You are here » Home » Companies » Company Overview » Thirumalai Chemicals Ltd

Thirumalai Chemicals Ltd.

BSE: 500412 Sector: Industrials
NSE: TIRUMALCHM ISIN Code: INE338A01024
BSE 00:00 | 21 Jan 249.70 -7.65
(-2.97%)
OPEN

257.00

HIGH

260.55

LOW

245.10

NSE 00:00 | 21 Jan 250.50 -7.80
(-3.02%)
OPEN

254.20

HIGH

260.70

LOW

245.05

OPEN 257.00
PREVIOUS CLOSE 257.35
VOLUME 74051
52-Week high 357.25
52-Week low 85.00
P/E 15.15
Mkt Cap.(Rs cr) 2,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 257.00
CLOSE 257.35
VOLUME 74051
52-Week high 357.25
52-Week low 85.00
P/E 15.15
Mkt Cap.(Rs cr) 2,557
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Thirumalai Chemicals Ltd. (TIRUMALCHM) - Director Report

Company director report

With Management Discussion & Analysis To

The Members

Thirumalai Chemicals Limited

Your Directors are pleased to present to you the Forty Eighth Annual Report &Audited Statement of Accounts of the Company for the year ended March 31 2021. TheManagement Discussion and Analysis has also been incorporated into this report.

STANDALONE FINANCIAL RESULTS – Summary

(Rs In Million)
Particulars Year Ended 31 Mar 2021 Year Ended 31 Mar 2020
Revenue from Operations 8572 8654
Other Income 88 220
Total Revenue 8660 8874
Gross Profit/(Loss) before Interest 1983 964
Finance Charges and Depreciation (EBITDA)
Interest and Finance Charges (189) (155)
Profit/(Loss) before Depreciation and Tax 1794 809
Depreciation (252) (212)
Profit/(Loss) before Tax (PBT) 1542 597
Provision for Tax (406) (75)
Profit/(Loss) after Tax 1136 522
Provision for Deferred Tax 40 (113)
Profit/(Loss) after Tax (PAT) 1176 409

• The Net Revenue including Export Earning (FOB) during the year was 663Million (Previous Year: 846 Million).

CONSOLIDATED FINANCIAL RESULTS

(Rs In Million)
Particulars Year Ended 31 Mar 2021 Year Ended 31 Mar 2020
Revenue from Operations 10857 10848
Other Income 69 210
Total Revenue 10926 11058
Gross Profit/(Loss) before Interest 2300 991
Finance Charges and Depreciation (EBITDA)
Interest and Finance Charges (209) (168)
Profit/(Loss) before Depreciation and Tax 2091 823
Depreciation (495) (441)
Profit/(Loss) before Tax (PBT) 1596 382
Provision for Tax (407) (76)
Profit/(Loss) after Tax 1189 306
Add : Provision for Deferred Tax (12) (74)
Profit/(Loss) after Tax (PAT) 1177 232

Dividend

Based on the performance of the Company and the anticipated Investments in variousProjects that have been announced your Directors have recommended a dividend of 2.20 pershare for the Financial Year 20-21 (previous year NIL/-per share was paid). This wouldresult in an out flow of 225 Mn if approved by the shareholders at the Annual GeneralMeeting.

Impact of Covid

2020-21 was a year of sharp ups and downs for your Company. While our society andeconomy as a whole suffered the impact was pronounced among the poor the self-employedthe retailer and the contract & migrant worker. This has had a terrible impact on thehealth and well-being of the citizens at large. We have seen a second wave of thisinfection that was even more severe than the last one with the healthcare system beingseverely strained. However with vaccines becoming available and many private andGovernment investments in oxygen plants there is hope that we will be able to fight anymore waves of the infection much more effectively. We also saw that the business communitywas more resilient this time around and was able to bounce back in a shorter period oftime.

Business Performance

The performance of your Company during the Financial Year 2020-21 has consistentlyimproved since the end of the 1st Quarter. The 1st quarter (April through June 2020) washit sharply due to the National Lockdown; the inability of almost all our customers tooperate the chaos in logistics and the collapse of trading meant that our operationswere deeply constrained and like many of our peers suffered a loss. However our robustBalance Sheet and very low Net Debt and good Cash Flows saw us through. Every succeedingQuarter up to Q4 FY20-21 has shown good improvement. This is despite the second wave ofthe pandemic causing intense disruptions across Western India later moving throughout thecountry cities and rural areas.

