With Management Discussion & Analysis
To,
The Members,
Thirumalai Chemicals Limited
Your Directors are pleased to present to you the Fifty First Annual
Report & Audited Statement of Accounts of the Company for the Financial Year ended
March 31, 2024. The Management Discussion and Analysis has also been incorporated into
this report.
Standalone Financial Results of Thirumalai Chemicals Ltd.
Summary
Sl. No. Particulars |
Year Ended March 31, 2024 |
Year Ended March 31, 2023 |
1 Revenue from Operations |
1,98,681 |
1,84,727 |
2 Other Income |
3,802 |
4,426 |
3 Total Income |
2,02,483 |
1,89,153 |
4 Gross Profit/(Loss) before Interest, Finance Charges and
Depreciation (EBITDA) |
12,616 |
21,996 |
5 Interest and Finance Charges |
(4,357) |
(3,362) |
6 Profit/(Loss) before Depreciation and Tax |
8,259 |
18,634 |
7 Depreciation |
(3,418) |
(3,003) |
8 Profit before Tax (PBT) |
4,841 |
15,631 |
9 Provision for Tax |
(1,127) |
(3,473) |
10 Profit after Tax |
3,714 |
12,158 |
11 Provision for Deferred Tax |
(84) |
(205) |
12 Profit after Tax (PAT) |
3,630 |
11,953 |
y The Net Revenue includes Export Earning (FOB) during the year was
17,824 lakhs (Previous Year: 20,706 lakhs).
Consolidated Financial Reports FY23-24
Sl. No. Particulars |
Year Ended March 31, 2024 |
Year Ended March 31, 2023 |
1 Revenue from Operations |
2,08,313 |
2,13,224 |
2 Other Income |
1,934 |
3,015 |
3 Total Income |
2,10,247 |
2,16,239 |
4 Gross Profit before Interest, Finance Charges and
Depreciation (EBITDA) |
7,036 |
21,634 |
5 Interest and Finance Charges |
(4,171) |
(3,125) |
6 Profit before Depreciation and Tax |
2,865 |
18,509 |
7 Depreciation |
(6,320) |
(5,568) |
8 Profit/(Loss) before Tax (PBT) |
(3,455) |
12,941 |
9 Provision for Tax |
(1,105) |
(3,790) |
10 Profit/(Loss) after Tax |
(4,560) |
9,151 |
11 Provision for Deferred Tax |
681 |
(168) |
12 Profit/(Loss) after Tax (PAT) |
(3,879) |
8,983 |
The Dividend
Based on the performance of the Company and the anticipated Investments
in various Projects that have been announced, your Directors have recommended a dividend
of 1/- per share for the Financial Year 23-24 (previous year 1.50/-per share was
paid). This would result in an out flow of 1,024 lakhs, if approved by the shareholders
at the Annual General Meeting.
The company began its operations with cash and cash equivalent balance
of 4,487 lakhs (Previous year 15,898 lakhs). During FY 23-24 it generated cash from
operating activities to the extent of 12,904 lakhs (net) (Previous year
1,663 lakhs). The company generated a cash of 19,675 lakhs (Previous
year outflow 29,973 lakhs) through investing activities. On account of financing
activities there was an outflow of 21,409 lakhs against an inflow of 16,618 lakhs. The
closing cash and cash equivalent balance remained at 15,975 lakhs (Previous year 4,487
lakhs).
MANAGEMENT DISCUSSION AND ANALYSIS
Global Challenges and our response
The world has faced several new and severe challenges over the past two
years, including the economic slowdown in the Far East and Europe, as well as deepening
geopolitical tensions. The war in Ukraine, the major conflict in the Middle East, and the
consequent crisis in the Red Sea have created severe problems and risks. The tensions in
the South China Sea between China, the Philippines, and Taiwan raise the risk of a major
conflagration. The economic standoff between China and the US raises the temperature
further, distorting trade and causing a severe crisis in shipping in recent weeks. Major
downstream industries in the chemical and polymer sector are faced with sharply reduced
demand due to customer destocking, demand drops, and reduced margins. China's economy
did not bounce back as expected, affecting Far East and Rest of Asia volumes and margins
in our industry. European demand is stagnating and in some areas has shrunk significantly.
The global and Indian chemical industry had to react and navigate each of these challenges
without prior warning.
Most industries, including ours, have encountered sharp volatility in
commodity prices since 2021. Fluctuating commodity prices have been a major concern, as
stability in raw materials, product, and energy prices are essential for planning business
operations, production, stocking, costs and margins, and working capital requirements.
