Page 65 - Tata_Chemicals_yearly-reports-2017-18

In January 2018, the Company completed the sale of the Urea No material related party transactions were entered during the
business to Yara India and received a consideration of ` 2,682 crore financial year by the Company. Accordingly, the disclosure of related
(subject to post completion working capital adjustments). party transactions, as required under Section 134(3)(h) of the Act in
Form AOC-2 is not applicable to the Company.
Dividends from subsidiaries/joint venture
All transactions with related parties were reviewed and approved
Rallis, a subsidiary of the Company and IMACID, a joint venture,
by the Audit Committee. Prior omnibus approval is obtained for
paid dividends of ` 36.50 crore (FY 2016-17: ` 24.34 crore) and related party transactions which are of repetitive nature and entered
` 9.82 crore (FY 2016-17: ` 21.02 crore) respectively to the Company. in the ordinary course of business and on an arm’s length basis.
Tata Chemicals North America Inc., a step-down subsidiary of the The transactions entered into pursuant to the omnibus approval
Company, paid a dividend of US$ 12.34 million (FY 2016-17: US$ 10 so granted are reviewed by the internal audit team. Thereafter, a
million) which has been deployed towards operational requirements statement giving details of all related party transactions is placed
and external finance costs at TCIPL, Singapore. before the Audit Committee on a quarterly basis for its review.
Credit Ratings The details of the transactions with related parties are provided in the
accompanying financial statements.
There were no changes in the credit rating of the Company. As at Integrated Report
31 March, 2018, the Company had the following credit ratings: RISK MANAGEMENT POLICY
- Long Term Corporate Family Rating of Ba1/Stable from Moody’s The Risk Management policy of the Company lays down the
Investors Service framework of Risk Management promoting a proactive approach in
reporting, evaluating and resolving risks associated with the business.
- Long-Term Issuer Default Rating (IDR) of BB+ with Stable
Mechanisms for identification and prioritisation of risks include
outlook from Fitch Ratings
scanning the business environment and internal risk factors. Analysis
- INR denominated Non-Convertible Debentures of ` 250 crore of the risks identified is carried out by way of focused discussion at
are rated at CARE AA+ with Stable outlook by CARE Ratings and the meetings of the empowered Risk Management Group (Senior
BWR AA+ (Stable) by Brickwork Ratings Leadership team) and Risk Management Committee of the Board.
- Long term bank facilities (fund-based limits) of ` 1,897 crore The robust governance structure has also helped in the integration of
and short term bank facilities (non-fund based limits) of the Enterprise Risk Management process with the Company’s strategy
` 2,448 crore are rated at CARE AA+ (Outlook: Stable) and CARE and planning processes where emerging risks are used as inputs in
A1+, respectively, by CARE Ratings the strategy and planning process.
- Short term debt programme (including Commercial Paper) of Identified risks are used as one of the key inputs for the development Statutory Reports
` 600 crore is rated at CRISIL A1+ by CRISIL Ratings of strategy and business plan. The respective risk owner selects a
series of actions to align risks with the Company’s risk appetite and
Tata Chemicals North America Inc. credit rating at 31 March, 2018 was: risk tolerance levels to reduce the potential impact of the risk should
- A Long Term Corporate Family Rating of Ba3/Stable, Senior it occur and/or to reduce the expected frequency of its occurrence.
Secured Bank Credit Facility rating of Ba3/LGD4 and Sp. Grade Mitigation plans are finalised, owners are identified and progress of
Liquidity rating of SGL-2 from Moody’s Investors Service mitigation actions are monitored and reviewed. The risk management
process has been rolled out to overseas subsidiaries including
- A Corporate credit rating of B+/Stable and issue level ratings of
domestic business.
BB/Recovery rating 1(95%) on Senior Secured debt from S&P
Global Although non-mandatory, the Company has constituted a Risk
Management Committee (‘RMC’) to oversee the risk management
MANAGEMENT DISCUSSION AND ANALYSIS efforts in the Company under the chairmanship of Dr. Y.S.P. Thorat,
Pursuant to Regulation 34 of the SEBI (Listing Obligations & Independent Director. Risk assessment update is provided to the
RMC on periodical basis. RMC assists the Audit Committee and the
Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’),
Board of Directors in overseeing the Company’s risk management
the Management Discussion and Analysis is presented in a separate
processes and controls. Some of the risks identified are set out in the
section forming part of this Annual Report. Financial Statements
Management Discussion and Analysis which forms part of this Annual
BUSINESS RESPONSIBILITY REPORT Report.
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business DIVIDEND DISTRIBUTION POLICY
Responsibility Report initiatives taken from an environmental, social
In accordance with Regulation 43A of Listing Regulations, it
and governance perspective in the prescribed format is available as
is mandatory for the top 500 listed entities, based on market
a separate section of this Annual Report and also available on the capitalisation, as on 31 March of every financial year to formulate a
Company’s website viz. www.tatachemicals.com. Dividend Distribution Policy (‘Policy’) and disclose the same in the
RELATED PARTY TRANSACTIONS Annual Report and on the website of the Company.
The Company has formulated a policy on materiality of related Accordingly, the Board of Directors of the Company has adopted
party transactions and manner of dealing with related party the Policy which endeavours for fairness, consistency and
transactions which is available on the Company’s website at the link: sustainability while distributing profits to the shareholders. The
Policy is attached to this Annual Report as Annexure 1 and same is
http://tatachemicals.com/upload/content_pdf/tcl_rpt_policy.pdf.
available on the Company’s website under the ‘Investors’ section at
All related party transactions entered into during FY 2017-18 were http://www.tatachemicals.com/upload/content_pdf/tcl-dividend-
on an arm’s length basis and in the ordinary course of business. distribution-policy.pdf.
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