The Management team and all the employees of your Company united together to overcomethis challenge and we took a number of steps to minimize the impact of the pandemic andthe economic disruption to our businesses to our people and communities through some ofthe following key initiatives:

a) The proactive and hands-on approach by our Senior Management in working closely withthe Functional Heads to anticipate problems and develop and implement solutions andmonitor progress was key to the recovery. We found this essential in a situation whereeverything in the environment had to be viewed as a potential threat which if unforeseenand unattended could develop into a major crisis or bottleneck. b) Task Forces weremobilized with the top Management support and control to handle Personnel Safety WorkFrom Home infrastructure and support safe travel facilitation for all our essentialstaff logistics hourly cash flow control active support to vendors training in safebehaviours and methods and active work in the communities around us for ensuring the means& materials and the infrastructure. c) Daily interaction with the Government Agenciesat Local District State and the Central levels for permits information communitysupport and for a variety of other requirements.

By the time we reopened the Unit after the first lockdown in early May 2020 all theseinitiatives were successfully implemented and we were able to ramp-up productiondespatches and sales by keeping our people contractors vendors and service providers andcommunities safe. This paid off well in our efforts in Q2 FY20-21 to maximise productionand sale and cash flow and to bring our businesses back on track.

As Shareholders will note from the summary of the appended Quarterly performance thismomentum was largely driven by the enthusiasm of the staff at all levels and experienceand a culture of "high energy performance" within the organization.

Quarter Revenue in cr. EBITDA in cr. PBT in cr.
Q1 FY20-21 106.66 0.69 (10.47)
Q2 FY20-21 223.75 44.46 33.85
Q3 FY20-21 244.92 60.45 49.55
Q4 FY20-21 281.85 92.76 81.35

The performance of your Company during the Q4 FY20-21 significantly improved despitethe severe crisis of the second wave of pandemic and your Directors are indeed proud toreport this to our Shareholders.

At the Board level there were regular productive interactions between the DirectorsCommittees and the Senior and Middle Management teams. This support and interaction helpedyour Company tide over the uncertainties. The quick and sustained efforts and proactivesteps taken by the top and middle level Management and the unrelenting hard work put in byall segments of the employees in spite of severe handicaps were instrumental inachieving these results.

This crisis has been a great tragedy for so many in our country communities andstakeholders. Some of our employees and their families have been affected by illness. Mostunfortunately some of them have suffered bereavement and loss of loved ones. We offer ourcondolences to all our employees their families our customers and suppliersshareholders and other stakeholders who have suffered and continue to suffer during thispandemic.

Besides managing the Company its businesses and organization effectively among everchanging challenges during the year your Company and its employees have contributedpersonally and collectively as an organization towards alleviating the impact of thepandemic. We have detailed out some of these among Community Activities in this report.

Overall Business and the Individual Units/Products

Your Company suffered a loss in the first Quarter FY20-21. But there was a sharprebound in the next three Quarters that is clearly reflected in our performance.

Volumes were reasonable while profitability at PBT and PAT levels have been good andnet Operating Cash Flows have been excellent in spite of difficulties in some sectors.

Phthalic Anhydride (PAN)

Our main commodity business Phthalic Anhydride (PAN) showed a significant recoveryduring the latter part of the financial year despite the slowdown in the market segmentsspanning Construction Infrastructure and Automotive sectors arising out of the pandemicrestrictions during the year. The slowdown pulled down the demand in the ResinsColourants Coatings segments. However the efforts taken by the company during the last 5years in focussing on healthy and growing customers building customer relations andproviding excellent service in the market place enabled the company to present an improvedbusiness performance.

On the manufacturing front the modernisation and revamp of the PAN facilities atRanipet in Tamil Nadu commissioned during the previous year 2019-2020 performed very wellin terms of Productivity Quality Reliability Safety and modern Technology. Thisresulted in better utilisation of energy and optimisation of all input costs.

The business teams' constant focus on managing the trade working capital cycle paid offresulting in the cash flows needed for further investments and growth of the company.

The project at Dahej which was due to be commissioned during the year gotsignificantly delayed because of the shortage of project manpower due to the Covidlockdowns and delays in arrival schedules of the final project related material.Subsequently when the finishing and safety and commissioning checks were under progressthe second wave of Covid forced many project and plant personnel to return to their homesdue to increasing vulnerability for exposure. This forced the company to postpone thecommissioning of the project further despite all readiness in the plant. However with theslowing down and removal of the restrictions the commissioning works have since startedand the company hopes to report positive news in the future.