Equally important is the stability in supply chain, which has been experiencing numerous
shocks since the beginning of the pandemic. Falling demand coupled with sharp inflation of
input costs creates additional pressure on margins. Operational efficiency, cost
management in plants, and production planning are severely impaired. Most industries,
especially the chemical industry, were not able to pass the increases in logistics and
input costs on to customers, as they face their own crises. The chemical industry was
particularly unable to pass on the logistics cost increase resulting from the Middle East
conflicts to customers.
TCL and its subsidiaries have responded to these multiple challenges
and volatility with excellent speed and adaptability. Our initiatives over the last five
yearsrobust planning systems, continuous investment in technologies and plant
improvement, tightening of working capital, intense training and development of staff, and
significantly reduced operating and breakeven costshave greatly helped us navigate
this turbulence. This was possible only because of our mature and experienced management
team, supported by well-trained middle management in all departments: Manufacturing,
Marketing, Commercial, Technology, Finance, and Risk Management.
TCL and its subsidiaries quickly moved to alternate suppliers and
markets to address weaknesses in these areas.
Business performance FY24
The fiscal year 2023-24 witnessed a dynamic journey for our business,
marked by fluctuations in performance amidst evolving market conditions. The year kicked
off on a strong note, showcasing our robust operational efficiency, high-capacity
manufacturing, and higher levels of production, sales, and collections. This performance
was driven by solid domestic market demand for our products. The second quarter began the
slide that would lead to severe hits in the second half of the financial year for us, and
the entire chemical industry. Q2 and Q3 were extremely difficult, given dull demand and
margin compression. Amid the volatility and uncertainty among our customers, along with
aggressive destocking, we used this period to work on improving efficiencies and
implementing severe cost reductions.
Sl. No. |
Quarter |
Total Income in lakhs |
EBITDA in lakhs |
PBT in lakhs |
1 |
Q1 FY23-24 |
47,586 |
4,864 |
2,716 |
2 |
Q2 FY23-24 |
56,983 |
3,788 |
1,625 |
3 |
Q3 FY23-24 |
47,620 |
1,622 |
(114) |
4 |
Q4 FY23-24 |
50,294 |
2,342 |
614 |
The decline in Q3 was primarily due to the economic downturns and
supply chain disruptions. Logistics costs increased across the globe. Our investments in
new plants and technologies from 2016 to 2019 helped us prioritise efficiency, cost
control, and capacity utilisation. Despite the problems, quick changes in our marketing
approach helped us sell the entire volume during this period.
We started several initiatives in FY 21-22, including process safety
management, equipment reliability programs, and quality improvements. These initiatives
reached maturity during the year and improved our productivity, product quality, safety,
and capacity utilisation while significantly reducing costs. This was crucial as margins
had become one of the lowest in the last 30 years.
Phthalic Anhydride:
While domestic product demand remains excellent, margins have been one
of the worst ever. For some months, there have been negative spreads between raw materials
and finished products. In India, growth and demand have occurred mainly in plastics,
paints and coatings, and composite resins, driven principally by the automotive,
construction, and public infrastructure sectors.
The Indian government has been supportive of the growth of the chemical
industry, promoting initiatives such as AATMANIRBHAR BHARAT to boost domestic
manufacturing. During this financial year, two new plants were commissioned in India. TCL
will also be starting up a new plant in its 100% subsidiary at Dahej in Q2-Q3 FY25. These
expansions will not only cater to Indian demand but also help our export efforts, which is
vital for earning foreign exchange. This will help hedge our plants to increase imports of
raw materials. We expect the Phthalic Anhydride industry to grow robustly between 5% and
6.5%, which will lead to the absorption of all new capacities within the next two years.
Volatility in the price of the raw material, ortho-xylene, due to global supply
contractions, fluctuating crude oil prices, and competing demand for higher-priced
gasolines, will be the feedstock challenges that we will face. However, we are well
prepared to handle these challenges as our import terminals and infrastructure in Chennai
and Gujarat give us added flexibility.
Our expansion at Dahej, which includes significant capacity additions
in PA and fine chemicals by-product recovery, will address our long-standing need to be
closer to raw material supplies and positioned within the center of 80% of our market. We
are leveraging the most advanced technology at this plant, drawing on our experience of
replacing two older plants with a state-of-the-art facility in South India about four
years ago. This investment brings world-class capacity with exceptional reliability,
energy and yield efficiency, low-cost operations, and a high degree of automation and
safety. In addition to providing the lowest energy footprint globally, the fine chemicals
recovery from wastewater generates a valuable revenue stream for both domestic and export
markets. The investment is designed to allow for quick and cost-effective capacity
doubling.
