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Texmo Pipes and Products Directors Report, Texmo Pipes Reports by Directors
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Texmo Pipes and Products

BSE: 533164|NSE: TEXMOPIPES|ISIN: INE141K01013|SECTOR: Plastics
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Directors Report Year End : Mar '18    Mar 16

The Members,

The Directors have pleasure in presenting their 10th Annual Report on the business and operations of your Company together with the Audited Financial Statements and the Auditor''s Report for the year ended 31st March, 2018.

1. Financial summary or highlights/Performance of the Company (Standalone and Consolidated) (Amount in Rs. Lakh)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Turnover

25232.00

28,393.93

25829.82

32,172.97

Profit before Interest, Depreciation and Tax Less Interest Less Depreciation

1327.00

660.77

531.17

1447.01

731.05

664.85

1313.16

660.77

531.17

1424.87

731.05

664.85

Profit before tax Less Provision for tax Current tax Deferred tax

Excess provision for earlier year

135.06

32.71

73.92

0.03

51.11

55.32

(52.84)

161.06

121.22

32.71

73.91

0.03

28.97

55.32

(52.84)

161.06

Profit after tax Prior year adjustment

28.41

(112.43)

14.57

(134.57)

Profit after tax & prior year adjustments

28.41

(112.43)

14.57

(134.57)

Profit after adjustment of discontinued operations

28.41

(112.43)

15.50

(134.22)

Balance of profit brought forward from earlier years

(1205.42)

(1078.71)

1936.99

2085.48

Transferred from Revaluation Reserve

12.47

7.79

12.47

7.79

Adjustment relating to Fixed Assets (net of Deferred Tax)

-

-

-

-

Unamortized cost written off on discounting of loans to subsidiary

(24.83)

(22.99)

(1.84)

(22.99)

Other comprehensive income

(12.61)

0.93

(12.61)

0.93

Exchange difference on translation of financial statements of foreign operations

-

-

(0.66)

-

Profit available for Appropriations:

(1201.98)

(1205.42)

1949.85

1936.99

Appropriations

Transfer to General Reserves Proposed dividend:

Equity

Preference

Profit carried to Balance Sheet

(1201.98)

(1205.42)

1949.85

1936.99

During the year under review, the Company recorded total revenue of Rs. 25788.67 Lakh as compared to Rs.28870.62 Lakh in the previous year which is declined by 10.67%. The Company has earned a net profit of Rs. 28.41 Lakh as against loss of Rs. 112.43 Lakh in the previous year. Your Directors are hopeful that the company may be able to show better performance in coming year.

Your company recorded Production of 22886.08 MT for the year ended 31st March, 2018 as against 22205.65 in the previous year which shows a increase to 3.06%.

2. Adoption of Indian Accounting Standards (IND-AS)

Pursuant to Companies (Indian Accounting Standards) Rules, 2015, IND-AS have become applicable to your Company with effect from 1st April, 2017, accordingly the Company has prepared all its financial statements in compliance with IND-AS. Figures of previous financial year 2016-17 have also been restated as per applicable IND-AS. Impacts of first time adoption of IND-AS and various reconciliations are provided in the Standalone financial statements (please refer to Note 43 to the standalone financial statement).

3. Implementation of SAP 9.2

The Company has implemented SAP 9.2 a leading ERP solution with effect from 1st April, 2017 by switching over from existing ERP. The implementation of SAP 9.2 shall integrate all the business process across the organization. The new Regime of SAP shall bring discipline by transforming the work culture thereby bringing transparency and structured information system.

4. Change in nature of Business

During the year under review, there has been no change in the nature of business of the Company.

5. Dividend

Your Directors do not recommended any dividend for the year ended 31st March, 2018 and the available surplus be retained to strength the net worth of the company.

6. Transfer to Reserves

Your Directors do not proposed any amount to be transferred to the Reserves for the year ended 31st March, 2018.

7. Details of Subsidiary/Associate Companies

The Company had two subsidiaries namely Tapti Pipes & Products Limited FZE (Overseas Subsidiary). Another subsidiary was Texmo Petrochemicals LLP.

Texmo Petrochemicals LLP has ceased to be subsidiary of the Company, during the year under review w.e.f 10.01.2018.

