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T C P Ltd.

BSE: 530282 Sector: Infrastructure
NSE: TCPLTD ISIN Code: INE459B01018
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T C P Ltd. (TCPLTD) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting the Forty fourth Annual Report and theAudited Accounts of your company for the financial year ended 31st March 2016.

FINANCIAL RESULTS

The Financial Results for the year ended 31st March 2016 is as follows:

Year ended 31st March 2016 Year ended 31st March 2015
(Rs. in Lakhs)
Sales – Net of Excise Duty 27499.40 35794.03
Other operating revenue 597.50 1402.92
Other income 58.63 134.23
Total revenue 28155.53 37331.18
Profit before Interest & Depreciation 3878.40 7128.94
Less: Interest 771.90 565.45
Depreciation 595.84 536.72
1367.74 2182.90
Profit before tax 2510.66 6026.77
Less: Current tax (Net of MAT credit) 685.00 1850.00
Deferred tax (Net) 101.24 89.14
Wealth Tax - 4.31
Tax relating to earlier years (-) 3.71 4.41
Profit after tax 1728.13 4078.91
Add: Surplus brought forward from previous year 17385.93 13809.16
Add: Carrying amount of assets not having any remaining useful life - 58.41
Available for appropriations 19114.06 17946.48
Dividend 10% (2014-15: 10%) 50.32 50.32
Corporate Dividend Tax 10.24 10.24
Transfer to General Reserve 500.00 500.00
Surplus carried forward to Balance Sheet 18553.50 17385.92
Company’s Key Financial Ratios 2016 2015
Rs. Rs.
Earnings per share 34 81
Dividend per share 1 1
Return on Net worth 4% 11%

DIVIDEND

Your Directors have pleasure in recommending a dividend of 10% on the Equity Shares.The quantum of dividend outgo on this account is Rs. 50.32 lakhs representing 2.91% ofprofit after tax.

SEGMENTWISE / PRODUCTWISE PERFORMANCE PRODUCTION

I. CHEMICALS

Sodium Hydrosulphite

During the year your company had produced 9141 MT of Sodium Hydrosulphite as against10811 MT in the previous year a decrease by about 15%. The decrease in production wasdue to an unexpected plant shut down for maintenance work from 1st April 2015 to 12th May2015.

Liquid Sulphur Dioxide

During the year your Company had produced 8330 MT of Liquid Sulphur Dioxide as against10075 MT in the previous year a decrease by about 17 %.

Sulphoxylate

There was no production of Sulphoxylates during the year as against 5 MT in theprevious year.

II. RECOVERY SALTS

The trisalt production was 4017 MT as against 3391MT in the previous year.

III. ELECTRIC POWER Electric Power Generation

Your company had generated 3714 lakh units of electricity as against 4781 lakh unitslast year from the Thermal Power Plant. The average Plant Load Factor during the yearunder review was 67.36%. The Biomass based power plant had generated 20 lakh units ofelectricity as against 186 lakh units in the previous year. The Wind Mills had generated205 lakh units of electricity as against 262 lakh units in the previous year. The lowergeneration was due to lower demand. The Plant was shut down for annual maintenance worksin the months of October 2015 and November 2015.

SALES

I. CHEMICALS

Sodium Hydrosulphite

During the year your company had made sale of 8579 MT of Sodium Hydrosulphite asagainst 11188 MT in the previous year. The domestic sales decreased by about 2.8% duringthe year when compared with the previous year due to fall in production and shrinking ofdemand in the domestic market. Your company is preparing to expand its market base in thecurrent year.

Liquid Sulphur Dioxide

The sale of Liquid Sulphur Dioxide during the year was 512 MT as against 894 MT in theprevious year. During the year the sales has decreased by about 42%. The lower sales isdue to lower production. The sales can be augmented in the coming years as we foresee agood demand for the product.

Sulphoxylates

There were no sale of Sulphoxylates during the year as against 8 MT in the previousyear. This is due to no production during this year.

Recovery salts

The sale of Recovery salts was 1735 MT during the year as against 2776 MT in theprevious year. The lower sale is due to lower demand during the year.

II. POWER

During the year your Company had sold 3353 lakh units of electricity as against 4479lakh units in the previous year from the Thermal Power Plant. The Biomass based Powerplant had sold 10 lakh units of electricity as against 144 lakh units in the previousyear. The Wind mills had exported 152 lakh units of electricity as against 202 lakh unitsin the previous year. The less sales during the year was due to lower generation duringthe year.

The Company sells power under Group Captive Consumer arrangement. The power generatedup to 58 MW were sold to Group Captive Consumers and the balance power generated wastowards captive consumption. The Group Captive Consumers arrangement Rules stipulate thatthe Group Captive Consumers should hold at least 26% share holding in the Company.Accordingly the present Group Captive Consumers hold about 26% equity shareholding in theCompany. As at 31st March 2016 there are about 40 Group Captive Consumers.

EXPORTS

During the year your Company had exported 1035 MTs of Sodium Hydrosulphite as against3418 MTs during the previous year a decrease by 69.72% due to unexpected fall inproduction. There was also a weak demand in the overseas markets and also intensecompetition from China. The exports constituted about 11.33% of the production and about12.07% of the total Sales.

The highlight of this year’s performance is that for the first time we hadexported directly to Turkmenistan with shipments of 108 MT’s. We had secured repeatedorders from the buyer in this country which indicates once again their acceptance of ourproducts and our product quality packing quality and timely shipments. Another highlightis that this year we had identified a new customer in Egypt to whom we had exportedabout 4.50 MT’s. We expect to secure repeated orders from this buyer. In Turkey alsowe had identified a new customer and will be supplying to him in the current year.

This year Sodium Hydrosulphite was exported to 9 countries spread across all theregions like the United States of America Europe Far East South Asia and Africa. Inkeeping with the past trend the United States of America and the Turkey were again thecountries were major shipments were exported. We had exported about 51% of the totalexports during the year to these two countries. We had also exported to Pakistan SriLanka and Turkmenistan about 38% of the total exports during the year.

At present the international market has transformed itself into a price-sensitivemarket where price of the product determines the securing of the orders. There are alsoother markets where buyers prefer Company’s products primarily due to its quality andtimely shipments which is favourable factor to the Company.

