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Tuticorin Alkali Chemicals & Fertilizers Ltd.

BSE: 506808 Sector: Industrials
NSE: TUTICORALK ISIN Code: INE400A01014
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NSE 05:30 | 01 Jan Tuticorin Alkali Chemicals & Fertilizers Ltd
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Mkt Cap.(Rs cr) 127
Buy Price 10.60
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Sell Price 10.40
Sell Qty 100.00
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52-Week high 14.50
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 127
Buy Price 10.60
Buy Qty 55.00
Sell Price 10.40
Sell Qty 100.00

Tuticorin Alkali Chemicals & Fertilizers Ltd. (TUTICORALK) - Director Report

Company director report

Your Directors are pleased to present the 47th Annual Report anc the Audited FinancialStatements of the Company for the year endec 31st March 2020.

FINANCIAL RESULTS (Rs. In Crores)

description 2019-20 2018-19
Sales Turnover (Net of GST) 156.64 174.80
Gross Loss after meeting all expenses but before providing depreciation and interest 18.48 32.10
Add: Interest 1.78 2.34
Cash Loss 20.26 34.44
Add: Depreciation for the year 3.37 3.47
Extraordinary items -- --
Net Profit / (Loss) for the year (23.63) (37.91)
Accumulated Loss 326.42 302.79
EPS & Diluted EPS (1.94) (4.15)

During the financial year the operation of the process plants posed lot ofdifficulties due to ageing equipments of pumps compressors etc. and maintenanceactivities which need to be stepped by replacing several of those to stabilize theproduction. Though the production was stabilized at around 75% frequent interruptionsbrought down the average to around 50% more-or-less similar to what was achieved in thelast few years. The performance in the next financial year would be lot better as most ofthe problems are getting resolved and continuous higher level of production can beexpected.

The production and sales during the year ended 31st March 2020 compared to theprevious year are as given below;

product

production

Sales (Includes internal Consumption)

2019-20 2018-19 2019-20 2018-19
Soda Ash (Light) 51140 55881 * 50116 * 55735
Soda Ash (Dense) -- -- -- --
Ammonium Chloride 42780 52215 47598 55303
Sodium Bicarbonate -- -- -- --

‘Includes captive consumption DIVIDEND

Your Directors are not able to recommend any dividend in view of the accumulatedlosses.

MARKET SCENARIO

The selling price of Soda Ash started dropping since June '19 and most of our long-termcustomers renegotiated to lower the prices for the second half of the year. Even thoughour production is low in view of our long-term commitment to customers we have to agreefor lowering the selling price during the second half of the year.

The Ammonia prices in CIF terms came down. However due to appreciation of US dollarthe landed cost remained high throughout the year. The Ammonium Chloride price in CIFterms fell sharply undoing

the benefits of the dollar appreciation. Moreover the 18% GST on Ammonium Chloride iscontinuously forcing the Company to maintain lower price to make Ammonium Chloridefertilizer match the subsidized other nitrogenous fertilizers.

FUTURE OUTLOOK

In-spite of large scale import of Soda Ash and also coastal movement of indigenousproduction through Tuticorin Port we are able to maintain our market share and sell toour customers as usual. The long-term commitments helping the Company to hold on to themarket share. The higher production level would definitely help in increasing the sales tothese customers. The selling prices of the product are in line with the landed cost of theimported and indigenous soda ash. Very good opportunity is available for the Company toboost up the production and to expand the facility with in-house availability of CO2 andAmmonia import facility at Tuticorin Port and situated in the heart of the salt productionarea. The Company can look to increase the production and expand its operation on thesestrengths. Since Ammonium Chloride is not a subsidized product of the Government of Indiaefforts are on to implement conversion of the Ammonium Chloride fertilizer to complexfertilizer which will bring in additional revenue.

opportunities and threats

The market is expanding and since other manufacturers are in western India the Companyconveniently caters to the needs of the customers not only in Tamilnadu but also in thestates of Andhra Pradesh and Karnataka. As already reported last year Greenstar secondammonia tanker will ensure continuous availability of ammonia. Hence the threat ofnon-availability of raw material has been reduced considerably.

ENVIRONMENT AND SAFETY

Updation to ISO 9001:2015 the latest standard is under progress.

WIND MILL

During the year 2019-20 366663 units were generated from Wind Turbine PowerGenerators at Gudimangalam Tirupur District as against 591608 units generated in theprevious year. The aging windmills are being refurbished for better results.

POWER PURCHASE

Your company has not purchased any power from the Group Captive Scheme in the financialyear.

captive salt works

14040 MTs of salt was produced and all the unused pans were also brought underproduction and the systems were modified to produce quality salt. With the availability ofenriched water from the RO plant more quantity of quality salt would be produced duringthe year.

NCLT / SEBI

BSE gave its approval for listing and trading for the of shares issued as per theearlier SEBI order Some of the freshly issued shares are to be disposed of to achieveminimum public shareholding of 25%. Accordingly the promoter shareholders alreadyidentified in the order will be selling their specified quantities following the variousrules and regulation within 1 year of the listing approval. Additional time will be soughtfrom SEBI if the sale could not be achieved within the prescribed time to offset thelost time due to lockdown.