The consolidated financial statements of your Company for the financial year 2017-18, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (LODR) Regulations, 2015. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries, as approved by their respective Board of Directors.

A separate statement in Form AOC-1 containing the salient features of financial statements of 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, 2013.

8. Commission received by Directors from Subsidiary

During the year under review none of the directors of the company are inreceipt of the commission or remuneration from subsidiary of the Company, as provided under section 197 (14) of the Companies Act, 2013.

9. Particulars of Employees

The Company has not appointed any employee(s) in receipt of remuneration exceeding the limits specified under Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

10. Details relating to remuneration of Director, KMPs and employees

Disclosure pertaining to remuneration and other details as required Section 197(12) of the Companies Act 2013 read with rule 5 (1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure A.

11. Particulars of loans, guarantees, investments outstanding during the financial year

Particulars of loans given, investments made, guarantees given and 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 7 and 8 to the standalone financial statement).

12. Extract of the annual return

In terms of provision of Section 134(3)(a) of the Companies Act, 2013, the extract of the Annual Return as provided under sub-section (3) of the Section 92 of the Companies Act, 2013 in Form MGT-9 forming part of this Board''s Report and is annexed as Annexure -B.

13. Deposits

Your company has not invited/accepted any deposit within the meaning of Section73 of the Companies Act, 2013 and Rules made there under, during the year under review.

14. Conservation of energy, technology absorption, foreign exchange earnings and outgo

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and out-go, in accordance with the requirement of the Section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Account) Rules, 2014 forms part of this Board''s Report and is annexed as Annexure-C.

15. Particulars of contracts or arrangements 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 transactions. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013 for the financial year 2017-18 in the prescribed format, AOC 2 has been enclosed with the report as Annexure-D.

The Policy on materiality of related party transactions and manner of dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: www.texmopipe.com.

16. Auditors:

A. Statutory Auditors:

M/s. Pankaj Somaiya & Associates LLP, Chartered Accountants, Burhanpur (M.P.), (Firm Registration No. 010081C/C400001), the Statutory Auditors of the Company, hold office till the conclusion of the 10th Annual General Meeting of the Company. The Board has recommended the appointment of M/s Anil Kamal Garg & Co; Chartered Accountants, Indore (Firm Registration No. 004186C) as the Statutory Auditors of the Company in their place, for a term of five consecutive years, from the conclusion of this Annual General Meeting till the conclusion of the 15th Annual General Meeting of the Company. The company has received from M/s Anil Kamal Garg & Co; Chartered Accountants, Indore (Firm Registration No. 004186C) an eligibility letter under section 141 of the Companies Act, 2013 and rules made thereunder that they are not disqualified.

B. Secretarial Auditor:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed CS Dinesh Kumar Gupta, Company Secretary in Practice, Indore (M.P), to undertake the Secretarial Audit of the Company for the Financial Year 2018-19.

C. Cost Auditors:

During the year under review, M/s Sushil Kumar Mantri & Associates, Cost Accountants (Firm Registration No 101049) have tendered their resignation for Financial Year 2017-18 due to their personal reason. The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Saurabh Parikh and Associates, Cost Accountants, (Firm Registration No. 101495), as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2017-18.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Saurabh Parikh and Associates, Cost Accountants, (Firm Registration No. 101495), as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2018-19. In accordance with the provisions of Section 148 of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors require ratification by the shareholders of the company.

17. AUDITOR’S REPORTS

A. Statutory Auditor’s 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.

B. Secretarial Auditor’s Report:

Pursuant to the provisions of section 204 (1) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personal) Rules, 2014, the Company has obtained a Secretarial Audit Report in the prescribed From MR-3, from CS Dinesh Kumar Gupta, Company Secretary in practice, Indore (M.P.). The Secretarial Auditor'' Report is annexed herewith as Annexure -E

18. Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.

19. Share Capital

During the Financial Year 2017- 18, there has been increase in paid-up share capital of the Company from Rs. 23,82,00,000/- to Rs. 25,02,00,000/-, pursuant to allotment of 12,00,000 Equity shares of face value of Rs. 10/- at a premium of Rs. 12/- each on preferential basis to Shree Padmavati Irrigations LLP, Promoter Group entity.

