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Axtel Industries Ltd.

BSE: 523850 Sector: Others
NSE: N.A. ISIN Code: INE767C01012
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VOLUME 8558
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P/E 22.03
Mkt Cap.(Rs cr) 144
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OPEN 91.95
CLOSE 90.05
VOLUME 8558
52-Week high 107.00
52-Week low 38.70
P/E 22.03
Mkt Cap.(Rs cr) 144
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Axtel Industries Ltd. (AXTELINDUSTRIES) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 25th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 312017.

1. Financial summary or highlights/Performance of the Company

The financial results for the year are as under:

[Rupees in Lacs]
PARTICULARS YEAR ENDED 31.03.2017 YEAR ENDED 31.03.2016
Sales and other income 7715.95 6734.86
Profit before depreciation 1109.93 916.52
Less: Depreciation 278.21 344.58
Profit/(Loss) of the year 831.72 571.94
Less: Provision for tax 163.71 124.00
Provision for deferred tax (15.44) (32.18)
Profit/(Loss) after taxation 683.45 480.12
Balance brought forward from previous year 1369.76 918.52
Arrears of Depreciation NIL 28.88
Balance carried to balance sheet 2053.21 1369.76

2. Dividend

Your Board does not recommend any dividend for the financial year 2016-17

3. Reserves

Your Board does not propose to carry to any reserves for the financial year 2016-17.

4. Brief description of the Company's working during the year/State of Company's affair

Total turnover during the year 2016-17 increased by Rs. 898.49 lac (increase of 13.39%)compare to previous year 2015-16 and there is profit of Rs. 68345 lac (after tax)(increase of 42.35%) during the year 2016-17 against profit of Rs.480.12 lac (after tax)during the year 2015-16.

5. Change in the nature of business if any

There is no change in the nature of business during the financial year 2016-17.

6. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report

No material changes occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of the report

7. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

No significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the financialyear and or subsequent to the close of the financial year of the Company to which thebalance sheet relates and the date of the report

8. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements

The Company has appointed internal auditor for adequacy of internal financial controlsand your Board has taken adequate care for financial control.

9. Details of Subsidlary/Joint Ventures/Associate Companies

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

10. Performance and financial position of each of the subsidiaries associates andJoint venture companies included in the consolidated financial statement.

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

11. Deposits

Your Company has not accepted any deposit during the year and there was no deposit atthe beginning of the year. Therefore the details relating to deposits covered underChapter V of the Act is not applicable.

12. Statutory Auditors

The present statutory auditor M/s. V.K. Shastri & Co. Chartered Accountants hascompleted more than five years in the Company. Pursuant to the provisions of section 139of the Companies Act 2013; the said auditor is not eligible for re-appointment asstatutory auditor of the Company for a period of five years now onwards. The auditcommittee of the Company has considered the qualifications and experience of M/s VGA& Associates Chartered Accountants Vadodara and recommended their appointment.

The Company has obtained a letter of consent and also a certificate under section 139and 141 of the Companies Act 2013 from M/s. VCA & Associates to the effect thattheir appointment if made would be within the limits prescribed in the said section.

13. Auditors' Report

The observations of the Auditors are explained wherever necessary in an appropriatenote to the Audited Statement of Accounts. No qualification reservation or adverse remarkor disclaimer has been made by the auditor in their auditors' report for the year 2016-17.

14. Share Capital

During the year under review the Company has not issued any securities nor has grantedany stock option or sweat equity.

15. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 forming part of the Board's reportis attached herewith as (Annexure-G)

16. Conservation of energy technology absorption and foreign exchange earnings andoutgo

The details of conservation of energy technology absorption foreign exchange earningsand outgo are attached herewith (Annexure-A)

17. Corporate Social Responsibility (CSR)

The Company spent Rs.1.33 lakh (Rupees One Lakh Thirty Three Thousands Only) towardscorporate social responsibility during the year 2016-17 as required under section 135 ofthe Companies Act 2013. Report on CSR activities in terms of section 135 of the CompaniesAct 2013 is annexed to this report (Annexure-D)

18. Directors & Key Managerial Personnel

(A) Shri Ameet Nalin Parikh (DIN 00007036) and Shri Kirit Kumar Pathak (DIN01849295) Directors retire by rotation at the ensuing annual general meeting and beingeligible offered themselves for re-appointment as Directors.

Shri Hardip Singh Bubber Director resigned as Director with effect from 11th November2016 and accepted by the Board of directors with effect from 11th November2016.

(B) Declaration by an Independent Director(s) and re- appointment If any

A declaration by Independent Directors that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 have been received.