FIXED DEpOSIT

There was no outstanding deposit as at 31st March 2020. The Company has neitheraccepted nor renewed any deposits during the year under review.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATESAND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relateson the date of this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY

The Statement showing the details regarding the development and implementation of RiskManagement Policy of the Company is furnished in Annexure 1 which isattached to thisreport.

The risk management includes identifying types of risks and its assessment riskhandling and monitoring and reporting.

Your Company is dependent primarily on SPIC for the supply of CO2 and for receiving theimported Ammonia through their storage system. Your Company has now implemented anindependent CO2 Recovery facility which is operational from November 2016. This hasreduced the risk considerably. The Board does not envisage any other major risks.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibilityinitiates as the said provisions are not applicable as on date in view of the accumulatedlosses the Company has incurred.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The transactions entered into during the financial year with related party as definedunder the Act were in the ordinary course of business and at arm's length basis. Therewere no materially significant transactions during the financial year 2019-20 which werein conflict with the interests of the Company. Policy on materiality of related partytransactions is placed on the Company's website viz. www.tacfert.in

COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Annexure 2 and is attached to this report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had four Board meetings during the financial year under review. Fulldetails are given in the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively. Internal financial control means the policies and procedures adopted by theCompany for ensuring the orderly and efficient conduct of its business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint venture or Associate Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

No case of sexual harassment was reported during the year. DIRECTORS AND KEYMANAGERIAL PERSONNEL

The Company's Board comprises of the following directors: Mr.B.Narendran Mr. S.AsokanMrs. Rita Chandrasekar and Mr.G.Ramachandran.

As already reported in the last year Dr. Rm. Krishnan retired at the end of the lastyear Annual General Meeting held on 02.08.2019.

Mr.S.Nandakumar continue to be Chief Finance Officer of the Company.

Mr. RS Abhinandhanan was our Company Secretary till 10.10.2019 and he tendered hisresignation and Mr. Walter Vasanth P J took over as Company Secretary in his place.

Mrs. Rita Chandrasekar will be retiring at this AGM and being eligible forre-nomination for yet another term of 5 years.

COMMITTEES OF THE BOARD

There are four committees of the Board namely Audit Committee Nomination &Remuneration Committee Stakeholders Relationship Committee and Risk Management Committee.The details of composition of committees are furnished in the Corporate Governance reportwhich is annexed to this report.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves for the continuance / appointment as independent directors underthe provisions of the Companies Act 2013 and the relevant rules.

The Independent Directors have also affirmed that they have completed requisite stepstowards the inclusion of their names in the data bank of Independent Directors maintainedwith the Indian Institute of Corporate Affairs in terms of Section 150 of the Act readwith Rule 6 of the Companies (Appointment and Qualification of Directors) Rules 2014.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligations andDisclosure Requirements) Regulations 2015 the Boards' performance and performance of thenon-independent Director were considered/evaluated by the independent directors at theirmeeting without the participation of the non-independent director and key managerialpersonnel.

They also assessed the quality quantity and timeliness of flow of information betweenthe Company's Management and the Board that are necessary for the Board to effectively andreasonably perform its duties.

Pursuant to the provisions of the Companies act 2013 and Regulation 17 of SEBI(Listing obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its various committees.

STATUTORY AUDITORS

M/s.MSKA & Associates Chartered Accountants Chennai (Registration No.105047W)have been appointed as Statutory Auditors of the Company in 44th Annual General meetingfor a term of five years from the Financial year 2017-‘18 to hold office till theconclusion of the Annual General Meeting of the Company to be held in the year 2022.

SECRETARIAL AUDITOR

Mr. R Kannan has been appointed by the Board of Directors to carry out the SecretarialAudit for the year ended 31st March 2020. Secretarial Auditor's Report is annexed whichforms part of this report.

COST AUDITOR

As per the Government of India's directive the Company's Cost Reports in respect ofFertilizer - Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March 2020are being audited by the Cost Auditor Mr. P R Tantri (M.No. 2403) who was appointed bythe Board.The Company is required to maintain Cost Records as specified by the CentralGovernmentunder Section 148 (1) of the Act and that accordingly such accounts and recordsare made and maintained. The Cost Audit Report for the year ended 31st March 2019 wasfiled within the time stipulated under the Act.

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE pRACTICING COMpANY SECRETARY IN THEIR REpORTS

There was no qualification reservations or adverse remarks made by the StatutoryAuditors M/s. MSKA & Associates and Secretarial Auditor Mr. R. Kannan PracticingCompany Secretary in their reports.

The Statutory Auditors' Report for the financial year ended 31st March 2020 isannexed.

INTERNAL FINANCIAL CONTROL:

The Board has adopted the Policies and Procedures for ensuring the orderly andefficient conduct of its business including adherence to Company's Policies theSafeguarding of its Assets the Prevention and

Detection of Frauds and Errors the Accuracy and Completeness of the AccountingRecords and the timely Preparation of Reliable Financial Disclosures.

