 2007-08 – ICI India Limited
92
Total future minimum lease rentals
payable as on 31 March 2007
(Rs lacs)
79
39
–
97
84
–
1,18
1,81
NOTES TO THE ACCOUNTS
24. Finance lease *
2007-08
(Rs lacs)
2006-07
(Rs lacs)
–
–
–
–
95
51
–
1,46
The Company had given equipments under finance lease to certain bodyshops
(a) Gross receivable for each of the following periods :
Within one year
Later than one year and not later than five years
Later than five years
(b) Present value of minimum lease payment for each of the following periods:
Within one year
Later than one year and not later than five years
Later than five years
–
84
–
45
–
–
–
1,29
(c) Unearned finance income
–
17
* Relates to Paints Advanced Refinish ('2K' ) business which the Company had divested in 2006-07. These were considered not recoverable and
have been provided for.
25. Employee Benefits
a) The Company has adopted the Accounting Standard on Employee Benefits (AS 15) which has become mandatory from 1 April 2007. The
excess of plan assets of the pension and gratuity schemes as on 1 April 2007 over the obligations of the schemes, as determined on the basis
of actuarial valuation carried out, estimated to be Rs 797 lacs, had been provisionally recognised as an asset in the books of the Company as
on April 1 2007. The final actuarial valuation of retirement benefit liabilities was carried out , and in accordance with AS 15, the above surplus
has been recognised to the extent of present value of future contributions to be made for the retirement benefits of its existing employees,
aggregating Rs 384 lacs, as follows :
Rs lacs
Management Staff Pension scheme
87
Non Management Staff Pension scheme
40
Gratuity schemes
2,57
3,84
In accordance with the transitional provisions of the accounting standard, Rs 253 lacs (net of deferred tax adjustment of Rs 131 lacs) has been
adjusted to opening general reserves. Following adoption of the accounting standard, no adjustments were required in accounts in respect of
liability for post retirement benefit schemes and leave encashment schemes as on 1 April 2007.
b)
Disclosures made in accordance with Accounting Standard (AS 15) pertaining to defined benefit plans:
Pension (funded)
Management
Non Management
Staff
Staff
(i) Employee benefit expense recognised in
Profit and Loss Account
(a) Current service cost
(b) Interest cost
(c) Expected return on plan assets
(d) Actuarial (gains) / losses
Total expense / (gain) $
(ii) Net Asset / (Liability) recognised in
Balance Sheet as on 31 March 2008
(a) Present value of obligation as at 31 March 2008
(b) Fair value of plan assets as at 31 March 2008
Net Asset / (Liability)
Present value of future contributions
Net Asset / (Liability) recognised in Balance Sheet
(iii)Change in defined benefit obligations during the
year ended 31 March 2008
Present value of obligations as on 1 April 2007
(a) Current service cost
(b) Interest cost
(c) Benefits paid
(d) Actuarial (gains) / losses
Present value of obligations as on 31 March 2008
(iv) Change in fair value of plan assets during the
year ended 31 March 2008
Fair value of plan assets as on 1 April 2007
(a) Expected return on plan assets #
(b) Company contributions
(c) Benefit payments
(d) Actuarial gains / (losses) #
Fair value of plan assets as on 31 March 2008
Gratuity
(funded)
(Rs lacs)
Post Retirement
Medical Benefit
(unfunded)
37
3,18
(3,47)
2
10
1,50
1,86
(1,90)
(1,62)
(16)
45
38
(69)
43
57
6
56
–
29
91
43,10
46,83
3,73
92
92
24,63
25,19
56
56
56
5,35
8,68
3,33
2,00
2,00
7,33
–
(7,33)
41,52
37
3,18
(3,66)
169
43,10
24,59
1,50
1,86
(2,57)
(75)
24,63
5,35
45
38
(1,20)
37
5,35
7,54
6
56
(1,12)
29
7,33
45,19
3,47
15
(3,66)
1,68
46,83
24,99
1,90
–
(2,57)
87
25,19
9,25
69
–
(1,20)
(6)
8,68
–
–
1,12
(1,12)
–
–
(7,33)
Annual Report 2007-08 – ICI India Limited 37
NOTES TO THE ACCOUNTS
Pension (funded)
Management
Staff
(v) Category of assets
Debt securities
Gilt mutual funds
Insurer managed funds
Special deposit scheme
Total
Non Management
Staff
69%
15%
11%
5%
100%
62%
5%
20%
13%
100%
Gratuity
Post Retirement
(funded)
Medical Benefit
(unfunded)
91%
5%
–
4%
100%
(vi) Actuarial assumptions
(a) Discount rate (annual)*
8.10%
8.10%
8.10%
8.10%
(b) Expected rate of return on assets (per annum)
8.00%
8.00%
8.00%
(c) Estimates of future salary increases take account of inflation, seniority, promotion, and other relevant factors, such as supply and
demand in the employment market
(d) Medical cost trend rates have no impact on actuarial valuation of any of the above employee benefit plans
$ Shown as an expense under 'Contribution to provident and other funds' in Schedule 13.
* Discount rate is based on market yields available on Government bonds as at 31 March 2008 with a term that matches that of the
liabilities
# together constitute actual return on plan assets
c) The Company has separate pension schemes for management staff and non-management staff. The former scheme is in the nature of 'final
salary' plan,and the latter scheme is in the nature of 'flat salary' plan. The Company also has separate gratuity schemes for management and
non-management staff; the benefits paid are as per the scheme rules or as per Payment of Gratuity Act, 1972, whichever is higher.
d) A part of the Company's pension scheme is a defined contribution plan. The Company's contribution of Rs 66 lacs has been recognised as
an expense and shown under 'Contribution to provident and other funds' in Schedule 13.
e) The guidance on implementing AS-15 (revised) issued by Accounting Standards Board of the Institute of Chartered Accountants of India
states that benefit involving employer established provident funds, which requires interest shortfall to be recompensated, are to be considered
as defined benefit plans. Considering that presently there is no shortfall and also, as confirmed by the Actuary, there is no formal guidance
from Acturial Society of India, the Company believes that actuarial valuation at present is not necessary. The amount of contribution
during the year of Rs 208 lacs has been charged as 'contributions to provident and other funds' in Schedule 13.
f) This being the first year of adoption of the Standard, previous year figures have not been disclosed.
26. Segment Information
(A) Information about primary business segments
(1) Following the divestment of Adhesives business in 2008-09 (refer to note 3), the Company's business segments comprise of:
Paints
: consisting of decorative and refinish paints.
Others
: consisting of food starch and polymers (earlier shown under 'Chemicals' segment)
Segment information relating to Adhesives business, earlier considered under 'Chemicals' segment, has been classified under 'Discontinuing
Business' (Refer to note 3)
In 2006-07, the Company had divested its Uniqema business, and previous year numbers have been shown under Discontinued Business
[Refer to Note 14( c)]
(2) Segment revenues, results and other information
Paints
1.
2.
(Rs lacs)
Others
2007-08 2006-07 2007-08
External sales (gross) 898,83
808,49
23,43
Excise Duty
(114,13)
(96,15)
(1,87)
External sales (net) 784,70
712,34
21,56
Inter segment sales
–
–
–
Other business
related income
9,63
8,01
31
Total Revenue
794,33
720,35
21,87
Results
Segment results
72,56
70,60
4,92
Unallocable income (net of unallocable expense)
Profit from operations before interest,
taxation and exceptional items
Interest expense (net of interest income)
Profit before exceptional items
Exceptional items
Profit before Taxation
Income taxes
– Current tax
– Deferred tax
– Fringe benefits tax
Profit after Taxation
2006-07
18,67
(1,64)
17,03
11
Discontinuing
business
Adhesives
2007-08 2006-07
140,10
116,36
(16,22)
(12,47)
123,88
103,89
–
–
Discontinued
business
Uniqema
2007-08 2006-07
–
63,53
–
(8,57)
–
54,96
–
1,10
9
17,23
2,48
126,36
2,60
106,49
–
–
1,08
57,14
3,35
15,28
11,41
–
11,63
38 Annual Report 2007-08 – ICI India Limited
Eliminations
2007-08
–
–
–
–
2006-07
–
–
–
(1,21)
–
–
–
(1,21)
Total
2007-08 2006-07
1062,36 1007,05
(132,22) (118,83)
930,14 888,22
–
–
12,42
942,56
11,78
900,00
92,76
15,88
108,64
96,99
45,41
142,40
(50)
109,14
(18,73)
90,41
2,29
140,11
446,12
586,23
26,60
7
3,53
60,21
140,00
(4,94)
2,75
448,42
NOTES TO THE ACCOUNTS
Paints
2007-08
3.
a.
b.
c.
d.
Others
2006-07
2007-08
2006-07
Other Information
Assets
Segment assets
301,38
318,46
9,21
7,25
Investments
Unallocable assets
Total assets
Liabilities/ Shareholders' funds
Segment Liabilities
231,29
193,46
4,49
6,72
Unallocable liabilities
Share Capital
Reserves
Total Liabilities/ Shareholders' funds
Others
Capital expenditure
23,56
19,38
14
8
Depreciation
20,27
19,76
3
1
Information on Discontinued /Discontinuing businesses
Total Revenues
Total expenses (incl.excise duty)
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Discontinuing
business
Adhesives
2007-08 2006-07
Discontinued
business
Uniqema
2007-08 2006-07
Eliminations
Total
2007-08
2006-07
2007-08 2006-07
73,90
62,64
(27)
–
384,22 388,35
692,60 825,72
58,87 100,10
1135,69 1314,17
32,50
35,11
(27)
–
268,01 235,29
104,71 209,23
38,38
40,87
724,59 828,78
1135,69 1314,17
7,79
1,57
2,11
1,39
82
142,58
127,30
6,83
(93)
–
118,96
107,55
16,48
15,70
–
65,71
54,08
35
(4,99)
–
Outside India
2007-08 2006-07
5,66
5,81
1,62
1,30
–
–
Total
2007-08 2006-07
942,56 900,00
384,22 388,35
31,49
21,57
B. Information on secondary segment (by geographical segment) (Rs lacs)
India
2007-08 2006-07
936,90
894,19
382,60
387,05
31,49
21,57
Revenue
Carrrying amount of segment assets *
Capital expenditure *
* Excludes inter-segment assets
Notes:i) The business segments have been identified in line with the Accounting Standard 17, taking into account the nature of products, risks and
return,organisation structure and internal reporting system.
ii) Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks, within an overall
optimisation objective for the Company.
iii) Segment revenue, results and assets and liabilities figures include the respective amounts identifiable to each of the segments. Other un-allocable
items in segment results include income from investment of surplus funds of the Company and corporate expenses. Un-allocable assets include
un-allocable fixed assets and current assets. Unallocable liabilities include un-allocable current liabilities and net deferred tax liability.
27. Related Party Disclosures
1.
List of related parties :
a) Holding Company : Imperial Chemical Industries Limited, England
b) Ultimate Holding Company : AkzoNobel N.V.
c) Subsidiaries of the Company : Polyinks Limited (from 15 December, 2006), and Quest International India Limited (upto 2 March 2007).
d) Associate of the Company: PMC Rubber Chemicals India Private Limited (upto 31 January 2007).
e) Other related parties (fellow subsidiaries) where common control exists and with whom transactions during the year have taken place :
Acheson Industries (Europe) Ltd., Netherlands
Alco Chemical, USA
Dongsung NSC Ltd, Korea
Dongsung NSC Ltd, Vietnam
Elotex Ag, Switzerland
ICI Colombia SA Transav
ICI Packaging Coating
ICI (Paints) Vietnam Ltd.
ICI Paints (Malaysia) Sdn Bhd
ICI Paints (Thailand) Ltd
ICI Paints (Asia Pacific) Pte Ltd
ICI Pakistan Limited
ICI Woobang Co.Ltd., Korea
ICI India Research & Technology Centre
ICI Swire Paints (Shanghai) Ltd
ICI Paints (Vietnam) Holdings PTE Ltd.
f)
Key managerial persons
Mr. A. Narayan
Mr. Rajiv Jain
Mr. M.R.Rajaram
Mr. S. Batra
National Adhesives Corporation, Belgium
National Adhesives Limited (Saudi Arabia)
National Starch, Singapore
National Starch & Chemical (Vietnam), Ltd
National Starch & Chemical Gmbh, Germany
National Starch & Chemical Industrial Ltda., Brazil
National Starch & Chemical Ltd., London
National Starch & Chemical Pty. Ltd, Australia
National Starch & Chemical, A.B., Sweden
National Starch & Chemical SAS, France
National Starch & Chemical Spa, Italy
National Starch & Chemical Co. Dongsung NSC, Korea
National Starch & Chemical (M) Sdn Bhd, Malaysia
National Starch & Chemical Co. Ltd, Taiwan
National Starch & Chemical (Thailand) Ltd.
National Starch & Chemical Trading Co Ltd. (Thailand)
NSC Pakistan -Pakistan
National Starch and Chemical Ltd, UK
National Starch & Chemical Co., USA (Bridgewater)
National Starch & Chemical (Guangdong) Ltd., China
National Starch & Chemical (Singapore) Pte Ltd.
National Starch & Chemical (Hongkong)
National Starch & Chemicals (Canada)
National Starch & Chemicals B.V, Holland
National Starch China (Shanghai)
Nitrex Chemicals India Ltd.
PT National Starch & Chemical, Indonesia
Pinturas INCA
PT ICI Paints Indonesia
PT Dongsung NSC
The Glidden Co.
Inter-National Starch & Chemical Co. Inc.,
Philippines
Chairman
Managing Director
Wholetime Director (Upto 31 March 2007)
Wholetime Director ( From 1 April 2007)
Annual Report 2007-08 – ICI India Limited 39
NOTES TO THE ACCOUNTS
2.
a)
The following transactions were carried out with related parties in the ordinary course of business:
Transactions during the year:
Purchase of materials / finished goods
Holding
company
Subsidiary
of the
Company
Associates
of the
Company
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
Fellow
subsidiary
of the
Company
2007-08
2006-07
–
–
–
–
1,23
30
48
35
–
–
56,10
12,47
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
1,82
16
–
–
–
–
–
–
–
–
–
31,10
–
–
–
–
28
–
–
–
3,20
3,21
52
6
–
2
–
12
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
47,14
39,53
1,99
1,58
99
1,61
10,57
4,18
2,08
53
–
–
–
–
85
1,16
3,57
1,35
–
–
–
–
–
–
–
–
Sale of finished goods
Expenses incurred and recovered from other companies
Expenses recovered by other companies
Royalty paid
Dividend paid
Dividend received
Indent commission received
Services provided
Toll conversion
Managerial remuneration
Inter Corporate Deposit given
Interest income on Inter Corporate Deposit
(Rs lacs)
Key
Managerial
Persons
2007-08
2006-07
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,27
2,49
–
–
–
–
Balance as at the end of the year:
Dues to related parties
b)
1,26
–
–
13,61
–
1,51
–
–
15,56
–
Due from related parties
23
6,75
–
1,41
–
11
3,23
4,54
86
–
Outstanding loans receivable at the end of the year from key managerial persons: Refer Schedule 8
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
Purchase of raw material
Acheson Industries (Europe) Ltd, Netherlands
Dongsung NSC Ltd, Korea
Elotex Ag, Switzerland
National Starch & Chemical (Guangdong) Ltd, China
National Starch & Chemical Co., USA (Bridgewater)
Others
Sales of finished products
Chemical Industries (Colombo) Ltd
Polyinks Ltd
ICI Pakistan Limited
National Adhesives Limited (Saudi Arabia)
Others
Expenses incurred and recovered from other companies
Imperial Chemical Industries Limited, England
ICI Paints (Asia Pacific) Pte Ltd
PT Uniqema, Indonesia
The Glidden Co.