But there is still a stiff competition from China the world’s largest producerand exporter of Sodium Hydrosulphite. Their products pose a threat to our productsprimarily due to their unbelievably low price at which they are offered to the buyers. Inthe current year also the Company would be focusing on retaining the existing marketsidentifying new buyers in the existing markets and penetrating into new markets.

CREDIT RATING

The Credit rating assigned to the Company as at 31st March 2016 are as follows:

Credit Rating Agency Credit Facilities Rating
CRISIL Bank borrowings – Long term CRISIL BBB+/ Stable
CRISIL Bank borrowings – Short term CRISIL A2
CRISIL Fixed Deposits FA-/ Stable

FIXED DEPOSITS

As at 31st March 2016 there are 2078 fixed deposits amounting to Rs.1838.76 lakhsand 666 cumulative deposits amounting to Rs.515.77 lakhs (maturity value Rs.695.54 lakhs)aggregating to 2744 deposits for an amount of Rs.2354.53 lakhs (for maturity value ofRs.2534.30 lakhs) that have not yet matured for repayment. These outstanding depositsinclude 7 cumulative deposits accepted from 4 members of the Company for an amount ofRs.54.74 lakhs (maturity value Rs.72.65 lakhs). There are 113 fixed deposits and 32cumulative deposits aggregating to 145 deposits for an amount of Rs. 59.76 lakhs that havematured but remained unclaimed (maturity value Rs.65.71 lakhs). The total amount ofdeposits matured and renewed during the year under review was Rs. 601.93 lakhs and thetotal amount of deposits matured and repaid during the year under review was Rs. 528.19lakhs aggregating to Rs.1130.12 lakhs and the total amount of deposits that will bematuring as at 31st March 2017 will be Rs.1068.60 lakhs. The total amount of new depositsaccepted during the year was Rs.502.84 lakhs. There were no deposits which were claimedbut not paid by the Company. Appropriate steps are being taken continuously to obtain thedepositors’ instructions so as to ensure renewal/repayment of the matured deposits intime.

As per Section 76 of the Companies Act 2013 the credit rating agency CRISIL Limitedhas assigned a rating of ‘CRISIL FA-/Stable’ (pronounced "F A minus ratingwith stable outlook") for the Fixed Deposits accepted by the Company indicating‘Adequate Safety’. This rating indicates that the degree of safety regardingtimely payment of interest and principal is satisfactory. The Ministry of CorporateAffairs vide Notification No. G.S.R. 639(E) dated 29th June 2016 has provided thatcompanies may accept the deposits without deposit insurance contract till 31stMarch 2017. The Company will obtain insurance contract for its deposits as per therequirements of section 73 (2) (d) of the Companies Act 2013 read with Rule 5 of theCompanies (Acceptance of Deposits) Rules 2014 as and when it becomes applicable.

The company has deposited with the Indian Overseas Bank in a separate bank accountcalled as Deposit Repayment Reserve Account an amount of not less than 15% of the amountof its deposits maturing during the financial years 2016-17 and 2017-18 in accordance withthe requirements of section 73(2) (c) of the Companies Act 2013 read with Rule 13 of theCompanies (Acceptance of Deposits) Rules 2014.

The Company will comply with the requirements of advertisement inviting deposits asprovided in Rule 4 of the Companies (Acceptance of Deposits) Rules 2014.

The Company’s outstanding deposits are within the limits laid down in Rule 3(4) ofthe Companies (Acceptance of Deposits) Rules 2014 viz. 10% of the aggregate of the paidup share capital and free reserves of the Company as at 31st March 2016 in the case ofdeposits accepted from the members and 25% of the aggregate of the paid up share capitaland free reserves of the Company as at 31st March 2016 in the case of deposits acceptedfrom the public. The Company will accept deposits within the aforesaid limits.

The company will accept deposits from its members and the public as unsecured deposits.

BOARD OF DIRECTORS Composition of the Board:

The Board of Directors of the Company consists of professionals from varieddisciplines. The day to day management of the affairs of the Company is entrusted withExecutive Director (Whole time director) headed by the Managing Director who functionsunder the overall supervision direction and control of the Board of Directors of theCompany.

As of 31st March 2016 the Company’s Board comprised of eight directors. The Boardcomprises of an optimum combination of Executive and Non-Executive Directors with sixdirectors being Non-Executive directors. The Non-Executive Directors thus constitutemore than 50% of the Board. There are four Independent Directors who exercise independentjudgement in the Board’s deliberations discussions and decisions. Shri V.R.Venkataachalam Managing Director and Shri V. Rajasekaran Executive Director are the twoexecutive directors on the Board. Shri V.R. Venkataachalam is the Chairman of the Boardand accordingly the Chairman of the Company.

Director retiring by rotation and seeking reappointment:

Shri A.S. Thillainayagam (DIN 00951729) Director is retiring by rotation at thisAnnual General Meeting and he is eligible for re-appointment.

Reappointment of Executive Director for a further term of five years:

The Board of Directors at its meeting held on 29th July 2016 has reappointed Shri V.Rajasekaran as the Executive Director of the Company for a further term of five years witheffect from 1st March 2017 and up to 28th February 2022. The profile of Shri V.Rajasekaran Executive Director of the Company has been given in the explanatory statementof the Notice of the ensuing Annual General Meeting wherein the appropriate resolutionsfor his appointment as an Executive Non-Independent Director of the Company is proposedfor approval of shareholders.

The Board of Directors commend the passing of the resolution for reappointment ShriV. Rajasekaran as Executive Director.

No other Key Managerial Personnel has been appointed or resigned during the year underreview.

Director resigned during the year:

Smt Nidhya R. Guhan Director (DIN 06969627) Independent director and woman directoron the Board resigned on 29th February 2016 citing personal reasons.

AUDIT COMMITTEE

The Audit Committee of the Company is constituted in accordance with the provisions ofSection 177 of the Companies Act 2013.

The Audit Committee comprises of the following members:

The Shri S. Varatharajan Chairman of the Committee
Shri R. Ravi Krishnan; and
Shri M. Parthasarathi

All the members of the Audit Committee are Independent Directors. The members of thecommittee are financially literate with ability to read and understand the financialstatement. The Chairman of the committee has related financial management expertise by wayof experience in financial management in his field of business. The Company Secretary actsas the Secretary for the Audit Committee.

