DIRECTORS' REPORT To The Members, Tainwala Chemicals & Plastics (India) Limited Your Directors have pleasure in presenting the 30th Annual Report and Audited Statement of Accounts for the Year ended 31st March 2015. OPERATIONS: The financial year 2014-15 was a year of challenges and uncertainties for businesses across various segments of industry with the financial crisis and volatile Markets, but your Company continues to demonstrate the robustness of its business model. Your Company has been able to achieve a turnover of Rs. 984.05 lakhs and a competitive Net Profit of Rs. 202.76 lakhs. DIVIDEND : Considering the future prospects and better operations of the company, the board is deciding not to declare dividend for the year under review. FIXED DEPOSITS : Your Company has not accepted any deposits covered by the provisions of Section 73 of the Companies Act, 2013 and the Rules framed there under. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO: Information pursuant to Section 134(3)(m) of the Companies Act , 2013 read with the Rule, 8 of The Companies (Accounts) Rules, 2014 is given in Annexure "A" to this report. DEPOSITORIES : The Company is registered with both National Securities Depositories Limited (NSDL) and Central Depository (Services) Limited (CDSL). The shareholders can take advantage of holding their shares in dematerialized mode. INSURANCE: All the assets of the Company, wherever necessary and to the extent required, have been insured. SHARE CAPITAL AND LISTING OF SECURITIES: The equity shares of the Company are listed with Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). Annual Listing fee has been paid to exchange. PARTICULARS OF EMPLOYEES : The Percentage of remuneration of each Director, Chief Financial officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the medium of remuneration of the employees of the Company for the Financial Year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under : Statement of Disclosure of Remuneration Under Section 197 of Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 i) Ratio of the remuneration of each Executive Director to the median remuneration of the Employees of the Company for the financial year 2014-15, the percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer and other Executive Director and Company Secretary during the financial year 2014-15. ii. The percentage increase in the median remuneration of Employees for the financial year was 16.69%. iii. The Company has 46 permanent Employees on the payroll of Company as on 31st March, 2015. iv. Relationship between average increase in remuneration and Company's performance: The reward philosophy of the Company is to provide market competitive total reward opportunity that has a strong linkage to and drives performance culture. Every year, the salary increases for the Company are decided on the basis of a benchmarking exercise that is undertaken with similar profile organizations. The final salary increases given are a function of Company's market competitiveness in this comparator group as well as overall business affordability. During the year, similar approach was followed to establish the remuneration increases to the Employees. Variable compensation is an integral part of our total reward package and is directly linked to an individual performance rating and business performance. Salary increases during the year were in line with Company's performance as well as per Company's market competitiveness. v. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: In line with Company's reward philosophy, merit increases and annual bonus pay-outs of its Employees including Key Managerial Personnel are directly linked to individual performance as well as that of the business. Given the superior business performance and the performance rating of the Key Managerial Personnel, appropriate reward by way of merit increase or variable pay have been awarded to the Key Managerial Personnel for the current year. This was duly reviewed and approved by the Nomination & Remuneration Committee of the Company. vi. The Market Capitalisation of the Company as on 31st March, 2015 was X 20.13crores as compared to Rs. 16.01 crores as on 31st March, 2014. The price earnings ratio of the Company was 9.90 as on 31st March, 2015 as compare to 53.4375 as on 31st March, 2014. The closing share price of the Company at BSE Limited on 31st March, 2015 was X 21.50/- per equity share of face value of X10/- each. vii. Average percentage increase made in the salaries of Employees other than the managerial personnel in the financial year was 23% whereas the increase in the managerial remuneration was [0] %. The average increases every year is an outcome of Company's market competitiveness as against its peer group companies. In keeping with our reward philosophy and benchmarking results, the increases this year reflect the market practice. Viii The ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Not Applicable ix. It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company. DIRECTORS : Your Company has 7 (Seven) Directors consisting of 1 (One) Promoter and