DIRECTORS REPORT To, The Members, Your Directors have pleasure in submitting the Twenty-eighth Annual Report with the audited accounts of the Company for the year ended 31st March 2016. DIVIDEND Your Directors are pleased to recommend dividend of Rs.7.35 per Equity share amounting to Rs. 769.63 lacs including tax thereon, which equates to 20.11% of PAT. WORKING REVIEW During the year 2015-16, the gross turnover of your Company has increased to Rs. 626.51 crores from Rs. 517.40 crores for the previous year ended 31stMarch 2015 representing a growth of 21.09%. Your Company has converted 56614 MT of paperboard as against 48917 MT in the previous year. As you may be aware, your Company continues to do significant share of its business by the conversion route. However, had all the products been sold on sales basis, the turnover would have been Rs.660.34 crores as against Rs.551.47 crores in the previous year, representing a growth of 19.74 %. During the year under review, your Company has earned an EBIDTA of Rs.100.54 crores as compared to Rs.82.00 crores, an increase of 22.61 % over the previous year. This amounts to 17.31% of net sales, as against 16.70 % in the previous year. During the year under review, the performance of your Company’s manufacturing plants have been encouraging and all the units have recorded healthy growth in terms of sales and volume of paperboard converted. The Company has crossed another milestone by achieving revenue of Rs.626.51 crores and the Compound Annual Growth Rate achieved over the last 5 years is 20%., This rate of growth has been made possible by timely expansion and an enhanced capability to cater to a wide range of customers requiring value added packaging materials. During the year under review, the Company has also achieved record sales in terms of exports. FUTURE PROSPECTS Your Directors are confident that the Company will continue to maintain rates of growth as per the past few years since its products are well received by its customers and it enjoys a good reputation with them. The Company is now present in all the four geographic locations in India, enabling it to service its customers across the Country in an optimal manner. Further, your Directors are pleased to inform that the Company is setting up a new facility for manufacturing of flexible packaging materials at Silvassa which is expected to be operational during the year 2016. Once fully operational, your Company will be able to offer its customers, both cartons and flexible packaging. PERFORMANCE Assam Your Directors are pleased to infrom you that new plant set up near Guwahati is now stable and its products have been well received by its customers. Your Directors are confident that this unit will contribute significantly to the Company's growth in furture. Goa Your Directors are pleased to infrom you that the Company has been allotted land at Kundaim Industrial Estate, Ponda, Goa to establish packaging unit. The current unit at Goa is set up in rented premises, which shall be shifted to the new site once it is operational. The Company is currently in the process of developing the site and construction of the building will commerce shortly. This is planned to happen in the current financial year, so that the production of the operations of Goa unit can be moved to this site when completed, in next year. Haridwar Your Directors are pleased to inform you that during the year under review, the Company expanded its operations at Haridwar by setting up a new additional manufacturing unit equipped with a state-of-art printing line imported from KBA Germany and other ancillary equipments. This investment was placed into commercial production from September 2015 and same is performing satisfactorily. This facility has enhanced capabilities such as cold foil printing which is a highly specialised technology and offered by only very few manufacturers. Silvassa: The operation at the Company's plants loacated in Silvassa have been extremely satisfactory and has contributed greatly to the enhanced level of exports achieved. DIRECTORS Mr. K K Kanoria, Executive Chairman was re-appointed by the Board, for a period of three years with effect from 01.10.2015, subject to approval of Members, on such terms and conditions including remuneration thereof, on the recommendation of the Nomination and Remuneration committee. Mr. Saket Kanoria, Managing Director was re-appointed by the Board, as Managing Director of the Company for a period of three years with effect from 01.10.2015, subject to approval of Members, on such terms and conditions including remuneration thereof, on the recommendation of Nomination and Remuneration committee. Mr. S. G. Nanavati retires by rotation and being eligible offers himself for re-appointment. Mr. Rishav Kanoria resigned as Executive Director of the Company with effect from 07.08.2015 for pursuing Higher Studies abroad. He continues to serve as a Director of the Company. Mr. Akshay Kanoria has been appointed by the Board of Directors,as an Additional Director with effect from 27.05.2016. He has also been appointed as Executive Director for the period from 27.05.2016 to 30.09.2018 on such terms and conditions including remuneration thereof, as recommended by the Nomination and Remuneration Committee, subject to approval of Members. Declarations from Ms. Sonal Agrawal, Mr. Sudhir Merchant, Mr. Atul Sud, Mr. Rabindra Jhunjhunwla, and Mr. Sunil Talati, all Independent Directors of the Company, under Section 149(6)/(7) of the Companies Act, 2013 have been received by the Company. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement u/s 134 (3) (c) of the Companies Act, 2013 with respect to the Directors Responsibilities Statement, it is hereby confirmed; (a) In the preparation of the annual financial statement, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; (b) The directors had 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) The directors had 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; (d) The directors had prepared the annual accounts on a going concern basis; (e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and (f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. NUMBER OF BOARD MEETINGS During the year under review four meetings of Board of Directors of the Company were held on 29.05.2015, 07.08.2015, 05.11.2015 and 21.01.2016. The gap between two meetings did not exceed 120 days. CORPORATE GOVERNANCE It has always been the Company’s endeavor to operate in a fair and transparent manner with the highest standards of Corporate Governance. The Company complies with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Statutory Auditors confirming the compliance of conditions on Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given as annexure to this effect. AUDIT COMMITTEE Pursuant to the provisions of Section 177 (8) of the Companies Act, 2013, the composition of the Audit Committee is disclosed as under: Sr. No. Name Position 1. Mr. Atul Sud Chairman (Independent Director) 2. Mr. Sudhir Merchant Member (Independent Director) 3. Ms. Sonal Agrawal Member (Independent Director) 4 Mr. Sunil Talati * Member (Independent Director) The Board of Directors of the Company accepted all the recommendations of the Audit Committee during the year. • Mr. Sunil Talati, Independent Director was inducted as member of the Audit Committee with effect from 02.05.2016. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted the Corporate Social Responsibility Committee on 30thMay 2014, consisting of following members Name Position Mr. Sudhir Merchant Chairman Mr. Saket Kanoria Member Mr. Rishav Kanoria Member A policy on the Corporate Social Responsibility (CSR) formulated by the Corporate Social Responsibility Committee is available at the website of the Company www.tcpl.in. The required detail of expenditure incurred under CSR Programmes in the prescribed format is annexed to the Director’s Report The Company was operating under the assumption that the expenditure to be incurred on CSR activities was to be @ 2% of the average profit of the preceding three years. In this case, the profit after tax was considered as the amount to be taken into account while computing the budget. Accordingly, the Company was entitled to spend Rs.22.48 lacs for the year 2014-15, and Rs.38.80 lacs for the year 2015-16, totaling to an amount of Rs.61.28 lacs. However, on the 12th January, 2016 vide general circular bearing reference no.01/2016, the Ministry of Corporate Affairs has stated vide its said circular that the entitlement to spend on CSR shall be computed by taking into account, Profit before Tax and accordingly, the CSR budget in our case is amounting to Rs.34.31 lacs for the year 2014-15 and Rs.55.41 lacs for the year 2015-16, totaling to Rs.89.72 lacs. Against the above entitlement, the Company has spent an amount of Rs.23.01 lacs in 2014-15 and Rs.44.92 lacs in 2015-16, totaling to Rs.67.93 lacs. As the circular mentioning the revised computation was received only in January 2016, it left very little time to achieve the expenditure on this activity for the year under review and the CSR Committee of the Company is taking adequate steps to ensure that the shortfall of Rs. 21.80 Lacs is covered alongwith the expenditure for the year 2016-17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 During the Financial Year 2015-16 the Company has not given any Loans, or provided Guarantees or made Investments as defined under section 186 of the Companies Act, 2013 PARTICULARS OF CONTRACT OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 All related party transactions that were entered into during the financial year were on an arms 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 potential conflict with the interest of the Company at large. A policy on dealing with Related Party Transactions was formulated by the Company which is available on the website of the Company www.tcpl.in The disclosure requirements regarding Holding and Subsidiary Companies are not given as there is no Subsidiary Company. BOARD EVALUATION The entire Board, excluding the Director being evaluated, also carried out the performance evaluation of the Independent Directors. The Independent Directors carried out the performance evaluation of the Chairman and the Non Independent Directors by review at the meeting of the Independent Directors. Your Directors express their satisfaction with the evaluation process. A formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors as per provisions and in manner specified in Listing Agreement with the Stock Exchange and Schedule IV of the Companies Act, 2013 at the meeting of the Board of Directors and separate meeting of Independent Directors was held on 29th May, 2015. The determined criteria for performance evaluation are as follows: v Attendance. v Willingness to spend time and effort to know more about the company and its business. v Contribution towards business development, Management of Affairs of Company, Corporate Governance. v Contribution to developments of various Policies such as Remuneration Policy, Board’s Diversity