Directors' Report TO THE MEMBERS, The Board of Directors hereby present the ninety-seventh Annual Report on the business and operations of your Company along with the audited financial statements for the year ended 31st March 2016 DIVIDEND The Board has recommended a dividend of Rs. 2 per Equity Share of Rs. 10 each for the year ended 31st March, 2016(Rs. 1.60 per Equity Share for the year ended 31st March, 2015). The dividend on Equity Shares is subject to the approval of the shareholders at the ensuing Annual General Meeting. TRANSFER TO RESERVE The Company proposes to transfer Rs. 734 lacs to the general reserves out of the amount available for appropriation and amount of Rs. 4,085 lacs is proposed to be retained in the profit and loss account. ECONOMIC ENVIRONMENT The business sentiment accross the globe continued to remain weak in FY 2015-16. Geopolitical issues in Middle-East and North Africa, escalating refugee crisis in Europe, slowing down of economic activity in China and the resultant fall in commodity prices, added to the depressed economic environment across the world. The slowdown in China reduced the flow of industrial commodities into China and drove down prices and margins for mineral-exporting countries. Countries in South East Asia, having strong supply-chain linkages with China, struggled with currency volatility, affecting their exports. Metal prices (including steel) plummeted sharply due to the global slowdown and massive over capacity, especially in China. Consequently, exports from India continued to decline sharply with no recovery in sight in the on-going fiscal year. The Indian economy on the other hand enjoyed the benefits of lower crude oil and commodity prices in FY 2015-16. This helped in keeping the twin deficits (fiscal and current account) and inflation under control. Highly leveraged positions across industries negated gains achieved through lower input costs. This reflected in concerns relating to non- performing assets (NPA) which occupied headlines during the year. On the other hand having stayed on-course on fiscal targets, Government is gradually increasing productive investments on road, railways and defense this fiscal. There are signs of rural distress with two successive monsoon failures and crop damage in early 2015 due to unseasonal rains. Recovery in rural economy remains dependent on a good monsoon with the Government's rural focus in Budget-2016 for achieving growth in agriculture. Low demand pick-up, credit growth and capacity utilization points to an ascent economic recovery for the current fiscal. Going forward, implementation of policy measures already announced, structural reforms and government investment in infrastructure will be critical to India's economy. Progress on Goods and Services Tax bill and its implementation, which is expected to ease supply chain and simplify taxation, will be an added advantage. PERFORMANCE During the year under review, the Company's operating performance was maintained at the same level as that of the previous financial year. The Net Sales reflects a marginal decline on account of lower exports due to sharp decline in the international prices. However, lower raw material costs and an exceptional income on account of sale of non-current investment had a favorable impact on the financial performance of the Company. The Company's EBITDA (Earnings before depreciation, interest, exceptional items and taxes) during the year under review increased to Rs. 18,400 Lacs from Rs. 15,140 Lacs in FY 2014-15 on the strength of significant reduction in raw material prices. The profit after tax also increased to Rs. 7,338 Lacs from Rs. 4,460 Lacs in FY2014-15. In order to improve the performance, the Company continues its focus on conversion cost efficiencies, improving product quality and developing capabilities for servicing the stringent requirements of customers. SAFETY AND ENVIRONMENT Safety and occupational health responsibilities are integral to your Company's business process and these are laid down in the Company's Safety and Health Policy, standards and working procedures. Safety is a key performance indicator and your Company is committed to ensuring zero harm to its employees, to any person in the Company premises and to the community. The Company is continuously focusing on improved training, new initiatives and communications enhancing safety in the work place. During the year under review, there were three lost time injury incidents. These incidents were investigated in detail and recommendations of the investigations have been implemented. For FY 2015-16, the Lost Time Injury Frequency rate has reduced to 0.52 as against 0.67 in FY 201415. Monitoring the health of the employees commensurate with the work environment is a continuous process and there have been no significant observations relating to deficiencies in workplace health and hygiene conditions. Your Company is committed to minimizing the environmental impact of its operations through adoption of sustainable practices and