Others
Expenses recovered by other companies
ICI Paints (Asia Pacific) Pte Ltd
National Starch & Chemical (Singapore) Pte Ltd
Others
40 Annual Report 2007-08 – ICI India Limited
2007-08
(Rs lacs)
2006-07
(Rs lacs)
4,84
6,78
7,14
8,62
5,21
14,55
47,14
4,06
7,61
4,83
4,59
4,29
14,18
39,56
–
1,82
1,32
52
15
3,81
22
–
51
45
68
1,86
1,23
62
–
–
37
2,22
30
28
28
43
62
1,91
5,71
3,95
1,39
11,05
2,58
1,51
44
4,53
NOTES TO THE ACCOUNTS
Indent Commission received
Elotex Ag, Switzerland
National Starch & Chemical (Guangdong) Ltd, China
National Starch & Chemical (Singapore) Pte Ltd.
Acheson Industries (Europe) Ltd, Netherlands
Others
2007-08
(Rs lacs)
2006-07
(Rs lacs)
15
31
–
17
22
85
32
52
12
–
20
1,16
2,08
–
2,08
53
–
53
56,10
12,47
–
31,10
3,57
1,35
28
–
5
2,39
–
82
3,26
5
1,25
1,19
–
2,49
3,20
3,21
52
6
Royalty paid
National Starch & Chemical Co., USA (Bridgewater)
Others
Dividend paid
Imperial Chemical Industries Limited, England
Dividend received
Quest International India Limited
Service provider
ICI India Research & Technology Centre
Toll conversion
Polyinks Limited
Managerial Remuneration
Mr. A.Narayan
Mr. Rajiv Jain
Mr M R Rajaram
Mr S. Batra
Inter Corporate Deposit given
Polyinks Limited
Interest income on Inter Corporate Deposit
Polyinks Limited
28. Details of amounts due from bodies corporate under the same management as defined in Section 370(1B) of the Companies Act, 1956 as referred to in
Schedule 6, are given below :
As at
As at
31 March 2008
31 March 2007
(Rs lacs)
(Rs lacs)
Acheson Industries (Europe) Ltd., Netherlands
6
5
Elotex Ag, Switzerland
–
11
ICI Pakistan Ltd.
11
3
PT ICI Paints Indonesia
7
5
ICI Paints (Malaysia) Sdn Bhd
16
7
ICI Paints (Thailand) Ltd
1
2
ICI Paints(Asia Pacific) Pte Ltd
7
5
ICI Research & Technology Centre
–
5
Inter-National Starch & Chemical Co. Inc., Philippines
9
–
National Starch & Chemical (M) Sdn Bhd, Malaysia
–
3
National Starch & Chemical Co. Ltd, Taiwan
3
4
National Starch & Chemical (Singapore) Pte Ltd.
21
–
National Starch & Chemical (Guangdong) Ltd., China
40
27
National Starch & Chemical Co., USA (Bridgewater)
19
–
National Adhesives Limited (Saudi Arabia)
–
9
National Starch China (Shanghai)
1
–
Total
1,41
86
29. ( a) The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions. The Company
does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at 31 March 2008 (all
'buy' contracts) are as under:
USD
GBP
EUR
CHF
As at 31 March 2008
28,45,711
11,646
415,848
3,24,305
As at 31 March 2007
54,24,610
–
–
–
(b) As at 31 March 2008, the Company had net foreign currency exposure that are not hedged by a derivative instrument or otherwise, as under:
USD
GBP
EUR
CHF
AUD
SGD
As at 31 March 2008
21,29,154
8,940
19,697
(2,85,431)
(14,400)
6,056
As at 31 March 2007
12,87,868
5,27,790
4,91,012
–
–
–
30. Figures of the current year are not comparable with those of the previous year in view of divestment of Uniqema business with effect from 2 September 2006
and Paints Advanced Refinish business ('2K') with effect from 16 March 2007.[refer to note 14(c) and (b)]
31. The figures relating to previous year have been regrouped wherever necessary to conform with the current year's classification.
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
Gurgaon
20 May 2008
Annual Report 2007-08 – ICI India Limited 41
STATEMENT OF PARTICULARS OF EMPLOYEES PURSUANT TO THE PROVISIONS OF
SECTION 217(2A) OF THE COMPANIES ACT, 1956
Name
Designation/Nature of Duties
Remuneration
(Rs.)
Qualification
Experience
in years
Joining
Date
Age
Previous
(years) Employment
(A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR
Ahuja M
General Manager - Sales, Paints
61,40,112
MBA
16
08-Jun-04
40
Banerjee S
Head, Information Technology, Paints
50,59,320
MBA
34
05-Apr-90
55
Batra S
83,91,833
ACA
20
25-Jan-88
43
Choubey S
Wholetime Director &
Chief Financial Officer
Works Manager, Hyderabad, Paints
29,89,530
B Tech
22
16-Oct-86
51
Ghoshal T
Works Manager, Panki
40,17,877
B Tech
33
08-Oct-92
55
Guha R
Company Secretary &
General Manager, Corporate Affairs
Financial Controller, NSC
55,92,271
ACA,ACS
25
15-Jun-95
49
39,26,072
B.Com
28
27-Jun-02
48
278,02,339
MBA, B Tech
36
18-Apr-83
57
211,00,117
B Tech
29
12-Aug-99
53
68,45,621
Ph D, M Sc
32
01-Apr-82
59
52,59,727
MBA
17
03-Jun-91
42
Mahato D C
General Manager Institutional Business, Paints
General Manager- HR, Paints
52,26,567
MBA
32
25-Mar-85
56
Mitra I
General Manager, Supply Chain
49,43,418
B Tech
24
09-Oct-84
49
Nautiyal A M
Personnel & Administration Manager
28,58,707
B.Sc
32
08-Aug-79
59
Rajan K
Samuel A
Regional Manager, Paints, South
Senior Manager, Business Development
SPG India
26,59,419
25,04,770
B Tech
MBA
39
16
01-Sep-74
26-Jun-00
59
39
Sachdev R
General Manager, Legal
36,50,669
32
01-Aug-84
54
48,75,230
B Sc, LLB, Dip in
Labour Laws, Dip.
In Corporate Laws
ACA
33
01-Jan-76
57
J K Synthetics Ltd,
Accounts Officer
Max Newyork Life
Insurance Co. Ltd,
Vice President, Marketing
Dongsung Chemicals, Korea,
Technical Manager
Gulf Oil India Ltd, Regional
Manager - West
Nestle India Ltd,
Business Manager
The Alkali & Chemical Corpn
of India Ltd, Manager Group Finance
Avebe UA, Technical Sales
Manager
Iyer S
Jain Rajiv
Krishna A P
Kapoor S K (Dr)
Mahajan J
Managing Director &
Chief Executive Officer, Paints
Chief Executive & General Manager,
NSC India
Chief Executive, New Ventures
Venkatakrishnan R Taxation Controller
Whirlpool of India Ltd,
Director- Sales
Brooke Bond Lipton India Ltd,
Manager- Management Services
First employment
Simon Carves India Ltd,
Engineer (Design)
Jenson & Nicholson (India) Ltd,
Production Manager
Duncans Industries Ltd,
DGM (Finance)
Hindustan Lever Ltd,
Profit Centre Accountant
Chemicals & Fibres India
Limited - Senior Accountant
Hindustan Lever Ltd,
Business Manager
Alchemie Research Centre,
Scientist
First employment
Bharat Wagon & Engineering
Company Ltd,
Asst Personnel Manager
Turnkey International Ltd,
Project Engineer
Remington Rand of India Ltd,
Security Officer
First employment
RPG Life Sciences Ltd,
Manager, International
Marketing
DCM Ltd, Senior Law officer
(B) EMPLOYED FOR PART OF THE FINANCIAL YEAR
Anand V
General Manager, Marketing,
Paints
17,21,270
MBA
16
01-Nov-07
38
Kim H J
General Manager, DNSC India
37,79,646
20
01-Apr-06
46
Mundkur A
National Sales Manager, Retail Adhesives
20,68,851
Bachelor of Polymer
Science & Technology
MBA
17
21-Sep-98
42
Nagarajan H (Ms)
3,08,136
MBA
20
12-Oct-00
43
Rajaram M R
General Manager, Marketing &
Innovation, Deco Paints
Management Staff
41,73,764
ACA
39
01-Oct-84
62
Rao U
National Sales Manager, NPG
5,28,427
Dip Paper Tech
18
04-Feb-08
41
Notes :
1.
2.
3.
Remuneration includes all allowances, perquisites, commission payable if any to the Directors, employer's contribution to provident fund and employer's contribution
to pension fund (if covered under defined contribution scheme). It excludes employer's contribution to gratuity fund and leave encashment.
All appointments are / were contractual and are subject to the rules of the Company.
None of the employees is a relative of any Director of the Company.
On behalf of the Board
Gurgaon
20 May 2008
42 Annual Report 2007-08 – ICI India Limited
A NARAYAN
Chairman
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I
II
Registration details
Registration No.
:
U24292WB1953PLC021516
Balance Sheet date
:
31 - 03 - 2008
State Code
:
21
Capital raised during the year (Amount in Rs lacs)
Public Issue
:
NIL
Rights Issue
:
NIL
Bonus Issue
:
NIL
Private Placement
:
NIL
III Position of mobilisation and deployment of funds (Amount in Rs lacs)
Total Liabilities
:
772,45
Total Assets
:
772,45
Paid-up Capital
:
38,38
Reserves and Surplus
:
724,59
Secured Loans
:
NIL
Unsecured Loans
:
NIL
Deferred Tax Liability
:
948
Net Fixed Assets
:
143,72
Investments
:
692,60
Net Current Assets/(liability)
:
(63,87)
Sources of Funds
Application of Funds
IV
V
Performance of Company (Amount in Rs lacs)
Turnover
:
964,33
Total Expenditure
:
855,19
Profit/(Loss) before Tax
:
90,41
Profit/(Loss) after Tax
:
60,21
Earnings per share in Rs.
:
15.16
Dividend rate %
:
80
Generic names of three Principal Products/Services of Company
Item Code No. (ITC Code)
:
3408
Product Description
:
Synthetic Enamels
Item Code No. (ITC Code)
:
3209
Product Description
:
Emulsion Paints
Item Code No. (ITC Code)
:
3506
Product Description
:
Adhesives
Annual Report 2007-08 – ICI India Limited 43
POLYINKS LIMITED
Summary of Accounts for the year ended 31 March 2008
Balance Sheet as at
31 March 2008
31 March 2007
(Rs lacs)
(Rs lacs)
75
2,44
1,16
6,41
2
10,78
12,26
(1,48)
10,78
75
1,74
1,19
3,21
6
6,95
8,27
(1,32)
6,95
31 March 2008
8,58
1,08
(38)
70
NIL
31 March 2007
12,20
18
(21)
(3)
13
Share Capital
Reserve & Surplus
Secured Loans
Unsecured Loans
Deferred Tax Liability
Total Assets
Total liabilities
Profit & Loss Account for the year ended
Turnover-Net of Excise
Profit before taxation
Provision for Taxation
Profit after taxation
Proposed Dividend
Note : ICI India Limited has obtained the Central Government's approval for not publishing the full accounts of its subsidiary
Polyinks Limited ('Polyinks') as a part of Annual Report, in terms of section 212(8) of the Companies Act, 1956. The full
accounts of Polyinks will be available for inspection by any investor at the registered office of the Company. Members who are
interested in having a full set of the audited accounts of Polyinks, may write to the Company Secretary.
STATEMENT REGARDING SUBSIDIARY COMPANY PURSUANT TO SECTION 212(3) OF THE COMPANIES ACT, 1956
1
Name of the subsidiary company
Polyinks Limited
2
The financial year of the subsidiary ended on
31 March 2008
3
Holding company’s interest
4
Number of equity shares
500,000 of Rs. 10 each
Percentage holding
66.67%
The net aggregate amount of profit of the subsidiary
company so far as it concerns the members of ICI India Limited
a) Not dealt with in the accounts of ICI India Limited
i) for the subsidiary's current financial year
ii) for the previous financial years since it
became a subsidiary of ICI India Limited
Rs. 47 lacs
(-) Rs. 15 lacs
b) Dealt with in the accounts of ICI India Limited
i) for the subsidiary's current financial year
ii) for the previous financial years since it
became a subsidiary of ICI India Limited
Nil
Nil
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
Gurgaon
20 May 2008
44 Annual Report 2007-08 – ICI India Limited
S BATRA
Wholetime Director
R GUHA
Company Secretary
Annual Report 2007-08 – ICI India Consolidated
AUDITORS' REPORT
Auditors' report to the Board of Directors of ICI India Limited
on the consolidated financial statements of ICI India Limited
and its subsidiary
1.
2.
3.
We have examined the attached consolidated Balance Sheet
of ICI India Limited ('the Company') and its subsidiary as
at 31 March 2008 and also the consolidated Profit and Loss
Account and the consolidated Cash Flow Statement for the
year ended on that date, annexed thereto. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards in India. Those standards
require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements are
prepared, in all material respects, in accordance with the
financial reporting framework generally accepted in India
and are free of material misstatements. An audit includes,
examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statements presentation. We
believe that our audit provides a reasonable basis for our
opinion.
We did not audit the financial statements of the subsidiary
Polyinks Limited, whose financial statements reflect total
assets of Rs 1227 lacs as at 31 March 2008, total revenues
of Rs 908 lacs (these figures include intra-group assets and
intra-group transactions eliminated on consolidation) and
cash flows of Rs 10 lacs for the year ended 31 March 2008.
These financial statements have been audited by other
auditor whose report has been furnished to us, and our
opinion, in so far as it relates to the amounts included in
respect of that subsidiary, is based solely on the report of
the other auditor.
4.
We report that the consolidated financial statements have
been prepared by the Company in accordance with the
requirements of Accounting Standard 21, Consolidated
Financial Statements, specified in Companies (Accounting
Standard) Rules, 2006 and on the basis of the separate
audited financial statements of the Company and its
subsidiary included in the consolidated financial statements.
5.
On the basis of the information and explanations given to
us, and on consideration of the separate audit reports on
individual audited financial statements of the Company and
its subsidiary, we are of the opinion that:
(a)
the consolidated Balance Sheet gives a true and fair
view of the consolidated state of affairs of the
Company and its subsidiary as at 31 March 2008;
(b)
the consolidated Profit and Loss Account gives a true
and fair view of the consolidated results of operations
of the Company and its subsidiary for the year ended
on 31 March 2008; and
(c)
the consolidated Cash Flow Statement gives a true
and fair view of the consolidated cash flows of the
Company and its subsidiary for the year ended on 31
March 2008.
For BSR & Associates
Chartered Accountants
Gurgaon
20 May 2008
KAUSHAL KISHORE
Partner
Membership No: 090075
Annual Report 2007-08 – ICI India Limited 45
CONSOLIDATED BALANCE SHEET
As at 31 March 2008
As at 31 March 2007
(Rs lacs)
(Rs lacs)
Schedule
I)
SOURCES OF FUNDS
1.
2.
3.
4.
Shareholders’ funds
a) Share Capital
b) Reserves and surplus
Minority interest
Loan funds
Secured loans
Deferred tax liability (net)
1
2 (a)
38,38
724,16
APPLICATION OF FUNDS:
1. Fixed assets
a) Gross block
b) Less : Accumulated depreciation
c) Net block
d) Capital work-in-progress
869,76
2 (b)
1,05
82
3
1,16
1,19
18 (18, 22)
9,50
8,16
774,25
879,93
Total
II)
762,54
40,87
828,89
4
321,03
179,41
141,62
17,94
159,56
295,12
156,53
138,59
6,06
2.