The Audit Committee shall have such powers duties and responsibilities and shallfunction in such manner as provided in Section 177 of the Companies Act 2013.

VIGIL MECHANISM

Pursuant to section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 the Company has established a VigilMechanism for directors and employees to report their genuine concerns or grievances. TheVigil Mechanism is monitored by the Audit Committee. The Vigil Mechanism provides foradequate safeguards against victimization of directors / employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee inexceptional cases. It also ensures standards of professionalism honesty integrity andethical behavior.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board is constituted in accordancewith Section 178 (1) of the Companies Act 2013.

The Nomination and Remuneration Committee comprises of the following members:

Shri S. Varatharajan Chairman of the Committee
Shri M. Parthasarathi and
Shri N. Jaiganesh;

All the members of the Committee are Independent directors. The Company Secretary actsas the secretary for the Nomination and Remuneration Committee.

The Nomination and Remuneration Committee shall carry out such functions as laid downin section 178 of the Companies Act 2013.

STAKEHOLDERS’ RELATIONSHIP COMMITTEE

The Stakeholders’ Relationship Committee of the Board is constituted in accordancewith Section 178(5) of the Companies Act 2013.

The following Non-Executive directors are the members of the Stakeholders RelationshipCommittee:

Shri A.S. Thillainayagam Chairman of the Committee
Shri V. Sengutuvan and
Shri S. Varatharajan

The Chairman of the Committee is a Non-executive director. The company secretary actsas the secretary for the committee.

The Stakeholders’ Relationship Committee was constituted to consider and resolvethe grievances of shareholders and other security holders of the Company. The Committeeshall expedite the process of share transfers. The Board has delegated the powers ofregistration of share transfers to the committee. Any major transfers approved at theStakeholders Relationship Committee meetings are placed before the Board.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Pursuant to section 135(1) of the Companies Act 2013 the Board of directors at itsmeeting held on 30th May 2014 had constituted Corporate Social Responsibility (CSR)Committee. As required by section 135 (2) of the Companies Act 2013 the CSR Committeecomprises of the following three directors viz.

Shri V. R. Venkataachalam Chairman Shri V. Rajasekaran member; and Shri S.Varatharajan member

Shri S. Varatharajan is an independent director on the Board.

The CSR Committee shall carry out such functions as laid down in section 135 of theCompanies Act 2013.

DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8(5) OF THECOMPANIES (ACCOUNTS) RULES 2014 Extract of Annual Return:

The extract of Annual Return in the Form No. MGT 9 is annexed to the Directors’Report as

Annexure I.

Number of meetings of the Board:

There were four Board meetings during the year.

Directors’ Responsibility Statement:

To the best of their knowledge and belief and according to the confirmation andexplanations obtained by them your Directors make the following statement in terms ofSection 134(5) of the Companies Act 2013.

i) That in the preparation of the Annual Accounts for the year ended 31st March 2016the applicable Accounting Standards have been followed along with proper explanation formaterial departures if any;

ii) That such accounting policies have been selected and applied consistently andjudgements and estimates that are reasonable and prudent were made so as to give a trueand fair view of the state of affairs of the Company as at the end of the financial yearended 31st March 2016 and of the profit of the Company for the year ended on that date;

iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv) That the annual accounts for the year ended 31st March 2016 have been prepared on agoing concern basis.

v) Internal financial controls had been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and;

vi) Proper systems to ensure compliance with the provisions of all applicable laws hadbeen devised and that such systems were adequate and operating effectively.

Declaration by Independent Directors:

The Board has received the declaration from all the Independent Directors as per therequirement of section 149(7) of the Companies Act 2013 and the Board is satisfied thatall the Independent Directors meet the criterion of independence as mentioned in section149(6) of the Companies Act 2013.

Company’s policy on Directors appointment and remuneration:

In accordance with the requirements of section 178 of the Companies Act 2013 theNomination and Remuneration Committee has put in place a policy for appointment ofdirectors taking into consideration the qualification and wide experience of the directorsin the fields of chemical power generation manufacturing finance administration andlegal apart from compliance of legal requirements of the Company. The Nomination andRemuneration Committee has also laid down remuneration criteria for the directors keymanagerial personnel and other employees in the Nomination and Remuneration Policy. It hasalso laid down in the Nomination and Remuneration Policy the evaluation criteria forperformance evaluation of the directors including independent directors. The Nominationand Remuneration Policy is annexed to the Directors’ Report as Annexure II andis also uploaded on the Company’s website www.tcpindia.com.

Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made in the Auditors’ Report and in the Secretarial AuditReport:

The Auditors’ Report to the Shareholders for the year under review states that theManagerial Remuneration paid by the Company for the year ended 31st March 2016 exceeds thelimit of 10% of the Net Profits of the Company for the year in which such remuneration ispaid by an amount of Rs.14046795/-.

Explanation to the observation:

The aggregate amount of remuneration paid to the Managing Director and the ExecutiveDirector during the financial year 2015-16 exceeds the prescribed limit of 10% of thenet profits of the Company for the financial year ended 31st March 2016 by an amount ofRs.14046795/-.This is due to inadequate profit during the financial year 2015-16 tomatch the remuneration paid. Section 197 (9) of the Companies Act 2013 provides that ifany director draws or receives directly or indirectly by way of remuneration any suchsums in excess of the limit prescribed by this section or without the prior sanction ofthe Central Government where it is required he shall refund such sums to the company anduntil such sum is refunded hold it in trust for the company.

Section 197 (10) of the Companies Act 2013 provides that the company shall not waivethe recovery of any sum refundable to it under sub-section (9) unless permitted by theCentral Government.

The Company is making application the Central Government seeking its permission underSection 197 (10) of the Companies Act 2013 for waiver of recovery of the sum refundableto it towards the excess remuneration drawn over and above the limit of 10% of the NetProfits for the year in which the remuneration is paid. The reason for having paid theremuneration in excess of the limit is due to inadequate profits in the year 2015-16which is a temporary phenomenon and will be reversed in the next year.

The Secretarial Audit Report given by a Company Secretary in practice states that thecompany could not spend the eligible amount on Corporate Social Responsibility Measures.

The explanation to this observation is given in the para "Reasons for not spendingthe amount that is to be spent during the financial year 2015-16" under the mainheading of ‘Corporate Social Responsibility initiatives taken during the year’.

