AFFLUENCE

Directors' Report

To the Members,

1. The Directors present the Forty-Seventh Annual Report on the business and operations of your Company along with the financial statements for the year ended March 31, 2015

2. DIVIDEND:

The Directors have decided not to recommend any dividend for the year ended March 31, 2015 due to loss.

3. INCREASE IN AUTHORIZED SHARE CAPITAL:

During the financial year 2014-15, the authorized share capital of your Company was increased from Rs. 200,00,00,000/- (Rupees two hundred crores only) to Rs. 350,00,00,000/- (Rupees three hundred fifty crores only) by creation of additional 1,50,00,000 (one crore fifty lakhs only) Redeemable Preference Shares of Rs. 100/- (Rupees one hundred only) each. Consequently, the authorized share capital of the Company comprises of Equity Shares of Rs.15,00,00,000/- (Rupees fifteen crores only) divided into 1,50,00,000 (one crore fifty lakhs only) Equity Shares of Rs. 10/- (Rupees Ten only) each and Redeemable Preference Shares of Rs. 3,35,00,00,000/- (Rupees three hundred thirty five crores only) divided into 3,35,00,000 (three crores thirty five lakhs only) Redeemable Preference Shares of Rs. 100/- (Rupees one hundred only) each.

Allotment of part of these additional Redeemable Preference Shares has been done in tranches to the promoter(s) of the Company on preferential basis. These Non-cumulative Redeemable Preference shares are not listed on any Stock Exchange.

4. PREFERENTIAL ALLOTMENT OF REDEEMABLE PREFERENCE SHARES:

Pursuant to the Shareholders approval, 63,00,000 (sixty three lakhs only) 8.50% Non-cumulative Redeemable Preference Shares of Rs. 100/- (Rupees one hundred only) each has been allotted toTata Steel Limited on preferential basis. After allotment of these Non-cumulative Redeemable Preference Shares, the paid up share capital of the Company is Rs. 2,45,26,09,350/- (Rupees two hundred forty five crores twenty six lakhs nine thousand three hundred fifty only).

5. OPERATION AND SALES:

(i) During the year under review, the Company's turnover was Rs. 157.56 crores as against Rs. 167.55 crores in the previous year. The production and sales of rolls were 7719 tons and 7805 tons, respectively as against the production and sale of 7750 tons and 7624 tons, respectively in the previous year. This includes the sale of forged rolls of 908 tons against 912 tons in the previous year.

(ii) During the year under review, the production and sales of pig iron were 17247 tons and 12283 tons respectively, as against 20382 tons and 17115 tons in the previous year.

(iii) During the year under review, the Company has incurred a net loss of Rs. 67.62 crores as against the net loss of Rs. 75.04 crores in the previous year.

(iv) During the year under review, the export of cast rolls was 879 tons as compared to 1437 tons in the previous year, equivalent to Rs. 12.02 crores as compared to Rs. 20.97 crores in the previous year. 

6. FINANCIAL AND WORKING CAPITAL MANAGEMENT:

(i) The liquidity position of the Company was fragile during the year due to lower off-take and order booking. The ramping of the forging business and quality improvement in Cast Rolls business has progressed during the year and the management is hopeful of achieving the planned level of production during the coming financial year.

(ii) During the year under review, CRISIL has given BB-stable rating (downgraded from BB+) for term loan and A4+ for short term borrowing.

7. FIXED DEPOSITS:

The Company has stopped accepting / renewing the fixed deposits. Matured deposits have been repaid when claimed by the depositors together with interest accrued upto the date of maturity. As per the Companies Act, 2013, all the existing deposits must be repaid either on the date of maturity or within one year from the date of applicability of Companies Act, 2013, whichever is earlier. Accordingly, the Company has fully repaid its existing deposits, together with interest thereon upto the date of repayment, on or before March 31, 2015. All unclaimed deposits along with interest accrued upto the date of maturity have been deposited, as and when they became due, with the Investors Education and Protection Fund (IEPF).

