tuticorin alkali chemicals & fertilizers ltd share price Directors report


Your Directors are pleased to present the 50th Annual Report and the Audited Financial Statements of the Company for the year ended 31st March, 2023.

FINANCIAL RESULTS (Rs. In Crores)

DESCRIPTION

2022-23 2021-22

Sales Turnover (Net of GST)

515.09 180.57

Gross Profit / (Loss) after meeting all expenses, but before providing depreciation and interest

85.64 (28.63)

Interest

3.21 2.30

Cash Profit / (Loss)

82.43 (30.93)

Depreciation for the year

3.67 3.04

Extraordinary items

- -

Net Profit / (Loss) for the year

78.76 (33.97)

Accumulated Loss

(339.63) (418.39)

Networth before revaluation of land & buildings

(211.01) (289.97)

Networth after revaluation of land & buildings

9.67 (69.09)

Unabsorbed deferred tax benefit

22.42 --

Total Earnings

101.18 (33.97)

EPS & Diluted EPS

8.30 (2.79)

The production for the financial year increased substantially by 40% over the last financial year, which was affected by the unseasonable rains and non-availability of salt and coal. However this year, the production was maintained as planned, almost all the days. However it could not be pushed further due to recurring maintenance issues, which now have been effectively attended to, and also due to loss of production for a month due to complete structural failure of the control room in October 22. However, our team has responded very firstly to bring back the productivity within 30 days by installing the controls in make shift arrangement.

The average production levels have now been stabilized at around 200 TPD and your Company hopes to reach 225 TPD average in the current financial year.

All the repair works on major tanks, pipelines etc. were carried out, to achieve the above production level. New centrifuge, pumps have been added and orders have been placed for phased change of large volume circulation pumps, which will improve the efficiency of the plant further.

The production and sales during the year ended 31st March, 2023 compared to the previous year, are as given below;

(Qty. in MTs)

Product

Production

Sales

(Includes internal Consumption)

2022-23 2021-22 2022-23 2021-22

Soda Ash (Light)

58,430 41,683 * 57,099 * 41,860

Ammonium

Chloride

55,402 37,414 62,122 30,547

*Includes captive consumption

DIVIDEND

Your Directors are not able to recommend any dividend in view of the accumulated losses.

MARKET SCENARIO

The selling price of Soda ash was in tune with the landed cost of the international product, which remained high throughout the year. The prices were stable throughout the year and the market was also absorbing the material, at that price.

The price of salt and coal went up during the year, however the availability was not an issue. The ammonia price continued to increase and after reaching all-time high, it started coming down from the 4th quarter of the financial year 2022-23. The Soda ash sales to detergent units, has picked up and also steady and in view of the better plant performance, the Company hopes to market at least

55.000 to 65,000 MTs of Soda Ash in the current financial year. Our other regular customers need also will be met satisfactorily.

Ammonium Chloride has found acceptance with many users during the last financial year and your Company sold all-time high of around

62.000 MTs of Ammonium Chloride in the financial year.

FUTURE OUTLOOK

Since the market for the soda ash manufactured by your Company is continuing to improve in view of the lower carbon footprint when compared to competing product, it should be possible to ramp-up the production further, and also expand the capacity.

Our Company is targeted to convert the boiler feedstock from coal to biomass. The CO2 capture plant is being upgraded with a special technology, which is expected to bring down the cost of the production further, and also capture more CO2, which will enable the Company to expand further and distribute lower carbon footprint Soda ash to detergent units, who have also announced to align with the Carbon Reduction Intention of the Government of India.

Ammonia storages with M/s. Green star Fertilizers Limited, has enabled the Company to operate continuously without having to shutdown for want of ammonia.

OPPORTUNITIES AND THREATS

While there is an opportunity to increase the production, the additional production of Soda Ash need to be moved up North, as your Company is located in the southern tip of India, this will bring in additional transportation cost. However effective use of rail racks and coastal shipping, will help us in keeping the cost under control and maximize the contribution. Your Company is also trying tie-ups with other units in this area, who are transporting large volume, to part use of their facilities, with the view to reduce the cost.

INDUSTRY STRUCTURE AND DEVELOPMENTS.