DISCLOSURE OF COMpOSITION OF AUDIT COMMITTEE AND pROVIDING VIGIL MECHANISM/WHISTLEBLOWER pOLICY

The Audit Committee consists of Mr.B.Narendran Mr.S.Asokan and Mrs. Rita Chandrasekarall of whom are Independent Directors. Dr. Rm. Krishnan retired in August 2019 andMrs.Rita Chandrasekar was inducted in the committee.

The Company has established a vigil mechanism and oversees through a committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co-employees and the Company.Policy is given in Annexure 3.

SHARES

The Company has allotted 107040000 equity shares of Rs.10 each on 17.09.2018 byconverting un secured loans and Preference shares in to equity in continuation to the EGMdated 10.04.2018 and order of SEBI dated 06.09.2018. The Company obtained the "In-principle" approval and listing and trading approval from BSE. The promoters holdingare made demat. The Company has acquired exemption from SEBI to meet the minimum publicshareholding within one year period from the day of Trading Approval i.e. 25th September2019.

The Company has not bought back any of its shares during the year under review.

The Company has not issued any "Sweat Equity" Shares during the year underreview.

No Bonus Shares were issued during the year under review.

The Company has not provided any Stock Option Scheme to the employees.

ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished in Annexure 4 and is attached to this Report.

CORPORATE GOVERNANCE

A report on Corporate Governance as stipulated under Schedule Vand Regulation 34(3) ofthe SEBI (Listing obligations and Disclosure Requirements) Regulations 2015 forms part ofthis Annual Report. The requisite certificate from a Chartered Accountant confirmingcompliance with the conditions of corporate governance as stipulated is annexed to thisReport.

FAMILIARIZATION PROGRAMME

The Independent Directors attend a Familiarization programme on being inducted to theBoard. The details are provided in the Corporate Governance report and on the website ofthe Company viz. www.tacfert.in.

DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been complied with.

PARTICULARS OF EMPLOYEES

The Company has no Employees whose salary exceeds the limits as prescribed under Rule(5)(2) of Companies (Appointment and Remuneration of Key Managerial Personnel) Rules2014.

Disclosures under Rule 6(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

The ratio of the remuneration of each director to the median remuneration Mr.G.Ramachandran 6%
of the employees of the company for the financial year - 2019-20 Managing Director
The percentage increase in remuneration of each director Chief Financial Officer Company Secretary in the financial year - 2019-20. Mr.G.Ramachandran Managing Director Nil
Mr. S.Nandakumar Chief Financial Officer 16.55%
Mr. R.S. Abhinandhanan Company Secretary Resigned w.e.f 10.10.2019 Nil
The percentage increase in the median remuneration of employees in the financial Year - 2019-20. (6.62)
The number of permanent employees on the rolls of Company as on 31.03.2020 216
Average percentage increase already made in the salaries of employees Average percentage increase already made in 7.97%
other than the managerial personnel in the last financial year and its the salaries of employees other than the key
comparison with the percentage increase in the managerial remuneration managerial personnel in the FY 2019-20.
and justification thereof Average percentage increase already made in the salaries of the key managerial personnel in the FY 2019-200 41.44%

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY

Company is adopting remuneration guidelines for fixing the remuneration as per thepolicies laid down by the Nomination and Remuneration Committee.

PARTICULARS AS REQUIRED UNDER RULE 3 OF THE COMPANIES (ACCOUNTS) RULES 2014

A. Conservation of Energy

1. Steps taken or impact on conservation of energy

The cold and hot installation are erected wherever necessary to reduce the energy loss.Better compressors are being considered for instrument air and refrigeration.

2. Steps taken for utilizing alternative sources of energy

a) A Project jointly with Group Companies is under implementation for production andutilization of solar energy.

b) Induction turbine alternator to recover 650 KW of power from letdown steam is underimplementation.

c) RO plant rejection water is used to enhance salt recovery.

3. Capital investment in conservation energy Projects are under implementation.

B. Technology Absorption

(a) The Company has fully utilized the imported Technology of Hitachi zosen Japanwhich was imported in the year 1980.

(b) Expenditure on Research & Development

(i) Capital Nil
(ii) Recurring Nil
(iii) Total Nil

C. Foreign Exchange Earnings and outgo:

(a) Foreign Exchange inflow: Rs. 36.05 Crores
(b) Foreign Exchange outflow: Rs. 1.84 Crores

GENERAL

No disclosure or reporting is required in respect of the following matters as therewere no transactions on these items during the year:

a. No significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future

b. There was no issue of Equity shares with differential voting rights

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. Your Directors also acknowledgegratefully the shareholders for their support and confidence reposed on your Company.

DISCLAIMER

Statements in the Management Discussion and Analysis describing the Company'sobjectives estimates projections expectations may be "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatwould make a difference to the Company's operations include economic conditions affectingdemand-supply and price conditions in the domestic and overseas markets in which theCompany operates raw material availability and its prices changes in the Governmentalregulations labour negotiations tax laws and other statutes and economic developmentwithin India

For and on behalf of the Board of Directors

Chennai B NARENDRAN G. RAMACHANDRAN
15th June 2020 Director Managing Director