The Company has complied all the provisions of Companies Act, 2013 & Rules made thereunder, SEBI (LODR) Regulations, 2015, SEBI (ICDR) Regulations, 2009, SEBI (SAST) Code and all other applicable provisions including obtaining all requisite approvals from National Stock Exchange of India Ltd & BSE Ltd where the shares of the Company are listed.

20. Disclosure regarding issue of employee stock options

The Company has not issued any shares under employee''s stock options scheme pursuant to provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.

21. Disclosure regarding issue of sweat equity shares

The Company has not 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.

22. Details of Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Smt. Rashmi Devi Agrawal (DIN 00316248), retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. Smt. Rashmi Devi Agrawal has given declaration in terms of Section 164(2) of the Companies Act, 2013 to the effect that she is not disqualified from being reappointed as a Director of the Company.

During the Financial Year under review there is no change has taken place in Directors or KMPs of the Company.

23. Declaration given by Independent Director(s) and reappointment.

In compliance with section 149(7) of the Act, all Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

24. 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 Auditor whose findings and recommendations are reviewed by the Audit Committee of 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.

25. Number of meetings of Board of Directors and committees

The details of Board and Committee meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period as prescribed under the Companies Act, 2013.

26. Audit Committee

The Audit Committee comprises of 4 (four) Members of which 3 (three) are independent including Chairman. All recommendations made by the Audit Committee were accepted by the Board during FY 2017-18.

27. Familiarization Programme

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:- Familiarization 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.

The Policy on Familiarization Programme may be accessed on the Company''s website at the link: WWW.texmopipe.com.

28. Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 is not applicable to the Company, therefore the company has not developed and implemented any Corporate Social Responsibility initiatives.

29. 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 as Annexure - F.

30. 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 Regulation, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an email, 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. During the year no complaint was received on vigil mechanism.

31. Nomination and Remuneration Policy

The Company framed a policy for Nomination and Remuneration of all Directors& KMPs etc in accordance with provisions of section 178 of Companies Act, 2013 and Rules made thereunder and other applicable provisions of Companies Act, 2013, provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to harmonize the aspirations of human resources consistent with the goals of the Company. Board of Directors of the Company approved and updated the said policy as and when required.

The Nomination and Remuneration Committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole and for individual members. Members are expected to possess the required qualifications, integrity, expertise and experience for the position. They should also possess the deep expertise and insights in sectors / areas relevant to the Company and ability to contribute to the Company''s growth.

32. 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 part 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.

33. Transfer to Investor Education and Protection Fund

During the year under review the Company has transferred Rs 20,250/- (Rupees Twenty Thousand Two Hundred Fifty only) to Investor Education and Protection Fund, said amount were pertains to application money and remained unclaimed for previous seven years. The Company has followed the requisite procedure and complied all relevant provisions in this regard.

34. Management Discussion and Analysis Report

Management Discussion and Analysis, as required under Regulation 34(3) of SEBI (LODR) Regulations, 2015 read with Schedule V of said Regulations, forms part of this Board''s report as Annexure-F.

35. 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 for the financial year 2017-18, 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 and loss 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;

(v) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(vi) 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.

36. Material changes and commitments affecting the financial position of the Company.

There have been no material changes and commitments affecting financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

37. Details of significant and material orders passed by the regulators or courts or tribunal

There were no significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and Company''s operations in future.

38. 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) Act 2013. 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

39. Acknowledgement

Your Directors would like to gratefully acknowledge and place on record their sincere appreciation for the cooperation and assistance received from its stakeholders, advisors, valued customers, suppliers, banks, consultants, financial institutions, government authorities and stock exchanges. The Directors also wish to place on record their sincere appreciation of the devoted and dedicated services rendered by all Executives, Staff Members and Workmen of the Company.

For and on behalf of the Board of Directors

Place:- Burhanpur Sanjay Kumar Agrawal Vijay Prasad Pappu

Date:- 25.08.2018 Managing Director Whole Time Director cum CFO

(DIN 00316249) (DIN 02066748)

Source : Dion Global Solutions Limited
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