Soda Ash industry is concentrated in the state of Gujarat due to availability of salt and lime and your company is the only factory which is outside Gujarat. The product is mainly used in the manufacturing of detergents and glass. We co-produce Ammonium Chloride fertilizers, unlike Gujarat based industries. We capture raw material Co2 gas from boiler flue gas whereas others use lime kiln gas.

PRODUCT WISE PERFORMANCE

Soda Ash about 36 Million Tons is the production in the country whereas the consumption level is around 40 Million Tonnes. India is both Importer and Exporter of Soda Ash.

Ammonium Chloride is a fertilizer with 25% available nitrogen. It is under fertilizer control order and is widely used as it is and used in combination with Potassium and phosphorous as complex fertilizer.

RISKS AND CONCERN

The major risks of non-availability of Co2 gas and ammonia has been addressed with Co2 capture plant and additional ammonia storage plant. Only in the unlikely event of blockage of ocean transport of ammonia to India can cause stoppage of production. Since it is a global problem, it is highly unlikely.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The company has a very good Internal control system with external Internal auditor auditing various aspects and presenting it in the Board. All decisions are implemented after multilevel multidisciplinary scrutiny.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The company has a recognized union operating on democratic principles frequently holding meetings with Human Resources department. We have 266 number of people employed and usually people from the adjacent districts/villages are recruited with a view to train and retain them. The recruitment are done through engineering level and junior engineering level training schemes

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The plant operations of the company has been improved substantially in 2022-23 and the plant capacity in the year 2022-23 increased by 110% compared to previous year 2021-22. The selling prices of finished goods, ie Soda Ash and Ammonium Chloride are increased during the financial year 2022-23. Due to improved plant performance and selling prices resulted in higher net profit for the company.

The company have revalued its land at Tuticorin windmill land and also the buildings of the company after a long period. The revised value are accounted in the books of account of revaluation, the reserves have been increased and net worth has become positive.

ENVIRONMENT AND SAFETY

Updating to ISO 9001:2015 the latest standard is under progress. WIND MILL

During the year 2022-23, 4,59,128 units were generated from Wind Turbine Power Generators at Gudimangalam, Tirupur District, as against 4,70,712 units generated in the previous year. All the available 5 units are operating in good condition. The aging windmills are being refurbished for better results

POWER PURCHASE

Your Company didnt purchase electricity under the Group Captive Scheme during the financial year starting from 1 st April, 2022 to 31 st March, 2023.

CAPTIVE SALT WORKS

10,845 MTs of salt was produced and all the unused pans were also brought under production and the systems were modified to produce quality salt. With the availability of enriched water from the SWRO plant, more quantity of quality salt would be produced during the year.

FIXED DEPOSIT

There was no outstanding deposit as at 31st March, 2023. The Company has neither accepted nor renewed any deposits during the year under review..

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no Dividend declared last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

MATERIAL CHANGES AND COMMITMENT IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATES AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates on the date of this report. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY The Statement showing the details regarding the development and implementation of Risk Management Policy of the Company is furnished in Annexure 1, which is attached to this report.

The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting.

Your Company was earlier primarily dependent on SPIC for the supply of CO2, while the ammonia was imported through their storage and pumping system. Your Company has now implemented an independent CO2 Recovery facility, which is operational from November 2016. This has reduced the risk considerably. Ammonia will continue to be imported through the augmented storage system. The Board does not envisage any other major risk.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiates as the said provisions are not yet applicable as on date in view of the accumulated losses of the Company .

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The transactions entered into during the financial year with related party as defined under the Act were in the ordinary course of business and at arms length basis. There were no materially significant transactions during the financial year 2022-23, which were in conflict with the interests of the Company. Policy on materiality of related party transactions is placed on the Companys website viz., www. tacfert.in

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 2 and is attached to this report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

The Company had four Board meetings during the financial year under review. Full details are given in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgements 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; and

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. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

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.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

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

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No case of sexual harassment was reported during the year. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Companys Board comprises of the following directors: Mr.B.Narendran, Mr.S.Asokan, Mrs.Rita Chandrasekar, Mr.E.Balu, Mr.K.R.Anandan and Mr.G.Ramachandran.

Mr.S.Nandakumar is the Chief Financial Officer of the Company.