Investments
5
683,57
3.
Current assets, loans and advances
a) Inventories
b) Sundry debtors
c) Cash and bank balances
d) Loans and advances
6
7
8
9
124,35
104,96
17,19
49,03
295,53
133,13
167,53
14,00
41,44
356,10
Less : Current liabilities and provisions
a) Current liabilities
b) Provisions
10
11
266,46
97,95
364,41
234,94
202,57
437,51
144,65
816,69
Net current assets / (liabilities)
(68,88)
(81,41)
Total
774,25
879,93
Significant accounting policies
17
Notes to the accounts
18
The accompanying schedules form an integral part of the financial statements.
As per our report attached.
For BSR & Associates
Chartered Accountants
For ICI India Limited
KAUSHAL KISHORE
Partner
Membership No. 090075
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
Gurgaon
20 May 2008
46 Annual Report 2007-08 – ICI India Limited
S BATRA
Wholetime Director
R GUHA
Company Secretary
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Schedule
Income
Gross sales
Less: Excise duty
Net sales
Other income
Total income
Expenditure
Materials consumed, etc.
Other expenditure
Depreciation / Amortisation (net)
Interest (net)
Profit before taxation and exceptional items
Exceptional items [ gain / (loss) ]
Profit before taxation *
Provision for taxation :*
–
Current tax
–
Deferred tax
–
Fringe benefit tax
Profit after taxation
Transfer to minority interest
Profit for the year attributable to the group
Balance brought forward
Balance available for appropriation
Appropriations
General reserve
Proposed dividend
Corporate dividend tax (including tax on proposed dividend)
Balance carried to the balance sheet
Basic and diluted earnings per equity share (in Rs.)
* Information on discontinuing business
(A) Adhesives business (including subsidiary Polyinks Limited)
Profit before taxation from operations
Income tax expense related to the above
12
13
14
15
16
18 (17)
18 (3, 23)
* Information on discontinued businesses
(A) Uniqema business
Profit before taxation from operations
Income tax expense related to the above
Profit on disposal of discontinued business (pre tax)
Income tax expense related to the above disposal
(B) Quest business
Profit before taxation from operations
Income tax expense related to the above
Profit on disposal of discontinued business (pre tax)
Income tax expense related to the above
Significant accounting policies
Notes to the accounts
For the year ended
31 March 2008
For the year ended
31 March 2007
(Rs lacs)
(Rs lacs)
1072,32
133,61
938,71
34,26
972,97
1146,85
131,68
1015,17
42,08
1057,25
557,73
282,98
23,00
5
863,76
109,21
(18,73)
90,48
622,66
279,77
35,47
2,08
939,98
117,27
486,06
603,33
27,00
4
3,54
59,90
23
59,67
469,87
529,54
143,52
(5,88)
2,89
462,80
1,04
461,76
208,57
670,33
54,00
30,70
5,22
89,92
439,62
15.02
67,00
110,35
23,11
200,46
469,87
112.98
16,36
6,16
1,128
485
–
–
–
–
1,163
382
25,085
5,186
–
–
–
–
1,219
263
19,839
4,232
17
18
The accompanying schedules form an integral part of the financial statements.
As per our report attached to the balance sheet.
For BSR & Associates
Chartered Accountants
For ICI India Limited
KAUSHAL KISHORE
Partner
Membership No. 090075
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
Gurgaon
20 May 2008
Annual Report 2007-08 – ICI India Limited 47
CONSOLIDATED CASH FLOW STATEMENT
A.
B.
C.
Cash flow from operating activities
Profit before taxation and exceptional items
Adjusted for :
Depreciation/Amortisation
(Profit)/Loss on sale/write-off of fixed asset
Provisions/Liabilities no longer required written back
Other Provisions made during the year
Bad debts and advances written off
Provision for doubtful debts and advances (net)
Income on sale of investment
Profit on maturity/redemption of Fixed Maturity Plan
Interest (net)
Operating profit before working capital changes
Changes in :
Trade and other receivables
Inventories
Trade payables and other creditors
Cash generated from operations
Income tax paid
Exceptional items (relating to outflow on account of
voluntary retirement scheme payments, additional
contribution to employee retiral funds and other provisions)
Net cash flow from operating activities (A)
Cash flow from investing activities
Purchase of fixed assets
Acquisition of business
Sale of businesses (see note 2 below)
Sale of properties (including advance received)
Payments relating to divested businesses
Sale of other fixed assets
Redemption of Capital Gains bonds
Profit on maturity/redemption of Fixed Maturity Plan
Interest received
Income from investments
Net cash flow from / (used in) investing activities (B)
Cash flow from financing activities
Borrowings during the year
Borrowings repaid during the year
Buyback of shares
Dividend paid
Tax on dividend
Interest paid
Net cash flow used in financing activities (C)
Net changes in cash & cash equivalents (A+B+C)
Cash and cash equivalents - opening balance
Cash and cash equivalents - closing balance
48 Annual Report 2007-08 – ICI India Limited
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
109,21
117,27
23,00
18
(37)
3
12
1,14
(10,80)
(10,30)
5
35,47
(1,05)
(3)
1,25
15
1,72
(15,41)
(10,01)
2,08
3,05
112,26
(3,41)
8,75
8,26
13,60
125,86
(37,79)
(5,17)
14,17
131,44
(39,20)
(39,92)
61,06
(18,07)
113,37
(158,73)
(6,91)
82,90
(52,27)
(38,01)
–
63,23
2,10
(2,30)
–
50,00
10,30
3,46
13,32
102,10
(32,47)
(66,00)
612,94
4,78
(74)
3,62
50,00
10,01
76
16,43
599,33
50,00
(50,03)
(133,49)
(109,45)
(18,75)
(3,21)
(264,93)
–
(2,75)
–
(24,54)
(7,80)
(3,03)
(38,12)
(79,93)
779,12
699,19
508,94
270,18
779,12
CONSOLIDATED CASH FLOW STATEMENT
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
31
2
13,66
29
2,91
682,00
699,19
30
46
10,96
27
2,01
765,12
779,12
Cash and cash equivalents comprise :
Cash in hand
Cheques in hand
Bank balance in current accounts
Fixed deposits held as margin money
Bank balance in unclaimed dividend account
Investments in fixed maturity Debt Mutual Funds
Notes :
1. The above cash flow statement has been prepared under the indirect method set out in Accounting Standard "Cash Flow Statement" specified in
Companies (Accounting Standards) Rules, 2006.
2. Relates to dues from sale of businesses.
3. Fixed deposits held as margin money and bank balances in unclaimed dividend account are not available for use by the Company
4. The above cash flow statement includes cash flows from discontinuing business (refer to note 23, Schedule 18)
As per our report attached to the balance sheet.
For BSR & Associates
Chartered Accountants
For ICI India Limited
KAUSHAL KISHORE
Partner
Membership No. 090075
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
Gurgaon
20 May 2008
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 1 : CAPITAL
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
Authorised
4,16,90,000 equity shares of Rs. 10 each (2006-07 : 4,16,90,000 equity shares)
41,69
41,69
Issued, Subscribed and Paid Up
3,83,79,950 equity shares of Rs. 10 each fully paid up
(2006-07 : 40,870,612 equity shares)
38,38
40,87
(1) Of the above equity shares :(a) 85,32,667 were allotted as fully paid up bonus shares by capitalisation of share premium and reserves (2006-07 : 85,32,667
shares)
(b) 29,68,824 were issued on part conversion of debentures. (2006-07 : 29,68,824 shares)
(c) 89,18,121 were issued as fully paid up otherwise than for cash, issued pursuant to a contract. (2006-07 : 89,18,121 shares)
(d) 2,07,76,213 shares are held by the holding company Imperial Chemical Industries Limited, UK. (2006-07 : 2,07,76,213
shares). On 2nd January 2008, AkzoNobel N.V. has become the owner of the entire equity share capital of Imperial Chemical
Industries Limited, which makes it the ultimate holding company (refer to note 1, Schedule 18)
(2) During the year 24,90,662 shares were bought back (2006-07 : nil) and the shares have been extinguished, and face value
thereof of Rs 249 lacs has been adjusted against share capital (refer to note 2, Schedule 18)
SCHEDULE 2 : (a) RESERVES AND SURPLUS
(Rs lacs)
As at
Additions Deductions
As at
31 March 2007
31 March 2008
Capital reserve
23,92
–
–
23,92
Capital redemption reserve (a)
–
2,49
–
2,49
Share premium (a)
1,15
–
1,15
–
Revaluation reserve (b)
1,48
–
1
1,47
General reserve (a,c)
332,47
56,53
132,34
256,66
Profit and Loss Account
469,87
59,67
89,92
439,62
Total
828,89
118,69
223,42
724,16
Previous year
501,59
528,76
201,46
828,89
(a) In respect of shares bought back during the year, Rs 115 lacs have been adjusted against Share premium and Rs 12,985 lacs have
been adjusted against General reserve. Face value of shares bought back Rs 249 lacs have been reduced from General reserve and
adjusted to Capital redemption reserve (refer to note 2, Schedule 18)
(b) Adjustment against Revaluation reserve of Rs 1 lac is in respect of depreciation on revalued assets (2006-07 : Rs 1 lac)
(c) Adjustment to General reserve of Rs 253 lacs is relating to adjustment as per transitional provisions of AS 15, net of deferred tax,
in respect of retirement benefit plans (refer to note 22 (a), Schedule 18)
Annual Report 2007-08 – ICI India Limited 49
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 2 : (b) MINORITY INTEREST
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
82
23
–
–
1,05
66,56
1,04
89
67,67
82
1,16
1,19
Opening balance
Add : Profit for the year attributable to minority
Add : Minority interest on acquisition of Polyinks Limited
Less : Adjustment in respect of buy out of Quest minority interest
Closing balance
SCHEDULE 3 : SECURED LOANS
Short term working capital loan from Banks
(Secured by way of hypothecation of stocks and debtors of the
subsidiary company, Polyinks Limited)
SCHEDULE 4 : FIXED ASSETS
Particulars
(Rs lacs)
Gross Block
Depreciation/Amortisation
Book value Additions Disposals/
at cost or
at cost adjustments
revalued
at book
amounts
value
as at
31 March
2007
Tangible assets
Land
(refer to note 1 below)
– leasehold
– freehold
Buildings
Plant and machinery
Plant and machinery
- under operating lease
Railway sidings and jetties
Rolling stock,
motor vehicles etc.
Furniture, fittings and
equipment
Data processing equipment
Intangible assets
Goodwill
(refer to note 3 below)
Patents, trademarks,
knowhow etc
Book value
at cost or
revalued
amounts
as at
31 March
2008
Net Block
Upto Depreciation /
In respect
Upto
As at
As at
31 amortisation of disposals/ 31 March 31 March 31 March
March For the year adjustments
2008
2008
2007
2007
93
5,86
54,98
131,66
–
–
1,85
6,57
–
–
(2)
–
93
5,86
56,81
138,23
42
–
15,45
88,05
1
–
1,40
8,46
–
–
(2)
(1)
43
–
16,83
96,50
50
5,86
39,98
41,73
51
5,86
39,53
43,61
56,88
–
16,50
–
(14)
–
73,24
–
28,60
–
9,33
–
(6)
–
37,87
–
35,37
–
28,28
–
34
–
–
34
32
–
(1)
31
3
2
9,75
22,24
37
93
(13)
(2)
9,99
23,15
5,21
15,81
55
2,39
(1)
(2)
5,75
18,18
4,24
4,97
4,54
6,43
7,62
–
–
7,62
11
38
–
49
7,13
7,51
4,86
–
–
4,86
2,56
49
–
3,05
1,81
2,30
Total
295,12
26,22
(31)
321,03
156,53
23,01
(13)
179,41
141,62
Previous Year
503,24
32,32
(240,44)
295,12
232,90
35,48
(111,85)
156,53
Capital work-in-process
(including capital advances)
138,59
17,94
6,06
159,56
144,65
Notes :
(1) Land and buildings at certain locations were revalued in 1983.
(2 Gross depreciation for the year includes depreciation on revalued assets of Rs. 1 lac (2006-07 : Rs. 1 lac), charged against Revaluation reserve.
(3) Rs. 38 lacs has been amortised during the year in respect of Goodwill.
(4) Disposals/adjustments in gross block for the previous year include assets transferred on divestment of Uniqema, Quest International India Limited
('Quest') and Paints Advanced Refinish ('2K') businesses aggregating Rs. 3,509 lacs, Rs. 7,326 lacs and Rs. 1,117 lacs respectively. [Refer to note
13(b,c,d), Schedule 18]
(5) Disposals/adjustments in depreciation for the previous year include Rs. 2,473 lacs, Rs. 4,142 lacs and Rs. 692 lacs being accumulated depreciation
on assets transferred on divestment of Uniqema, Quest and Paints Advanced Refinish ('2K') businesses respectively. [Refer to note 13(b,c,d),
Schedule 18]
50 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 5 :INVESTMENTS
(At cost less write offs/provisions)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
7,50,000
7,50,000
10
74
74
105
205
100
1
1
(A) LONG TERM INVESTMENTS
(i)
Trade Investments
Equity shares - unquoted
Nitrex Chemicals India Limited
Adyar Property Holding Company Limited
(100 shares transfered during the year)
(Book value Rs 6,825 (2006-07: Rs.13,325) ;
paid-up Rs.65 per share)
Debentures - unquoted
5%
Woodlands Research Foundation - non-redeemable
(Book value Rs 28,001)
5%
Woodlands Research Foundation - non-redeemable
1
1
110
110
100
19
19
1,000
1
1
5,98,50,000
–
–
57,918
57,918
10
21
21
5
5
100
Maneck-Chowk & Ahmedabad Manufacturing
Co. Limited
(Book Value Re 1)
Debentures - unquoted
144
144
250
6%
523
523
100
62,247
62,247
100
62
62
5.00% National Bank for Agriculture and
Rural Development
(10,000 units redeemed during the year)
–
15,000
10,000
–
15,00
5.10% National Housing Bank
(15,000 units redeemed during the year)
–
15,000
10,000
–
15,00
5.00% Small Industries Development Bank of India
(10,000 units redeemed during the year)
–
5,000
10,000
–
5,00
5.15% Rural Electrification Corporation Limited
(15,000 units redeemed during the year)
–
15,000
10,000
–
15,00
0.5% Woodlands Research Foundation (Book value Re 1)
6.5% Bengal Chamber of Commerce and Industry
(Book value Rs. 19,000)
PMC Rubber Chemicals India Private Limited
(refer to note 14, Schedule 18)(Book value Rs. Nil)
86,000
(ii) Non - trade Investments
Equity shares - quoted
ICICI Bank Limited
Equity shares - unquoted
Kohinoor Mills Limited
(Book value Rs 1,300)
Sholapur Spinning & Weaving Co. Limited
(in Liquidation)
(Book Value Re 1)
Government of India Securities - unquoted
6.75% Government of India Tax free bonds
Capital Gains Bonds - unquoted
contd..