Upon stabilisation, TCL will be the largest producer of this particular
raw material globally. Despite the difficult situation in the market, we are confident
that robust market growth, our cost leadership, and our logistics position will yield
excellent results in the next few years.
Fine Chemicals and Food Ingredients:
The year was characterised by a combination of external factors that
affected the performance of the Food Ingredients business of your company.
In the beginning of the year, there was the after effect of poor demand
in Europe in various user segments with the Ukraine war and energy crisis affecting all
industrial sectors and consumption. Many consumers in the Industrial, Food and Animal feed
segments had carried over inventory from previous years resulting in lower demand for
ingredients and additives. In the meantime, poor local demand in China resulted in large
exportable surplus of food ingredients in the second quarter of the year resulting in low
priced Chinese products flooding the European and Asian markets.
In the latter part of the year, your company's exports to US and
Europe were severely impacted by high freight costs and some specific input costs due to
the Red Sea Crisis, which could not be passed on to the consumers.
This combination of poor demand in EU and surplus crisis from China
resulted in temporary supply excess affecting finished product prices and sales volume.
Therefore, the Food Ingredients performance was characterised by lower
margins for the fiscal year 2023-24. However, excellent customer relationships, steady
operating performance, ensured that the business still made profits under such testing
market conditions.
Demand for the other fine chemical products by your company remained
robust though margins were impacted because of low prices. Despite the challenges, your
company has navigated a dynamic landscape characterised by evolving market demands and
regulatory shifts. The company's robust supply chain and operational efficiencies
ensured resilience amid the fluctuations.
Human Resource and Strengthening the Organisation:
Our company faced significant challenges in human capital development.
As we grow succession planning and integration in key roles became pivotal in our HR
agenda. To address this, we brought in senior professionals and internally promoted young
managers into these roles. Your company is well known for 45 years for its efficient
training and development programmes. These continue to be improved and modernised. We
embarked on a journey to benchmark the best HR practices and realign our policies and
procedures to meet evolving industry standards. Additionally, numerous engagement
activities were organised to nurture a sense of belonging among employees. We observed
significant stability in employee turnover. This improvement is a testament to our focused
efforts in human capital management.
New investments & Projects Dahej Project
Our project in Dahej through our subsidiary TCL Intermediates Private
Limited saw the start-up of Fumaric Acid production in January 2024. The rest of the plant
is expected to be completed soon. The team is working very hard to drive the project to
completion.
US Project and US Subsidiary Activities
Work on the project in the US is in the final stages of civil
construction. About 80% of the plant is being assembled and constructed modularly at our
TCL Technology and Engineering (TCL TE) Division in India. All other equipments purchased
from Japan, Europe, and North America has already arrived at the site. We expect all the
modules to be shipped out soon. The COVID-19 crisis, followed by the Ukraine war and the
Red Sea shipping crisis, delayed engineering, equipment manufacturing, and shipping.
However, we have managed to make up part of the lost time. This modular design is unique
and offers significant advantages in construction safety, supervision, inspection, testing
quality, and post-construction performance. This will not only be the largest
manufacturing plant for these food ingredients but also one of the most modern and
efficient. The subsidiary will manufacture petrochemicals and fine chemicals/food
ingredients for the North American, European, and Latin American markets. This strategic
location will address the largest markets for these products and offer significant
advantages in raw material sourcing and logistics.
Our Subsidiary in the Netherlands TCL Global B.V.
The European subsidiary, TCL Global B.V., has completed its third year
of operations and continues to grow its marketing and distribution network, serving
customers from the UK to Turkey. Despite facing serious headwinds in Europe, TCL Global
currently distributes our products from India and
Malaysia. With the start-up of our Dahej subsidiary and our US
subsidiary, our export volume is set to increase many fold. Having a local presence is
essential as it allows direct access to customers, better service and compliance, and
improved margin capture. In a volatile market, it also provides the flexibility for quick
repositioning.
Our Subsidiary in Malaysia
During the year FY 23-24, like most of other chemicals, Maleic
Anhydride business was also adversely impacted due to drop in global Maleic Anhydride
demand and low prices in the Far East, Asian and European regions. In spite of overall
pressure of Maleic Anhydride demand, during this year, the company has sold all its
production.