8. TECHNOLOGY AND GROWTH:

8(i) TECHNOLOGY: 8(i)(a) Cast Roll:

During the year, your Company has focused primarily on the stabilization of Enhance Carbide (TS) Roll for CSP (Compact Strip Profile) mills. Improvement in SG Core strength of Bi-metallic Rolls to fulfill high end application in mill to improve Plate mill Roll performance.

Modified SNG (Type-1) & SNG (Type-5) Rolls supplied to TSL and modified Enhance Carbide Rolls supplied to TSCR are giving higher performance in HSM & TSCR. Heat treated SG Rolls are giving double roll life & similar grade roll order is also expected from roughing stands. Improved version of SNG grade (Type-5) & (Type-2), Heat treated SG Roll for Indigenous and export long product mills for Roughing stand, Adamite Edger Rolls of increased hardness and SG Sleeves for MLSM mill were supplied for improvement in roll performance. Efforts have also been made for achieving high hardness on ICDP Rolls, to achieve better resistant property and roll life. Heat treatment process modification has been done to improve performance of Hi-Cr (Iron) &Hi-Cr (Steel) Rolls in the mills.

During the year, your Company engaged deeply with Yodogawa Steel Works Ltd., Japan to improve the quality performance of Cast Rolls.

Methoding and process improvement have resulted in quality improvement of Static Cast Rolls. Graphitic Cast Steel has been developed. This will fulfill the latest requirement of long product and hot strip mill as an Edger, RUBM & MLSM mill Rolls against conventional Adamite Roll. Manufacturing of HSS Rolls is in progress by effecting process changes. Revamping of CCM to control vibration has given encouraging results with low level of vibration and helping in achieving better roll properties. SG Sleeves were cast through CCM route with high yield and lower cost.

Your Company has bagged orders for new generation rolls like 'Graphitic Cast Steel', Edger Rolls of high hardness, Plate mill roll with SG core and Hi-Cr.(Steel) Roll orders.

Several initiatives have been taken to reduce energy cost and other fixed cost through the Kar Vijay Har Shikhar initiatives.Changing of power source has also led to reduce power cost and increased reliability.

8(i)(b) New Business:

During the year, your Company had primarily focused on revamping the Press to improve forging productivity.

Being the only integrated forged roll manufacturer, your Company has framed out action plan to achieve next level of cleanliness in forged products which will give edge over competitors in terms of performance and thereby enable your Company to capture more markets.

Implementation of unique specialized cryogenic treatment of forged work rolls has given significant improvement in hardness on the surface as well as at depth. Deep analysis and experiments have resulted in better microstructure in the Forged Rolls.

Your Company was deeply engaged with Sheffield Forgemasters International Limited to achieve next level of quality in Forged Rolls. 

8(ii) GROWTH: 8(ii)(a) Cast Roll:

During the year, your Company could not show promising volume due to several reasons. However, revamping of Foundry & Melting furnace equipment has improved the reliability of equipment & infrastructure.

Installing a new spectrometer with additional channels of different elements analysis and Nitrogen gas analysis from same equipment has helped to meet the demand of constituent's elements of new product like HSS, Ingot etc. The usage of Rigaku X-ray analyzer equipment for measuring compressive stress on high grade of rolls and thereby correlation of stress value vis-à-vis hardness achieved by selecting right tempering temperature has led to quality improvement of Hi-Cr (Iron) & Hi-Cr (Steel) grade Rolls. Further, change in certain machining practices and finishing have given better results.

8(ii)(b)New Business

In Forge Roll, Tayo's prime focus was on making inclusion free ingots, restricting minimum forging temperature, adopting modified post forge heat treatment cycle and rescheduling forged rolls for cryogenic treatment along with capacity utilization of existing resources for production ramp up. Stabilization of induction hardening parameters for non-standard grades is planned for better end result. Your Company has taken initiatives for new product development for growth of this business.

9. TOTAL QUALITY MANAGEMENT:

(i) Your Company had participated in the "Tata Innovista 2015", which is a platform within the Group to showcase innovative edges and initiatives.

(ii) An experienced team of Assessors from various Tata Group companies and mentored by a senior executive of the Group, facilitated by Tata Quality Management Services (TQMS), conducted an External Assessment at Tayo as per the TATA Business Excellence Model (TBEM). The Indian Register Quality Systems conducted Recertification Audit from 24th to 26th June,2014 for ISO 9001:2008 Quality Management System, ISO14001:2004 Environmental Management System and OHSAS 18001:2007 Occupational Health and Safety Management System, and your Company was successful in this audit.

