DIRECTORS' REPORT To, The Members, 1. Your Directors have pleasure in presenting their 7th Annual Report and the Audited Financial Statement for the financial year ended March 31, 2015. On a standalone basis your company recorded a turnover of Rs. 26,604.07 Lacs for the year ended 31" March, 2015 as against Rs. 19,730.63 Lacs in the previous year which shows an increase of 34.34%. Company had recorded a Manufacturing turnover of Rs. 25 185.13 Lac for the year ended 31"' March. 2015 as against Rs. 19,361.19 Lac in the previous year which shows an increase of 30.03%. On a standalone basis, the profit before interest, depreciation and tax for the financial year is Rs. 1645.13 Lacs as against Rs. 1516.58 Lacs recorded in the previous year. The profit before tax for the financial year stood at Rs. 486.06 Lac compared to Rs. 251.11 Lac of the previous year. The profit after tax, before exceptional item for the financial year at Rs. 330.50 Lac compared to Rs. 162.03 Lac of the previous year. On a standalone basis your company recorded Production of 21213.03 MT for the year ended 31st March, 2015 as against 19020.14 MT in the previous year which shows an increase of 11.53%. 2. Dividend With a view of augmenting the financial resources for gen orating stable growth the Board of Directors of the company has decided to carry forward entire profit and hence they did not propose any dividend for the financial year on equity shares. (Previous Year-Nil) 3. Details of Subsidiary/Associate Companies We have Two subsidiary Companies namely Texmo Petrochemicals Private Limited and Tapti Pipes & Products Limited FZE {Overseas Subsidiary). The consolidated financial statements of your Company for the financial year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013.. Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiary, as approved by the irrespective Board of Directors. A separate statement in Form AOC 1 containing the salient features of financial statements of all subsidiaries of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 201 3. 4. Commission received by Directors from Subsidiary During the year under review none of the director of the company are receipt of the commission or remuneration from subsidiaries of the Company, as provided under section 197 (14) of the Companies Act, 2013. 5. Particulars of Employees Pursuant to the Provision of section 197(2) of Companies act read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 no employee received the Remuneration of Rs. 60 Lacs per annum and Rs. 5 Lacs per month. In accordance with Section 176 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 27th September, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report. The Managing Director of your Company does not receive remuneration from any of the subsidiaries of your Company. 6. Voting Rights of Employees During the year under review the company has not given loan to any employee for purchase of its own shares as per section 67 (3) (c) of the Companies Act, 2013. Therefore the company is not required to make disclosure as per rule 6 (4) of the Companies (Share Capital and Debentures) Rules, 2014. 7. Details relating to remuneration of Director, KMPs and employees Disclosure pertaining to remuneration arid other details as required Under Section 197(12) of the Companies Act 2013 read with rule 5 (1) of the Companies {Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure A. 8. Particulars of loans, guarantees, investments outstanding during the financial year Particulars of loans given, investments made, guarantees given arid securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 11,12, and 14 to the standalone financial statement). 9. Deposits During the year under review.. Company did not accept any fixed deposits in terms of Section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules. 2 014.The Company did not have outstanding deposits at the beginning/at the end of the year. 10. Statutory Auditors M/s Pankaj Somaiya and Associates, LLP, were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 27th September, 2014 for a term of four years. As per the provisions of Section 139 of the Companies Act. 2 Q13, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. 11. Auditors' Report The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. 12. Cost Auditor The Company has appointed M/s Sushil Kumar Mantri & Associates, Cost Accountants, as cost accountant for Financial Year 2015-16. The cost audit is not applicable to the company for the year 2014-15. 13. Share Capital The paid up Equity Share Capital as at March 31, 2015 stood at Rs. 23.62 Crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31.2015, none of (he Directors of the Company hold instruments convertible into equity shares of the Company. 14. Extract of the annual return The extract of annual return as on the financial year ended March 31, 2015 in Form No. MGT-9 shall form pail of Board's Report is provided in Annexure B. 15. Conservation of energy, technology absorption, foreign exchange earnings and outgo The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act. are provided in Annexure C. 16. Details of Change in Directors and Key Managerial Personnel Smt. Rashmi Agrawal (DIN 00316248) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible: offers herself for re-appointment. Mr. Shyam Sunder Agrawal Company Secretary and Compliance Officer (ACS No 24489) of the Company resigned from the services of Company with effect from 29' January, 2015 and Mr. Ravi Patidar (ACS No. 3238) has been appointed as Company Secretary and Compliance Officer of the Company with effect from 20th February 2015. 17. Declaration given by Independent Director(s) and reappointment, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 4$ of the Listing Agreement with the Stock Exchanges. The Board shall include a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors. Additionally, details of evaluations made by the Nomination and Remuneration Committee and independent directors to also be provided. 18. Internal Financial Controls The Company believes that internal control is necessary principle of prudent business governance that freedom of management should be exercised within a framework of appropriate checks and balances. The Company remains committed to ensuring an effective internal control environment that inter alia provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information. The Company's independent and Internal Audit processes, both at the Business and Corporate levels, provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements. The Financial Statements of the Company are prepared on the basis of the Significant Accounting Policies that are carefully selected by management and approved by the Board. These, in turn are supported by a set of divisional Delegation Manual & Standard Operating Procedures (SOPs)that have been established for individual units/ areas of operations. The Company uses SAP Systems as a business enabler and also to maintain its Books of Account. The SOPs in tandem with transactional controls built into the SAP Systems ensure appropriate segregation of duties, tiered approval mechanisms and maintenance of supporting records. The systems. SOPs and controls are reviewed by Senior management and audited by Internal Audit whose findings and recommendations are reviewed by the Board of Directors and tracked through to implementation. The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless the Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis. 19. Number of meetings of Board of Directors The Board of Directors of the Company met 5 times during the Financial Year 2014-15, the Company held on 29.05.2014, 14.08.2014, 27.09.2014, 07.11.2014 and 12.02.2015 meetings of the Board of Directors. The gap between any two meetings has been less than four months. 