Scheduled re-catalyzation in two oxidation reactor trains were
undertaken. Even after shutdown of these trains, production in FY 2024 was at the similar
levels of FY 2023. The Company continued to implement several improvement programmes to
improve efficiencies and reliability. As part of the company policy to increase its
downstream portfolio to improve performance, OOSB has developed a few new products in FY24
for specialty applications and for industrial feedstock; and received approvals and bulk
orders from customers. Work on more new products is ongoing. Going forward, increased use
of bio-degradable plastics will significantly increase the demand of Maleic Anhydride, as
these are fast catching on.
STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)
Sl. No. Particulars |
Year Ended March 31, 2024 |
Year Ended March 31, 2023 |
1 Revenue from Operations |
34.75 |
50.68 |
2 Other Income |
0.67 |
0.86 |
3 Total Revenue |
35.42 |
51.54 |
4 Gross Profit/(Loss) before Interest, Finance Charges and
Depreciation (EBITDA) |
(1.75) |
3.03 |
5 Interest and Finance Charges |
(0.18) |
(0.2) |
6 Profit/(Loss) before Depreciation and Tax |
(1.93) |
2.83 |
7 Depreciation |
(3.01) |
(3.06) |
8 Loss before Tax |
(4.94) |
(0.23) |
9 Provision for Tax |
0.99 |
(0.16) |
10 Profit/(Loss) after Tax |
(3.95) |
(0.4) |
11 Loss after Tax |
(3.95) |
(0.4) |
Finance and Accounts:
Despite various challenges faced by your company due to the external
environment, it has been able to generate adequate funds during the year to meet its
operating cash flow requirements and also deploy additional funds as equity to its
domestic subsidiary in Dahej. This is after meeting the initial equity requirements of the
U.S. subsidiary out of the accumulated surplus funds generated over the previous few
years. Your company was able to efficiently manage the working capital cycle and focus on
its operational needs. Your company will continue to strive to focus on generating cash
flows from operations and building more reserves for meeting its inorganic growth
opportunities.
Your company continues to emphasise process-driven initiatives in all
areas of operations, starting from the manufacturing plants to various billing locations.
Various subcommittees of the Board periodically monitor the progress in each area of
operation and review the mitigation measures implemented by the company in reducing
various types of risks. They also review the internal controls (both manual and systemic)
built-in to address the processes being followed. The continuing inflationary trend in the
United States and the absence of anticipated interest rate reduction by the U.S. Fed has
adversely impacted the interest rates of foreign currency loans in both India and abroad.
Your company is constantly engaging with banks and forex experts to explore avenues of
reduction in interest costs and is also negotiating hard to bring down each and every
aspect of finance costs. Your company has been taking steps to mitigate risks that arise
due to foreign currency fluctuations by using various derivative products available.
Looking forward to FY24-25:
In navigating the volatile landscape of the chemical industry, your
company remains steadfast in its commitment to ride out downward cycle in the market.
Notably, the demand for our flagship product, Phthalic Anhydride, remains robust, serving
as a cornerstone of stability amidst fluctuating market conditions. Furthermore, the
increasing capacities within key customer segments such as paints and plasticizers signify
promising growth opportunities. By continuously optimising our cost structure, we position
ourselves as a reliable and significant producer, ensuring sustained profitability and
market relevance.
Additionally, our forward-thinking approach extends to exploring new
avenues for growth and differentiation. With a focus on servicing higher priced segments
within the food ingredients market, we aim to capitalise on premium opportunities,
aligning with evolving consumer preferences and market dynamics. However, amidst our
pursuit of growth, challenges such as the influx of low-priced imports from China persist,
necessitating proactive measures and strategic responses. Through the implementation of
trade remedies and vigilant market monitoring, we safeguard our interests and preserving
fair market practices. Moreover, the imminent completion and commissioning of the second
phase of Dahej project underscore our commitment to continue being a reliable partner to
all our customers and other stakeholders. This further bolster our competitive edge and
position us for sustained success in the global chemical domain.
New Business:
In the last fiscal year, we formed a team to identify new product lines
in various chemistry and look at feasibility, market demand and other relevant details for
establishing new business segments. With manufacturing bases in India and Asia, and recent
investment in the resource-rich North American market, we see exciting prospects to expand
our product range across various market segments.
People:
At your company, we implement comprehensive technical training programs
tailored specifically for new graduates. Our commitment to continuous learning ensures
that all employees have access to ongoing training opportunities, allowing them to stay at
the forefront of industry advancements. Recently, we have introduced innovative programs
focused on safety leadership, underscoring our dedication to creating a secure and
productive work environment. These initiatives not only enhance technical competencies but
also cultivate essential leadership skills, preparing our workforce to handle complex
challenges safely and effectively. We believe that by investing in our employees'
growth, we are building a stronger, more resilient organisation.