Annual Report 2007-08 – ICI India Limited 51
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 5 :INVESTMENTS (Contd.)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
ABN AMRO Mutual Fund
(FTP Series 1 - Regular Growth)
(redeemed during the year)
– 1,50,00,000
10
–
15,00
ABN AMRO Mutual Fund
(FTP Series 2 - 13 months Growth)
(redeemed during the year)
– 1,00,00,000
10
–
10,00
(B) CURRENT INVESTMENTS
(i)
Non-Trade Investments #
Investment in Fixed Maturity Plans of Mutual
Funds - unquoted
ABN AMRO Mutual Fund
(FTP Series 8 - Yly Plan A Growth)
(invested during the year)
2,50,00,000
–
10
25,00
–
2,50,00,000
–
10
25,00
–
–
50,00,000
10
–
5,00
1,50,00,000 1,50,00,000
10
15,00
15,00
Birla Sun Life Mutual Fund
(FTP - Quarterly Series 9 - Dividend)
(redeemed during the year)
– 6,00,00,000
10
–
60,00
DWS Mutual Fund
(Fixed Term Fund Series 5 - Growth)
(redeemed during the year)
–
30,00,000
10
–
3,00
2,00,00,000 2,00,00,000
10
20,00
20,00
50,00,000
10
5,00
5,00
– 2,00,00,000
10
–
20,00
Birla Sun Life Mutual Fund
(Fixed Term Plan-Institutional-Series X
Yearly Plan-Growth) (invested during the year)
Birla Sun Life Mutual Fund
(FTP - Series E - Growth) (redeemed during the year)
Birla Sun Life Mutual Fund
(FTP - Series P - Growth)
DWS Mutual Fund
(Fixed Term Fund Series 21 - Inst. Plan)
DWS Mutual Fund
(Fixed Term Fund Series 24 - Inst. Plan)
DWS Mutual Fund
(Fixed Term Fund Series 28 - Dividend)
(redeemed during the year)
DSP Merrill Lynch Mutual Fund
(FTP Series 3E - Growth Inst.)
50,00,000
6,00,000
6,00,000
1,000
60,00
60,00
–
50,00,000
10
–
5,00
Franklin Templeton Mutual Fund
1,00,00,000 1,00,00,000
(Fixed Horizon Fund Series 1 - 15 months Inst Growth)
10
10,00
10,00
HDFC Mutual Fund
(FMP 13M March 2006 (1) - Wholesale-Growth)
(redeemed during the year)
50,00,000
10
–
5,00
HDFC Mutual Fund
(FMP 18M October 2006 - Wholesale-Growth)
3,00,00,000 3,00,00,000
10
30,00
30,00
HDFC Mutual Fund
(FMP 16M January 2007 (3) - Wholesale Growth)
1,50,00,000 1,50,00,000
10
15,00
15,00
HDFC Mutual Fund
(FMP 14M March 2007 (3) - Wholesale Growth)
2,00,00,000 2,00,00,000
10
20,00
20,00
Franklin Templeton Mutual Fund
(Fixed Tenure Fund Series V 13 months - Growth)
(redeemed during the year)
–
contd..
52 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 5 :INVESTMENTS (Contd.)
HDFC Mutual Fund
(FMP 370 days March 2008 (VII) - 2 Wholesale Growth) (invested during the year)
HSBC Mutual Fund
(Fixed Term Series 4 - Growth)
(redeemed during the year)
HSBC Mutual Fund
(Fixed Term Series 9 - Growth)
(redeemed during the year)
HSBC Mutual Fund
(Fixed Term Series 22 Institutional Growth)
ING Mutual Fund
(ING Long Term FMP - I Institutional Growth)
(invested during the year)
Kotak Mahindra Mutual Fund
(FMP Series 14 - Growth) (redeemed during the year)
Kotak Mahindra Mutual Fund
(FMP 3M Series 12 - Dividend)
(redeemed during the year)
Kotak Mahindra Mutual Fund
(FMP 13M Series 1 Inst - Growth)
Kotak Mahindra Mutual Fund
(FMP 12M Series 1 Inst-Growth)
(invested during the year)
Lotus India Mutual Fund
(India FMP - 3 months - Series III - Inst. Dividend)
(redeemed during the year)
Lotus India Mutual Fund
(FMP - 14 months - Series I - Inst. Growth)
Lotus India Mutual Fund
(FMP - 375 Days - Series I - Inst. Growth)
(invested during the year)
Principal Mutual Fund
(PNB FMP-27 - 385 Days - Series II)
(redeemed during the year)
Principal Mutual Fund
(PNB FMP-38 - 91 Days - Series IX)
(redeemed during the year)
Principal Mutual Fund
(PNB FMP-36 460 days-Series III March 07)
Prudential ICICI Mutual Fund
(FMP Inst. Cumulative-XXVIII)
(redeemed during the year)
Prudential ICICI Mutual Fund
(FMP Series-34 - Sixteen Months Growth)
Prudential ICICI Mutual Fund
(FMP Series-34 - Fifteen Months)
Reliance Mutual Fund
(Fixed Horizon Fund II Quarterly Plan Series VIInst. Dividend) (redeemed during the year)
Reliance Mutual Fund
(Fixed Horizon Fund IV Series 5 Growth)
(invested during the year)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
50,00,000
–
10
5,00
–
–
50,00,000
10
–
5,00
– 2,00,00,000
10
–
20,00
4,00,00,000 4,00,00,000
10
40,00
40,00
–
10
5,00
–
– 1,00,00,000
10
–
10,00
– 2,50,00,000
10
–
25,00
1,50,00,000 1,50,00,000
10
15,00
15,00
2,50,00,000
–
10
25,00
–
– 2,51,17,176
10
–
25,12
1,00,00,000 1,00,00,000
10
10,00
10,00
2,50,00,000
–
10
25,00
–
–
50,00,000
10
–
5,00
–
50,00,000
10
–
5,00
4,00,00,000 4,00,00,000
10
40,00
40,00
70,00,000
10
–
7,00
1,50,00,000 1,50,00,000
10
15,00
15,00
5,00,00,000 5,00,00,000
10
50,00
50,00
– 3,00,00,000
10
–
30,00
10
35,00
–
50,00,000
–
3,50,00,000
–
contd..
Annual Report 2007-08 – ICI India Limited 53
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 5 :INVESTMENTS (Contd.)
No. as at
31 March
2008
No. as at
31 March
2007
Face Value
Rs. per unit
As at
31 March
2008
(Rs lacs)
As at
31 March
2007
(Rs lacs)
Reliance Mutual Fund
1,50,00,000
(Fixed Horizon Fund VII Series 4)
(invested during the year)
SBI Mutual Fund
5,20,00,000
(Debt Fund Series - 13 Months-March 07-Growth)
SBI Mutual Fund
–
(Debt Fund Series - 90 Days-March 07- Dividend)
(redeemed during the year)
Standard Chartered Mutual Fund
–
(Fixed Maturity - 20th Plan - Growth)
(redeemed during the year)
Standard Chartered Mutual Fund
–
(Grindlays Fixed Maturity - 22nd Plan - Growth)
(redeemed during the year)
Standard Chartered Mutual Fund
–
(FMP - Qtly Sr. 6 - Dividend)
(redeemed during the year)
Sundaram BNP Paribas Mutual Fund
1,00,00,000
(Fixed Term Plan D Inst. Growth)
(invested during the year)
Sundaram BNP Paribas Mutual Fund
1,00,00,000
(Fixed Term Plan E Inst. Growth)
(invested during the year)
TATA Mutual Fund
2,50,00,000
(Fixed Horizon Fund Series 7-Scheme A - Growth)
TATA Mutual Fund
3,00,00,000
(Fixed Horizon Fund Series 6-Scheme C-Growth)
TATA Mutual Fund
2,50,00,000
(Fixed Horizon Fund Series 13-Scheme A-IG-Growth)
(invested during the year)
UTI Mutual Fund
–
(UTI Fixed Term Income Fund-Series 1Plan 18-Q3 Growth) (redeemed during the year)
UTI Mutual Fund (UTI Fixed Maturity Plan yearly
2,50,00,000
Series YFMP/0507- Growth) (invested during the year)
–
10
15,00
–
5,20,00,000
10
52,00
52,00
80,00,000
10
–
8,00
50,00,000
10
–
5,00
50,00,000
10
–
5,00
2,50,00,000
10
–
25,00
–
10
10,00
–
–
10
10,00
–
2,50,00,000
10
25,00
25,00
3,00,00,000
10
30,00
30,00
–
10
25,00
–
1,50,00,000
10
–
15,00
–
10
25,00
–
683,57
816,69
Note : Investment in shares are fully paid up, except where indicated
For investments purchased and sold during the year, refer to note 16, Schedule 18
#
As at 31 March 2008
Aggregate Market Value
Book Value
Net Asset
Value ##
(Rs lacs)
(Rs lacs)
Quoted investments
As at 31 March 2007
Aggregate Market Value
Book Value
Net Asset
Value ##
(Rs lacs)
(Rs lacs)
21
4,46
21
4,94
682,00
747,22
765,12
776,53
Unquoted investments
##
–
Fixed Maturity Plans of Mutual Funds
–
Others
In case of Mutual Funds
54 Annual Report 2007-08 – ICI India Limited
1,36
51,36
683,57
816,69
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
As at
31 March 2008
(Rs lacs)
As at
31 March 2007
(Rs lacs)
26
1,77
26,19
35,33
SCHEDULE 6 : INVENTORIES
Stores and spare parts (at cost or under)
Stock in trade (at lower of cost and net realizable value)
–
Raw materials
–
Packing materials
1,77
2,00
–
Work-in-process
1,65
1,55
–
Finished products
94,48
92,48
124,35
133,13
23
15
5
82
28
97
Considered good
4,93
4,24
Considered doubtful
8,79
7,65
13,72
11,89
8,79
7,65
4,93
4,24
98,99
98,33
76
8,79
SCHEDULE 7 : SUNDRY DEBTORS
Secured - considered good
– Debts outstanding over six months
– Other debts
Unsecured
– Debts outstanding over six months
Less : Provision for doubtful debts
– Other debts - considered good
#
Dues relating to sale of business - unsecured, considered good ##
– Debts outstanding over six months
– Other debts
#
Includes amount of Rs. 141 lacs (2006-07 : Rs 86 lacs) due from bodies
corporate under the same management as defined in Section 370(1B) of the
Companies Act, 1956. For details refer to note 25, Schedule 18
##
Refer to note 6, Schedule 18
–
55,20
76
63,99
104,96
167,53
31
30
2
46
13,66
10,96
SCHEDULE 8 : CASH AND BANK BALANCES
Cash in hand
Cheques in hand
Balances with scheduled banks :
Current accounts
Fixed deposits held as margin money
Unclaimed Dividend accounts
29
27
2,91
2,01
17,19
14,00
Annual Report 2007-08 – ICI India Limited 55
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
As at
31 March 2008
(Rs lacs)
As at
31 March 2007
(Rs lacs)
31,95
28
31,14
28
32,23
31,42
28
28
31,95
3,75
3,79
9,52
2
31,14
2,46
3,92
1,38
2,54
49,03
41,44
SCHEDULE 9 : LOANS AND ADVANCES
(Unsecured and considered good unless otherwise stated)
Loans and advances recoverable in cash or in kind or for value to be received :
Considered good *
Considered doubtful
Less : Provision for doubtful advances
Balances with Customs, Port Commissioners, Railways, Excise Authorities etc.
Others Deposits
Taxation (net of provision for taxation)
Interest accrued on investments
* includes
(a)
Housing loans given to employees, against which the employees
have submitted property title papers or other assets/documents
as envisaged under the housing loan scheme
4,81
4,40
(b)
Due from Directors
Maximum amount due at any time during the year
1,10
1,11
78
89
(c)
Due from Officer
Maximum amount due at any time during the year
14
15
15
15
31,66
25
220,79
2,91
10,85
30,87
–
190,67
2,01
11,39
266,46
234,94
30,70
5,22
65
2
7,62
10,78
42,96
110,35
18,75
–
1
12,79
12,34
48,33
97,95
202,57
SCHEDULE 10 : CURRENT LIABILITIES
Acceptances
Sundry creditors - micro and small enterprises
Sundry creditors - others **
Unclaimed dividends ***
Other liabilities
** Refer to note 13 (b), Schedule 18
*** Refer to notes 7 and 8, Schedule 18
SCHEDULE 11 : PROVISIONS
Proposed dividend
Corporate dividend tax
Taxation (net of advance tax)
Fringe benefit tax (net of advance tax)
Voluntary Retirement Scheme liability
Retirement benefits
Others #
#
Refer to note 19, Schedule 18
56 Annual Report 2007-08 – ICI India Limited
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
For the year ended
31 March 2008
(Rs lacs)
For the year ended
31 March 2007
(Rs lacs)
–
1,70
7,04
3,75
29
1,82
6,49
3,18
12,49
11,78
9,47
1,33
10,30
37
–
30
10,85
4,57
10,01
3
1,05
3,79
21,77
30,30
34,26
42,08
SCHEDULE 12 : OTHER INCOME *
From businesses
Insurance claims received
Commission
Lease rentals
Miscellaneous receipts
Other operating items
Income on sale of non trade investments
–
current
–
long term
Profit on maturity/redemption of Fixed Maturity Plans (current, non-trade)
Provisions / liabilities no longer required written back
Profit on sale of fixed assets (net)
Miscellaneous receipts
* Refer to note 9, Schedule 18
SCHEDULE 13 : MATERIALS CONSUMED AND MOVEMENT IN FINISHED STOCK AND WORK-IN-PROCESS
Opening stock
Raw materials
Packing materials
Finished products
Work-in-process
Add : Purchases
Raw materials
Packing materials
Finished products
Less : Inventory adjustments in respect of divested / acquired businesses (net) #
Raw materials
Packing materials
Finished products
Work-in-process
Less : Closing stock
Raw materials
Packing materials
Finished products
Work-in-process
Add : Excise duty adjustment for movement in finished goods inventory
(including duty on inventory of divested business)
Materials consumed, etc.
#
35,35
1,99
92,48
1,53
40,54
1,56
92,07
2,37
131,35
136,54
388,46
59,44
102,44
482,04
58,10
120,25
550,34
660,39
–
–
–
–
19,56
74
24,52
26
–
45,08
26,22
1,74
94,48
1,65
35,33
2,00
92,48
1,55
124,09
131,36
13
2,17
557,73
622,66
Refer to note 13, Schedule 18
Annual Report 2007-08 – ICI India Limited 57
SCHEDULES TO THE CONSOLIDATED ACCOUNTS
For the year ended
31 March 2008
(Rs lacs)
SCHEDULE 14 : OTHER EXPENDITURE
Stores and spare parts
Repairs to buildings
Repairs to plant and machinery
Power and fuel
Salaries, wages and bonus
Contributions to provident and other funds
Workmen and staff welfare
Travelling
Rates and taxes
Rent
Communication
Insurance
Freight and transport
Selling commission
Publicity and sales promotion
Royalty and technical fees
Cash discount on sales
Bad debts / advances
12
Less : Provision for doubtful debts and advances (adjusted)
12
Provision for doubtful debts and advances
Research and development
Directors' fees
Loss on sale/write-off of fixed asset
Sundries (include consultancy, godown running cost, data processing costs, etc.)
For the year ended
31 March 2007
(Rs lacs)
4,50
18
2,43
6,13
45,48
4,31
2,15
10,67
5,29
9,08
4,13
1,51
33,27
2,88
61,51
6,51
44,88
–
1,26
3,82
4
18
32,77
282,98
4,75
56
2,85
6,70
48,34
5,91
2,83
11,49
8,37
9,57
5,07
2,02
35,15
3,95
50,09
3,76
38,96
15
15
–
1,87
2,77
3
–
34,73
279,77
SCHEDULE 15 : INTEREST
Interest expense on loans, acceptances, etc.