Fine Chemicals and Food Ingredients

The Fine Chemicals and Food Ingredients business had a mixed performance. In someproducts we had difficulties because of the need to revamp some of the utilities andservices. In others the difficulties in accessing the Industrial Alcohol in South Indialimited production and sale. However the other products did very well in terms of marginand volumes. These infrastructure requirements with respect to utilities and services havebeen addressed and the results will be seen from the new FY 2021-22.

In the case of Industrial Alcohol we have received permissions after many decades fromthe Tamil Nadu Government to import Alcohol. This move has helped us plan much better andthe business unit has now started functioning more positively.

Overall it was a difficult year for business operations on all fronts but from theperformance point of view our results have been excellent.

Human Resources and Strengthening the Organization

During the last 3 years we were reporting to you about the ageing of many of oursenior Management team and even some people in the middle Management. The structuredreview followed by an induction programme was initiated at different levels (topmanagement middle management and at the operating functional levels) in the organization.

During the year under review all these have come to fruition. Our CEO Mr.C.G.Sethuramtook over a senior role as Group CEO with specific assignments on organizational growthbusinesses new projects and strategic initiatives.

We inducted a new CEO Mr. Sanjay Sinha a person with excellent experience inProduction Manufacturing and two-decades as a Business Head in Petrochemicals andChemicals in a large organization. He joined our Company about 4 months back and hassettled down well.

Mrs. Ramya Bharathram has been given additional responsibilities and the Board hasrecommended her elevation to the position of Managing Director. She has had a successfultenure over the last 13 years in the Company in business reorganisation management andgrowth of Fine Chemicals businesses new Projects Revamping Projects and its Finance andStrategic role. She will take over a significant set of responsibilities including fromour CMD Mr. R. Parthasarathy in the current year.

The HR Group has been strengthened with a highly qualified Head to support theserequirements and initiatives. A new Project Manager at a senior level has taken charge tomanage new Projects. Others amongst the middle Managers and the younger Management teamhave been developed and are taking over senior responsibilities in MarketingManufacturing and Commercial & Business roles. These and other inductions andmanagerial development which are in progress have greatly bolstered the organisation forthe future as your company takes on more exciting challenges going forward. We also planthis to be a continuing effort as the organization grows our needs change and othertransitions happen.

Projects

As we mentioned the first greenfield Project at Dahej in Gujarat was delayedsignificantly and suffered severe challenges during the year due to the pandemic. It isnow on course to start operations in the near future. The Company has also startedplanning and working on a large phased expansion in the same location at Dahej Gujarattotalling about 210000 Tons of PAN Fine Chemicals and Derivatives. These are meant forthe growing Indian Market and Exports. As per the Company Policy this Project will gothrough a number of stages of internal approvals and Engineering and Detailing. We willkeep the Shareholders informed of major developments.

Our Stepdown Subsidiary in the USA

We have formed a Stepdown Subsidiary in the USA to set up opportunities for our FoodIngredients and Maleic Anhydride businesses based on the availability of large quantitiesof local Gas Feedstock. After over 2 years of intense studies and work we decided toproceed with this Project through our Subsidiaries "TCL Inc" / "TCLSpecialties LLC".

The new Subsidiary having investigated this Project thoroughly and with support andadvice from us has decided to go ahead with the Project to build a 40000 Tons Per AnnumMaleic Anhydride and Food Ingredients Plant based on Butane Gas Feedstock. These productshave a large demand in the region and with various changes happening strategicopportunities have opened up. The project is located very advantageously in the largeShale Gas basin and close to the North American Market and logistics hubs. The Companyalso plans to market these in Europe and Latin America which all taken together are thelargest Regional Markets in the world for these products. The ASEAN and the Middle EastMarkets for these products will continue to be addressed by the Indian manufacturingfacility. We will provide the subsidiary with Technology Engineering and ProjectServices.

Our Subsidiary in the Netherlands

About 18 months ago we formed the Subsidiary "TCL Global BV" in TheNetherlands strengthening our marketing presence in Europe. This had a slow start due toCOVID but was steadily ramped up and has started servicing customers. It works asMarketing Agent Distributor and Logistics Service Provider for our Products as also forour Subsidiary in Malaysia. It is expected that this will support our exports to Europe byproviding Marketing and Sales support to the existing and potential customers and quicklyrespond to evolving situations and opportunities.