Public Initiatives:
Your company believes that social responsibility is an integral part of
doing business. In line with this thought we continue to be actively involved in social
initiatives in the fields of health care, education and community development. We support
local services and as part of this, have provided new chairs and tables to the
collector's office to improve their work environment. Additionally, we have equipped
the local police department with CCTV cameras and laptops to enhance security and
efficiency.
Your company plays an active role in industry associations like the
Indian Chemical Council (ICC), Confederation of Indian Industry (CII) and Chemical
Industries Association. Through these associations the company also participates in
Industry initiatives and government interactions to represent various issues of the
industry to relevant authorities. Improvement in trade policy, international trade
negotiations and tariff concession for the industry wre some of the key areas of
engagement during the year.
Overall, your company remains dedicated to fostering positive change
through various initiatives, partnerships, and contributions aimed at improving public
welfare, healthcare, education and industry development.
OUR ASSOCIATES
None of our successes would be possible without the interest and
participation of our stakeholders, including customers, bankers, suppliers, distributors,
consultants, government agencies, and local communities. We look forward to the ongoing
involvement of all stakeholders in the company's activities and to sharing in its
future achievements.
BOARD AND MANAGEMENT
The Board of your Company consists of
The Chairman & Managing Director - Mr. R. Parthasarathy
Managing Director & Chief Financial Officer Mrs. Ramya
Bharathram
Seven Independent Non-Executive Directors:
- Mr. R. Ravi Shankar
- Mr. Raj Kataria
- Mr. Dhruv Moondhra
- Mr. Arun Ramanathan
- Mr. Rajeev M Pandia
- Mrs. Bhama Krishnamurthy
- Mr. Arun Alagappan
Two Non-Executive Director:
- Mr. R. Sampath Chairman - Ultramarine and Pigments Ltd.
- Mr. P. Mohana Chandran Nair Managing Director - TCL intermediates Private
Limited
They are supported closely by
Mr. C.G. Sethuram Group Chief Executive Officer
Mr. Sanjay Sinha Chief Executive Officer
Mr. T. Rajagopalan Company Secretary
And the Business and Functional Heads
Mr. S. Venkatraghavan - President Food Ingredients
Mr. R. Srinivasaraghavan - President Factory Operations
Ms. J. Radha - Executive Vice President, Finance
Mr. B. Krishnamurthy - Executive Vice President, Accounts & Systems
The term of appointment of the Managing Director of the Company, Mrs.
Ramya Bharathram will be expiring on May 25, 2024, and the Board recommends her
re-appointment as the Managing Director of the Company for a further period of three years
from May 26, 2024. Mr. Rajeev Pandia's tenure as Independent Director of the Company
expires on July 24, 2024. Hence it is proposed to reappoint him as Independent Director of
the Company for a further period of three (3) years at the ensuing Annual General Meeting.
The 2nd term of the following Independent Directors of the
Company will end on August 5, 2024: Mr. R. Ravi Shankar Mr. Raj Kataria Mr. Dhruv Moondhra
At this time, the management would like to acknowledge the significant
contributions of these Directors. Their support and valuable advice over the past decade
have been instrumental in the company's growth, particularly in strategic planning
and efficiency improvements, paving the way for our continued success.
Our Directors play a highly active role in the company, bringing
expertise in Business Strategy and Management, Technology, Finance and Accounting,
Governance, Project Appraisal and Management, and Government Relations.
Their frequent and intense interactions with the management team occur
through board and committee meetings, reviews, suggestions, criticisms, and advice over
the past decade. The executive management team has been transparent in presenting and
discussing initiatives, plans, failures, issues, and responses. This healthy and open
interaction has been of immense value to the governance, health and growth of the company.
The Committees in the Board, especially the Risk Management Committee, Business Review
Committee and the Audit Committee met often and participated in depth by setting goals,
reviewing performance, correcting slippages and monitoring execution. The Nomination &
Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social
Responsibility Committee have been active in their respective roles.
Further details of these are given in the Corporate Governance Report.
Pursuant to the provisions of Section 149 of the Act, the Independent
Directors have submitted declarations that each of them meets the criteria of independence
as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation
16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances
affecting their status as independent directors of the Company.
SOCIAL RESPONSIBILITY:
Your Company continues to play an active and important role in the
welfare of the local communities. The Founders of your Company, Mr. N.S. Iyengar and Mr.
N.R. Swamy had set up the Thirumalai Charity Trust (TCT) in 1970, and The Akshaya Vidya
Trust (AVT) in 1994.