continuous improvement in environmental performance. The major focus areas are - water conservation, reduction in emission / effluents, waste minimization, energy management and tree plantation. Actions have been initiated to reduce carbon footprint through reduction in energy, fuel and water consumption. Actions are ongoing for ensuring a cleaner environment. DIRECTORS As per the provisions of the Companies Act, 2013 (the Act) and the Companies Articles of Association, Mr. Anand Sen retires by rotation in the ensuing AGM and being eligible seeks re- appointment. INDEPENDENT DIRECTORS DECLARATION In compliance with Section 149(7) of the Act all Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Regulation,2015]. MEETINGS OF THE BOARD AND ITS COMMITTEES BOARD MEETINGS During the financial year under review four meetings of the Board of Directors were held. The intervening gap between the Meetings was within the period prescribed under the Companies Act 2013 and SEBI Regulations, 2015. The details of the Board Meetings are provided in the Corporate Governance Report forming part of this Annual Report. AUDIT COMMITTEE The Audit Committee of the Company comprises Mr. Dipak Kumar Banerjee (Chairman), Mr. Ashok Kumar Basu, Dr. Sougata Ray and Ms. AtrayeeSanyal as Members. The details of terms of reference of the Committee, number and dates of meetings held, attendance of Directors during the year are given in the Corporate Governance Report forming part of this Annual Report. The primary objective of the Committee is to monitor and provide effective supervision of the Management's financial reporting process to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. During the financial year there has been no instance where the Board has not accepted any recommendation of the Committee. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, SENIOR MANAGEMENT AND OTHER DETAILS Based on recommendation of the Nomination and Remuneration Committee the Board has adopted the following policies namely : i. Policy on appointment and removal of Directors which includes Board membership criteria, Board diversity policy and criteria for determining independence of directors. ii. Policy on remuneration for directors, key managerial personnel and other employees. The details of the above policies are attached to this report as Annexure1. In addition, the Company also adopted the Policy on Familiarization Program for Independent Directors. All new Independent Directors (IDs) inducted into the Board are presented with an overview of the Company's business operations, products, organization structures and about the Board constitution and its procedures. The Policy on the Company's Familiarisation Programme for IDs can be accessed at <http://www.tatatinplate.com/IndependentDirectorFamiliarizationEducationProgramme.pdf> BOARD EVALUATION The process and criteria for annual performance evaluation of the Board, its Committees and individual Directors had been laid down by the Nomination and Remuneration Committee and the Board of Directors of the Company. In compliance with the relevant provisions of the Act and Regulation 17(10) of the SEBI Regulations 2015, the evaluation of the Board, its Committees and that of its individual Directors has been carried out during the year. The evaluation process covered the aspects which included participation in the long term strategic planning, contribution to and monitoring of corporate governance practices and the fulfilment of Directors' obligation and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. The Nomination and Remuneration Committee at its meeting reviewed the performance of the Board as a whole; and that of the individual directors. The Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non-Executive Directors. The Board at its meeting reviewed the performance of the Board as a whole, its Committees and individual Directors, taking into account feedback of the Nomination and Remuneration Committee and the Independent Directors which included the evaluation of the Chairman and Non- Independent Directors of the Company. DIRECTORS' RESPONSIBILITY STATEMENT The Board of Directors 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, is of the opinion that the Company's internal financial controls were adequate and effective as on 31st March, 2016. Accordingly pursuant to Section 134(3)(c) read with Section 134(5) of the Act the Board of Directors, to the best of their knowledge and ability, confirm that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. they 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 of the Company for that period; iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the annual accounts on a going concern basis; v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. KEY MANAGERIAL PERSONNEL Pursuant to the provisions of Section 203 of the Act the following are the Key Managerial Personnel (KMP) of the Company as on the date of this report: i. MrTarun Kumar Daga – Managing Director ii. Mr Chacko Joseph – Chief