As our volumes from India Malaysia and the USA grow the European market will be animportant part of our growth to capitalize on the diversification strategies and allow usto establish a large stable business and growth vehicle.

Post Brexit our "Only Representative" (OR) for REACH registrations had to bemoved into the UK and so this subsidiary serves the additional purpose of functioning asan OR in Europe.

Our Subsidiary in Malaysia

The Malaysian Subsidiary "Optimistic Organic Sdh. Bhd" went through a crisisin the beginning of FY 20-21; prices and margins were extremely poor. They lost nearly twoQuarters of Production and Business due to the breakdown of a major power generatorequipment (Turbine). These two factors created a large loss. However they were able tosupport this financially with their cash reserves built up from the previous years. In thelast two Quarters of the year they had showed strong improvement. The manufacturing wasstabilized and marketing was taken up aggressively. As a result they were able tobreak-even during the year. They have also been able to build up significant cash reservesin spite of the production problem. The corrective steps of the last few years in Plantreliability and active reorganization of Management Manufacturing and Marketing withpositive changes and geographical focus has strengthened the Company significantly in thisperiod.

STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)

USD in Million
Particulars Year Ended 31 Mar 2021 Year Ended 31 Mar 2020
Revenue from Operations 32.37 33.65
Other Income 0.01 0.13
Total Revenue 32.38 33.78
Gross Profit / (Loss) before Interest 4.04 0.63
Finance Charges and Depreciation (EBITDA)
Interest and Finance Charges (0.17) (0.09)
Profit/(Loss) before Depreciation and Tax 3.87 0.52
Depreciation (3.35) (3.29)
Profit/(Loss) before Tax (PBT) 0.52 (2.75)
Provision for Tax -- (0.02)
Profit/(Loss) after Tax 0.52 (2.77)
Provision for Deferred Tax 0.37 0.58
Profit/(Loss) after Tax (PAT) 0.89 (2.19)

Our Division

The Division "TCL Technology and Engineering" of your Company established atthe Special Economic Zone at Ranipet Tamil Nadu in March 2020 could not continue withits operations in full swing due to Covid. It has now planned to commence its operationsfrom August 2021.

Finance

Our Finances continue to be strong. More than 40% of the investment in the Ranipetplant and the Dahej project was funded from internal sources. In spite of the difficultiescaused by Covid your Company was able to improve its cash reserves so that there issignificant nett cash reserves (after all borrowing). This has been a part of our plannedstrategies initiated over eight years ago to steadily reduce working capital speed up thebusiness cycles and to improve operating cash flow. From 75 days in 2012 after the globalcrisis we have reduced our working capital cycle to about 30 days of Sales by the end ofFY 20-21. Our net debt is negative. This will be very useful as we start on another roundof growth. The operating business and finance teams have played an important role inkeeping a tight control on Working Capital and Finances.

The Prospects for the FY 2021-22

Q1 FY22 has started out well though the businesses faced difficulties since a largenumber of customers in Western India have been affected including our Logistics and manyof our Contractors and Staff. Mobility is still restricted.

There has been a sustained pressure for the last many months from rising imports of ourcommodity product PAN which is now at an all-time high especially from the Far East.The Government has started taking action in our products as also in products of otherindustries and has declared clear evidence of non-compliant dumping behaviour which is astep in the right direction. The implementation of the final findings has been delayed asmany critical Government Departments in Delhi are suffering from the extensive Covidimpact in terms of staff and attendance. We are following up actively so that thenecessary instructions are given.

Demand is good and we expect a significant bounce back after the present wave. While weare not ruling out further pandemic waves our own ability to manage these has improvedsignificantly. The devastation caused by the ongoing wave has made people cautious andcareful which is important to minimize future disruptions. We have also taken varioussteps to protect our employees and their families and support them and the localcommunities at this time. So while the future is hazy we remain confident about ourbusiness and our strength to maximise on these opportunities and surmount difficulties.

We also expect that the contributions from our Dahej Project and the improvement in ourinfrastructure at Tamil Nadu will bear fruit in the coming year and start yieldingreturns.

People

Besides the regular development and training we initiated and put in place a largenumber of programmes to address the impact of Covid.

1) 50% to 60% of our staff have been working from home almost since mid-March 2020.