Particulars of loans guarantees or investments under section 186 of the Companies Act2013:

There are no loans made guarantees given or security provided during the year undersection 186 of the Companies Act 2013. The aggregate value of investments made by theCompany under section 186 of the Companies Act 2013 is within the limits prescribed inthe section.

Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013:

The Related Party Transactions (RPT’s) entered into by the Company are given inthe Notes on Accounts attached to the Financial Statements. These transactions wereentered into in the ordinary course of business and on an arm’s length basis and werein compliance with the provisions of the Companies Act 2013. There are no contracts orarrangements with Related Parties referred to in section 188 (1) of the Companies Act2013. There are no materially significant related party transactions made by the Companywith the Promoters Directors Key Managerial Personnel or other designated persons whichmay have a potential conflict with the interest of the Company at large.

The statement of RPT’s is placed before the Audit Committee and the Board on aquarterly basis. Omnibus approval was obtained for the transactions of repetitive nature.

None of the directors have any pecuniary relationships or transactions with the Companyexcept for the payment of sitting fees. There are no particulars of RPT’s to bedisclosed in Form AOC-2.

The state of the Company’s affairs:

The state of the Company’s affairs is explained in the paragraph ‘Segmentwise/ product wise performance’ in the Directors’ Report.

The amount if any carried to reserves:

The Company has transferred an amount of Rs. 5 crores to General Reserve.

The amount if any which it recommends should be paid by way of dividend:

The Board is recommending payment of dividend of Re.1/- per equity share on the paid upequity shares of the Company.

Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of report:

There are no material changes and commitments affecting the financial position of theCompany that have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of report viz. for the period from 31stMarch 2016 to 29th July 2016.

Conservation of energy technology absorption foreign exchange earnings and outgo:

The information pursuant to section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is as follows: (A) Conservation of Energy:a. The Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved. As theimpact of measures taken for conservation and optimum utilisation of energy are notquantitative its impact on cost cannot be ascertained accurately. b. The Company’schemical plant engaged in manufacturing operations utilises the alternative sources ofenergy from the Biomass based power and power generated from windmills. c. No specificinvestment has been made on energy conservation equipment.

(B) Technology absorption:

The Company’s products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company constantly strives for maintenance and improvement in quality ofits products and entire Research & Development activities are directed to achieve theaforesaid goal.

(C) Foreign exchange earnings and outgo:

During the year the foreign exchange earnings and outgo are as follows: Foreignexchange earnings:

Foreign exchange earnings from exports Rs.7.13 crores Foreign exchange outgo:

Foreign exchange outgo on payments for imports Rs.54.72 crores.

A statement indicating development and implementation of a Risk Management Policy forthe Company including identification therein of elements of risk if any which in theopinion of the Board may threaten the existence of the Company:

The Company has framed a Risk Management Policy to identify communicate and managematerial risks across the organisation. The policy also ensures that responsibilities havebeen appropriately delegated for risk management. Key Risks and mitigation measures are asfollows: Risk Management is an ongoing process. The Board of directors has approved a RiskManagement Policy. The Board has defined the roles and responsibilities of personsidentified for implementation of the Risk Management Policy and has delegated themonitoring and reviewing of the Risk Management Plan to the Executive Director.

The Company maintains Risk Register listing all the risks likely to affect theachievement of the business goals set by the Company. Significant risks are identifiedusing a scoring methodology. The process of Risk Management includes Risk Identificationand Categorization Risk Description and Risk Mitigation. The Risk Owners are accountableto the Executive Director for identification assessment aggregation reporting andmonitoring of the risks related to their respective areas / functions.

The key implementation areas for Risk Mitigation are as follows:

For Finance function: Treasury operations and fund transfers
For Computer systems and Data maintenance Data Security
For purchase and sales functions Credit Administration

The Company is exposed mainly to Credit Risk Market risk (competition) interest raterisk and Cash Management Risk in its business operations. The experience in the sellingfunctions acquired by the Company over the years has helped to identify the creditworthiness of its customers for giving credit and has helped to mitigate the Credit Risk.The Company has maintained its quality in supply and services to its customers and hasearned a brand image for quality supplies and by this process manages to retain existingcustomers and bring in new customers. In this way it tries to mitigate the Market risk.The Company’s debt servicing is a record without any default in the timely payment ofinterest for its working capital borrowings. The Company’s profitability andfinancials are improving every year. This strength of the Company helps to mitigate theinterest rate risk. The Company’s fund operations are centralized at the Head Office.The requirement of funds from the units are met from the Head Office. The spending at theunits are monitored by the accounts personnel at the Head office on a periodical basis.The Cash operations at the Head Office is subjected to multi-level checks and controlsthe internal auditor periodically verifies physical cash balance and in this way theCompany mitigates the Cash Management Risk.

The details about the policy developed and implemented by the Company on CorporateSocial Responsibility initiatives taken during the year:

The objective of the CSR Policy of the Company is to continue to contribute towardssocial welfare projects for the benefit of the general public and in particular to thepeople living around the areas where the company’s manufacturing / generationactivities are located. The CSR Policy focuses on providing facilities for impartingeducation vocational training and promoting health care to economically weaker and underprivileged sections of the society and to do such other activities as may be permissibleunder section 135 of the Companies Act 2013 and the Companies (Corporate SocialResponsibility Policy) Rules 2014.

The Company has carried out the following CSR activities during the year 2015-16:

Measures for reducing inequalities faced by socially and economically backward groups:In pursuance of this programme the Company had made contribution of Rs.95000/- fromout of the budgeted amount of Rs.40 lakhs towards distribution of clothes to the floodaffected people in the local area at the location of the Company’s Power Plant atGummidipoondi Thiruvallur District Tamil Nadu.

Reasons for not spending the amount that is to be spent during the financial year2015-16: During the financial year ended 31st March 2016 the Company has to spend anamount of Rs. 7964130/- being the 2% of the average net profits of the Company madeduring the three immediately preceding financial years as provided in section 135 (5) ofthe Companies Act 2013. The CSR Committee has identified and approved various CSRProjects for Rs.55 lakhs to be spent in a phased manner. During the year the Company hadspent an amount of Rs.95000/- on CSR activities in pursuance of its CSR Policy. Theamount unspent is Rs.7869130/-. During the financial year 2015-16 the Company wasengaged in identification of CSR activities and identifying Implementing agencies layingbasic framework for the CSR Projects. The Company has undertaken the aforesaid CSRactivities during the year. The Company will ensure achievement of the target spend on CSRactivities in a phased manner in the Financial years to follow.