(iii) There were various initiatives to improve quality with special task forces and groups within the organization and your Company has been working on stabilizing manufacture of certain high end grades of Rolls. The support of the technical expert from Yodogawa Steel Works Ltd., Japan in this regard is worth mentioning. The active and deep engagement of the Company with Sheffield Forgemasters International Limited has led to quality improvement in Forged Rolls.

(iv) The process of Rewards and Recognition for good jobs done and suggestions' scheme have been rejuvenated to improve the morale of employees and quality of processes. Your Company had also arranged sessions with experts on technical and quality aspects of Roll manufacturing.

(v) The "Kar Vijay Har Shikhar (KVHS)" improvement initiative wing "Business Performance Enhancement - Operations" of Tata Steel had launched its initiative in Tayo. Projects which were identified through an idea generation session were reviewed in a periodic manner.Your Company has also taken "in-house" improvement initiatives known as "TIPs - Tayo Improvement Projects".

10. SAFETY AND HEALTH:

As per the Tata Group philosophy, Safety is given primary focus in the Company. Senior leadership is fully committed towards improving the safety culture and awareness and is involved in formulating and guiding the safe work practices. Being in close proximity of our Promoter, Tata Steel, we enjoy the guidance and expertise support in the various avenues of safety.

Your Company initiated improvement projects in Safety for awareness among the employees and institutionalize safety practices all across. Your Company also conducted awareness sessions in the adjoining colony. The Safety team also had special awareness drives on "Road Safety".

Apart from the visuals and awareness training programmes, the behavioral aspects of safety are communicated through interactions and discussions at various levels. Safety initiatives are also extended to our service providers, contract workforce, local community, visiting customers, inspectors and other officials through mandatory use of PPEs. Following actions have been taken to improve behavioral safety.

(i) As per the annual practice, National Safety Day was observed during the year. Safety programmes like Safety Competitions, House-keeping, Safety training, Fire Fighting training, Mock Drill and First-Aid Training were conducted regularly. Basic and standard lead and lag measures pertaining to safety performance form the basis of "Safety Performance Reporting and Review". Review of the lag measures like near misses, first aid cases, incident investigations and analysis of root causes helped in strengthening the improvement plans and executions 

(ii) Employees undergo mandatory periodical medical examination as stipulated under various statutory requirements. Free medical facilities are provided at Tata Main Hospital and Company's Dispensaries apart from other areas where specific attention is given to ensure fitness of employees at the work place.

(iii) Tree plantation was done in and around the factory premises. Compliance to EHS legislations has been achieved through implementation of the Environmental, Occupational Health and Safety Policy of the Company which ensures continual improvement on safety front.

11. COMMUNITY INITIATIVES:

Your Company is committed towards the welfare and development of the society. Several initiatives were undertaken during the year like, community and skill development, HIV & AIDS Awareness programme, Free Acu-pressure Treatment Camp, Health awareness programmes in villages situated around the plant, Blood Donation Camp etc.

12. AFFIRMATIVE ACTION:

The Company is guided by the Code of Conduct on Affirmative Action. The Company ensures implementation of the Code by arousing awareness on the subject amongst employees, vendors, suppliers and stakeholders through training programmes conducted from time to time. The data on Affirmative Action lays emphasis on 4Es i.e. Employment, Entrepreneurship, Employability and Education which is being monitored on quarterly basis to ensure its implementation in the right spirit.

13. AUDIT REPORT:

The Statutory Auditors Report on Audited Annual Accounts for the financial year 2014-15 doesn't contain any qualification, reservation or adverse remark which warrants comments from the Board of Directors.

The Secretarial Auditors Report for the financial year 2014-15 doesn't contain any qualification, reservation or adverse remark which warrants comments from the Board of Directors. The Secretarial Audit Report as required under section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report.

14. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The particulars of Loans, Guarantees and Investments, if any, have been disclosed in the Financial Statements.