2) Only essential manufacturing staff attend to the work at the Factory physically andthey are fully protected: by providing Company-organized Buses for all of them fortheir transport to and from their homes. With regular medicine supplies at home. Teleconsultation facilities with medical staff for affected employees Conducting anumber of Educational sessions about Covid by experts. Strong and sustained Covidprotocols and regular audits at every location and correction of any gaps. Restriction on all visitors and in-person meetings Support in case of medical care andhospitalization etc

Since late January 2021 our HR and Personnel teams have started an active vaccinationcampaign for all employees and their families and to the community. Here we work closelywith the Tamil Nadu Government which has been very supportive.

Your Company would like to thank all its employees for their active support to thebusiness and the community during this difficult time. Many of them have worked throughthe pandemic period adopting all safety protocols instituted by the Company to ensure thatthe impact on the businesses due to Covid is minimal.

Public Initiatives

Since March last year we have engaged with the local Administration and the Governmentagencies in public sanitization training for safe behaviour setting up Covid beds andsupplying Personal Protective Equipment's (PPEs) for the front line workers and thepublic.

Since Q3 FY21 we have started setting up large Oxygen Plants for Hospitals throughdonations. These are fully automatic and designed & constructed with the latesttechnologies. The first Plant is functioning at the CMC Hospital Vellore. Our Company hastaken the initiative to install 2 more Plants again at the CMC Hospital and 3 Plants atHospitals in Chennai in providing Medical Grade Oxygen for a large number of Covid Wardsand ICU Wards at extremely low cost. These will now directly help Hospitals and patientsand save lives. As these Plants have a long life of more than 3 decades they become apermanent asset for the Hospitals and reduce the cost of Oxygen dramatically.

Our Associates

Your company recognizes the active involvement of our Customers Bankers SuppliersDistributors consultants and Government agencies during this pandemic year and theirrole in helping us deliver positive results. The continued association of thesestakeholders will play a large part in the growth of the Company and all its initiatives.

BOARD AND MANAGEMENT

The Board of your Company consists of

• The Chairman & Managing Director - Mr. R. Parthasarathy

• Two Executive Directors: - Mr. P. Mohana Chandran Nair Mrs. RamyaBharathram

• Seven Independent Non-Executive Directors: Mr. R. Ravi Shankar Mr. N.Subramanian Mr. Raj Kataria Mr. Dhruv Moondhra Mr. Arun Ramanathan Mr. RajeevM Pandia Mrs. Bhama Krishnamurthy

• A Non-Executive Director:

Mr. R. Sampath – Chairman - Ultramarine and Pigments Ltd.

They are supported closely by

Mr. C.G. Sethuram – Group Chief Executive Officer
Mr. Sanjay Sinha – Chief Executive Officer
Mr. T. Rajagopalan – Company Secretary

And the Business and Functional Heads

Mr. S. Venkatraghavan - President – Food Ingredients
Ms. J. Radha - Executive Vice President Finance
Mr. B. Krishnamurthy - Vice President-Accounts & Finance
Mr. S.Ilango - Executive Vice President- HR and TQM

At the Board Meeting held on August 14 2020 your Board has re-appointed Mr. P. MohanaChandran Nair as a Whole-time Director of the Company under section 196 of the companiesAct 2013 for a period of three years with effect from 28-10-2020. Your Directorsplay a very active role in the Company. They bring in expertise in Business Strategy andManagement Technology Finance & Accounting Governance Project Appraisal &Management Government Relations. Their interaction with the Management team is frequentand intense at the Board and Committees through reviews suggestions criticisms &advice to the Management team over the last 8 years. The executive management team in turnhas been very transparent in presenting and discussing initiatives & plans andfailures issues & responses. This healthy and open interaction has been of immensevalue to the governance health and growth of the company.

The Committees in the Board especially the Business Review Committee and the AuditCommittee met often and participated in depth by setting goals reviewing performancecorrecting slippages and monitoring execution.

The Nomination & Remuneration Committee Stakeholders Relationship Committee andthe Corporate Social Responsibility Committee have been active in their respective roles.Further details of these are given in the Corporate Governance Report.