Annual Report on CSR activities for the financial year 2015-16: Pursuant to Rule8(1) of the Companies (Corporate Social Responsibility Policy) Rules 2014 the AnnualReport on CSR activities to be included in the Directors’ Report for the financialyear 2015-16 in the format prescribed as Annexure to the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed to the Directors’ Report as AnnexureIII and is also uploaded on the Company’s website www.tcpindia.com

Performance and financial position of the Subsidiary Company viz. TCP Hotels PrivateLtd:

The Company has one Subsidiary Company viz. TCP Hotels Private Limited. ThisSubsidiary Company is a non-material Indian unlisted subsidiary Company. The Company holds96% equity shareholding in its subsidiary company.

TCP Hotels Private Ltd:

TCP Hotels Private Ltd derives rental income from letting out its property and this isthe only source of income for the company for the year ended 31st March 2016. For the yearended 31st March 2016 the company has earned income of Rs.42 lakhs (Rs.6 lakhs in theprevious year) and had reported Net profit (before tax) of Rs.3836221 (Rs. 49827 in theprevious year) and Net profit (after tax) of Rs.2945221 (Net loss (after tax) ofRs.54921 in the previous year). TCP Ltd is paying rent to TCP Hotels Private Ltdpursuant to a rental agreement entered into with TCP Hotels Private Ltd for taking onrent a portion of the premises owned by TCP Hotels Private Ltd and the amount of suchrent paid during the year is Rs.36 lakhs. This is a related party transaction in theordinary course of business and made on arm’s length basis. The omnibus approval ofthe Audit Committee has been obtained for entering into this routine transaction. Theannual report and annual accounts of the subsidiary company viz. TCP Hotels Private Ltdfor the financial year ended 31st March 2016 and the related detailed information shall bemade available to shareholders of the Company seeking such information. The annualaccounts of the subsidiary company shall also be kept for inspection by shareholders atthe Registered Office of the company and the Subsidiary Company. The annual accounts ofthe subsidiary company shall be available on the website of the Company viz.www.tcpindia.com.

The financial summary or highlights:

The financial summary is given in the Paragraph ‘Financial Results’ in theDirectors’ Report.

The change in the nature of business if any:

There is no change in the nature of business.

The details of directors or key managerial personnel who were appointed or haveresigned during the year:

There are no appointments of directors or key managerial personnel during the year.During the year Smt. Nidhya R. Guhan (DIN : 06969627) Woman Director and IndependentDirector resigned with effect from 29th February 2016 citing personal reasons.

The names of companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year:

There are no companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year.

The details relating to deposits covered under Chapter V of the Companies Act 2013:

(a) Accepted during the year:

The total amount of deposits matured and renewed during the year under review was Rs.601.93 lakhs. The total amount of new deposits accepted during the year was Rs. 502.84lakhs. The aggregate amount of deposits accepted during the year is Rs.1104.77 lakhs. (b)Remained unpaid or unclaimed as at the end of the year: There are 113 fixed deposits and32 cumulative deposits aggregating to 145 deposits for an amount of Rs. 59.76 lakhs thathave matured but remained unclaimed (maturity value Rs.65.71 lakhs).

(c) Whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved:There has been no default in repayment of deposits or payment of interest thereon duringthe year.

The details of deposits which are not in compliance with the requirements of Chapter Vof the Companies Act 2013:

There are no deposits which are not in compliance with the requirements of Chapter V ofthe Companies Act 2013.

The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

The details in respect of adequacy of internal financial controls with reference to theFinancial Statements:

The Company’s well defined organizational structure documented policy guidelinesdefined authority matrix and internal financial controls ensure efficiency of operationsprotection of resources and compliance with the applicable laws and regulations. Moreoverthe Company continuously upgrades its systems and undertakes review of policies. Theinternal financial control is supplemented by regular reviews by management and standardpolicies and guidelines to ensure reliability of financial data and all other records toprepare the financial statements and other data. The Audit Committee reviews the internalfinancial controls and also monitors the implemented suggestions.

Disclosure under section 22 of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

There were no cases filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a Consolidated Financial Statement of the Company and itsSubsidiary Company viz. TCP Hotels Private Ltd has been prepared in the same form andmanner in which the Company’s Financial Statement has been prepared and suchConsolidated Financial Statement is attached to this Annual Report. The ConsolidatedFinancial Statement has been prepared in compliance with the applicable AccountingStandards. A Statement containing the salient features of the Financial Statement of theSubsidiary Company in Form AOC-1 is also attached to this Annual Report.

STATEMENT OF EMPLOYEES’ PARTICULARS

Pursuant to Rules 5 (2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the statement showing the particulars of the employeesemployed throughout the financial year ended 31st March 2016 and was in receipt ofremuneration for the year which in the aggregate was not less than Rs.60 lakhs isannexed to the Directors’ Report as Annexure IV.

The managerial remuneration paid by a company to more than one managerial personnelshall not exceed 10% of the net profits of the company for the financial year in whichsuch remuneration is paid.

The aggregate amount of remuneration paid to the Managing Director and the ExecutiveDirector during the financial year 2015-16 exceeds the prescribed limit of 10% of thenet profits of the Company for the financial year ended 31st March 2016 by an amount ofRs.14046795/-. This is due to inadequate profit during the financial year 2015-16 tomatch the remuneration paid.

The Company is making application the Central Government seeking its permission underSection 197 (10) of the Companies Act 2013 for waiver of recovery of the sum refundableto it towards the excess remuneration drawn over and above the limit of 10% of the NetProfits for the year in which the remuneration is paid. The reason for having paid theremuneration in excess of the limit is due to inadequate profits in the year 2015-16which is a temporary phenomenon and will be reversed in the next year.

AUDITORS

M/s T. Selvaraj & Co. Chartered Accountants Chennai the Statutory Auditors ofthe company retire at the conclusion of the 44th Annual General Meeting and are eligiblefor re-appointment. Certificate has been received from them to the effect that theirre-appointment as statutory auditors of the Company if made would be within the limitsprescribed under Sections 139 & 141 of the Companies Act 2013. The Directorsrecommend their reappointment. If reappointed they will hold office until the conclusionof the Forty-fifth Annual General Meeting of the company.