Thirumalai Chemicals supports TCT financially and through management
reviews and in their infrastructure planning & development process.
The TCT works in Ranipet District where our main Indian manufacturing
site is located, since 1983, providing services in Community Healthcare, Women's
Empowerment, Disability, De-addiction, and Village development.
The TCT founded and operates the Thirumalai Mission Hospital, which
provides health coverage to 315 village with 36,500 households and 150K population and
over 100 medical camps/year with experienced consulting physicians. TCT is embarking on an
ambitious expansion project to augment the existing 50-bedded to 100 bedded hospital.
This addresses a critical need of the community.
School Community Development coverage is 6 Villages, primary aim of
these visits was to engage with the local communities and raise awareness on key social
and environmental issues while showcasing our school's activities.
Industrial Relations:
Industrial Relations during the year under review continued to be very
cordial.
Finance:
All taxes and statutory dues have been paid on time. Payment of
interest and instalments to the Financial Institutions and Banks are being made as per
schedule. Your Company has not collected any Fixed Deposits during the Financial Year.
Exports:
Calculated on FOB basis, Exports amounted to 17824 lakhs (previous
year 20,706 lakhs)
Related Party Transactions
All transactions entered into with Related Parties (as defined under
the Companies Act, 2013) during the Financial Year were in the ordinary course of business
and on an Arm's length pricing basis, and do not attract the provisions of Section
188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. There were no materially
significant transactions with related parties during the Financial Year which were in
conflict with the interests of the Company. Suitable disclosure as required by the Indian
Accounting Standards (Ind AS24) has been made in the notes to the Financial Statements.
The Board has approved of a policy for Related Party Transactions which
has been uploaded on the Company's website.
Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the following
statements in terms of Section 134(3)(c) of the Companies Act, 2013:
i) In preparation of the Annual Accounts, the applicable Accounting
Standards have been followed along with proper explanation relating to material
departures.
ii) We have selected such Accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give true and fair view of the state of affairs of the Company at the end of the Financial
Year and of the Profit or Loss of the Company for that period.
iii) We have taken proper and sufficient care to maintain 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) We have prepared the Annual Accounts on a going concern basis.
v) Proper Internal Financial Controls were in place and that the
Financial controls were adequate and were operating effectively.
vi) Systems to ensure compliance with the provisions of all applicable
laws were in place and were adequate and operating effectively.
Business Risk Management
Business Risk Evaluation and Management is an ongoing process within
the Organisation. The Company has a robust risk management framework to identify, monitor
and minimise risks. The composition of the Committee is given below:
Sl. No. Name of member |
Category |
1 Mr. Rajeev M. Pandia |
Independent Director & Chairman |
2 Mr. Dhruv Moondhra |
Independent Director |
3 Mrs. Ramya Bharathram |
Managing Director |
4 Mr. Sanjay Sinha |
Chief Executive Officer |
5 Mr. B. Krishnamurthy |
Executive Vice President Accounts & Systems |
Vigil Mechanism / Whistle Blower Mechanism
The Company has a vigil mechanism to deal with instances of fraud and
mismanagement, if any. The details of the Policy are explained in the Corporate Governance
Report and also posted on the website of the Company.
Corporate Social Responsibility (CSR) Committee:
The Committee recommended continuing support for the Thirumalai Charity
Trust's Health and Rural Development Projects and for the Akshaya Vidya Trust's
Educational Programmes.
The composition of the Corporate Social Responsibility Committee is
given below:
Sl. No. Name of member |
Category |
1 Mr. Arun Ramanathan |
Independent Director & Chairman |
2 Mrs. Bhama Krishnamurthy |
Independent Director |
3 Mr. R. Sampath |
Director (Promoter) |
A detailed note is given in the Corporate Governance report.
Total Expenditure on Corporate Social Responsibility (CSR) as
percentage of profit after tax (%):
The Company's total spending on CSR is 2% of the average profit
after taxes in the previous three Financial Years towards Health and Sanitation Programmes
The CSR report is set out in the Annexure B to the Directors' report.
Statement pursuant to Listing Regulations:
Your Company's shares are listed with the National Stock Exchange
of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no
arrears.
Business Responsibility and Sustainability Report:
Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended,
inter alia, provides that the Annual Report of the top 1000 listed entities based on
market capitalisation (calculated as on 31st March of every Financial Year),
shall include a Business Responsibility and Sustainability Report (BRSR Report). Your
Company is in the top 1000 listed entities as on March 31, 2024. The Company, has
presented its BRSR Report for FY 23-24, which is part of this Annual Report.