SOCIAL RESPONSIBILITY

Your Company continues to play an active and important role in the welfare of the localcommunities. The Founders of your Company Mr. N.S. Iyengar and Mr. N.R. Swamy had set upthe Thirumalai Charity Trust (TCT) in 1970 and The Akshaya Vidya Trust (AVT) in 1994.Thirumalai Chemicals supports TCT financially and through management reviews and in theirinfrastructure planning & development process. The TCT works in Ranipet District whereour main Indian manufacturing site is located since 1983 providing services in CommunityHealthcare Women's Empowerment Disability De-addiction and Village development. TheTCT founded and operates the Thirumalai Mission Hospital which provides primaryhealthcare in 315 villages covering over 160000 people. The Hospital provides bothout-patient and in-patient services through departments of General Medicine Emergencyservices Intensive Medical Care General Surgery Paediatrics Obstetrics GynaecologyOrthopaedics ENT Dentistry Physiotherapy De-addiction & Rehabilitation. With TCLssupport the Thirumalai Mission Hospital has set up a separate centre for Non-CommunicableDiseases such as Diabetes Thyroid disorders Endocrinology Obesity Osteoporosis etc.The dialysis service started at TMH last year is expanding to serve more people. Thisaddresses a critical need of the community. The Vedavalli Vidyalaya Schools (with 3schools at 2 campuses) managed by The Akshaya Vidya Trust have around 2600 studentsout of whom 70% are from rural families.

Industrial Relations:

Industrial Relations during the year under review continued to be very cordial.

Finance

All taxes and statutory dues have been paid on time. Payment of interest andinstalments to the Financial Institutions and Banks are being made as per schedule. YourCompany has not collected any Fixed Deposits during the Financial Year.

Contribution to the Exchequer:

The amounts paid to the Central and State Exchequer by way of GST Customs duties(incl. paid to supplier) Income Tax and other taxes is about 2074 Million onGross Sales of about 8413 Million (Previous Year 2015 Million on GrossSales of about 8427 Million). Contribution to the Exchequer is about 25% ofyour Company's Sales.

Exports:

Calculated on FOB basis Exports amounted to 663 Million (previous year 846Million)

Particulars of loans guarantees or investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Related Party Transactions

All transactions entered into with Related Parties (as defined under the Companies Act2013) during the Financial Year were in the ordinary course of business and on an Arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. There were no materially significanttransactions with related parties during the Financial Year which were in conflict withthe interests of the Company. Suitable disclosure as required by the Indian AccountingStandards (Ind AS24) has been made in the notes to the Financial Statements.

The Board has approved of a policy for Related Party Transactions which has beenuploaded on the Company's website.

Directors' Responsibility Statement:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

i) In preparation of the Annual Accounts the applicable Accounting Standards have beenfollowed along with proper explanation relating to material departures. ii) We haveselected such Accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give true and fair view of the state ofaffairs of the Company at the end of the Financial Year and of the Profit or Loss of theCompany for that period. iii) We have taken proper and sufficient care to maintainadequate Accounting Records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.iv) We have prepared the Annual Accounts on a going concern basis. v) Proper InternalFinancial Controls were in place and that the Financial controls were adequate and wereoperating effectively. vi) Systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

Business Risk Management

Business Risk Evaluation and Management is an ongoing process within the Organization.The Company has a robust risk management framework to identify monitor and minimizerisks. The Company has re-constituted the Business Risk Management Committee on 11.02.2021and the details of the Committee are as given below:

Sr. No Name of member Category
1. Mr. Rajeev M. Pandia Independent Director
2. Mr. Dhruv Moondhra Independent Director
3. Mrs. Ramya Bharathram Whole-time Director
4. Mr. Sanjay Sinha Chief Executive Officer
5. Mr. N.S. Mohan President(Mfg)
6. Ms. J. Radha Executive Vice President -Finance
7. Mr. B. Krishnamurthy Vice President Accounts & Finance
8. Mr. G. Prabhakaran Site Head-Dahej

Vigil Mechanism / Whistle Blower Mechanism

The Company has a vigil mechanism to deal with instances of fraud and mismanagement ifany. The details of the Policy are explained in the Corporate Governance Report and alsoposted on the website of the Company.

Corporate Social Responsibility (CSR) Committee

The Committee recommended continuing support for the Thirumalai Charity Trust's Healthand Rural Development Projects and for the Akshaya Vidya Trust's Educational Programmes.

The composition of the Corporate Social Responsibility Committee is given below:

Sr. No Name of member Category
1. Mr. Arun Ramanathan Independent Director & Chairman
2. Mr. N. Subramanian Independent Director
3. Mr. R. Sampath Director (Promoter)
4. #Mrs. Bhama Krishnamurthy Independent Director

# Inducted on 12.11.2020

A detailed note is given in the Corporate Governance report.