Financial Officer iii. Mr Kaushik Seal – Company Secretary During the financial year under review Mr S Kar, Company Secretary, KMP and Compliance Officer superannuated with effect from 1st June, 2015. Consequent to Mr Kar's superannuation Mr Kaushik Seal was appointed as the Company Secretary, KMP and Compliance Officer by the Board with effect from 1st June, 2015. The remuneration and other details of the Key Managerial Personnel for FY 2015-16 are provided in Extract of the Annual Return which forms part of this Directors' Report. VIGIL MECHANISM AND WHISTLE BLOWER POLICY In compliance with provisions of Section 177 of the Act, the Board of Directors of the Company has adopted a Vigil Mechanism which comprises Whistle Blower Policy for Directors, employees and vendors of the Company. The Whistle Blower policy enables the Directors, employees and vendors to report concerns about unethical, actual or suspected fraud or violation of Company's code of conduct or ethics policy, thereby ensuring that the activities of the Company are conducted in a fair and transparent manner. The said policy is available at the Company's website at <http://www.tatatinplate.com/VigilMechanism.pdf>. CORPORATE SOCIAL RESPONSIBILITY POLICY Up holding the Tata tradition, service to the community has been part of the Company's commitment. Over the years the Company has put in place a well-defined process in the key thrust areas of education, employability, skill development and health care. With the applicability of Section 135 of the Act coming into force, the Company's initiatives towards Corporate Social Responsibility have been suitably focused. The brief outline of the CSR policy and the CSR initiatives undertaken by the Company during the financial year under review are provided in the 'Annual Report on Corporate Social Responsibility Activities 2015-16' forming part of this report as Annexure 2. The Policy adopted by the Company can be viewed at <http://www.tatatinplate.com/> Corporate Social Responsibility Policy.pdf. The average net profit of the Company for the last 3 (three) years was Rs. 6,944.33 lacs. As against the minimum statutory requirement of 2% of the aforesaid amount i.e. Rs. 138.89 lacs, the Company has spent Rs. 142.60 lacs. LOANS GUARANTEES AND INVESTMENTS During the financial year under review the Company did not give any loans, directly or indirectly to any person (other than to employees) or to other body corporate, nor did it give any guarantee or provide any security in connection with a loan to any other body corporate or person. The Company has certain long term non-current investments, as detailed under note 12 to the 'Notes to the Financial Statements'; such investments are in compliance with Section 186 of the Act. The loans provided to employees are also in compliance with Section 186 of the Act. RELATED PARTY TRANSACTIONS The related party contracts or arrangements entered into by the Company do not fall under the ambit of Section 188(1) of the Act and all related party transactions during the financial year were at arm's length and in the ordinary course of business. In compliance with the provisions of the Act and Regulation 23(2) of the SEBI Regulation 2015, all related party transactions had been placed before the Audit Committee for prior approval. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 information pertaining to related parties are given in Form AOC-2 as Annexure 3 of this report. The details of material related party transactions, with Tata Steel Limited, which are at arm's length and in the ordinary course of business, relating to the ongoing arrangements for conversion and sales assistance since 1998 and purchase of Electrolytic Tin Plate (ETP) during FY 2014-15 and FY 2015-16 and for each subsequent years were approved by the shareholders by way of Postal Ballot. The said material transactions are disclosed in the Corporate Governance Report forming part of this Annual Report. There have been no material related party transactions except for which shareholder's approval has already been secured. As per Regulation 34(3) of SEBI Regulation 2015 the related party disclosure has been made part of this Annual Report. Further, in the opinion of the Board of Directors the Company's transaction with Tata Steel Limited (a "Related Party" in terms of Regulation 2(zb) of SEBI Regulation 2015), in relation to purchase of power is likely to cross the materiality threshold as per Regulation 23 (1) of SEBI Regulation 2015. Hence in order to comply with Regulation 23(4) of SEBI Regulation 2015 the Board of Directors recommends shareholders' approval for the above prospective material transaction in the ensuing Annual General Meeting of the Company. RISK MANAGEMENT The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a Company's capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a Company's operating environment and they emerge on a regular basis. The Board of Directors of the Company has adopted a Risk Management policy. The Company's Risk Management processes focus on ensuring that these risks are identified on a timely basis and addressed. The development and implementation of the risk management system has been covered in the Management Discussion and Analysis section which forms a part of this Annual Report. FIXED DEPOSITS The Company has not accepted any fixed deposits nor does the Company have any outstanding deposits under Section 73 of the Act, read with Companies (Acceptance of Deposit) Rules, 2014 as on the Balance Sheet date. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS No significant material orders were passed by the regulators or court during the financial year which would have impacted the going concern status of the Company's operation in the future. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 the prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo have been attached as Annexure 4 to this report. PARTICULARS OF EMPLOYEES The information required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report as Annexure 5. The statement containing particulars of employees as required under Section 197 (12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate Annexure forming part of this Report. However, in terms of Section 136 of the Act the Annual Report is being sent to Members excluding this Annexure. The said Annexure is available for inspection by the Members at the Registered Office of the Company during business hours on working days, and if, any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, where upon a copy would be sent. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted Sexual Harassment (Prevention) Policy for prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. During FY 2015-16, the Company had received one complaint on sexual harassment and the same has been disposed off. As at the end of the year, no other complaint is pending. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The details of the internal financial control system and their adequacy is included in the Management Discussion and Analysis, which forms a part of this Annual Report. CORPORATE GOVERNANCE Pursuant to Regulation 34(3) of the SEBI Regulation 2015 the Management Discussion and Analysis, Corporate Governance Report, Auditors' Certificate regarding compliance with conditions of Corporate Governance are made a part of this Annual Report. In compliance with the above regulation the Managing Director's declaration confirming compliance with the code of conduct has been made part of this report as Annexure 6. AUDITORS Statutory Auditors M/s Delloitte Haskins & Sells, Chartered Accountants, (Firm registration No. 302009E) was appointed as the Auditors of the Company to hold office from the conclusion of the ninety-fifth Annual General Meeting(AGM) held on 05.09.2014 till the conclusion of ninety-eighth AGM to be held in the year 2017 subject to ratification of their appointment by the Members at every subsequent AGM. Therefore, ratification of appointment of Auditors is being sought from the Members of the Company at the ensuing AGM. Cost Auditors Your Company has re-appointed M/s Shome & Banerjee, Cost Accountants, as the Cost Auditor of the Company for audit of the cost records maintained by the Company for the year ended 31st March, 2017. Pursuant to Section 148 of the Act read with Rule 14 of Companies (Audit and Auditors) Rules, 2014 ratification of the remuneration of Cost Auditors is being sought from the Members of the Company at the ensuing AGM. Secretarial Auditor The Board of Directors of the Company, in compliance with Section 204 of the Act had appointed Mr A K Labh, Practicing Company Secretary (FCS - 4848 / CP-3238) of M/s A K Labh & Co., Company Secretaries, as the Secretarial Auditor to conduct secretarial audit of the Company for FY 2015-16. The Report of Secretarial Auditor for FY 2015-16 is annexed to this report as Annexure7. Auditors' report and Secretarial Auditors' Report The Auditors' Report and Secretarial Auditors' Report does not contain any qualification, reservations or adverse remarks. EXTRACT OF ANNUAL RETURN In compliance with Section 134(3)(a) of the Act, an extract of Annual Return in the prescribed format is appended to this report as Annexure 8. OTHER DISCLOSURES No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. There was no change in the nature of business during FY 2015-16. The Company does not have any subsidiary, joint ventures or associates. ACKNOWLEDGEMENTS The Directors would like to place on record their appreciation for all the employees of the Company for their efforts and their contribution to the Company's performance. The recognized Unions at Jamshedpur and Kolkata have cooperated in an exemplary manner towards achieving the objectives of your Company. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions, Central and State Government agencies and all other stakeholders for their trust and continuous support to the Company. On behalf of the Board of Directors Chairman Koushik Chatterjee Mumbai, 29th April,2016 |