Shri Ameet Nalin Parikh (DIN 00007036) and Shri Kirit Kumar Pathak (DIN 01849295)Directors of the Company retiring by rotation and eligible for re-appointment have giventheir consent and declaration under form DIR-8 pursuant to Section 164(2) read with Rule14(1) of Companies (Appointment and Qualification of Directors) Rules 2014. Details ofShri Ameet Nalin Parikh and Shri Kirit Kumar Pathak seeking re-appointment as perRegulation 36 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulation 2015 with the Bombay stock exchange is attachedherewith (Annexure- E)

(C) Formal Annual Evaluation

The Company has devised a policy for performance evaluation of Independent DirectorsBoard Committees and individual Directors which includes criteria for performanceevaluation of executive directors and non-executive directors in evaluating thesuitability of individual Board members the Committee may take into account factors suchas;

i. General understanding of the Company's business;

ii. Educational back ground and experience;

iii. Personal and professional ethics integrity and values;

iv. Willingness to devote sufficient time and energy in carrying out their duties andresponsibilities effectively.

19. Number of meetings of the Board of Directors

During the year from 1st April 2016 to 31st March 2017 the Board of Directors metfive times on the following dates:

Sr Date Board Strength No. of Directors Present
1 27-05-2016 9 8
2 01-08-2016 9 5
3 10-10-2016 9 3
4 11-11-2016 9 5
5 08-02-2017 8 7

20. Audit Committee

The members of the Audit Committee of the Company are as under:

No. Name of Director Designation
1 Shri Sandeep Gul Lalwani Non-Executive Independent Director
2 Shri Nikhil Ramesh Parlkh Non-Executive independent Director
3 Shri Ameet Nalin Parikh Non-Executive Director

There was no occasion regarding non acceptance of any recommendation of the AuditCommittee during the year

21. Details of establishment of vigil mechanism for directors and employees

The Board has appointed the following persons as members of vigil committee:

No. Name of Director Designation
1 Shri Ajay Naishad Desai Whole-time Director
2 Shri Sandeep Gul Lalwani Non-Executive Independent Director
3 Shri Ameet Nalin Parikh Non-Executive Director

The Company has framed a whistle blower policy in terms of listing agreement and thesame may be accessed on the \ Company's website.

22. Nomination and Remuneration Committee

The members of Nomination and Remuneration Committee of the Company are as under:

No. Name of Director Designation
1 Shri Sandeep Gul Lalwani Non-Executive Independent Director
2 Shri Nikhil Ramesh Parikh Non-Executive Independent Director
3 Mrs Anjali Harshvardhan Hegde Non-Executive Independent Director

The policy formulated by nomination and remuneration committee:

The terms of reference of the committee inter alia include succession planning forBoard of Directors and Senior Management Employees identifying and selection ofcandidates for appointment of Directors/independent Directors based on certain laid downcriteria identifying potential individuals for appointment of Key Managerial personneland other senior managerial position and review the performance of the Board of Directorsand Senior Management personnel including Key managerial personnel based on certaincriteria approved by the Board. While reviewing the performance the committee ensuresthat the remuneration is reasonable and sufficient to attract retain and motivate thebest managerial talents remuneration commensurate with the performance of individual andgroup and also maintains a balance between both short and long term objectives of thecompany.

23. Particulars of loans guarantees or investments under section 186

The Company has not given any loan guarantees or made investments under section 186 toany person or body corporate except loan to employees of the Company as per Company'spolicy for employees and investment in mutual funds.

24. Particulars of contracts or arrangements with related parties:

The Company has not entered into any contract or arrangement with related partyreferred to in sub-section (1) of section 188 of the Companies Act 2013 except contractwith Tranzmute Capital & Management Private Limited to avail professional serviceswhich has been approved by passing resolution at the annual general meeting of the Companyheld on 31st August 2015 for a period of five years with effect from 01.10.2015 to30.09.2020. Form No. AOC -2 regarding transactions under section 188 of the Companies Act2013 is enclosed herewith (Annexure-B)

25. Managerial Remuneration

Disclosures pursuant to section 197(12) of the Companies Act 2013 read with Rule 5(1)5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are enclosed herewith (Annexure-C).

26. Secretarial Audit Report

The Secretarial Audit Report pursuant to section 204(1) of the Companies Act 2013given by M/s. Dinesh Mehta & Co. a company secretary in practice enclosed herewith(Annexure-F).

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

27. Corporate Governance Certificate

The Compliance certificate from M/s. Dinesh Mehta & Co. a company secretary inpractice regarding compliance of conditions of corporate governance as stipulated inSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulation 2015 has been annexed with corporate governance report (Annexure-I).