Ms.S.Rohini Priyadarshini, the Company Secretary, left the services of the Company on 31.10.2022 and Ms.C.S.Vijayalakshmi, till then Consultant - Secretarial, took over as Company Secretary on 01.11.2022.

PARTICULARS OF SENIOR MANAGEMENT INCLUDING THE CHANGES THEREIN SINCE THE CLOSE OF THE PREVIOUS FINANCIAL YEAR.

Sl. No Name of the Director

Designation Change With Effect from

1. E. Balu

Executive

Director

Resignation 24-05-2023

2. Devaki Ashwin Muthiah

Additional

Director

Appointment 24-05-2023

3. G. Ramachandran

Managing

Director

Resignation 07-08-2023

4. E. Rajeshkuamr

Additional Director / WTD Appointment 08-08-2023

COMMITTEES OF THE BOARD

There are four committees of the Board namely, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee. The details of composition of committees are furnished in the Corporate Governance report, which is annexed to this report.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for the continuance / appointment as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

The Independent Directors have also affirmed that they have completed requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act, read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Boards performance and performance of the non-independent Director were considered/evaluated by the Independent Directors at their meeting without the participation of the Non-Independent Director and key managerial personnel.

They also assessed the quality, quantity and timeliness of flow of information between the Companys Management and the Board that are necessary for the Board to effectively and reasonably perform its duties.

Pursuant to the provisions of the Companies act, 2013 and Regulation 17 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various committees.

STATUTORY AUDITORS

M/s.MSKA & Associates, Chartered Accountants, Chennai, (Registration No.105047W) have been appointed as Statutory Auditors of the Company in 44th Annual General meeting and after completion of a five years period, the term was further extended by another 5 years, till the AGM to be held in 2027, in the AGM held on 21.09.2022.

SECRETARIAL AUDITOR

M/s. KRA & Associates, Practicing Company Secretaries have been appointed by the Board of Directors to carry out the Secretarial Audit for the year ended 31st March, 2023. Secretarial Auditors Report is annexed, which forms part of this report.

COST AUDITOR

As per the Government of Indias directive, the Companys Cost Reports in respect of Fertilizer -Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March, 2023 are being audited by the Cost Auditor M/s. Ravichandran Bhagyalakshmi & Associates, (Firm Reg No. 001253), who was appointed by the Board. The Company is required to maintain Cost Records as specified by the Central Government under Section 148 (1) of the Act and that accordingly such accounts and records are made and maintained. The Cost Audit Report for the year ended 31 st March, 2022 was filed within the time stipulated under the Act.

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There was no qualification, reservations or adverse remarks made by the Statutory Auditors, M/s. MSKA & Associates and Secretarial Auditor KRA & Associates, Practicing Company Secretaries in their reports.

However the Secretarial Auditor have some observations and our response is as below:- Under SEBI

Delay in one day in furnishing prior intimation of Board Meeting for 31st October, 2022.

Due to oversight, five days of prior Intimation was missed.

Delay in submission of Related party transactions for the half year ended September, 2022.

Due to network issues and due to hospitalization of Company secretary the uploading got delayed by 2 days.

The Statutory Auditors Report for the financial year ended, 31st March 2023 is annexed.

INTERNAL FINANCIAL CONTROL:

The Board has adopted the Policies and Procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companys Policies, the Safeguarding of its Assets, the Prevention and Detection of Frauds and Errors, the Accuracy and Completeness of the Accounting Records, and the timely Preparation of Reliable Financial Disclosures.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Audit Committee consists of Mr. B. Narendran, Mr. K.R. Anandan and Mrs. Rita Chandrasekar.

The Company has established a vigil mechanism and oversees through a committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company. Policy is given in Annexure 3 and is placed on the Companys website viz., www.tacfert.in.

SHARES

The Company has not bought back any of its shares during the year under review.

The Company has not issued any "Sweat Equity" Shares during the year under review.

No Bonus Shares were issued during the year under review.

The Company has not provided any Stock Option Scheme to the employees.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with relevant Rules, is placed in the website of the Company in the link https://www.tacfert.in/ CORPORATE GOVERNANCE

A report on Corporate Governance as stipulated under Schedule V and Regulation 34(3) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The requisite certificate from a Chartered Accountant confirming compliance with the conditions of corporate governance as stipulated is annexed to this Report.