Report on Corporate Governance
The Report on Corporate governance is annexed herewith.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and under
obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board carries out the annual performance evaluation of its own performance, of
the Directors individually as well as the evaluation of working of its various Committees.
A structured questionnaire is prepared after taking into consideration the inputs received
from the Directors, covering various aspects of the Board's functioning such as
adequacy of the composition of the Board and its Committees, Board culture, Execution and
Performance of specific duties, obligations and governance.
A separate exercise is carried out to evaluate the performance of
individual Directors including the Chairman of the Board, who are evaluated on parameters
such as level of engagement and contribution, independence of judgment, safeguarding the
interests of the Company and of its minority shareholders, etc. The performance evaluation
of the Independent Directors is carried out by the entire Board. The performance
evaluation of the Chairman and the Non-Independent Directors is carried out by the
Independent Directors who also review the performance of the Secretarial Department.
The Directors expressed their satisfaction with the evaluation process.
Appraisal of Board's performance:
It includes setting individual and collective roles and
responsibilities of its Directors, creating awareness among Directors about their expected
level of performance and thereby improving the effectiveness of the Board.
Board evaluation contributes significantly to improved performance and
aims at,
a. Improving the performance of Board in line with the corporate goals
and objectives.
b. Assessing the balance of skills, knowledge and experience on the
Board.
c. Identifying the areas of concern and issues to be focused on for
improvement.
d. Identifying and creating awareness about the role of Directors
individually and collectively as Board.
e. Fostering Team work among the members of the Board. f. Effective
Coordination between the Board and Management.
g. Overall growth of the organisation 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 & Redressal) Act,
2013. An Internal Complaints Committee (ICC) has been set up by the Company to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. Since the number of complaints filed
during the year was Nil, the Committee prepared a Nil complaints report.
Statutory Auditors
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm
Registration No. No. 001076N / N500013) were appointed as the Statutory Auditors of the
Company for a period of five years at the Annual General Meeting (AGM) of the Company held
on July 21, 2021, to hold office from the conclusion of the Forty Eighth AGM till the
conclusion of the Fifty Third AGM to be held in the year 2026.
Internal Auditors
The Internal Auditors M/s. M.S. Krishnaswamy & Co, Chartered
Accountants, have played an important role in strengthening the internal controls within
the Company. The Internal Auditors M/s CNK & Associates LLP also contributed
significantly.
Cost Auditors
M/s GSVK & Co., Cost Accountants, were appointed as Cost Auditor to
conduct cost audit of the cost records maintained by our Company in respect of products
manufactured during FY 23-24. The Cost Audit Report was filed with the MCA, Government of
India, by the Company on August 3, 2023, well before September 30, 2023, the due date of
filing for FY 22-23.
Secretarial Audit
The Board appointed M/s. R.M. Mimani & Associates LLP, Company
Secretaries, to conduct Secretarial Audit for FY 23-24. The Secretarial Audit
Report for the Financial Year ended March 31, 2024 is attached to this Report. The
Secretarial Audit Report does not contain any qualifications, or reservations.
Web link of Annual Return
Pursuant to the provisions of section 92(3) and Section 134 (3) (a) of
the Companies Act, 2013 a copy of the Annual Return of the Company for the year ended
March 31, 2024 will be placed on the website of the company at http://www.
thirumalaichemicals.com.
Personnel
In terms of the provisions of section 197(12) of the of the Companies
Act, 2013 read with the Rule 5 of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 the names and other particulars of employees are set out in the
Annexure C to the Directors' report.
PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE
COMPANIES ACT, 2013: a) The ratio of the remuneration of each Director to the median
employee's remuneration for the Financial Year and such other details as prescribed
is as given below:
Sl. No. Name of Director |
Ratio |
1 Mr. R. Parthasarathy (Managing Director) |
71: 1 |
2 Mrs. Ramya Bharathram (Managing Director and CFO*) |
30:1 |
For this purpose, sitting fees paid to the Directors have not been
considered as remuneration. b) The percentage increase in remuneration including
commission, of Managing Director, Chief Financial Officer, Company Secretary or Manager,
if any, in the financial year: Mr. R. Parthasarathy (Managing Director): Nil Mrs.