Less : Interest income from banks and others *
Net interest
2,98
2,93
5
2,99
91
2,08
2,10
(20,83)
–
–
–
–
4,99
–
32,20
250,85
198,39
(37)
(18,73)
486,06
* Refer to note 9, Schedule 18
SCHEDULE 16 : EXCEPTIONAL ITEMS [gain / (loss)]
Profit on sale of properties ##
Compensation paid against sale of Paints Advance Refinish ('2K') business. #
Profit on sale of Paints Advanced Refinish ('2K') business
Profit on sale of Uniqema business
Profit on sale of Quest business
Charge for voluntary retirement scheme expenses
#
##
Refer to note 13 (b), Schedule 18
Refer to note 13 (a), Schedule 18
58 Annual Report 2007-08 – ICI India Limited
NOTES TO THE CONSOLIDATED ACCOUNTS
SCHEDULE 17 : SIGNIFICANT ACCOUNTING POLICIES
1.
Basis of Preparation of Financial Statements
The financial statements are prepared on the accrual basis under the historical cost convention, in accordance with applicable Accounting
Standards ("AS") specified in Companies (Accounting Standards) Rules, 2006 and presentational requirements of the Companies Act, 1956.
2.
Principles of Consolidation
The consolidated financial statements relate to "ICI India Limited" (the Parent Company), and its subsidiary, Polyinks Limited ('Polyinks'),
incorporated in India.
On 15 December 2006, the Company acquired 67% interest in Polyinks. On 2 March 2007, the Company sold its entire shareholding in Quest
International India Limited ('Quest India'), incorporated in India. Accordingly the consolidated Profit and Loss Account and the consolidated
Cash Flow Statement for 2006-07 include results of Polyinks from 15 December 2006 and Quest India upto 1 March 2007.
The consolidated financial statements have been prepared on the following basis:
(a) The financial statements of the parent company and its subsidiary have been combined on a line-by-line basis by adding together the
book values of like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions
resulting in unrealised profits or losses. The amounts shown in respect of reserves comprises the amount of the relevant reserve as per the
balance sheet of the parent company and its share in the post-acquisition increase in the relevant reserves of the relevant subsidiary.
(b) Consolidated financial statements are prepared by using uniform accounting policies for like significant transactions and other events in
similar circumstances.
(c) The consolidated financial statements are presented, to the extent possible, in the same format as that adopted by the parent company for
its separate financial statements.
(d) The excess/ shortfall of cost to the parent company of its investment in subsidiary over its portion of equity in the subsidiary is recognised
in the financial statements as Goodwill / Capital Reserve respectively. The parent company's portion of equity in the subsidiary is
determined on the basis of the book value of assets and liabilities as per the financial statements of the subsidiary.
(e)
3.
Goodwill arising on consolidation is amortised over the expected useful life of twenty years.
Other Significant Accounting Policies
The significant accounting policies set out in the financial statements of ICI India Limited, have also been followed by the subsidiary.
SCHEDULE 18 : NOTES TO THE CONSOLIDATED ACCOUNTS
1. Change of name of holding company
Effective 2 January 2008, AkzoNobel NV has become the owner of the entire share capital of Imperial Chemical Industries PLC, the holding
company of ICI India Limited, and has thus become the ultimate holding company of ICI India Limited. From the same date, Imperial Chemicals
Industries PLC, being no longer a public company in England, has been renamed Imperial Chemicals Industries Limited.
2. Share buyback
The shareholders had approved on 12 July 2007, a proposal of the Company to buy back its own shares in accordance with applicable regulations,
at a price not exceeding Rs 575 per share. The scheme will remain open till 11 July 2008, unless terminated earlier.
Under this scheme, the Company has till 31 March 2008, bought back and extinguished 24.91 lacs shares. Total amount paid consists of aggregate
consideration of Rs 131.82 cr and related expenses of Rs 1.67 cr. This total amount of Rs 133.49 cr has been accounted as follows :
–
The nominal value of shares purchased i.e. Rs 2.49 cr has been adjusted against the share capital.
–
The difference between consideration paid (including related expenses) and nominal value of shares aggregating Rs 131.00 cr, has been
adjusted against Share Premium (Rs 1.15 cr) and General Reserve (Rs 129.85 cr).
–
Rs 2.49 cr have been reduced from General Reserve and credited to Capital Redemption Reserve, in accordance with the provisions of the
Companies Act, 1956.
Following the above share buyback, the holding of Imperial Chemical Industries Limited in the Company, as on 31 March 2008 is 54.13%.
No shares were bought back under the earlier scheme approved by the shareholders on 14 September 2006, which was superceded by the current
scheme approved on 12 July 2007.
3. Divestment of Adhesives Business
The Company has entered into an agreement with Henkel CAC Private Limited on 18 April 2008 for the sale of :
–
Adhesives business for a consideration of Rs 230 cr; and
–
the Company's 67% shareholding in its subsidiary company Polyinks Limited ('Polyinks') for a consideration of Rs 30 cr.
Both the above consideration amounts are subject to certain agreed adjustments for working capital and cash / debt balances.
The sale, recommended by the Board of Directors at its meeting held on 28 March 2008, has since been approved by the shareholders through
postal ballot. As per terms of the business transfer agreement, the risks and rewards of the business will be to the purchaser’s account from
3 April 2008.The completion of the transaction awaits certain regulatory approvals and will be accounted on receipt of these approvals.
Accordingly :
–
results of the Adhesives business (including Polyinks) for the current year, and carrying amount of assets and liabilities as at the end of the year
have been shown under 'discontinuing business' (previously included under 'Chemicals' segment) (refer to note 23).
–
Profit on divestment of the Adhesives business and sale of shareholding in Polyinks will be accounted on completion of the transaction.
Annual Report 2007-08 – ICI India Limited 59
NOTES TO THE CONSOLIDATED ACCOUNTS
4.
5.
As at 31 March 2008
(Rs lacs)
As at 31 March 2007
(Rs lacs)
Capital committments
Estimated amount of contracts remaining to be executed on
capital account (net of advances)
2,90
1,82
Contingent liabilities not provided for:
(a) Liabilities in respect of third party claims
(b) Sales tax matters under appeal
(c) Excise matters in dispute/under appeal
(d) Industrial relations and other matters under dispute
(e) Income tax matters in dispute / under appeal *
1,18
8,60
2,25
20
1,18
6,45
2,30
20
* The Income tax assessments for the Company have been completed up to the financial year ended 31 March 2004. Arising from the completed
assessments and appellate orders, the total demand / liability is Rs 8626 lacs (2006-07 : Rs 6832 lacs), excluding interest and total refund is
Rs 5370 lacs (2006-07 : Rs 4976 lacs) excluding interest. The Company as well as the Income tax department have gone on further appeals on
these matters. Pending decision in the appeals, neither the refund nor the liability for the demand have been recognised in the accounts.
6.
Dues relating to sale of businesses (Sundry Debtors-Schedule 7), consist of :
–
–
–
–
Due from Nitrex Chemicals India Limited, towards balance consideration
Due from PMC Rubber Chemicals India Private Limited,
towards working capital settlement*
Due from Givaudan (India) Private Limited, towards balance
consideration settlement
Due from Asian PPG Industries Ltd towards balance consideration and
working capital settlement
76
–
4,25
4,54
–
50,97
–
4,23
76
63,99
* Private company in which a Director of the Company is a Director
7.
Sundry creditors - others (Schedule 10) include unclaimed matured fixed deposits from public amounting to Rs 5 lacs (2006-07 :Rs 7 lacs)
8.
As on 31 March 2008 there are no amounts due to be deposited with the Investor Education and Protection Fund, in respect of unclaimed matured
fixed deposits and unclaimed dividends.
9.
Income from investments, interest and others are stated at gross amounts. The amount of income tax deducted thereon is Rs 29 lacs (2006-07 :
Rs. 1 lac).
10. Gain on account of foreign exchange fluctuations for the year is Rs. 223 lacs (2006-07 : Rs. 3 lacs).
11. Sales exclude sale of equipment at cost amounting to Rs 52 lacs (2006-07: Rs. 185 lacs).
12. Directors' remuneration *#
Salaries and allowances
Commission
Perquisites
2007-08
(Rs. lacs)
2006-07
(Rs. lacs)
3,05
25
16
2,61
20
28
3,46
3,09
* The above amounts do not include provisions for / contribution to employee retirement / post retirement and other employee benefits which are
based on actuarial valuations carried out on an overall Company basis rather than separately for Directors.
# The above amounts do not include sitting fees paid to Directors Rs. 4 lacs (2006-07 : Rs 2 lacs)
13. Exceptional items in Profit and Loss Account (Schedule 16)
(a) Income from sale of property of Rs 2.10 cr is in respect of sale of land at Chennai. (The corresponding income of Rs. 4.99 cr in the previous
year was from sale of residential flats in Kolkata).
(b) On 16 March 2007, the Company sold its Paints Advanced Refinish business ('2K') to Asian PPG Industries Limited ('APPG')for a consideration
of Rs. 51.80 cr, subject to adjustments for working capital as on date of transfer, and this resulted in a profit of Rs 32.20 cr (shown as an
exceptional item in 2006-07).
As per terms of the sale agreement with APPG, the acquisition of Imperial Chemical Industries PLC (refer to note 1) by Akzo Nobel N.V. has
given rise to a payment to APPG of Rs 1.10 cr per month from the date of change of control upto July 2009. Accordingly, during the year
Company has accrued Rs 20.83 cr as its obligation arising out of the above acquisition and the amount has been shown as an exceptional item
in the Profit and Loss account. Tax adjustment on this charge has also been accrued and netted off from current tax charge for the year.
The amount still outstanding for 16 months and payable as at year end is Rs. 17.56 cr.
60 Annual Report 2007-08 – ICI India Limited
NOTES TO THE CONSOLIDATED ACCOUNTS
(c) On 2 September 2006, the Company sold its 'Uniqema' chemicals business to Croda Chemicals (India) Private Limited for a consideration of
Rs. 286.83 cr (including Rs 6.83 cr for working capital adjustments as on date of transfer), and this resulted in a profit of Rs 250.85 cr (shown
as an exceptional item in 2006-07).
(d) On 2 March 2007, the Company sold its entire shareholding in its subsidiary Quest International India Limited to Givaudan (India) Private
Limited, for a consideration of Rs 370.97 cr, and this resulted in a profit of Rs 198.39 cr (shown as an exceptional item in 2006-07).
14. During 2005-06, the Company had sold its Rubber Chemicals business to PMC Rubber Chemicals India Private Limited ('PMC-RC'). In respect of
the optionally convertible debenture of face value of Rs 5.98,50,000 which the Company had received as part of the sale consideration, the
Company had excercised the option last year to convert into equity shares. During the year, the Company has withdrawn the option exercised
earlier and intends to transfer the debenture to PMC Group International Inc, USA or its nominee.
As per the sale agreement with PMC-RC, the Company was also entitled to receive consideration as 'earn out' if the performance of PMC-RC
during the year exceeded certain agreed parameters. In respect of this, no earn out was earned during the year.
15. In the absence of any progress in the matter and continuing outstanding obligation of the Company, the provision of Rs 1500 lacs made during the
year 2002-03 in respect of probable land cost liability while determining the profit on sale of Catalyst business continues to be carried forward in
the current year's accounts (as on 31 March 2007 : Rs 1500 lacs)
16. During the year the Company invested the temporary surplus funds in liquid / cash schemes and fixed maturity plans of mutual funds. These
investments which were made and redeemed during the year are as under:
Non Trade (Current Investments)
Number
of units
5,28,06,087
3,33,20,832
8,32,03,171
6,78,31,868
50,064
2,50,41,214
99,74,761
5,00,99,393
2,70,22,193
65,68,864
2,05,94,927
3,35,77,088
3,31,739
1,00,040
13,29,95,359
2,34,809
Purchase value
(Rs lacs)
52,81
33,35
83,32
67,93
5,01
25,04
10,01
50,13
27,02
6,57
20,61
33,63
33,21
10,01
133,45
23,59
1,00,00,000
1,50,00,000
1,50,00,000
1,00,00,000
99,65,321
1,00,00,000
1,99,91,404
99,95,502
49,99,200
50,00,000
1,50,00,000
50,00,000
1,00,00,000
10,00
15,00
15,00
10,00
10,00
10,00
20,00
10,00
5,00
5,00
15,00
5,00
10,00
2007-08
2006-07
4,08,70,612
24,90,662
3,83,79,950
3,97,13,728
4,08,70,612
–
4,08,70,612
4,08,70,612
(b) Net profit after tax available for equity shareholders (Rs lacs)
59,67
461,76
(c) Basic and diluted earnings per share (Rs)
15.02
112.98
Liquid/Cash Mutual Funds Schemes
ABN Amro Money Plus - IP (Daily Dividend Reinvestment)
AIG India Treasury Plus Fund Super Institutional (Daily Dividend Reinvestment)
Birla Sun Life Liquid Plus - Institutional (Daily Dividend Reinvestment)
DWS Money Plus Fund - IP - (Daily Dividend Reinvestment)
DSP Merrill Lynch Liquid Plus - IP - (Daily Dividend Reinvestment)
Fidelity Liquid Plus Fund - Super IP - (Daily Dividend Reinvestment)
HDFC Cash Management Fund Saving Plus Plan - Wholesale (Daily Dividend Reinvestment)
HSBC Liquid Plus Fund - IP - (Daily Dividend Reinvestment)
ICICI Prudential Institutional Liquid Plan - Super Institutional (Daily Dividend Reinvestment)
ING Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
JP Morgan India Liquid Plus Fund - IP-(Daily Dividend Reinvestment)
Lotus India Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
Reliance Liquid Plus Fund - Institutional (Daily Dividend Reinvestment)
Standard Chartered Liquidity Manager Plus - (Daily Dividend Reinvestment)
Sundaram BNP Paribas Liquid Plus Super Inst. (Daily Dividend Reinvestment)
UTI Liquid Plus Fund - IP - (Daily Dividend Reinvestment)
Fixed Maturity Plans
ABN Amro Fixed Term Plan - Sr. 6 Quarterly plan D (Dividend)
ABN Amro Fixed Term Plan - Sr. 7 Quarterly plan D (Dividend)
Birla Sun Life Quarterly Interval - Series 2 (Dividend)
DWS Fixed Term Fund - Series - 37 (Dividend)
HDFC Quarterly Interval Fund - Plan A - Wholesale (Dividend)
Kotak FMP 3M Series 15 (Dividend)
Reliance Monthly Interval Fund Series II (Dividend)
Reliance Monthly Interval Fund Series II (Dividend)
Reliance Interval Fund Quarterly Plan Series I (Dividend)
Standard Chartered Fixed Maturity Plan Quarterly Series -14 (Dividend)
Standard Chartered Fixed Maturity Plan - Quarterly Series 8 (Dividend)
Templeton Quarterly Interval Plan - Plan A (TQIP-A) Institutional (Dividend)
UTI Fixed Maturity Plan Quarterly Series QFMP/0407 II Institutional (Dividend)
17. Earnings per share
(a) Calculation of weighted average number of equity shares of Rs 10 each
Number of equity shares at the beginning of the year
Less : Equity shares bought back during the year*
Total number of equity shares outstanding at the end of the year
Weighted average number of shares
* Refer to note 2
Annual Report 2007-08 – ICI India Limited 61
NOTES TO THE CONSOLIDATED ACCOUNTS
18. Details of Deferred tax liability (net)
Deferred Tax Assets
2007-08
2006-07
Timing differences on account of :
Accelerated depreciation
Surplus payments to retiral trusts(Refer to note 22)
Expenditure deferred under section 43B of Income Tax Act, 1961
Provision for doubtful debts and advances
Voluntary retirement scheme liability
Liability for leave encashment and retirement benefit provision
Other provisions relating to divested businesses etc
Total
18
3,11
90
3,66
6,22
63
2,70
1,55
4,03
7,25
14,07
16,16
Net deferred tax liability
(Rs lacs)
Deferred Tax Liability
2007-08
2006-07
22,44
1,13
24,32
–
23,57
24,32
9,50
8,16
19. Details of Other Provisions (refer to Schedule 11)
Indirect Taxes
Divested businesses
Others
(Rs lacs)
Total
Balance as on 31 March 2007
Payments against provisions
Write back
Adjustments
12,79
(42)
–
–
32,11
(1,40)
(1)
(2,77)
3,43
(47)
(36)
6
48,33
(2,29)
(37)
(2,71)
Closing balance as on 31 March 2008 *
12,37
27,93
2,66
42,96
* Notes:
(a) Provisions relating to indirect taxes are in respect of proceedings of various sales tax, excise duty, customs duty and other indirect tax cases,
including those relating to discontinued businesses. Outflows in all these cases, including their timing and certainty, would depend on the
developments/ outcome in these cases.