20. Familiarization Program me The Company has conducted the programme through its Managing Director, Whole-time Director. Company Secretary and other Senior Managerial Personnel to familiarize the Independent Directors with Company in following areas:- -FamiIiarization with the Company: -Independent directors' roles, rights and responsibilities; -Board dynamics & functions; -Nature of the Industry in which the Company operates; -Business Model of the Company: -Compliance management. 21. Corporate Social Responsibility As per section 135 of the Companies Act, 2013. all Companies having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more, or a net profit of Rs. 5 crore or more during any financial year are required to constitute a CSR Committee of the Board of Directors comprising three or more Directors, at least one of whom should be an independent director and such company shall spend at least 2 % of the average net profit of the Companies three immediately preceding financial year. The Company is not covered under the above mentioned limits of the act. However it has taken voluntary initiative by forming CSR Committee comprising of two independent directors and an executive director as member. As and when Company meets the required threshold limits of CSR policy further action will be taken accordingly in such respect. 22. Corporate Governance The Company continue to imbibe and emulate the best corporate governance practices aimed at building trust among all stakeholders - shareholders, employees, customers, suppliers and others. The Company believes that fairness, transparency, responsibility and accountability are the four key elements of corporate governance. The Corporate Governance Report presented in a separate section forms an integral part of this Annual Report. 23. Particulars of Contracts or Arrangement with Related Parties All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract! arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party Iran sad ions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: www.texmoplpe.com. 24. Details of Establishment of Vigil Mechanism for Directors and Employees The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail ID, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: www.texmopipe.com. 25. Secretarial Audit Report The Board has appointed M/s. Geetika Agrawal & Co Practising Company Secretaries to conduct Secretarial Audit during the year under review. A Secretarial Audit Report In Form No. MR. 3. given by them is provided in Annexure D.The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 26. Risk Management Policy The Company, like any other enterprise, is exposed to business risk which can be an internal risks as well as external risks. One of the key risks faced by the Company in today's scenario is the wide and frequent fluctuations in the prices of its raw material. Any further increase in prices of raw materials could create a strain on the operating margins of the Company. Inflationary tendencies in the economy and deterioration of macroeconomic indicators can impact the spending power of the consumer because of which down trading from branded products to non-branded can occur which can affect the operating performance of the Company. Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issue can affect our operations and profitability. However the Company is well aware of the above risks and as pan of business strategy has put in mechanism to ensure that they are mitigated with timely action. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. In the opinion of the Board of Directors, none of the aforementioned risks affect and/or threaten the existence of the Company. 27. Management Discussion and Analysis Report The Management Discussion and Analysis Report is presented in a separate section forming the part of the Annual Report, 28. Details of Downstream Investment The Company has not mad e downstream investment during the financial year 2014-15. 29. Directors' Responsibility Statement In terms of provisions of Section 134 (5} of the Companies Act, 2013, the Board of Directors Confirm that :• (i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) 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 of the company for that period; (iii) 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; (iv) the directors had prepared the annual accounts on a going concern basis: and (v) the directors had devised pro per systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. (vi) 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. 30. Material events that have occurred after the Balance Sheet date There has been no material changes and commitments affecting financial position of the Company that have occurred between 1 he balance sheet date and date of this report. 31. Impact on going concern status and company's operations There has been no significant and material orders passed by any regulators or courts or tribunals Impacting the going concern status and company's operations in future. 32. Disclosure regarding issue of employee stock options The Company does not have issued shares under employee's stock options scheme pursuant to provisions of Section Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014, so question does not arise about voting rights not exercised by employee. 33. Disclosure regarding Issue of sweat equity shares The Company does not have issued sweat equity shares pursuant to provisions of Section 54 read with Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014 during the Financial Year. 34. Anti sexual harassment policy The Company has in place an Anti Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace {Prevention. Prohibition and Redressal)Act201 3. An Internal Committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees including trainees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed off during the current financial year. Number of Complaints received: Nil Number of Complaints disposed off: Nil 35. Acknowledgement An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results. For and on behalf of the Board of Directors Sanjay Agrawal Managing Director [DM: 00316249] Vijay Prasad Pappu Whole Time Director [DIN: 02066748] Place: Burhanpur Date: -13.08.2015 |