Change of Auditors due to Rotation of Auditors prescribed under Section 139(2) of theCompanies Act 2013.

The existing auditors if reappointed can hold office only up to the conclusion of theForty-fifth Annual General Meeting (viz the next Annual General Meeting) of the company.The reason for this is stated below: Section 139(2) of the Companies Act 2013 (the Act)inter alia provides that companies belonging to such class of companies as may beprescribed shall not appoint or reappoint an audit firm as auditor for more than twoterms of five consecutive years.

The first proviso to the sub-section provides that an audit firm which has completedtwo terms of five consecutive years shall not be eligible for re-appointment as auditor inthe same company for five years from the completion of such term.

The third proviso to the sub-section provides that every company which is required tocomply with provisions of this sub-section shall comply with the requirements of thissub-section within a period which shall not be later than the date of the first annualgeneral meeting of the company held within the period specified under section 96 (1)after three years from the date of commencement of this Act.

Rule 5 of the Companies (Audit and Auditors) Rules 2014 prescribes the class ofcompanies that are required to comply with the provisions of Section 139(2) of the Act.The Rule inter alia provides all companies having public borrowings from financialinstitutions banks or public deposits of Rs.50 crores or more as companies to complywith the provisions of the Section 139(2) of the Act.

Your Company belongs to this class of Companies and hence is required to comply withthe provisions of Section 139(2) of the Act.Rule 6(3) of the Companies (Audit andAuditors) Rules 2014 provides that for the purpose of the rotation of auditors –the period for which the audit firm has held office as auditor prior to the commencementof the Act shall be taken into account for calculating the period of 5 consecutive yearsor 10 consecutive years as the case may be.

M/s T. Selvaraj & Co. Chartered Accountants Chennai the existing statutoryauditors have held office as the auditors of the Company for a term of more than 10consecutive years and hence can hold such office only up to the conclusion of theForty-fifth Annual General Meeting (viz the next Annual General Meeting) of the company.

It is required to appoint a new auditor (other than M/s T. Selvaraj & Co.Chartered Accountants) to hold office from the conclusion of the Forty-fifth AnnualGeneral Meeting (viz the next Annual General Meeting) of the company.

COST AUDITOR

Pursuant to section 148 of the Companies Act 2013 read with Rule 14 of the Companies(Audit and Auditors) Rules 2014 Shri M. Kannan Cost Accountant in practice has beenappointed as the Cost Auditor of the company for the year 2016-17 for the audit of thecost records maintained by the Company for the Chemical Division Power Division BiomassDivision and Windmill Division.

INTERNAL AUDITOR

Pursuant to section 138 of the Companies Act 2013 read with Rule 13 of the Companies(Accounts) Rules 2014 M/s Sankaran & Krishnan Chartered Accountants Chennai areappointed as internal auditors of the Company to conduct internal audit of the functionsand activities of the Company.

SECRETARIAL AUDIT

The Board has appointed Shri K. Elangovan M/s Elangovan Associates CompanySecretaries in Practice Chennai (Certificate of Practice No.3552) Membership No. FCS1808 to carry out Secretarial Audit under the provisions of section 204 of the CompaniesAct 2013 for the financial year 2015-16. The Secretarial Audit Report is annexed to theDirectors’ report as Annexure V.

ANNEXURES TO THE DIRECTORS’ REPORT

1. The Extract of Annual Return in Form MGT-9 – Annexure I

2. The Nomination and Remuneration Policy – Annexure II

3. Annual Report on CSR Activities – Annexure III

4. Statement under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 – Annexure IV; and

5. Secretarial Audit Report – Annexure V

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the continued co-operation andperformance extended by all employees of the Company. The Directors also place on recordtheir appreciation for the unstinted support given by the shareholders supplierscustomers depositors the Tamil Nadu Generation and Distribution Corporation Ltd(TANGEDCO) and accredited agents who have been instrumental in the company’scontinued satisfactory performance. The Directors also acknowledge with deep sense ofgratitude the timely financial assistance provided by the Company’s Bankers viz.Indian Overseas Bank State Bank of India IDBI Bank and HDFC Bank for smooth andefficient functioning of the Company.

For and on behalf of the Board
V.R. Venkataachalam
Chairman
DIN: 00037524
Place : Chennai: 600 004
Date : 29th July 2016

TCP LIMTED – NOMINATION AND REMUNERATION POLICY RELATING TO THE REMUNERATION FORTHE DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

Approved by the Board of Directors at its meeting held on 30th January 2015 Principleand Rationale:

Section 178 of the Companies Act 2013 read with Rule 6 of Companies (Meetings of Boardand its Powers) Rules 2014 requires the Board of Directors of every company havingturnover of Rs.100 crores or more or having outstanding loans or borrowings or depositsaggregating to Rs.50 crores or more as on the date of last audited financial statementsamong other classes of companies to Formulate the criteria for determiningqualifications positive attributes and independence of a director and recommend to theBoard a policy relating to the remuneration for the directors key managerial personneland other employees.

Identify persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down recommend to the Board theirappointment and removal.

Carry out evaluation of every director’s performance.

Formulate the criteria for evaluation of Independent Directors on the Board.

Accordingly in adherence to the above said requirements and in line with theCompany’s philosophy towards nurturing its human resources the Nomination andRemuneration Committee of the Board of Directors of TCP Limited herein below recommends tothe Board of Directors for its adoption the Nomination and Remuneration Policy for thedirectors key managerial personnel and other employees of the Company as set out below:

Company Philosophy:

TCP Ltd is an organisation committed to paying fair remuneration to its employeesmatching the responsibilities and performance. The organisation does not discriminate ongrounds of age gender colour race ethnicity language caste creed economic orsocial status or disability. The Company’s committed workforce spread across itscorporate office and factory locations which has over the years transformed TCP Ltdinto a consistent growing organisation forms the backbone of the Company. Pay revisionsand other benefits are designed in such a way to compensate good performance of theemployees of the Company and motivate them to do better in future.

Employee recognition schemes in the form of Production incentive and Service award havealso been introduced as successful tools in acknowledging their contribution.