FAMILIARIZATION PROGRAMME

The Independent Directors attend a Familiarization programme on being inducted to the Board. The details are provided in the Corporate Governance report and on the website of the Company viz., https:// www.tacfert.in. Till COVID set in, the Directors were visiting the factory as a team to keep updated of the progress. Now the visits are made individually and the regular team visits are to commence shortly. However the Directors virtually discuss with Plant personnel couple of times in a year.

DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with. PARTICULARS OF EMPLOYEES

The Company has no Employees, whose salary exceeds the limits as prescribed under Rule (5)(2) of Companies (Appointment and Remuneration of Key Managerial Personnel) Rules , 2014. Disclosures under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The ratio of the remuneration of each director to the median

Mr.G.Ramachandran 17.27

remuneration of the employees of the Company for the financial

Mr.B.Narendran 0.33

year - 2022-23

Mr.S.Asokan 0.33
Ms.Rita Chandrasekar 0.33
Mr.K.R.Anandan 0.33
Mr.E.Balu 0.33

The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary in the financial year - 2022- 23.

Mr.G.Ramachandran, Managing Director Mr. S.Nandakumar, Chief Financial Officer Ms. S.Rohini Priyadarshini,Company Secretary (till 31.10.2022) *

Ms.C.S.Vijayalakshmi Company Secretary (from 01.11.2022)

1.11

2.49

NA

NA

The percentage increase in the median remuneration of employees in the financial Year - 2022-23

10.19

The number of permanent employees on the rolls of Company as on 31.03.2023

252

Average percentage increase already made in the salaries of Average percentage increase already made in the employees other than the managerial personnel in the last financial salaries of employees other than the key managerial year and its comparison with the percentage increase in the personnel in the FY 2022-23.

10.10

Managerial remuneration and justification thereof Average percentage increase already made in the salaries of the key managerial personnel in the FY 2022-23

3.62

*relieved from the services on 31.10.2022

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY

Company is adopting remuneration guidelines for fixing the remuneration as per the policies laid down by the Nomination and Remuneration Committee.

PARTICULARS AS REQUIRED UNDER RULE 3 OF THE COMPANIES (ACCOUNTS) RULES, 2014

A. Conservation of Energy

1. Steps taken and impact on conservation of energy

a. Post COVID, induction turbine alternator to utilize the energy in the steam let down for process use, was commissioned and approximately 5000 units a day is being produced, which resulted in a saving of approximately Rs.1 crore per annum.

b. Due to installation of filter press in the recycle stream, added last year, the distiller steam consumption has come down, resulting in a saving of steam, which will save about Rs.2 crores per annum.

2. Steps taken for utilizing alternative sources of energy

Your Company is implementing a system to co-fire of biomass and trials will commence in the next financial year 2023-24. This will avoid usage of coal of approximately 50,000 MTs in a year.

3. Capital investment in conservation energy

Further investment of Rs.100 lakhs is being made to fire biomass into the boiler.

4. The company has installed various Variable frequency drives to reduce the energy consumption in motors and also installed LED lamps to conserve energy.

B. Technology Absorption

(a) The Company has fully utilized the imported Technology of Hitachi Zosen, Japan which was imported in the year 1980.

(b) Expenditure on Research & Development

(i)

Capital Ni

(ii)

Recurring Ni

(iii)

Total Ni

C. Foreign Exchange Earnings and outgo:

(a) Foreign Exchange inflow: Rs. Nil lakhs

(b) Foreign Exchange outflow: Rs. 17.36 lakhs

GENERAL

No disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year

a. No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future

b. There was no issue of Equity shares with differential voting rights ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companys activities during the year under review. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

DISCLAIMER

Statements in the Management Discussion and Analysis describing the Companys objectives, estimates, projections, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companys operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes and economic development within India.