15. CONTINGENT LIABILITIES AND MAJOR LITIGATIONS:

(i) Consequent to the order of the Hon'ble Supreme Court vide its order dated April 15, 2009, upholding the decision of the Hon'ble Patna High Court with a direction to BSEB to rework the rates of fuel surcharge. BSEB has adjusted Rs. 23.23 crore against the Coal Claims of Rs. 100 crore and modified the rate of fuel surcharge for 1998-99 to 158.79 P/ Kwh against the earlier notified rate of 164.83 P/ Kwh for 1998-99 thus giving a benefit of 6.04 P/ Kwh to the consumers. However, this benefit will be passed on to the consumers on receipt of Coal Claim of Rs. 100 crore by BSEB from the Coal Companies.

The Hon'ble Supreme Court has, however, given liberty to the consumers to approach High Court to challenge the correctness of this adjustment and the terms of such adjustment and also stated that the other pending issues on fuel surcharge can be taken up by the consumers before the High Court.

(ii) In the year 2000, your Company had filed a writ petition in Hon'ble Jharkhand High Court challenging the applicability of 1999 Tariff schedule (HTSS category) to 1993 Electricity Tariff on Tayo. Hon'ble Jharkhand High Court on May 02, 2013, had dismissed Company's Petition and confirmed the applicability of 1999 Tariff schedule on Tayo. Consequent to the adverse judgment of Hon'ble Jharkhand High Court, with regard to applicability of electricity tariff to the Company from January, 2000, till March, 2013, the Jharkhand State Electricity Board (JSEB) has issued a rectified energy bill dated June 10,2013 for Rs. 272.03 crore, which includes delayed payment surcharge of Rs. 208.00 crore and fuel surcharge of Rs. 5.96 crore.

The Judgment dated May 2, 2013 was challenged on various legal grounds by way of Letters Patent Appeal (intra- court appeal) before the Hon'ble Jharkhand High Court which was admitted on merit on July 3, 2013. The rectified energy bill dated June 10, 2013 has also been challenged separately before the Hon'ble Jharkhand High Court. LPA is still pending at Hon'ble Jharkhand High Court. Meanwhile the Jharkhand State Electricity Board has initiated a certificate proceeding against the Company and the Board of Directors for recovery of Rs. 263.61 crore, which has been challenged before the Certificate Court. 

(iii) On March 30, 2013, your Company has switched over to JUSCO for power supply. At the time of disconnection of Electricity supply from JSEB, your Company had given a Bank Guarantee for Rs. 3.72 crore in favor of JSEB to secure the amount of fuel surcharge shown as "kept in abeyance" in the electricity bills. This Bank Guarantee was given because JSEB was not ready to disconnect electricity supply without payment of aforesaid Rs. 3.72 crore. Consequent to the judgment of Hon'ble Jharkhand High Court on May 2, 2013 given on Induction Furnace case, the JSEB has raised a rectified bill of Rs. 272.03 crore on June 10, 2013. Thereafter, JSEB had applied for invocation of Bank Guarantee irrespective of the fact that the fuel surcharge matter was not a part of the aforesaid rectified bill and the same is sub judice in other case with theHon'ble Jharkhand High Court. The Hon'ble Jharkhand High Court has granted a stay on the invocation of Bank Guarantee and the same is still pending with the Court.

(iv) A writ petition has been filed by the Company challenging the order of Jharkhand Government denying exemption from the operation of Employee State Insurance Act, 1948.

16. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):

Mr. Osamu Nishimura (DIN-02503767) has stepped down as Director of the Company with effect from February 20, 2015. The Board would like to place on record their sincere appreciation to the contribution made by Mr. Nishimura during his tenure with the Company.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Article 146 of the Articles of Association of the Company, Mr. V. S. N. Murty (DIN- 00092348), Director retires by rotation and being eligible, offers himself for re-appointment.

With effect from October 20, 2014, Mrs. Ramya Hariharan (DIN-06928511) was appointed as Additional Director by the Board. According to section 161 of the Companies Act, 2013, Mrs. Hariharan will hold office till the date of forthcoming Annual General Meeting. A notice has been received from one of the members proposing her candidature for the office of Director under section 160 of the Companies Act, 2013. Mrs. Hariharan is an Independent Director on the Board.