Total Expenditure on Corporate Social Responsibility (CSR) as percentage of profitafter tax (%):

The Company's total spending on CSR is 2.41% of the average profit after taxes in theprevious three Financial Years towards Health and Sanitation Programmes

Statement pursuant to Listing Agreement:

Your Company's shares are listed with the National Stock Exchange of India Ltd. and theBSE Ltd. We have paid the annual listing fees and there are no arrears.

Business Responsibility Report:

Regulation 34(2) of the SEBI Listing Regulations 2015 as amended inter aliaprovides that the Annual Report of the top 1000 listed entities based on marketcapitalization (calculated as on 31st March of every Financial Year) shall include aBusiness Responsibility Report (BR Report).

Your Company is in the top 1000 listed entities as on 31st March 2021. The Companyhas presented its BR Report for the Financial Year 2020-21 which is part of this AnnualReport.

Report on Corporate Governance

The Report on Corporate governance is annexed herewith.

Performance Evaluation

Pursuant to the provisions of the Companies Act 2013 and under obligations of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board carries outthe annual performance evaluation of its own performance of the Directors individually aswell as the evaluation of working of its various Committees. A structured questionnaire isprepared after taking into consideration the inputs received from the Directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture Execution and Performance of specific dutiesobligations and governance.

A separate exercise is carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who are evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interests of theCompany and of its minority shareholders etc. The performance evaluation of theIndependent Directors is carried out by the entire Board. The performance evaluation ofthe Chairman and the Non-Independent Directors is carried out by the Independent Directorswho also review the performance of the Secretarial Department. The Directors expressedtheir satisfaction with the evaluation process.

Appraisal of Board's performance

It includes setting individual and collective roles and responsibilities of itsDirectors creating awareness among Directors about their expected level of performanceand thereby improving the effectiveness of the Board. Board evaluation contributessignificantly to improved performance and aims at

• Improving the performance of Board in line with the corporate goals andobjectives.

• Assessing the balance of skills knowledge and experience on the Board.

• Identifying the areas of concern and issues to be focused on for improvement.

• Identifying and creating awareness about the role of Directors individually andcollectively as Board.

• Fostering Team work among the members of the Board.

• Effective Coordination between the Board and Management.

• Overall growth of the organization

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up by theCompany to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. Since thenumber of complaints filed during the year was Nil the Committee prepared a Nilcomplaints report.

Statutory Auditors

M/s. Walker Chandiok & Co LLP Chartered Accountants (Firm Registration No.AAC-2085) were appointed as the Statutory Auditors of the Company for a period of fiveyears at the Annual General Meeting (AGM) of the Company held on July 29 2016 to holdoffice from the conclusion of the Forty Third AGM till the conclusion of the Forty EighthAGM to be held in the year 2021.

Internal Auditors

The Internal Auditors M/s. M.S. Krishnaswamy & Co Chartered Accountants haveplayed an important role in strengthening the internal controls within the Company.

Cost Auditors

M/s GSVK & Co. Cost Accountants were appointed as Cost Auditor to conduct costaudit of the cost records maintained by our Company in respect of products manufacturedduring the Financial Year 2020-21. The Cost Audit Report was filed with the MCAGovernment of India by the Company on August 17 2020 well before September 30 2020the due date of filing for the Financial Year 2019-20.

Secretarial Audit

The Board appointed M/s. R.M. Mimani & Associates LLP Company Secretaries toconduct Secretarial Audit for the Financial Year 2020-21. The Secretarial Audit Report forthe Financial Year ended March 31 2021 is attached to this Report. The Secretarial AuditReport does not contain any qualifications or reservations or adverse remarks.

Web link of Annual Return

Pursuant to the provisions of section 92(3) and Section 134 (3) (a) of the CompaniesAct 2013 a copy of the Annual Return of the Company for the year ended March 31 2021will be placed on the website of the company at http://www.thirumalaichemicals.com.

Personnel

In terms of the provisions of section 197(12) of the of the Companies Act 2013 readwith the Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the names and other particulars of employees are set out in the Annexure B to theDirectors' report.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT2013: a) The ratio of the remuneration of each Director to the median employee'sremuneration for the Financial Year and such other details as prescribed is as givenbelow:

Name of Director Ratio

1. Mr. R. Parthasarathy (Managing Director) 122: 1

2. Mrs. Ramya Bharathram (Whole-time Director and CFO*) 61: 1

3. Mr. P. Mohana Chandran Nair (Whole-time Director) 15: 1

For this purpose sitting fees paid to the Directors have not been considered asremuneration. b) The percentage increase in remuneration of Managing Director ChiefFinancial Officer Company Secretary or Manager if any in the financial year: Mr. R.Parthasarathy – (Managing Director): 137 % Mr. T. Rajagopalan – (CompanySecretary): 4 % **Mrs. Ramya Bharathram - Whole-time Director was appointed as theChief Financial Officer of the Company on July 24 2018. No additional remuneration waspaid to her for functioning as the CFO. c) The percentage increase in the medianremuneration of employees in the Financial Year: 4 % d) The number of permanentemployees on the rolls of the Company: 478 e) The explanation on the relationshipbetween average increase in remuneration and Company performance: The Company's PAT hasincreased from 409 Million to 1176 Million an increase of 187 % againstwhich the average increase in remuneration is 11%; f) Comparison of theremuneration of the Key Managerial Personnel against the performance of the Company:

Name Designation Remuneration In Mn* % Increase in Remuneration PAT in Mn* % increase in PAT
Mr. R. Parthasarathy Managing Director 48.06 137
Mrs. Ramya Bharathram Whole Time Director and CFO 24.07 122 1176 187%
Mr. T.Rajagopalan Company Secretary 3.20 4

* It consists of Salary/Allowances & Benefits.

The remuneration of the Managing Director Mr. R. Parthasarathy includes the commissionof

25.78Mn which works out to approximately 2.19% to the net profit for theFinancial Year ended March 31 2021.

As per the Compensation Policy the compensation of the key managerial personnel isbased on various parameters including Internal Benchmarks External Benchmarks and theFinancial Performance of the Company.

g) Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current Financial Year and the previous Financial Year andpercentage increase or decrease in the market quotations of the shares of the Company incomparison to the rate at which the Company came out with the last public offer:

Date Issued Capital (No. of Shares) Closing Market Price per share EPS in PE Ratio Market Capitalization ( in Cr)
31.03.2020 102388120 35.40 3.99 8.87 362.45
31.03.2021 102388120 85.55 11.49 7.45 875.93
Increase /(Decrease) NA 50.15 7.5 (1.42) 513.48
% of Increase/(Decrease) NA 141.67 187.97 (16.00) 141.67
Issue Price of the share at the last Public Offer (IPO) 1
Increase in market price as on 31.03.2021 as compared to Issue 84.55
Price of IPO
Increase in % 8455

h) Average percentile increase already made in the salaries of Employees other than theManagerial Personnel in the last Financial Year and its comparison with the percentileincrease in the Managerial remuneration and justification thereof and any exceptionalcircumstances for increase in the managerial remuneration: Average increase inremuneration is 3.6% for Employees other than Managerial Personnel & Nil forManagerial Personnel (KMP and Senior Management) i) The key parameters for any variablecomponent of remuneration availed by the Directors: Except Mr. R. Parthasarathy (ManagingDirector) Mrs. Ramya Bharathram (Whole-time Director) and Mr. P. Mohana Chandran Nair(Whole-time Director) no Directors have been paid any remuneration as only sitting feeshave been paid to them. The said Directors have not been paid any variable remuneration.The Directors are eligible for a commission on Net Profits as per the provision of sec.197of the Companies Act 2013. j) The ratio of the remuneration of the highest paid Directorto that of the employees who are not Directors but receive remuneration in excess of thehighest paid director during the year: Not Applicable k) If remuneration is as perthe remuneration policy of the Company: Yes

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars required to be included in terms of Section 134(3)(m) of The CompaniesAct 2013 read with Rule 8(3) of The Companies (Accounts) Rules 2014 with regard toconservation of energy technology absorption foreign exchange earnings and outgo aregiven in Annexure C.

Cautionary Statement

Company's objectives expectations or forecasts may be forward-looking within themeaning of applicable securities laws and regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influencethe Company's operations include global and domestic demand and supply conditionsaffecting selling prices of finished goods input availability and prices changes ingovernment regulations tax laws economic developments within the country and otherfactors such as litigation plant breakdowns industrial relations etc.

Acknowledgements

The Directors would like to place on record our sincere appreciation for the continuedsupport given by the Banks Internal Auditors Government Authorities Customers VendorsShareholders and Depositors during the period under review.

The Directors also appreciate and value the contributions made by the employees of ourCompany at all levels.

For and on behalf of the Board of Directors
R. Parthasarathy R. Ravi Shankar
Managing Director Director
(DIN:00092172) (DIN:01224361)
Place: Ranipet Place: Chennai
Date: 26th May 2021 Date: 26th May 2021

.