28. Code of Conduct

The Company has adopted a code of conduct for its directors and senior designatedmanagement personnel. All the Board members and senior management personnel have affirmedtheir compliance of code of conduct.

29. Risk management policy

In today's economic environment risk management is a very important part of business.The main aim of risk management is to identify monitor and take precautionary measures inrespect of the events that may pose risks for the business. Your Company's risk managementis embedded in the business processes. Your company has identified the following risks:

Key Risk Impact to Axtel Industries Ltd Mitigation Plans
Commodity Price Risk Risk of price fluctuation on basic raw materials like steel components power as well as finished goods used in the process of manufacturing. The Company commands excellent business relationship with the buyers. In case of major fluctuation either upwards or downwards the matter will be mutually discussed and compensated both ways. Also by focusing on new value added products helps in lowering the impact of price fluctuation in finished goods.
Uncertain global economic environment ~ slow growth In global economy Impact on demand and realization of exports of food processing plant and machinery. The Company has potentiality in domestic market and the people do not compromise on food and it will not affect much.
Interest Rate Risk Any increase in interest rate can affect the finance cost. Dependence on debt is very minimum and wo have enough funds to meet the need arises.
Foreign Exchange Risk Any volatility in the currency market can impact the overall profitability. The Company has potentiality in domestic market. In case of major fluctuation either upwards or downwards the effect will bo minimal
Human Resources Risk Your Company's ability to deliver value is dependent on its ability to attract retain and nurture talent. Attrition and non-availability of the required talent resource can affect the overall performance of the Company By continuously benchmarking of the best HR practices and carrying out necessary improvements to attract and retain the best talent. Company does not anticipate any major issue for the coming years
Competition Risk Every company is always exposed to competition risk. The increase in competition can create pressure on margins market share etc. By continuous efforts to enhance the brand image of the Company by focusing on quality cost timely delivery and customer service. By introducing new product range commensurate with demands your company plans to mitigate the risks so involved.
Compliance Risk ~ increasing regulatory Requirements. Any default can attract penal provisions. By regularly monitoring and review of changes in regulatory framework.
Industrial Safety Employee Health and Safety Risk. The engineering industry is exposed to accidents and injury risk due to human negligence. By development and implementation of critical safety standards across the various departments of the factory establishing training need identification at each level of employee.

30. Directors' Responsibility Statement

Your Directors state that—

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

31. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has been employing about 7 women employees in various cadres within thefactory premises. The Company has in place an anti-harassment policy in tine with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaint Committee has been set up to redress complaintsreceived regularly and are monitored by women line supervisors who directly report to theExecutive Director. All employees (permanent contractual temporary trainees) arecovered under the policy. There was no compliant received from any employee during thefinancial year 2016-17 and hence no complaint is outstanding as on 31.03.2017 forredressal.

32. Acknowledgements

The Board of Directors gratefully acknowledge the assistance and co-operation receivedfrom the Bank of Baroda and all other statutory and non-statutory agencies for theirco-operation. The Board of Directors also wish to place on record their gratitude andappreciation to the members for their trust and confidence shown in the Company. The Boardof Directors would like to especially thank all the employees of the Company for theirdedication and loyalty.

By Order of the Board of Directors

Ajay Nalshad Desai Ajay Nalin Parikh
Executive Director Executive Director
DIN:00452821 DIN:00453711
Dated : 22/05/2017
Registered Office:
Plot No.43/1 Village: Nurpura P.O. Baska
Tal. Halo! - 389 350 Dist. Panchmahals Gujarat

ANNEXURE-A

Particulars regarding Conservation of Energy Technology Absorption and ForeignExchange income and Outgo as per rule 8(3) of the Companies (Accounts) Rules2014:

A) Conservation of energy:
(i) the steps taken or impact on conservation of energy; NIL
(ii) the steps taken by the company for utilising alternate sources of energy; NIL
(iii) the capital investment on energy conservation equipments; NIL

(B) Technology absorption:

(i) the efforts made towards technology absorption : Technology developed by the Whole Time Directors
(ii) the benefits derived like product improvement cost reduction : product development or import substitution The Company developed improved various products and import substitution in-house.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- : N.A.
(a) the details of technology imported : N.A.
(b) the year of import : N.A.
(c) whether the technology been fully absorbed : N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof N.A.
(iv) the expenditure incurred on Research and Development : N.A.

(C) Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.