In order to comply with the provisions of Section 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 and clause 49 of the Listing Agreement, Mrs. Ramya Hariharan being an Independent Director was appointed for a period of Five (5) consecutive years or till the date of retirement of Non-Executive Directors as per Tata Group Policy, whichever is earlier, with effect from October 20, 2014. By appointing Mrs. Ramya Hariharan on the Board, the company has also complied with the requirement of appointing at least one woman Director as required under section 149(1) of the Companies Act, 2013 read with clause 49 of the Listing Agreement.

Mr. Yoshikazu Miyasaka (DIN- 07125432) was appointed as Additional Director of the Company with effect from March 17, 2015. According to section 161 of the Companies Act, 2013 Mr. Miyasaka will hold office till the date of forthcoming Annual General Meeting. A notice has been received from a member proposing his candidature for the office of Director under section 160 of the Companies Act, 2013. Mr. Miyasaka is Promoter, Non-Independent and Non-Executive Director.

Pursuant to Section 203 of the Companies Act, 2013 and Rule 8 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, appointments of Mr. K. Shankar Marar, Managing Director, Mr. Suresh Padmanabham, Deputy Chief Financial Officer (CFO) and Mr. Prashant Kumar, Company Secretary & Compliance Officer were formalized as Key Managerial Personnel of the Company.

17. DIRECTORS' SHAREHOLDING:

The shareholding of Managing Director and Non-Executive Directors in the Company is NIL.

18. NUMBER OF MEETINGS OF BOARD:

During the year, Nine Board meetings were held wherein directors were present either physically or through Video Conferencing.

19. DECLARATION BY INDEPENDENT DIRECTORS:

All the Independent Directors have given declaration under Sec 149(6) of the Companies Act, 2013 read with clause 49 of the Listing Agreement regarding their independence.

20. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, no reportable material weakness in the design or operation was observed. 

21. DIRECTORS RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year2014-15.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

21.1 in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

21.2 they have selected such accounting policies, consulted the Statutory Auditors and have 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 your Company at the end of the financial year and of the profit / loss of your Company for that period;

21.3 they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

21.4 they have prepared the annual accounts on a going concern basis;

21.5 they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

21.6 they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

22. BOARD MEMBERSHIP CRITERIA:

The Nominations and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education, and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.

In evaluating the suitability of individual Board members, the Nomination and Remuneration Committee considers many factors, including general understanding of marketing, finance, operations management, public policy, international relations, legal, governance and other disciplines relevant to the success of the Company in today's business environment; understanding of the Company's business; experience in dealing with strategic issues and long-term perspectives; maintaining an independent familiarity with the external environment in which the Company operates and especially in the Director's particular field of expertise; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity.

The Board evaluates each individual in the context of the Board as a whole, with the objective of having a group that can best perpetuate the success of the Company's business and represent stakeholder's interests through the exercise of sound judgment, using its diversity of experience.

In determining whether to recommend a director for re-election, the Committee, also considers the director's past attendance at meetings, participation in meetings and contributions to the activities of the Board, and the results of the most recent Board self- evaluation.

Board members are expected to rigorously prepare for, attend and participate in all Board and applicable Committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with the responsibilities at the Company.

23. BOARD DIVERSITY POLICY:

The Company recognizes the importance of diversity in its success. It is essential that the Company has as diverse a Board as possible.

A diverse Board will bring in different set of expertise and perspectives. The combination of Board having different skill set, industry experience, varied cultural and geographical background and belonging to different race and gender will bring a variety of experience and viewpoints which will add to the strength of the Company.

While all appointments to the Board are made on merit, the diversity of Board in aggregate will be of immense strength to the Board in guiding the Company successfully through various geographies. 

The Nomination and Remuneration Committee reviews and recommends appointments of new Directors to the Board. In reviewing and determining the Board composition, the Nomination and Remuneration Committee considers the merit, skill, experience, race, gender and other diversity of the Board. To meet the objectives of driving diversity and an optimum skill mix, the Nomination and Remuneration Committee may seek the support of Parent company.