Policy, Related Party Transaction Policy & Vigil Mechanism Policy v Sharing of knowledge and experience for the benefit of the Company. v Following up matters whenever they have expressed their opinion v Updated with the latest developments in areas such as corporate governance framework and financial reporting and in the industry and market conditions v Achievement of business plans, labour relation, litigation, attrition level of employees, compensation policy, vigil mechanism, establishment and implementation of internal control system etc. The familiarizing programme for the independent directors of the company, regarding their roles, rights, responsibilities in the Company, nature of the industry in which the company operates, business model of the company, etc. was conducted on 29th May, 2015. The details of such familiarization programme is disclosed on the website of the Company www.tcpl.in. MATERIAL CHANGES AND COMMITMENTS There are no material changes, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. POLICY FOR SELECTION, APPOINTMENT AND REMUNERATION OF DIRECTORS INCLUDING CRITERIA FOR THEIR PERFORMANCE EVALUATION The Company has adopted a “Nomination & Remuneration Policy” which interalia includes Company’s policy on Board Diversity, selection, appointment and remuneration of directors, criteria for determining qualifications, positive attributes, independence of a director and criteria for performance evaluation of the Directors. VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has a Vigil Mechanism Policy for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics Policy. This mechanism provides adequate safeguards against victimization of directors/employees to deal within stance of fraud and mismanagement, if any. The Vigil Mechanism Policy inter alia provides a direct access to the Complainant to the Audit Committee Chairman of the Company. The Vigil Mechanism Policy of the Company is also posted on the Company’s website. RISK MANAGEMENT The Board of Directors of your Company has framed the Risk Management Plan. The Company being a manufacturer of the packaging material is always exposed to the general risks such as government regulations and policies, statutory compliances, economy related, market related. The Company from time to time identifies the risk and has put in its place appropriate measures for mitigating such risks. SEXUAL HARASSMENT POLICY The Company has in place Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16: a) No of complaints received: Nil b) No of complaints disposed of: N.A. EXTRACTS OF ANNUAL RETURN The extracts of the annual return in form MGT-9 as required under Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed to this Board Report . PUBLIC DEPOSITS The Company has not accepted any deposits from the public within the meaning of Section 73 and 76 of the Companies Act, 2013 and Rules made thereunder. PERSONNEL There are 1323 employees on the Company’s payroll as on 31st March, 2016. Two persons employed throughout the year, were in receipt of remuneration of Rs. 60 Lacs per annum or more. Information required under Rule 5(1) (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure of the Boards’ Report. The above Annexure is not being sent along with this Report to the Members of the Company. In accordance with the provisions of section 136 of the Companies Act, 2013 the same is available for inspection during working hours for a period of 21 days before the date of the Annual General Meeting. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company in this regard. SECRETARIAL AUDIT REPORT M/s Makarand M Joshi & Co., Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and rules made thereunder. The Secretarial Audit report for Financial year 2015-16 forms part of Annual Report as Annexure to the Board’s Report. With respect to the observation of Secretarial Auditor, regarding delay in submission of Annual Report to the Stock Exchanges, the delay was for 1 day only. CONSERVATION OF ENERGY, TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In terms of Rule 8(3) of the Companies (Accounts) Rules, 2014, your Directors wish to state that as the Company is not carrying on any manufacturing activity and does not consume power the question of conservation of energy and absorption of technology does not arise. The figures of foreign exchange earnings and outflow are as follows: Particulars Rs. in Lakhs Foreign Exchange Earned 13514.75 Foreign Exchange Outgo 6431.75 AUDITORS M/s. Shah Gupta & Co, Chartered Accountants retire at the ensuing annual general meeting and being eligible has offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made would be within the prescribed limits specified under Section 139(1) of the Companies Act, 2013. The Directors recommend their re-appointment as statutory auditors of the Company for the Financial Year 2016-17 and on remuneration as may be mutually decided between the Board of Directors and Auditors. ACKNOWLEDGMENT Your Directors take this opportunity to place on record their warm appreciation for the valuable contribution, untiring efforts and spirit of dedication demonstrated by the employees and officers at all levels, in the sure and steady progress of the Company. Your Directors wish to record their appreciation to all our bankers namely Dena Bank, Axis Bank ICICI Bank, Citi Bank and RBL Bank for their continued support and timely assistance in providing working capital and long-term fund requirements. For and on Behalf of the Board of Directors Chairman Place: Mumbai Date: 27th May, 2016 |