The endeavour of the company is to acknowledge the contributions of its directors keymanagerial personnel and other employees with best compensation and benefits thatappropriately rewards performance in line with the regulatory and industry best practices.

Guiding Principles:

In the formulation of this Policy the Nomination and Remuneration Committee has alsoendeavoured to ensure the guiding principles as prescribed u/s 178(4) of the CompaniesAct 2013 summarized hereunder: a) the level and composition of remuneration is reasonableand sufficient to attract retain and motivate human resource including directors of thequality required to run the company successfully; b) Relationship of remuneration toperformance is clear and meets appropriate performance benchmarks; c) Remuneration todirectors key managerial personnel and senior management involves a balance between fixedand incentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals; d) Facilitating effective shareholder participationin key Corporate Governance decisions such as the nomination and election of boardmembers; e) Aligning key executive and board remuneration with the longer term interestsof the company and its shareholders; f) Ensuring a transparent board nomination processwith the diversity of thought experience knowledge perspective and gender in the Board.

Nomination of the Directors:

The Nomination and Remuneration Committee of the Board of Directors is dedicated toensuring the continuance of a dynamic and forward-thinking Board and recommend to theBoard qualified candidates for directorship.

Before recommending a nominee’s candidature to the Board for being appointed as aDirector the following criteria set out may be applied as guidelines in consideringpotential nominees to the Board of Directors.

General Criteria a) The background and qualifications of the Directors considered as agroup should provide a significant combination of experience knowledge and abilities toassist the Board in fulfilling its responsibilities. b) Directors should be so selectedsuch that the Board of Directors should remain as a diverse body with diversityreflecting gender ethnic background and professional experience.

Because a mix of viewpoints and ideas enhances the Board’s ability to functioneffectively the Committee shall consider the diversity of the existing Board whenconsidering potential nominees so that the Board maintains a body of directors fromdiverse professional and personal backgrounds. c) Potential nominees shall not bediscriminated against on the basis of race religion national origin sex disability orany other basis prohibited by law. d) Any nominee should be free of any conflict ofinterest which would violate any applicable law or regulation or interfere with theperformance of the responsibilities of a director. e) Commitment of the nominee tounderstanding the Company and its industry embracing the Company’s values to helpshape its vision mission and strategic direction including oversight of risk managementand internal control. f) Commitment of the nominee to spending the time necessary tofunction effectively as a Director including attending and participating in Boardmeetings and its Committee meetings Specific Criteria a) Demonstrated business acumenexperience and ability to use sound judgment and to contribute to the effective oversightof the business and financial affairs of a large or medium sized multifaceted IndianCompany. b) The nominee reflects the right corporate tone and culture and excels at board- management relationships. c) Experience in strategic planning and managingmultidisciplinary responsibilities the ability to navigate among diverse professionalgroups and points of view a track record of communicating effectively in a globalenvironment and high standards of integrity and professional conduct. d) Nomineesunderstand and endeavour to balance the interests of shareholders and / or otherstakeholders and put the interests of the company above self-interest. He/she hasdemonstrated a commitment to transparency and disclosure. e) He/ she is committed tosuperior corporate performance consistently striving to go beyond the legal and/orregulatory governance requirements to enhance not just protect shareholder value. f)Nominee contributes to effective governance through superior constructive relationshipswith the Executive Directorate and management.

Remuneration of the Directors:

The Company strives to provide fair compensation to directors taking intoconsideration industry benchmarks Company’s performance vis--vis the industryresponsibilities shouldered performance/ track record macroeconomic review onremuneration packages of heads of other similar sized companies.

The remuneration payable to the directors of the company shall at all times bedetermined in accordance with the provisions of Companies Act 2013.

Appointment and Remuneration of Managing Director and Whole time- Director:

T The terms and conditions of appointment and remuneration payable to the ManagingDirector and the Whole-time Director(s) shall be recommended by the Nomination andRemuneration Committee to the Board for its approval which shall be subject to approval byshareholders at the next general meeting of the Company and by the Central Government incase such appointment is at variance to the conditions specified in Schedule V to theCompanies Act 2013. Approval of the Central Government is not necessary if theappointment is made in accordance with the conditions specified in Schedule V to the Act.

In terms of the provisions of Companies Act 2013 the Company may appoint a person asits Managing Director or Whole-time Director for a term not exceeding 5 (years) at a time.The executive directors may be paid remuneration either by way of a monthly payment or ata specified percentage of the net profits of the Company or partly by one way and partlyby the other.

The break-up of the pay scale performance bonus and quantum of perquisites includingemployer’s contribution to P.F pension scheme medical expenses club fees etc.shall be decided and approved by the Board on the recommendation of the Committee andshall be within the overall remuneration approved by the shareholders and CentralGovernment wherever required. While recommending the remuneration payable to a Managing/Whole-time Director the Nomination and Remuneration Committee shall inter alia haveregard to the following matters: Financial and operating performance of the CompanyRelationship between remuneration and performance Industry/ sector trends forthe remuneration paid to similar executives.

Annual Increments to the Managing/ Whole Time Director(s) shall be within the slabsapproved by the Shareholders. Increments shall be decided by the Nomination andRemuneration Committee at times it desires to do so but preferably on an annual basis.

Insurance Premium as Part of Remuneration:

Where any insurance is taken by a company on behalf of its managing directorwhole-time director manager Chief Executive Officer Chief Financial Officer or CompanySecretary for indemnifying any of them against any liability in respect of any negligencedefault misfeasance breach of duty or breach of trust for which they may be guilty inrelation to the company the premium paid on such insurance shall not be treated as partof the remuneration payable to any such personnel.

However if such person is proved to be guilty the premium paid on such insuranceshall be treated as part of the remuneration.

Remuneration of Independent Directors:

Independent Directors may receive remuneration by way of Sitting fees forparticipation in the Board and other meetings

Reimbursement of expenses for participation in the Board and other meetings Commissionas approved by the Shareholders of the Company Independent Directors shall not be entitledto any stock options

Based on the recommendation of the Nomination and Remuneration Committee the Board maydecide the sitting fee payable to independent directors. Provided that the amount of suchfees shall not exceed the maximum permissible under the Companies Act 2013.