24. CRITERIA FOR DETERMINING INDEPENDENCE OF DIRECTORS: Independence Guidelines:

A Director is considered independent if the Board makes an affirmative determination after review of all the relevant information's.

The Board has established the categorical standards to assist it in making such determinations. A Director to be considered independent:

> Shall not be Managing Director or a Whole time Director or a Nominee Director.

> Shall be, in the opinion of the Board, a person of integrity and shall possess relevant expertise and experience.

> Shall not be a Promoter of the Company or its holding, subsidiary or associate Company.

> Shall not be related to Promoters or Directors in the Company, its holding, subsidiary, or associate Company.

> Apart from receiving Director's remuneration, shall not have any pecuniary relationships with the Company, its holding, its subsidiaries, its associate companies, its Promoters, or Directors, during the current financial year or immediately preceding two financial years.

> Relatives should not have or had pecuniary relationships or transactions with the Company, its holding (s), subsidiary or associate Company, or their Promoters, or Directors, amounting to 2% or more of its gross turnover or total income or Rupees 50 Lakhs (Rupees fifty lakhs) or such amount as the Company may prescribe, whichever is lower, during the two immediately preceding financial years or during the current financial year.

> Neither himself / herself nor any of his / her relatives shall hold or has held the position of a KMP or is or has been employee of the Company or its holding, subsidiary or associate Company in any of the three financial years immediately preceding the financial year in which he/she is proposed to be appointed.

> Neither himself / herself nor any of his / her relatives shall or has been an employee or proprietor or a partner, in any of the 3 financial years immediately preceding the financial year, of:

a) a firm of Auditors or Company Secretaries in practice or Cost Auditors of the Company or its holding, subsidiary or associate Company;

b) any legal or a consulting firm that has or had any transaction with the Company, its holding, subsidiary or associate Company amounting to 10%. or more of the gross turnover of such firm;

c) holds together with his relatives 2% or more of the total voting power of the Company ("Substantial Shareholder");

d) a Chief Executive or Director, by whatever name called, of any non-profit organization that receives 25%, or more of its receipts from the Company, any of its Promoters, Directors or its holding, subsidiary or associate Company or that holds 2%, or more of the total voting power of the Company;

> Has not held office for more than two consecutive terms on the Board of the Company.

> Should not be a material supplier, service provider or customer or a lessor or a lessee of the Company.

> Shall not be less than 21 years of age.

> Possesses such other qualifications as may be prescribed by the Companies Act, 2013.

25. REMUNERATION POLICY: 

The key principles governing the Remuneration Policy are as follows:

(i) Remuneration for Independent Directors and Non-Independent Non- Executive Directors:

> Overall remuneration should be reflective of the size of the company, complexity of the sector/ industry/ company's operations and the company's capacity to pay the remuneration and should be consistent with recognized best practices. 

> Independent Directors ("ID") and Non-Independent Non-Executive Directors ("NED") may be paid sitting fees (for attending the meetings of the Board and Committees of which they may be members). Quantum of sitting fees and NED Commission may be subject to review on a periodic basis, as required.

> Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the Nomination and Remuneration Committee and approved by the Board.

> Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the company.

> The aggregate commission payable to all the NEDs and IDs will be recommended by the Nomination and Remuneration Committee to the Board, based on company's performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters, as may be decided by the Board.

> The Nomination and Remuneration Committee will recommend to the Board, the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.

> In addition to the sitting fees and commission, the company may pay to any director such fair and reasonable expenditure, as may have been incurred by the Director while performing his/ her role as a Director of the company. This could include reasonable expenditure incurred by the director for attending Board/and its committee meetings, general meetings, court convened meetings, meetings with shareholders / creditors / management, site visits, induction and training (organized by the company for Directors) and in obtaining professional advice from independent advisors in the furtherance of his / her duties as a Director.

(ii) Remuneration for Managing Director ("MD") / Executive Directors ("EDs") / KMP/ rest of the employees:

The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be:

> Market competitiveness driven by the role played by the individual.

> Reflective of size of the company, complexity of the sector / industry / company's operations and the company's capacity to pay.

> Consistent with recognized best practices and aligned to any regulatory requirements.