Ramya Bharathram (Managing Director and CFO*): NIL
Mr. T. Rajagopalan (Company Secretary): 3%
*Mrs. Ramya Bharathram Managing Director, was appointed as the
Chief Financial Officer of the Company on July 24, 2018. No additional remuneration was
paid to her for functioning as the CFO. c) The percentage increase in the median
remuneration of employees in the Financial Year: 6% d) The number of permanent employees
on the rolls of the Company: 541 e) The explanation on the relationship between average
increase in remuneration and Company performance: The Company's PAT has decreased
from 11,953 lakhs to 3,630 lakhs, a decrease of 70% against which the average increase
in remuneration is (NA); f) Comparison of the remuneration of the Key Managerial Personnel
against the performance of the Company:
Name |
Designation |
Remuneration Rs. in Lakhs* |
% Increase in Remuneration |
PAT Rs. in Lakhs* |
% decrease in PAT |
Mr. R. Parthasarathy |
Managing Director |
332 |
NIL |
3,630 |
70% |
Mrs. Ramya Bharathram |
Managing Director and CFO |
141 |
NIL |
|
|
Mr. T.Rajagopalan |
Company Secretary |
48 |
3% |
|
|
* It consists of Salary/Allowances & Benefits.
The remuneration of the Chairman and Managing Director, Mr. R.
Parthasarathy includes the commission of NIL lakhs, which works out to approximately
NIL% to the net profit for the Financial Year ended March 31, 2024.
As per the Compensation Policy, the compensation of the key managerial
personnel is based on various parameters including Internal Benchmarks, External
Benchmarks, and the Financial Performance of the Company.
g) Variations in the market capitalisation of the Company, price
earnings ratio as at the closing date of the current Financial Year and the previous
Financial Year and percentage increase or decrease in the market quotations of the shares
of the Company in comparison to the rate at which the Company came out with the last
public offer:
Date |
Issued Capital (No. of Shares) |
Closing Market Price per share |
EPS in |
PE Ratio |
Market Capitalisation (Rs. in Lakhs) |
31.03.2023 |
10,23,88,120 |
171.85 |
11.67 |
14.72 |
1,75,954 |
31.03.2024 |
10,23,88,120 |
234.10 |
3.55 |
66.02 |
2,39,691 |
Increase /(Decrease) |
NA |
62 |
(8) |
51 |
63,737 |
% of Increase/(Decrease) |
NA |
36.22 |
(70) |
349 |
36 |
Issue Price of the share at the last |
|
1.0 |
|
|
|
Public Offer (IPO) |
|
|
|
|
|
Increase in market price as on |
|
233.1 |
|
|
|
31.03.2024 as compared to Issue |
|
|
|
|
|
Price of IPO |
|
23,310 |
|
|
|
Increase in % |
|
|
|
|
|
h) Average percentile increase already made in the salaries of
Employees other than the Managerial Personnel in the last Financial Year and its
comparison with the percentile increase in the Managerial remuneration and justification
thereof and any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration is 15% for Employees other than Managerial Personnel
& NIL for Managerial Personnel (KMP and Senior Management) i) The key parameters for
any variable component of remuneration availed by the Directors: Except Mr. R.
Parthasarathy (Managing Director) and Mrs. Ramya Bharathram (Managing Director), no
Directors have been paid any remuneration, as only sitting fees have been paid to them.
The said Directors have not been paid any variable remuneration. The Directors are
eligible for a commission on Net Profits as per the provision of sec.197 of the Companies
Act, 2013. j) 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 k) If remuneration is as per the remuneration
policy of the Company: Yes
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required to be included in terms of Section 134(3)(m)
of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014
with regard to conservation of energy, technology absorption, foreign exchange earnings
and outgo are given in Annexure D.
Details of significant changes (i.e. change of 25% or more as compared
to the immediately previous financial year) in key financial ratios, along with detailed
explanations therefor.
The details form part of Note No. 36 of Notes to standalone financial
statements.
Cautionary Statement
Company's objectives, expectations or forecasts may be
forward-looking within the meaning of applicable securities laws and regulations. Actual
results may differ materially from those expressed in the statement. Important factors
that could influence the Company's operations include global and domestic demand and
supply conditions affecting selling prices of finished goods, input availability and
prices, changes in government regulations, tax laws, economic developments within the
country and other factors such as litigation, plant breakdowns, industrial relations, etc.
Acknowledgements
The Directors would like to place on record our sincere appreciation
for the continued support given by the Banks, Internal Auditors, Government Authorities,
Customers, Vendors, Shareholders and Depositors during the period under review. The
Directors also appreciate and value the contributions made by the employees of our Company
at all levels.
For and on behalf of the Board of Directors |
R. Parthasarathy |
R. Ravi Shankar |
Managing Director |
Director |
(DIN :00092172) |
(DIN:01224361) |
Place: Ranipet |
Place: Chennai |
Date: May 15, 2024 |
Date: May 15, 2024 |