Remuneration to Directors in other capacity:

The remuneration payable to the directors including managing or whole-time director ormanager shall be inclusive of the remuneration payable for the services rendered by him inany other capacity except the following: (a) The services rendered are of a professionalnature; and (b) In the opinion of the Nomination and Remuneration Committee the directorpossesses the requisite qualification for the practice of the profession.

Evaluation of the Directors:

As members of the Board the performance of the individual Directors as well as theperformance of the entire Board and its Committees is required to be formally evaluatedannually.

Section 178 (2) of the Companies Act 2013 also mandates the Nomination andRemuneration Committee to carry out evaluation of every director’s performance.

In developing the methodology to be used for evaluation on the basis of best standardsand methods meeting international parameters the Board / Committee may take the advice ofan independent professional consultant.

Nomination and Remuneration of the Key Managerial Personnel (other than Managing /whole time directors) key executives and senior management:

The executive management of a company is responsible for the day to day management of acompany. The Companies Act 2013 has used the term "key managerial personnel"(KMP) to define the executive management.

The KMPs are the point of first contact between the company and its stakeholders. Whilethe Board of Directors are responsible for providing the oversight it is the keymanagerial personnel and the senior management who are responsible for not just layingdown the strategies but for its implementation as well.

The Companies Act 2013 has for the first time recognized the concept of KeyManagerial Personnel. As per section 2(51) "key managerial personnel" inrelation to a company means-(i) The Chief Executive Officer or the managing director orthe manager; (ii) The whole-time director; (iii) The Chief Financial Officer; (iv) Thecompany secretary; and (v) Such other officer as may be prescribed.

Among the KMPs the remuneration of the CEO or the Managing Director and the Whole timeDirector(s) shall be governed by the Section on Remuneration of the Directors ofthis Policy dealing with "Remuneration of Managing Director and Whole time-Director".

Apart from the directors the remuneration of

All the Other KMPs such as the company secretary or any other officer that may beprescribed under the statute from time to time; and "SeniorManagement" of the Company i.e. personnel who are members of its core managementteam excluding the Board of Directors. Senior executives one level below the Boardi.e. President cadre Shall be determined by the Human Resources Department of the Companyin consultation with the Managing Director and/ or the Whole time Director.

The remuneration determined for all the above said senior personnel shall be in linewith the Company’s philosophy to provide fair compensation to key - executiveofficers based on their performance and contribution to the Company and to provideincentives that attract and retain key executives instill a long-term commitment to theCompany and develop a pride and sense of Company ownership all in a manner consistentwith shareholder interests.

The break-up of the pay scale and quantum of perquisites including employer’scontribution to P.F pension scheme medical expenses club fees etc. shall be decided bythe Company’s HR department.

Decisions on Annual Increments of the Senior Personnel shall be decided by the HumanResources Department in consultation with the Managing Director and/ or the Whole timeDirector of the Company.

Remuneration of other employees:

Apart from the Directors KMPs and Senior Management the remuneration for rest of theemployees is determined on the basis of the role and position of the individual employeeincluding professional experience responsibility job complexity and local marketconditions. The Company considers it essential to provide incentives to the workforce toensure adequate and reasonable compensation to the staff. The Human Resources Departmentshall ensure that the level of remuneration motivates and rewards high performers whoperform according to set expectations for the employee.

The various remuneration components basic salary allowances perquisites etc. may becombined to ensure an appropriate and balanced remuneration package. The annual incrementsto the remuneration paid to the employees shall be determined based on the annualappraisal carried out by the Head of Departments of various departments. Decisions onAnnual Increments shall be made on the basis of this annual appraisal.

General:

This Policy shall apply to all future employment of Company’s Senior Managementincluding Key Managerial Personnel and Board of Directors.

Any or all the provisions of this Policy would be subject to the revision/ amendment inthe Companies Act 2013 related rules and regulations guidelines on the subject as maybe notified from time to time. Any such amendment shall automatically have the effect ofamending this Policy without the need of any approval by the Nomination and RemunerationCommittee and/ or the Board of Directors.

For and on behalf of the Board of Directors

V.R. Venkataachalam

Chairman

Statement under Rule 5(2) of the Companies Annexure IV (Appointment and Remuneration ofManagerial Personnel) Rules 2014

Name Designation Remuneration Nature of Employment Qualification

Experience

Date of commence- ment of employment Age in Years Particulars of last employment
Rs.
Shri V.R. Venkataachalam Managing Director 25254711 Contractual B.A.

36 years’ experience in business of various industries such as Textiles Chemicals Granites Vanaspati and Medical.

7-11-1986 56 NIL
Shri V. Rajasekaran Executive Director 20182537 Contractual B.E. (Chem) M.Tech M.B.A.

40 years’ experience in Chemical Power Textile and Financing

25-9-1976 63 NIL

Note:

1. The Remuneration amount includes an amount of Rs.1199039/- towards actuarialvaluation of earned leave entitlement and Rs.541081/- towards actuarial valuation ofGratuity entitlement not actually drawn by the managerial personnel.

2. Percentage of equity shares held by the employee in the Company along with hisspouse and dependent children:

Shri V.R. Venkataachalam 37.54% Shri V. Rajasekaran 0.06%

3. Relationship with Directors:

Shri V.R. Venkataachalam is the father of Shri V. Sengutuvan Director.

4. Remuneration drawn exceeds the limit: The managerial remuneration paid by a companyto more than one managerial personnel shall not exceed 10% of the net profits of thecompany for the financial year in which such remuneration is paid. The aggregate amount ofremuneration paid to the Managing Director and the Executive Director during thefinancial year 2015-16 exceeds the prescribed limit of 10% of the net profits of theCompany for the financial year ended 31st March 2016 by an amount of Rs.14046795/-.This is due to inadequate profit during the financial year 2015-16 to match theremuneration paid. The Company is making application to the Central Government seeking itspermission under Section 197 (10) of the Companies Act 2013 for waiver of recovery ofthe sum refundable to it towards the excess remuneration drawn over and above the limit of10% of the Net Profits for the year in which the remuneration is paid. The reason forhaving paid the remuneration in excess of the limit is due to inadequate profits in theyear 2015-16 which is a temporary phenomenon and will be reversed in the next year.

For and on behalf of the Board
V.R. Venkataachalam
Chairman
DIN: 00037524
Place : Chennai: 600 004
Date : 29th July 2016