> The remuneration mix for the MD / EDs is as per the contract approved by the shareholders. In case of any change, the same would again require the approval of the shareholders.

> Basic / fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience.

In addition to the basic / fixed salary, the company may provide employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimization, where ever possible. The company may also provide all employees with a social security net (subject to limits) by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death and dismemberment through personal accident insurance. The company provides retirement benefits as applicable.

In addition to the basic / fixed salary, benefits, perquisites and allowances, the company may provide MD / EDs such remuneration by way of bonus / performance linked incentive and/or commission calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Companies Act, 2013 read with Schedule V of the Act. The specific amount payable to the MD / EDs would be based on performance as evaluated by the Board or the Nomination and Remuneration Committee and approved by the Board.

The company may provide the rest of the employees a performance linked bonus and / or performance linked incentive. The performance linked bonus / performance linked incentive would be driven by the outcome of the performance appraisal process and the performance of the company.

(iii) Remuneration payable to Director for services rendered in other capacity:

The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such Director in any other capacity unless:

> The services rendered are of a professional nature; and

> The Nomination and Remuneration Committee is of the opinion that the director possesses requisite qualification for the practice of the profession. 

26. PERFORMANCE EVALUATION OF BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, Individual Directors as well as the evaluation of various Committees.

The performance evaluation of the Independent Directors was carried out by the entire Board. The Independent Directors at their exclusive meeting separately reviewed the performance of Non- Independent Directors and the Board as a whole, performance of the Chairman of the Company and quality, quantity & timeliness of flow of information between the Company Management and the Board. The Directors expressed their satisfaction over the evaluation process.

27. LOAN TO DIRECTORS:

During the year, the Company has not advanced any loan nor given any guarantee nor provided any security in connection with any loan made to any of its Director/s or to any other person in whom the Director is interested as mentioned in Section 185 of the Companies Act, 2013 read with Rule 10 of the Companies (Meetings of Board and its Powers) Rules, 2014.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per section 135 (1) of the Companies Act, 2013, every Company having a net worth of Rupees five hundred crores or more, or turnover of Rupees one thousand crores or more, or net profit of Rupees five crores or more, during any financial year is required to constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one Director shall be Independent Director.

Your Company has been suffering from loss since FY 2008-09 and doesn't fulfill any of the criteria as specified under section 135 (1) of the Companies Act, 2013, therefore, Corporate Social Responsibility Committee of the Board is not required and as a result, company has not constituted a Corporate Social Responsibility Committee. However, in spite of acute shortage of cash and poor financial position, your Company has tried to meet its social obligations, wherever possible with its limited resources.

29. RELATED PARTY TRANSACTIONS:

During the year under review, your Company has not entered into any contract/ arrangement which falls under the purview of Section 188 of the Companies Act, 2013. However few related parties transactions are such which are covered under clause 49 of the Listing Agreement with the Stock Exchange. The Company has also entered into material related party transactions for which approval of the shareholders are sought at this Annual General Meeting. All the transactions with the related parties are at arm's length and in the ordinary course of business. Pursuant to the provisions of clause 49 of the Listing Agreement, all these transactions have prior approval of the Audit Committee. The policy on materiality of Related Party Transaction is available on the website of the Company at www.tayo.co.in. As required under section 134 (3) (h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, "Form AOC-2" is annexed with this report.

30. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with Stock Exchange, Management Discussion and Analysis, Corporate Governance, Managing Director's and Auditor's Certificates are made part of this Annual Report.

31. EXTRACT OF ANNUAL REPORT:

As required under section 134 (3) (a) of the Companies Act, 2013 read with Section 92(3) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, "Form MGT-9" is annexed with this report.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the period under review:

• No. of complaints received : NIL

• No. of complaints disposed off : Not Applicable 

33. PARTICULARS OF EMPLOYEES:

33. a As per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board's Report shall include a statement showing the name of every employee of the company, who:

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than sixty lakh rupees;

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than five lakh rupees per month;

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

During the financial year 2014-15, none of the employee is in receipt of remuneration as specified above. Therefore statement under Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required.