Whole - time Director, 2 (Two) Executive Directors (Managing Director & Director) and 4 (Four) Independent Directors, as on 31st March, 2015. DIRECTOR'S RESIGNATION : During the period under review, Mr. Dungarmal Tainwala has resigned from the Board of Directors of the Company w. e. f. 27/07/2015 due to his health problems. DIRECTOR'S RESPONSIBILITY STATEMENT : The Director's Responsibility Statement referred to in clause (c) of sub - section (5) of Section 134 of the Companies Act, 2013 shall state that (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial year and of the profit and loss of the Company for that period; (c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) they have prepared the annual accounts on a going concern basis; and (e) they have laid down internal financial controls for the Company and such internal financial controls are adequate and were operating effectively. DECLARATION BY AN INDEPENDENT DIRECTOR (S) AND RE - APPOINTMENT IF ANY: In compliance of sub - section (7) of Section 149 of the Companies Act, 2013, all the Independent Directors of the Company have submitted their declarations stating that, they meet the criteria of independence as provided in sub-section (6) of the section 149 of the above said Act and Clause 49 of the Listing Agreement with the Stock Exchanges. SECRETARIAL AUDITOR : Pursuant to Section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Malay Shah & Associates Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Company for the financial year 2014-15. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the financial year 2014-15 is set out as Annexure and forms part of this report. The Board has proposed to appoint M/s. Malay Shah & Associates Practicing Company Secretaries as the Secretarial Auditors of the Company for the financial year 2015-16. AUDITORS : M/s. Rungta & Associates, Chartered Accountants, having firm registration no.108888W, retire at the ensuing Annual General Meeting and being eligible have offered themselves for Re-appointment. The Company has received a letter as required under section 139(1) of the Companies Act 2013 from M/s Rungta & associates confirming their eligibility and willingness to act as statutory auditors, if reappointed. Members are requested to elect auditors for the current year and fix their remuneration. CORPORATE GOVERNANCE - CLAUSE 49 OF THE LISTING AGREEMENT : A separate Section on Corporate governance with a detailed compliance report and the Certificate from The Practicing Chartered Accountant with respect to compliance with the provisions of Corporate Governance, as required by clause 49 of Listing Agreement, is also annexed. AUDITORS' REPORT : With reference to the Auditors comments in Para 3(a), 3(b) of Annexure to the Auditors Report, management would like to state that these loans were given in earlier years and the Company is confident of recovering the full amount. BOARD COMMITTEES : In order to ensure compliance with the applicable provisions of the Companies Act, 2013 as well the provisions of the Listing Agreement the Board has constituted an Audit Committee, Nomination and Remuneration Committee, Stakeholder's Relationship Committee and Risk Management Committee and details of these committees are given in the Corporate Governance Report which is annexed to the Director's Report . DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES : Your Company recognizes the value of transparency and accountability in its administrative and management practices. The Company promotes the ethical behavior in all its business activities. The Company has adopted the Whistle Blower Policy and Vigil Mechanism in view to provide a mechanism for the Directors and employees of the Company to approach Audit Committee of the Company to report existing/probable violations of laws, rules, regulations or unethical conduct. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. The particulars of contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 disclosed in Form No. AOC -2 and is set out as Annexure and forms part of this report. EXTRACT OF THE ANNUAL RETURN : Pursuant to sub - section 3(a) of the Section 134 and sub - section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as on 31st March, 2015 is set out as Annexure and forms part of this report. QUALITY : Your Company accord to high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regards. MANAGEMENT DISCUSSION AND ANALYSIS : The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agreement with the Stock Exchanges in India is presented in a Separate section forming part of this Annual Report. ACKNOWLEDGEMENT I would like to end by expressing my sincere appreciation for the continued support of the shareholders, employees, Tainwala Group, suppliers and commercial partners during the year. I would also like to thank my colleagues on the Board for their support and guidance to the Company's management, which goes a long way in encouraging the management in meeting the challenges in the growth path. By Order of the Board Mr. Dungarmal Tainwala (DIN : 00294150) Chairman Place: Mumbai Date: 26/05/2015 |