(b) Provisions relating to divested businesses (other than any indirect tax cases relating to such businesses) include Rs 1500 lacs as referred to in
note 15. Other provisions, amounting to Rs 1293 lacs are in respect of existing / anticipated costs arising from divestment of businesses
(Synetix, Explosives, Rubber Chemicals, Uniqema and Paints Advanced Refinish) and subsidiary (Quest International India Limited). Outflows
in these cases will depend upon settlement of demands/claims.
(c) Other provisions are relating to litigation matters in respect of sale of properties, demand for past arrears in respect of electricity and a possible
shortfall in retiral trust arising out of non recovery of dues, which the Company may have to make good.
(d) The provisions under (b) and (c) above are expected to be substantially utilised over the next two years.
20. Operating lease
(a) The Company has given colour solution machines under operating leases to various dealers and customers. These have been disclosed under
'Plant and machinery - under operating lease' in Schedule 3 (Fixed Assets). The future lease rentals receivable in respect of these assets are as
under :
Amounts receivable
Total future minimum lease rentals
receivable as on 31 March 2008
(Rs lacs)
Total future minimum lease rentals
receivable as on 31 March 2007
(Rs lacs)
Within one year
6,09
6,02
Later than one year and not later than five years
5,86
5,85
6
5
12,01
11,92
Later than five years
Total
(b) Obligation on long term non-cancellable operating leases
The Company has taken office space on operating leases. The lease rental charge during the year and maximum obligations on long term noncancellable operating leases payable as per the rentals stated in the respective agreements are as follows:
–
Lease rentals charged during the year
–
Lease obligations
2007-08
(Rs lacs)
2006-07
(Rs lacs)
97
110
Total future minimum lease rentals
payable as on 31 March 2008
(Rs lacs)
Total future minimum lease rentals
payable as on 31 March 2007
(Rs lacs)
Within one year
79
97
Later than one year and not later than five years
39
84
Later than five years
Total
62 Annual Report 2007-08 – ICI India Limited
–
–
1,18
1,81
NOTES TO THE CONSOLIDATED ACCOUNTS
21. Finance lease*
ICI India has given equipments under finance lease to bodyshops
(a) Gross receivable for each of the following periods :
Within one year
Later than one year and not later than five years
Later than five years
2007-08
(Rs lacs)
2006-07
(Rs lacs)
–
–
–
–
95
51
–
1,46
(b) Present value of minimum lease payment for each of the following periods:
Within one year
Later than one year and not later than five years
Later than five years
–
84
–
45
–
–
–
1,29
(c) Unearned finance income
–
17
* Relates to Paints Advanced Refinish ('2K') business which the Company had divested in 2006-07. These were considered not recoverable and
have been provided for.
22. Employee Benefits
a)
The Company has adopted the Accounting Standard on Employee Benefits (AS 15) which has become mandatory from 1 April 2007. The
excess of plan assets of the pension and gratuity schemes as on 1 April 2007 over the obligations of the schemes, as determined on the basis
of actuarial valuation carried out, estimated to be Rs 797 lacs, had been provisionally recognised as an asset in the books of the Company as
on April 1 2007. The final actuarial valuation of retirement benefit liabilities was carried out , and in accordance with AS 15, the above surplus
has been recognised to the extent of present value of future contributions to be made for the retirement benefits of its existing employees,
aggregating Rs 384 lacs, as follows :
Rs lacs
Management Staff Pension scheme
Non Management Staff Pension scheme
Gratuity schemes
87
40
2,57
3,84
In accordance with the transitional provisions of the accounting standard, Rs 253 lacs (net of deferred tax adjustment of Rs 131 lacs) has been
adjusted to opening general reserves. Following adoption of the accounting standard, no adjustments were required in accounts in respect of
liability for post retirement benefit schemes and leave encashment schemes as on 1 April 2007.
b)
Disclosures made in accordance with Accounting Standard (AS 15) pertaining to defined benefit plans:
Pension (funded)
Management
Non Management
Staff
Staff
(i) Employee benefit expense recognised in Profit and Loss Account
(a) Current service cost
37
1,50
(b) Interest cost
3,18
1,86
(c) Expected return on plan assets
(3,47)
(1,90)
(d) Actuarial (gains) / losses
2
(1,62)
Total expense / (gain) $
10
(16)
(ii) Net Asset / (Liability) recognised in Balance Sheet
as on 31 March 2008
(a) Present value of obligation as at 31 March 2008
43,10
24,63
(b) Fair value of plan assets as at 31 March 2008
46,83
25,19
Net Asset / (Liability)
373
56
Present value of future contributions
92
56
Net Asset / (Liability) recognised in Balance Sheet
92
56
(iii)Change in defined benefit obligations during the
year ended 31 March 2008
Present value of obligations as on 1 April 2007
41,52
24,59
(a) Current service cost
37
1,50
(b) Interest cost
3,18
1,86
(c) Benefits paid
(3,66)
(2,57)
(d) Actuarial (gains) / losses
1,69
(75)
Present value of obligations as on 31 March 2008
43,10
24,63
Gratuity
(funded)
(Rs lacs)
Post Retirement
Medical Benefit
(unfunded)
46
38
(69)
43
58
6
56
–
29
91
5,35
8,68
3,33
2,00
2,00
7,33
–
(7,33)
5,35
46
38
(1,20)
36
5,35
7,54
6
56
(1,12)
29
7,33
(7,33)
Annual Report 2007-08 – ICI India Limited 63
NOTES TO THE CONSOLIDATED ACCOUNTS
(Rs lacs)
Pension (funded)
Management
Staff
Non Management
Staff
Gratuity
Post Retirement
(funded)
Medical Benefits
(unfunded)
(iv) Change in fair value of plan assets during the
year ended 31 March 2008
Fair value of plan assets as on 1 April 2007
45,19
24,99
9,25
–
(a) Expected return on plan assets #
3,47
1,90
69
–
(b) Company contributions
15
–
–
1,12
(c) Benefit payments
(3,66)
(2,57)
(1,20)
(1,12)
(d) Actuarial gains / (losses) #
1,68
87
(6)
–
Fair value of plan assets as on 31 March 2008
46,83
25,19
8,68
–
(v) Category of assets
Debt securities
69%
62%
91%
Gilt mutual funds
15%
5%
5%
Insurer managed funds
11%
20%
–
Special deposit scheme
5%
13%
4%
Total
100%
100%
100%
(vi) Actuarial assumptions
(a) Discount rate (annual)*
8.10%
8.10%
8.10%
8.10%
(b) Expected rate of return on assets (per annum)
8.00%
8.00%
8.00%
(c) Estimates of future salary increases take account of inflation, seniority, promotion, and other relevant factors, such as supply and
demand in the employment market
(d) Medical cost trend rates have no impact on actuarial valuation of any of the above employee benefit plans
$ Shown as an expense under 'Contribution to provident and other funds' in Schedule 14.
* Discount rate is based on market yields available on Government bonds as at 31 March 2008 with a term that matches that of the
liabilities
# together constitute actual return on plan assets
c) The Company has separate pension schemes for management staff and non-management staff. The former scheme is in the nature of 'final
salary' plan,and the latter scheme is in the nature of 'flat salary' plan. The Company also has separate gratuity schemes for management and
non-management staff; the benefits paid are as per the scheme rules or as per Payment of Gratuity Act, 1972, whichever is higher.
d) A part of the Company's pension scheme is a defined contribution plan. The Company's contribution of Rs 66 Lacs has been recognised
as an expense and shown under 'Contribution to provident and other funds' in Schedule 14.
e) The guidance on implementing AS-15 (revised) issued by Accounting Standards Board of the Institute of Chartered Accountants of India
states that benefit involving employer established provident funds, which requires interest shortfall to be recompensated, are to be considered
as defined benefit plans. Considering that presently there is no shortfall and also, as confirmed by the Actuary, there is no formal guidance
from Acturial Society of India, the Company believes that actuarial valuation at present is not necessary. The amount of contribution
during the year of Rs 208 lacs has been charged as 'contributions to provident and other funds' in Schedule 14.
Polyinks Limited contributes to the Government's Provident fund for its employees.The amount of contribution during the year of Rs 2
lacs has been charged as contributions to provident and other funds' in Schedule 14.
f) This being the first year of adoption of the Standard, previous year figures have not been disclosed.
23 Segment Information
(A) Information about primary business segments :
Following the divestment of Adhesives business in 2008-09 (refer to note 3), the Company's business segments comprise:
Paints
Others
:
:
Decorative and Refinish Paints.
Food Starch, Polymers and Adhesives.
Segment information relating to Adhesives business earlier considered under 'Chemicals' segment has been classified under 'Discontinuing Business'
(Refer to note 3, schedule18)
In 2006-07, the Company had divested its Uniqema and Quest ('Flavours & Fragrances') businesses, and previous year numbers have been shown under Discontinued
Businesses (refer to note 13 (c), schedule 18)
(2) Segment revenues, results and other information
(Rs lacs)
Discontinuing
Paints
2007-08
Others
Business
Discontinued Businesses
Uniqema
Flavours & Fragrances
Eliminations
Total
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
2007-08
2006-07
808,49
(96,15)
712,34
–
23,43
(1,87)
21,56
–
18,54
(1,64)
16,90
24
150,06
(17,61)
132,45
–
120,51
(13,00)
107,51
–
–
–
–
–
63,53
(8,57)
54,96
1,10
–
–
–
–
135,78
(12,32)
123,46
–
–
–
–
–
–
–
–
(1,34)
1,072,32
(133,61)
938,71
–
1,146,85
(131,68)
1015,17
–
8,01
720,35
31
21,87
9
17,23
2,55
135,00
2,60
110,11
–
–
1,08
57,14
–
–
–
123,46
–
–
–
(1,34)
12,49
951,20
11,78
1,026,95
Segment results
72,56
70,60
4,92
Unallocable income (net of unallocable expense)
Profit from operations before interest and taxation
3,42
16,36
11,28
–
11,63
–
11,88
–
–
93,84
15,42
109,26
108,81
10,54
119,35
1. Revenue
External sales (gross) 898,83
Excise Duty
(114,13)
External sales
784,70
Inter segment sales
–
Other business
related income
9,63
Total Revenue
794,33
2. Result
64 Annual Report 2007-08 – ICI India Limited
NOTES TO THE CONSOLIDATED ACCOUNTS
(2) Segment revenues, results and other information (Contd.)
(Rs lacs)
Discontinuing
Paints
2007-08
2006-07
3.
a.
b.
c.
d.
Others
2007-08
2006-07
Interest expense (net of interest income)
Profit before exceptional items
Exceptionals items
Profit before Taxation
Income taxes
Income taxes
– Current tax
– Deferred tax
– Fringe benefit tax
Profit after Taxation
Other Information
Assets
Segment assets
301,38
318,46
9,21
Investments
Unallocable assets
Total assets
Liabilities/Shareholders' funds
Segment Liabilities
231,29
193,46
4,49
Unallocable liabilities
Share Capital
Reserves
Loans
Total Liabilities/ Shareholders' funds
Others
Capital expenditure
23,56
19,38
14
Depreciation
20,27
19,76
3
Information on Discontinued /Discontinuing business
Total Revenues
Total expenses (incl.excise duty)
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Business
2007-08
2006-07
Discontinued Businesses
Uniqema
2007-08
2006-07
Flavours & Fragrances
2007-08
2006-07
Eliminations
2007-08
2006-07
Total
2007-08
2006-07
5
109,21
(18,73)
90,48
2,08
117,27
486,06
603,33
27,00
4
3,54
59,90
143,52
(5,88)
2,89
462,80
7,25
86,16
70,91
–
–
–
–
(61)
–
396,14
683,57
58,95
1,138,66
396,62
816,69
104,13
1,317,44
6,72
34,00
36,43
–
–
–
–
(61)
–
269,17
104,74
38,38
725,21
1,16
1,138,66
236,61
209,88
40,87
828,89
1,19
1,317,44
8
1
13,37
1,67
2,18
1,42
–
–
–
82
–
–
43
8,78
152,61
136,25
9,23
(6,17)
2,93
123,11
111,83
16,55
15,41
39
–
–
–
–
–
65,71
54,08
35
(4,99)
–
–
–
–
–
–
135,78
129,92
(30)
2,54
(35,46)
(B)Information on secondary segment (by geographical segment)
(Rs lacs)
India
2007-08 2006-07
945,54
971,16
394,52
395,32
37,07
22,07
Outside India
Total
2007-08 2006-07 2007-08 2006-07
5,66
55,79 951,20 1,026,95
1,62
1,30 396,14
396,62
–
– 37,07
22,07
Revenue
Carrying amount of segment assets*
Capital expenditure*
* Excludes inter segment assets
Notes:i) The business segments have been identified in line with the Accounting Standard 17, taking into account the nature of products, risks and
return,organisation structure and internal reporting system.
ii) Inter segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks, within an overall
optimisation objective for ICI India Group.
iii) Segment revenue, results and assets and liabilities figures include the respective amounts identifiable to each of the segments. Other un-allocable
items in segment results include income from investment of surplus funds of the Group and corporate level expenses. Unallocable / Others in assets
include unallocable fixed assets and current assets. Unallocable / Others under liabilities include unallocable current liabilities and net deferred
tax liability.
24 Related Party Disclosures
1.
List of related parties :
a) Holding Company : Imperial Chemical Industries Limited, England
b) Ultimate Holding Company: AkzoNobel NV
c) Other related parties (fellow subsidiaries) where common control exists and with whom transactions during the year have taken place :
Acheson Industries (Europe) Ltd, Netherlands
Inter-National Starch & Chemical Co. Inc., Philippines National Starch & Chemical Trading Co Ltd. (Thailand)
Alco Chemical, USA
National Adhesives Corporation, Belgium
NSC Pakistan, Pakistan
Dongsung NSC Ltd, Korea
National Adhesives Limited (Saudi Arabia)
National Starch & Chemical Ltd, UK
Dongsung NSC Ltd, Vietnam
National Starch, Singapore
National Starch & Chemicals New Zealand Ltd
Elotex Ag, Switzerland
National Starch & Chemical (Vietnam), Ltd
National Starch & Chemical Co., USA (Bridgewater)
ICI Colombia SA Transav
National Starch & Chemical Gmbh, Germany
National Starch & Chemical (Guangdong) Ltd., China
ICI ( Paints) Vietnam Ltd.
National Starch & Chemical Industrial Ltda., Brazil
National Starch & Chemical (Singapore) Pte Ltd.