33. b The Information required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as under:

As on March 31, 2015, total number of employees on roll was 704. During the year under review, the ratio of remuneration of Whole Time Director ("WTD") to the median remuneration of employees is 12:1 (due to loss, only sitting fees is paid to other directors). The annual increment for officers is based upon the performance evaluation system and for other employees, it is governed as per the Wage Agreement. Based upon the performance evaluation system, following percentile annual increments were given to the Key Managerial Personnel (KMP).

- Managing Director : 23.21%

- Chief Financial Officer : 18.94%

- Company Secretary : 8.83%

The Key Managerial Personnel are holding strategic positions and are responsible for steering the performance of the Company and adhering to various statutory compliances as well as implementation of the strategies chalked out through the operational and management team. The overall average percentile increase in remuneration of Key Managerial Personnel is 17% as against the median remuneration of employees' increase of approximately 7%.The reason for low percentile increase in median remuneration of employees is retirement / superannuation of workman in higher wage structure and joining of new employees in new wage structure. The median increase in average remuneration was to take care of minimum inflation.

In terms of shareholders' approval obtained at the Annual General Meeting held on July 18, 2012, the Non-Executive Directors are also paid commission at the rate not exceeding 1% of the net profits computed in accordance with section 309 of the erstwhile Companies Act, 1956 (equivalent to section 197 of the Companies Act, 2013) distributed on the basis of Board and various Committees meetings attended and chaired by the Non-Executive Directors. Due to inadequacy of profits during the financial year 2014-15, commission will not be paid to the Non-Executive Directors.

Market Capitalization as on 31.03.2015 based upon the closing price of listed equity shares was Rs. 57.10 crores as against Rs.46.80 crores on 31.3.2014. Earnings Per Share (EPS) ratio as on 31.03.2015 was Rs. (65.90) as against Rs. (73.14) on 31.03.2014.The previous Rights issue of the Company was in the financial year 2008-09 @ Rs. 116/- per share. Percentage decrease in the quoted price of shares is approximately 52%

No employee is paid in excess of the Managing Director.

We confirm that the remuneration paid to the Director/Key Managerial Personnel and other employees are in accordance with the Remuneration policy approved by the Board of Directors on the recommendation of Nomination and Remuneration Committee. None of the employees of the Company are in receipt of remuneration in excess of Rs. 60.00 lakhs per annum.

34. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

In terms of the Section 134(3) (m) of the Companies Act, 2013 read Rule 8(3) with Companies (Accounts) Rules, 2014, the particulars in respect of (a) Conservation of Energy (b) Technology Absorption and (c) Foreign Exchange Earnings and Outgo are furnished on pages 27 - 28. 

35. AUDITORS: 

i) The existing Statutory Auditors, M/s Deloitte Haskins & Sells (DHS), Kolkata, Chartered Accountants (ICAI Registration No.302009E), retire at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. Your Company has received a certificate from the Auditors to the effect that their appointment, if made, would be within the limits of Section 141(3) (g) of the Companies Act, 2013. Members are requested to appoint Auditors for the financial year 2015-16 at the Annual General Meeting and to authorize the Board of Directors to fix their remuneration based upon the recommendation of Audit Committee as mutually agreed upon between the Audit Committee/ Board and the Auditors.

ii) The existing Cost Auditors, M/s Shome & Banerjee, Kolkata, Cost Accountants (Registration No: 000001) retire at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment to examine and report on the Cost Audit records of the Company for the financial year 2015-16, in accordance with the Central Government circular on Audit of Cost Accounting Records of the Company. Members are requested to ratify the remuneration payable to the Cost Auditors for the financial year 2015-16 at the Annual General Meeting.

iii) The Company has appointed M/s P. K. Singh & Associates, Practicing Company Secretaries (Registration No. 5878) as the Secretarial Auditors of the Company for the financial year 2015-16, to audit and report on the compliance with the various provisions of the Companies Act, 2013, FEMA, SEBI Act & Rules made thereunder, Secretarial Standards and Listing Agreement and other applicable Laws, Rules and Regulations etc. as specified under Companies Act, 2013 read with Companies (Audit & Auditors) Rules 2014. 

Anand Sen

Chairman

DIN-00237914 

Kolkata

April 21, 2015