For and on behalf of the Board of Directors

Chennai

09th August,2023

B NARENDRAN

Director

ANNEXURE1

RISK MANAGEMENT

Company have already formed Risk Management Committee on its own discretion, headed by Mr. B. Narendran, Independent Director. The other members are Mr. S. Asokan, Independent Director, Mr. G. Ramachandran, Managing Director, and Mr. S. Nandakumar, Chief Financial Officer. The Committee meets once in a quarter to discuss the points forwarded by the Risk Management Team and other risks facing the Company and submit a report to the Board of Directors. The report will contain the methods to mitigate the risk. The Risk Management Committee will study the risks/threats/concerns both in short term and long term and take adequate steps periodically to protect the interest of the various stakeholders.

During the year, a Committee meeting was held during March decided that in order to do in depth analysis into the risk of the factory site at Tuticorin, a support team was formed from the site and two representatives were inducted in the support team of the committee.

Mr. E. Balu - Director and Mr. Mr. Rajesh Kumar - Plant head were included in the support team.

It was decided that the support committee shall conduct regular meetings in the factory regarding the risk management at regular short intervals discussing the risk factors, how to control and manage the risk, to assign a team to take up the task of risk control etc...also have decided to prepare the register and records classifying the risk and apparently update the records as per the progress in the factory and shall submit the report to the main committee in every half financial year. A consolidated meeting will be held every half year and suggestions from the main committee members will also be taken up and follow up actions shall be made.

ANNEXURE 2 REMUNERATION POLICY PURPOSE

The Remuneration Policy is applicable to all employees of the Company, including Executives, Non-Executives and Board of Directors of the Company. The Policy is primarily focused on the employees of the Company other than Directors and Senior Executives to provide a competitive attractive remuneration to retain, protect and develop competent personnel. The pay package shall be based on the roles and responsibilities and shall consist in addition to the substantial fixed salary portion, motivating pays like Performance Pay, Production Incentives, Leave Travel Assistance, Ex-gratia payments and non-salary benefits like Health Care, Transport, Canteen Facilities, Pension, Township and Retirement/Statutory benefits of Provident Fund and Gratuity.

PAY PACKAGE

The Pay Package shall comply with general industrial practices and shall reflect the cost of living and also should take into account ability of the Company to sustain and pay such packages.

The Package shall consist of predominantly fixed income and not more than 30% of the pay shall be based on variable components consisting of Performance and Motivating Pays.

EXECUTIVE PAY PACKAGE

The Executive Pay Packages shall also follow the above guidelines. However, since they are primarily responsible for taking the Company forward and improving its business ability, deviations as necessary can be made to provide substantial motivating pays apart from the fixed salary. Perquisites of housing and transportation can also be different as per the need.

The Non-Executive Board of Directors would be paid Sitting Fees as decided by the Board from time to time depending on the ability of the Company, but to be within the statutory maximum.

OTHER GENERAL ISSUES

Notice pay, PF, Gratuity, etc., will be as per the various statutory regulations/ Companys approved policy from time to time. PROCEDURES

The Remuneration Committee of the Board will meet from time to time, discuss, review and approve the pay packages suggested by the executives of the Company for implementation and for settlement with the employees through the Trade Union either through a 12(3) agreement or 18(1) agreement as per the need. The pay packages/ sitting fees of the Executives/Working Directors and the other members of the Board would be fixed by the Remuneration Committee and suggested to the Board for implementation.

ANNEXURE 3

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As per Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the Company implemented a Whistle Blower Policy, by which all unethical and improper practices or wrongful conduct that may occur in the conduct of business of the Company when comes to the knowledge of an employee, can be brought to the attention of the concerned, including Managing Director and Audit Committee of the Board. The Policy provides a frame work by which a Whistle Blower has access to the top Management so that the wrongful conduct is brought to their attention, investigated and the concerned person punished. The frame work will also provide adequate safe guards to the Whistle Blower who will act in good faith and prevent harassment and victimization to him.

Policy

This Whistle Blower Policy is formulated to provide an opportunity to employees to raise concerns, in case they detect or observe unethical and improper practices or any other wrongful conduct in the Company to higher ups, Managing Director and/or to the Audit Committee of the Board of Directors. This Policy also provides necessary safeguards for protection to such whistle blower employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against them.

Reporting

An employee who observes or notices any unethical & improper practices or alleged wrongful conduct in the Company may report the same to the Head of Department or in case it involves Managerial Personnel to the Managing Director and in exceptional cases to Audit Committee through e-mail addressed to info@tacfert.com