ICI Paints (Malaysia) Sdn Bhd
National Starch & Chemical Ltd., London
National Starch & Chemical (Hongkong)
ICI Packaging Coating
National Starch & Chemical Pty. Ltd, Australia
National Starch & Chemicals (Canada)
ICI Paints (Thailand) Ltd
National Starch & Chemical, A.B., Sweden
National Starch & Chemicals B.V, Holland
ICI Paints (Asia Pacific) Pte Ltd
National Starch & Chemical SAS, France
National Starch China (Shanghai)
ICI Pakistan Limited
National Starch & Chemical Spa, Italy
Nitrex Chemicals India Ltd.
ICI Woobang Co. Ltd., Korea
National Starch & Chemical Co. Dongsung NSC, Korea PT National Starch & Chemical, Indonesia
ICI India Research & Technology Centre
National Starch & Chemical (M) Sdn Bhd, Malaysia
Pinturas INCA
ICI Swire Paints (Shanghai) Ltd
National Starch & Chemical Co. Ltd, Taiwan
PT ICI Paints Indonesia
ICI Paints (Vietnam) Holdings PTE Ltd.
National Starch & Chemical (Thailand) Ltd.
PT Dongsung NSC
The Glidden Co.
d) Key managerial persons
Mr. A. Narayan
Chairman
Mr. Rajiv Jain
Managing Director
Mr. M. R. Rajaram
Wholetime Director (upto 31 March 2007)
Mr. S. Batra
Wholetime Director (from 1 April 2007)
Annual Report 2007-08 – ICI India Limited 65
NOTES TO THE CONSOLIDATED ACCOUNTS
2. The following transactions were carried out with related parties in the ordinary course of business:
Holding
Company
a) Transactions during the year:
Purchase of materials / finished goods
Sale of finished goods
Purchase of fixed assets
Expenses incurred and recovered from other companies
Expenses recovered by other companies
Royalty paid
Dividend paid
Dividend Received
Indent Commission received
Services provided
Managerial remuneration
Balance as at the end of the year:
Dues to related parties
2007-08
2006-07
–
–
–
–
–
–
1,23
30
48
35
–
–
56,10
12,47
–
–
–
–
–
–
–
–
Fellow
Subsidiaries
of the
Company
2007-08
2006-07
47,14
50,98
1,99
6,45
19
8
99
1,72
10,56
5,82
2,35
53
–
–
–
–
85
1,16
3,57
1,35
–
–
(Rs lacs)
Key
Managerial
Persons
2007-08
2006-07
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,62
2,49
1,26
13,61
–
1,51
15,56
–
Due from related parties
23
1,41
–
11
5,40
–
Outstanding loans receivable at the end of the year from key managerial persons: Refer Schedule 9
b) Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during
the year
2007-08
2006-07
(Rs lacs)
(Rs lacs)
Purchase of raw material
Acheson Industries (Europe) Ltd., Netherlands
4,84
–
Dongsung NSC Ltd, Korea
6,78
7,61
Quest International, UK Ltd
–
7,94
Elotex Ag, Switzerland
7,14
–
National Starch & Chemical (Guangdong) Ltd., China
8,62
–
National Starch & Chemical Co., USA (Bridgewater)
5,21
–
Others
14,55
35,43
47,14
50,98
Purchase of fixed assets
National Starch & Chemical New Zealand Ltd
19
–
19
–
Sales of finished products
3,58
Hindustan Lever Limited
–
ICI Pakistan Ltd
1,32
–
National Adhesives Limited (Saudi Arabia)
52
–
Quest International,Egypt
–
95
Others
15
1,92
1,99
6,45
Expenses incurred and recovered from other Companies
Imperial Chemical Industries Limited, England
1,22
30
ICI Paints (Asia Pacific) Pte Ltd
62
28
PT Uniqema, Indonesia
–
28
The Glidden Co.
–
43
Others
37
73
2,21
2,02
66 Annual Report 2007-08 – ICI India Limited
NOTES TO THE CONSOLIDATED ACCOUNTS
Expenses recovered by other Companies
ICI Paints(Asia Pacific) Pte Ltd
Quest International,Nederland BV
National Starch & Chemical (Singapore) Pte Ltd.
Others
Indent Commission received
Acheson Industries (Europe) Ltd., Netherlands
Elotex Ag, Switzerland
National Starch & Chemical (Guangdong) Ltd., China
National Starch & Chemical (Singapore) Pte Ltd.
Others
Royalty paid
National Starch & Chemical Co., USA (Bridgewater)
Dividend paid
Imperial Chemical Industries Limited, England
Service provider
ICI India Research & Technology Centre
Managerial Remuneration
Mr. A.Narayan
Mr. Rajiv Jain
Mr. M R Rajaram
Mr. S. Batra
2007-08
(Rs Lacs)
2006-07
(Rs Lacs)
5,71
–
4,22
1,38
11,31
2,58
73
1,51
1,35
6,17
17
15
31
–
22
85
–
32
52
12
20
1,16
2,08
2,08
53
53
56,10
12,47
3,57
1,35
5
2,39
–
82
3,26
5
1,25
1,19
–
2,49
25. Details of amounts due from bodies, corporate under the same management as defined in Section 370(1B) of the Companies Act 1956
as referred to in Schedule 7, are given below :
As at 31 March 2008
As at 31 March 2007
(Rs lacs)
(Rs lacs)
Acheson Industries (Europe) Ltd., Netherlands
6
5
Elotex Ag, Switzerland
–
11
ICI Pakistan Ltd.
11
3
PT ICI Paints Indonesia
7
5
ICI Paints (Malaysia) Sdn Bhd
16
7
ICI Paints (Thailand) Ltd
1
2
ICI Paints(Asia Pacific) Pte Ltd
7
5
ICI Research & Technology Centre
–
5
Inter-National Starch & Chemical Co. Inc., Philippines
9
–
National Starch & Chemical (M) Sdn Bhd, Malaysia
–
3
National Starch & Chemical Co. Ltd, Taiwan
3
4
National Starch & Chemical (Singapore) Pte Ltd.
21
–
National Starch & Chemical (Guangdong) Ltd., China
40
27
National Starch & Chemical Co., USA (Bridgewater)
19
–
National Adhesives Limited (Saudi Arabia)
–
9
National Starch China (Shanghai)
1
–
Total
1,41
86
26. (a) The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions. The
Company does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at
31 March 2008 (all 'buy' contracts) are as under:
USD
GBP
EUR
CHF
As at 31 March 2008
2,845,711
11,646
415,848
324,305
As at 31 March 2007
5,424,610
–
–
–
(b) As at 31 March 2008, the Company had net foreign currency exposure that are not hedged by a derivative instrument or otherwise, as under:
USD
GBP
EUR
CHF
AUD
SGD
As at 31 March 2008
2,129,154
8,940
19,697
(285,431)
(14,400)
6,056
As at 31 March 2007
1,287,868
527,790
491,012
–
–
–
27. Figures of the current year are not comparable with those of the previous year in view of divestment of Uniqema business with effect from
2 September 2006 ,Paints Advanced Refinish business ('2K') with effect from 16 March 2007 and Quest International India Limited with effect
from 2 March 2007 [refer to note 13(c), (b) and (d)]
28. The figures relating to previous year have been regrouped wherever necessary to conform with the current year's classification.
A NARAYAN
Chairman
RAJIV JAIN
Managing Director
S BATRA
Wholetime Director
R GUHA
Company Secretary
Gurgaon
20 May 2008
Annual Report 2007-08 – ICI India Limited 67
ICI INDIA LIMITED
Registered Office: Geetanjali Apartment, 1st Floor, 8-B, Middleton Street, Kolkata 700 071
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 54 Annual General Meeting of
the Members of ICI India Limited will be held on Thursday, 17
July 2008 at 1400 hours at Bharatiyam Complex, IB 201, Salt
Lake, Kolkata 700106 to transact the following business:
In addition, reasonable out-of-pocket expenses and
service tax as applicable may also be reimbursed to the
Auditors. Any other fees for certification and other
services may be billed by the Auditors at such rates as
may be agreed between the Auditors and the Company."
th
ORDINARY BUSINESS
1.
To consider and adopt the audited Profit and Loss Account
for the financial year ended 31 March 2008, the audited
Balance Sheet as at that date and the Reports of the Directors
and Auditors thereon.
2.
To declare a Dividend on equity shares for the year ended
31 March 2008.
3.
a.
SPECIAL BUSINESS
5.
To consider and, if thought fit, to pass, with or without
modification, the following resolution as an ordinary
resolution:
To appoint a Director in place of Mr Aditya Narayan
who retires by rotation and being eligible has offered
himself for reappointment as a Director of the
Company. A brief resume of Mr Aditya Narayan has
been given in the Corporate Governance section of
the Directors' Report.
Accordingly, to consider and, if thought fit, to pass
with or without modification, the following resolution
as an ordinary resolution:
"Resolved that subject to the provisions of Sections 198
and 309 of the Companies Act, 1956, or any amendment or
re-enactment thereof, the Managing/Wholetime Directors
be paid such remuneration from time to time as may be
determined by the Board of Directors of the Company
within the maximum limits as set out in the Explanatory
Statement."
6.
"Resolved that Mr Aditya Narayan be and is hereby reappointed a Director of the Company."
b.
To appoint a Director in place of Mr R Gopalakrishnan
who retires by rotation and being eligible has offered
himself for reappointment as a Director of the
Company. A brief resume of Mr R Gopalakrishnan
has been given in the Corporate Governance section
of the Directors' Report.
"Resolved that this Meeting hereby approves the reappointment of Mr Rajiv Jain as the Managing Director of
the Company, in terms of Sections 198, 269, 309 and other
applicable provisions, read with Schedule XIII of the
Companies Act, 1956, for a period of five years with effect
from 1 April 2008 and the payment of such remuneration
to Mr Rajiv Jain during the tenure of his appointment as
set out in the agreement dated 20 May 2008 entered into
between him and the Company, a copy of which was placed
before the Meeting."
"Resolved that Mr R Gopalakrishnan be and is hereby reappointed a Director of the Company."
To appoint Auditors and to fix their remuneration and for
this purpose to consider and, if thought fit, pass with or
without modification, the following resolution as an
ordinary resolution; provided that in the event of the
provisions of Section 224A of the Companies Act 1956,
becoming applicable to the Company on the date of holding
the Meeting, the same will be proposed as a special
resolution:
"Resolved that the Auditors, M/s BSR & Associates,
Chartered Accountants, who retire at the conclusion of this
meeting, be and are hereby re-appointed Auditors of the
Company to hold office from the conclusion of this Annual
General Meeting until the conclusion of the next Annual
General Meeting of the Company at the remuneration as
given below:
Statutory Audit
Rs 20 lacs
Tax Audit
Rs 5 lacs
Statutory certification
Rs 12 lacs
68 Annual Report 2007-08 – ICI India Limited
To approve re-appointment of Mr Rajiv Jain as the
Managing Director of the Company
To consider and, if thought fit, to pass, with or without
modification, the following resolution as an ordinary
resolution:
Accordingly, to consider and, if thought fit, to pass with or
without modification, the following resolution as an
ordinary resolution:
4.
To approve revision in remuneration limits of Managing
and Wholetime Directors
7.
To approve payment of Commission to Non Executive
Directors
To consider and if thought fit, to pass, with or without
modifications, the following resolution as a Special
Resolution:
"Resolved that, in supercession of the resolution passed by
the Members at the General Meeting held on 30 July 2003:
i)
The Company, pursuant to Section 309 and other
provisions of the Companies Act, 1956 (the 'Act'), if
applicable and/or approvals as may be required under
the provisions of the Act, hereby authorizes payment
of remuneration by way of Commission to one or more
or all the Directors who are neither in the wholetime
employment nor Managing Director of the Company,
for each of the five financial years of the Company
commencing from 1 April 2008.
NOTICE OF ANNUAL GENERAL MEETING
ii)
The amount to be paid as Commission shall not exceed
in the aggregate one per cent of the net profit of the
Company in any financial year, computed in
accordance with Section 198 of the Act, for all such
Directors, and
iii)
The Board of Directors be and is authorized to decide
on the amount to be paid by way of Commission to
such Directors, subject to a maximum of Rs 10 lacs
for any such Director in any financial year."
viii) Members who wish to obtain any information on the
Company or the Accounts may visit Company's website
http://www.iciindia.com or may send their queries at least
10 days before the date of the Meeting to the Company
Secretary at the Company's Corporate Office at DLF Plaza
Tower, 10th Floor, DLF Qutab Enclave, Phase I,
Gurgaon - 122002.
ix)
By order of the Board
Gurgaon
20 May 2008
R GUHA
Company Secretary
NOTES
i)
A member entitled to attend and vote at the Meeting is
entitled to appoint a proxy to attend and vote on a poll
instead of him but the proxy shall not have any right to
speak at the Meeting. A proxy need not be a member of the
Company. The Proxy form, in order to be effective, should
be received at the registered office of the Company or at
the office of its Registrar and Share Transfer Agent M/s C
B Management Services (P) Ltd, (the 'RTA'), P-22, Bondel
Road, Kolkata - 700019 not later than 48 hours before the
commencement of the Meeting.
ii)
The Register of Members and Share Transfer books of the
Company will remain closed from 1 July 2008 to 17 July
2008, both days inclusive.
iii)
Dividend, if approved at the Meeting, will be paid on or
around 21 July 2008 by means of direct bank credit (ECS)
or dividend warrants or cheques to those members whose
names appear on the Company's Register of Members as
on 17 July 2008.
iv)
As per current SEBI Regulations, dividend is required to
be credited to shareholders through Electronic Clearing
Service (ECS), wherever the facility is available and the
requisite details/mandates have been provided by the
Members. Members desirous of availing of this facility may
send the details of their bank account with the address and
the MICR Code of their bank to their Depository
Participants (in case of shares held in dematerialized form)
or to the RTA (in case of shares held in physical form) at
the earliest.
v)
Members holding shares in physical form registered in the
same name or in the same order of names but in several
folios, may please write to the RTA so that the folios can be
consolidated.
vi)
Members holding shares in physical form, who are desirous
of making nomination in respect of the shares held by
them in the Company, may write to the RTA for the
prescribed form.
vii) Members/Proxy holders must bring the Attendance Slip to
the Meeting and hand it over at the entrance, duly signed.
A blank format of the Attendance Slip is enclosed.
Pursuant to the provisions of Section 205A of the
Companies Act, 1956, as amended, dividends which remain
unpaid or unclaimed for a period of 7 years will be
transferred to the Investor Education and Protection Fund
(the 'Fund') of the Central Government. Shareholders who
have not encashed the dividend warrants so far, for the
financial year ended 31st March 2001 or any subsequent
financial years, are requested to send unencashed dividend
warrant, to the RTA for necessary action. Separate intimation
to those members whose dividend warrants remain
unencashed as on 31 March 2008, as per the Company's
records, have been sent. All unclaimed dividends in respect
of financial year 2000-01 are due for transfer to the Fund
on expiry of seven years from the date they fell due. Pursuant
to the provisions of Section 205C of the Companies Act,
1956, no claim shall lie against the Company or the Fund
after the transfer in respect of the said dividends.
Explanatory Statement, pursuant to Section 173 for the
Companies Act, 1956
Item 4: Re-appointment of Auditors
The total shareholding of Public Financial Institutions ("PFI")
in the company is around 12% as on the date this Notice.
However, in the event of PFI holding in the Company increasing
to not less than 25% of the subscribed capital of the Company
between the date of this Notice and the date of the Annual General
Meeting, the reappointment of Auditors will need to be approved
by the shareholders by means of special resolution, in terms of
Sec 224A of the Companies Act.
Accordingly, this resolution will be proposed as an ordinary/
special resolution, as the case may be, at the Annual General
Meeting.
Item 5: Remuneration to Managing Director/Wholetime
Directors - revision in limits
At the Annual General Meeting held on 26 July 2001, Members
had delegated authority to the Board to fix the remuneration of the
Managing Director and Wholetime Directors from time to time
within the maximum limits sanctioned at the said Meeting. The Board
and the Remuneration & Nomination Committee, at their meeting
held on 20 May 2008, reviewed these limits and have recommended
their revision, considering the managerial remuneration structures
in other similar companies and also the need to retain and reward
talent, subject to the statutory limits laid down in Sec 198 and 309
of the Act, as follows:
1.
Fixed Salary
This head shall include Basic salary, supplementary
allowance, leave travel allowance and shall be subject to
the following limits:
Managing Director Rs 8.50 lacs per month
Wholetime Directors Rs 6.00 lacs per month
Annual Report 2007-08 – ICI India Limited 69
NOTICE OF ANNUAL GENERAL MEETING
2.
Commission / Variable Pay including Deferred
Performance Pay
payable, if approved, to Mr Rajiv Jain required to be circulated
to the members in terms of Section 302 of the Act.
This head shall include such amount as may be determined
by the Board for each financial year within the limits
provided under the Companies Act, 1956 and based on the
net profit for that year and taking into account all the
relevant circumstances.
Salient terms and conditions of the Agreement dated 20 May
2008 between Mr Rajiv Jain and the Company
Provided that the limit in aggregate of such Commission/
Variable Pay including Deferred Performance Pay shall be
fixed at 150% of the Fixed Salary, which can be used
interchangeably without any sub-limits under any of the
aforesaid heads.
3.
Perquisites
This head shall include furnished accommodation, gas,
electricity, water, club fees, medical reimbursement,
personal accident/ medical insurance, passage benefits for
expatriate Wholetime Directors, and/or any other perquisite
as may be approved by the Board or the shareholders, as
the case may be, and shall include allowances in lieu of
perquisites like housing accommodation, car etc, as per the
rules of the Company.
Provided that the limit in aggregate of such perquisites be
fixed at 100% of the Fixed Salary, which can be used
interchangeably without any sub-limits under any of the
aforesaid heads.
For the purpose of calculating the ceiling as above,
encashment of leave at the end of tenure, expenses on
account of car and telephone for official duties, Company's
contribution to Provident and other retiral benefit funds to
the extent not taxable under the Income Tax Act for Indian
Directors and passage benefits for expatriate directors will
not be taken into account.
The resolution is intended to give the necessary flexibility
to the Board in the emerging competitive environment to
fix the remuneration of Managing Director and Wholetime
Directors from time to time within the maximum limits as
aforesaid.
The Board recommends the resolution. Except Mr Rajiv
Jain and Mr Sandeep Batra, no other Director has any
interest or concern in the resolution.
Item 6: Re-appointment of Managing Director
The Board has, by its resolution by circulation dated 31 March
2008, re- appointed Mr Rajiv Jain as the Managing Director of
the Company for a period of five years with effect from
1 April 2008, subject to the approval of the members at the next
general meeting of the Company.
A brief resume of Mr Rajiv Jain has been given in the Corporate
Governance section of the Directors' Report.
1. Term
Five years with effect from 1st April 2008, subject to the
rules of the Company.
In terms of Articles of Association of the Company, the
Managing Director is not liable to retire by rotation from the
Board of Directors during the tenure of his appointment.
2. Emoluments
Subject to the overall limits approved by the shareholders
and as laid down in Sections 198 and 309 of the Act:
a) Fixed Salary
Basic Salary
Allowances including
Leave Travel Allowance
: Rs 377,580 per month
: Rs 329,170 per month
He shall be entitled to such other allowances, as per the
rules of the Company and as may be approved by the
Board.
The Board may review and determine from time to time
and make necessary changes in the salary and/or
allowances during the tenure of his appointment.
b) Commission / Variable Pay including Deferred
Performance Pay
As may be approved by the Board for each financial year
based on the net profit of the Company for that year,
computed in the manner laid down in Section 309(5) of
the Act and after taking into account all relevant
circumstances.
The aggregate monetary value of the Commission/
Variable Pay including Deferred Performance Pay shall
not exceed 150% of the Fixed Salary, which limit can be
used interchangeably without any sub limits under any
of the aforesaid heads.
c)
Perquisites
The following perquisites would be provided by the
Company, subject to tax as applicable:
i) Accommodation:
Furnished
residential
accommodation, including gas, electricity and water.
ii) Car and Telephone: Provision of car for use on
Company's business and telephone at residence.
These will not be considered as perquisites. However,
personal long distance calls on telephone shall be
billed by the Company.
iii) Contribution to Retiral Benefit Funds
The remuneration and other terms relating to Mr Rajiv Jain's
appointment as the Managing Director of the Company are
contained in the agreement dated 20 May 2008 between Mr Rajiv
Jain and the Company (the 'Agreement'), which was approved
by the Board at its meeting on 20 May 2008.
a) Mr Jain will continue to be a member of ICI's
Associated Companies in India Staff Provident
Fund with the Company's contribution not
exceeding the limit permissible under law
(currently 12% of the salary).
A summary of the key terms of Mr Jain's appointment are set out
below. This Notice and explanatory statement may be treated as
the abstract of the terms of appointment and remuneration
b) Mr Jain will be entitled to pension benefits in
accordance with the Pension Fund Rules
applicable to the Company's Management Staff,
70 Annual Report 2007-08 – ICI India Limited
NOTICE OF ANNUAL GENERAL MEETING
but the contributions therefor shall not, together
with the Company's contribution to the Provident
Fund, exceed the maximum limit permissible
under law.
c) Mr Jain will be entitled to Gratuity in accordance
with the Gratuity Fund Rules applicable to the
Company's Management Staff not exceeding half
a month's salary for each completed year of
service.
iv) Club Fees: Fees of a maximum of two clubs
excluding admission and life membership fees.
v) Leave: Leave on full pay and allowances, as per rules
of the Company, but not exceeding 35 days leave for
every 12 months of service.
vi) Encashment of Leave: At the end of tenure of office
in accordance with the Company's rules.
vii) Medical Benefits: Reimbursement of expenses
actually incurred for self and family.
viii)Personal Accident/Medical Insurance: As per
Company policy.
Mr Jain shall have the option to forego any of the
perquisites as above and opt for an allowance in lieu
thereof, as per rules of the Company and as approved by
the Board.
The aggregate monetary value of the perquisites and the
cash out value thereof, if availed by Mr Jain, shall not
exceed 100% of the Fixed Salary, which limit can be
used interchangeably without any sub-limits under any
of the aforesaid heads. For calculating the monetary value
of the perquisites, they shall be valued as per Income
Tax Rules wherever applicable and in the absence thereof,
at cost.
For the purpose of calculating the ceiling as above,
encashment of leave at the end of tenure, expenses on
account of car and telephone for official duties,
Company's contribution to Retiral Benefit Funds to the
extent not taxable under the Income Tax Act, shall not
be taken into account.
The Board may review and determine from time to time
any revision and/or modification in the above perquisites
during the tenure of his appointment.
3. The Board while approving any change in the remuneration
of Mr Rajiv Jain in his Fixed Salary, Commission/Variable
Pay including Deferred Performance Pay and Perquisites,
may take into account the recommendation of the
Remuneration & Nominations Committee.
4. Minimum Remuneration
In the event of absence or inadequacy of profit of the
Company in any financial year, Mr Rajiv Jain will be entitled
to receive such minimum remuneration as is permissible
under the provisions of the Act.
6. Duties and Obligations
The Agreement also sets out the duties and various obligations
of Mr Rajiv Jain.
The appointment of Mr Rajiv Jain as Managing Director and
the remuneration payable to him as aforesaid are to be
approved by the shareholders at this Annual General Meeting
in terms of Section 269 of the Act. This resolution is intended
for this purpose.
The terms of Mr Rajiv Jain's appointment are more fully set
out in the said Agreement dated 20 May 2008, which will be
available for inspection by any member at the registered office
of the Company between 10 am to 12 noon on any working
day (excluding Saturdays) prior to the date of the Annual
General Meeting as well as at the Meeting.
The Board recommends the resolution. Except Mr Rajiv Jain,
no other Director has any interest or concern in the resolution.
Item 7: Commission to Non-Executive Directors
The Members of the Company, at the General Meeting held on
30 July 2003, had approved payment of Commission to the NonExecutive Directors ('NEDs'), for a period 5 years from the
financial year commencing from 1 April 2003, in accordance
with the provisions of Section 309 of the Companies Act 1956
(the 'Act') and subject to a maximum of Rs 10 lacs per NED per
year. The said resolution expired on 31 March 2008.
Considering the time devoted and valuable inputs and guidance
available to the Company from the NEDs, the Board of Directors
have, in their meeting held on 20 May 2008, recommended to
the members continuation of payment of Commission to the
NEDs to compensate for the services rendered by them. The
members may note that though there was provision to pay a
Commission of upto Rs 10 lacs per annum per NED, the actual
amount paid during the period 2003-2008 was Rs 5 lacs per
Director per annum. The purpose of seeking to retain a higher
limit of Rs 10 lacs is to provide necessary flexibility to the Board
to remunerate the NEDs suitably depending on the Company's
performance in any particular year and other relevant
considerations.
It is therefore proposed that the Board be authorized to approve
payment of Commission not exceeding Rs 10 lacs in any financial
year per NED for a period of five financial years commencing 1
April 2008 within the overall ceiling of one percent of the net
profit of the Company as laid down in Section 309 of the Act
and subject to approval of the Central Government, as applicable.
The Board recommends the resolution. All the Non-Executive
Directors may be deemed to be concerned or interested in the
resolution.
By order of the Board
5. Termination
The Agreement provides that either party may terminate the
appointment by giving to the other six months' previous
notice in writing.
Gurgaon
20 May 2008
R GUHA
Company Secretary
Annual Report 2007-08 – ICI India Limited 71
ICI INDIA LIMITED – TEN YEARS AT A GLANCE
1998-99 1999-2000
Rs lacs
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
ASSETS EMPLOYED
Gross Fixed Assets
Accumulated Depreciation
Net Fixed Assets
Capital Work in Progress
Long Term Investments
Current Assets
(excl Cash & Bank
and inter-corp deposits)
Current Liabilities
Net Current Assets
Provision for
VRS liability (net)
Deferred Tax Liability
Misc. Expenditure
not written off
Net Assets Employed
418,54
367,28
367,47
362,11
363,40
351,58
373,68
311,51
285,69
311,57
(143,86)
(131,10)
(156,21)
(144,32)
(176,07)
(186,34)
(225,11)
(166,20)
(155,93)
(178,32)
274,68
236,18
211,26
217,79
187,33
165,24
148,57
145,31
129,76
133,25
11,27
5,24
2,52
5,20
11,72
3,81
2,67
4,88
3,53
10,47
13,80
13,03
12,97
159,95
199,96
243,87
293,86
253,03
60,60
10,60
375,00
294,82
261,53
234,22
227,51
263,72
293,97
280,44
338,05
275,97
(248,28)
(202,20)
(195,74)
(214,73)
(275,59)
(348,08)
(303,23)
(300,37)
(423,63)
(355,62)
126,72
92,62
65,79
19,49
(48,08)
(84,36)
(9,26)
(19,93)
(85,58)
(79,65)
–
(67,47)
(61,85)
(47,75)
(39,35)
(33,40)
(25,17)
(18,58)
(12,79)
(7,62)
(12,00)
(4,36)
(6,80)
(24,71)
(17,29)
(8,54)
(9,85)
(13,04)
(8,10)
(9,48)
–
9,78
9,78
7,94
5,14
5,09
2,58
1,21
–
–
414,47
285,02
233,67
337,91
299,43
291,71
403,40
352,88
87,42
57,57
40,87
40,87
40,87
40,87
40,87
40,87
40,87
40,87
40,87
38,38
FINANCED BY
Share Capital
Capital Reserves
46,08
39,42
38,66
32,28
30,75
30,17
27,61
27,55
26,55
27,88
Revenue Reserves
217,70
256,90
301,24
336,27
397,85
449,11
460,72
482,91
802,23
696,71
Shareholders Funds
304,65
337,19
380,78
409,42
469,47
520,15
529,20
551,33
869,65
762,97
Net Debt *
109,82
(52,17)
(147,10)
(71,51)
(170,04)
(228,44)
(125,80)
(198,45)
(782,23)
(705,40)
Total Funds Employed
414,47
285,02
233,67
337,91
299,43
291,71
403,40
352,88
87,42
57,57
Sales & services
833,33
873,12
818,42
712,19
700,83
775,70
855,90
992,89
1007,05
1062,36
Profit before
Depreciation & Interest
101,12
86,50
67,07
74,23
87,04
83,13
93,00
121,94
164,87
131,15
Depreciation
(24,16)
(23,29)
(23,11)
(22,96)
(23,37)
(24,28)
(20,14)
(21,79)
(22,47)
(22,51)
Interest
(27,56)
(16,09)
(3,45)
(1,70)
(3,34)
(4,58)
(3,50)
(3,63)
(2,29)
50
49,40
47,12
40,51
49,57
60,33
54,27
69,36
96,52
140,11
109,14
SALES AND PROFIT
Profit before Exceptional
items/Taxation
Exceptional items
26,48
17,03
46,41
57,64
72,85
77,18
(13,68)
(11,01)
446,12
(18,73)
(14,50)
–
(17,80)
(26,70)
(25,49)
(22,36)
(8,50)
(35,36)
(137,81)
(30,20)
61,38
64,15
69,12
80,51
107,69
109,09
47,18
50,15
448,42
60,21
Earnings per share (Rupees) 15.02
15.70
16.91
19.70
26.35
26.69
11.54
12.27
109.72
15.16
Equity Dividend – Amount
22,48
22,48
22,48
40,87
40,87
51,09
22,48
24,52
110,35
30,70
55
55
55
100
100
125
55
60
270
80
56,063
54,744
58,433
57,632
55,080
49,104
47,136
43,070
41,261
40,131
Taxation
Profit After Taxation
–%
NUMBER OF EQUITY
SHAREHOLDERS
* Net Debt consists of Secured and Unsecured Loans, (net of) cash and bank balances, current investments and inter corporate deposits. Current
assets have been regrouped accordingly.
72 Annual Report 2007-08 – ICI India Limited
ICI India Limited
Performance Trends: 1998-2008
Sales
Profit before Tax from Operations
120
1200
109.0 109.1
219
1000
574
Rs cr
800
274
375
96.5
100
942
216
510
1062
80
69.4
774
290
Rs cr
547
65
640
600
60
60.3
49.4
502
400
200
286
299
308
54.3
40.5
40
411
49.6
47.1
340
20
0
0
98-99 99-00
2001-02
2003-04
Continuing Businesses
2005-06
2007-08
98-99 99-00
2001-02
2003-04
2005-06
2007-08
Discontinued Businesses
Employee Productivity
Asset Productivity
7.0
2500
2,022
2000
1,657
1500
1,107
1,223
961
1000
780
733
685
6.0
Sales / Net Operating Assets
Value added per employee (Rs 000)
6.8
2,070
753
500
5.3
5.0
4.6
4.0
3.8
3.0
2.0
3.2
2.1
2.3
2.5
2.3
2.5
1.0
0
0.0
98-99 99-00
2001-02
2003-04
2005-06
2007-08
Value added = Operating Profit + Depreciation + Manpower Costs
98-99 99-00
2001-02
2003-04
2005-06
2007-08
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