Foreign exchange earning and outgo

[i] Activities relating to exports Sale of food processing plants & machinery
[ii] Initiatives taken to increase export : The Directors visit clients abroad several times and the Company expects to receive several export orders from time to time.
[iii] Development of new export markets for products and services and export plans : Not Applicable

 

[Rupees in Lacs]
Particulars F.Y. 2016-17 F.Y. 2015-16
Total foreign exchange used 22.41 264.57
Total foreign exchange earned 1693.83 90.65

Annexure-B

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 Of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section

(1) of section 188 of the Companies Act 2013 including certain arm's lengthtransactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm's length basis: NOTAPPLICABLE

(a) Name(s) of the related party and nature of relationship:

(b) Nature of contracts/arrangements/transactions;

(c) Duration of the contracts / arrangements/transactions:

(d) Salient terms of the contracts or arrangements or transactions including the valueif any:

(e) Justification for entering into such contracts or arrangements or transactions:

(f) date(s) of approval by the Board:

(g) Amount paid as advances if any:

(h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to section 188:

2. Details of material contracts or arrangement or transactions at arm's lengthbasis:

(a) Name(s) of the related party and nature of relationship: Tranzmute Capital &Management Private Limited. Mr.Ameet Nalin Parikh Non-Executive Director of the Companyis Director in the said company

(b) Nature of contracts/arrangements/transactions; Availing professional service inconnection with growth value creation and financial security

(c) Duration of arrangements: from 01.10.2015 to 30.09.2020.

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Tranzmute Capital & Management Private Limited provides services forestablishment of vision and a strategy for the Company a sound strategy for each of theenablers and for growth and implementation and monitoring the said strategies to enhancecompany's growth.

(e) date of approval by the Board: Board approved on 29th May 2015 for a period offive years with effect from 01.08.2015 to 30.09.2020.

(g) Amount paid as advances if any: No advance is paid.

By Order of the Board of Directors

Ajay Naishad Desai Ajay Nalin Parikh
Executive Director Executive Director
DIN:00452821 DIN:00453711
Date: 22/05/2017
Place: Village: Nurpura

ANNEXURE-C

Information as per Section 134 of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

Note: Rules 5(2) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are not applicable as no employee of the Company was in receipt ofremuneration for the year in the aggregate of Rs.one crore and two lakh and/ or Rs. eightlakh fifty thousand per month during the financial year 2016-17

Disclosure In the Board's Report under Rule 5 of Companies (Appointment &Remuneration) Rules 2014

(i) The Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2016-17 Director's Name Ratio to median remuneration
Mr. Ajay Naishad Desai Whole Time Director 20.43
Mr Ajay Nalin Parikh Whole Time Director 20.43

(ii) The Percentage increase in 'remuneration of each Director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear 2016-17 compared to 2015-16

Director's/CFO/CEO/CS/name % increase in remuneration
Mr. Ajay Naishad Desai WTD 0%
Mr. Ajay Nalin Parikh WTD 0%
Mrs Prerna Sudeep Bokil CS

Mr. R K Bhavsar CFO

0%
9.18%
(iii) Percentage increase in the median remuneration of employees in the financial year 2016-17 compared to 2015-16 16.19%
(iv) Number of permanent employees on the rolls of the company As on 31.03.2017 As on 31.03.2016
154 147

 

During 2016-17 During 2015-16
(viii) Average percentile increase in salaries of Employees other than managerial personnel 16.19% 7.28%
Justification for increase with reasons for any exceptional circumstances Normal industry standards applied based on performance of each employee

The Board of Directors of the Company affirms that the remuneration is as per theremuneration policy of the Company

The statement showing the names of every employee of the company as per Rule 5(2)forming part of Director's Report is not applicable.

ANNEXURE-E

DETAILS OF DIRECTOR SEEKING RE-APPOINTMENT AS PER REGULATION 36 OF SEBI (LODR)Regulation** 201S WITH THE BOMBAY STOCK EXCHANGE

Name of the Director Ameet Nalln Parikh Kirit Kumar Pathak
DIN No. 00007036 01849295
Date of Birth 03/11/1960 10/09/1952
Type of appointment Director retiring by rotation Director retiring by rotation
Date of Appointment 01/12/2009 13/11/1991
Areas of Specialization Risk management & finance Business management
Qualifications Chartered Accountant Ph.D.
No.of Shares Held in the Company NIL 765144
List of Directorship held in other Companies 1. Tranzmute Capital & Management Private Limited
2. India Capital Research and Advisors Private Limited 1. Mannk Foods (India) Private Limited
3. Desmet Ballestra India Private Limited {Alternate Director)

4. A20 Software India Private Limited

2. Nilons Enterprises Private Limited
5. Veiankani Information Systems Limited
6. Mediascope Publicitas (India) Private Limited
7 Pdm Media (India) Private Limited
8. Tranzmute Business Advisory LLP
9. Morphis Business Advisory LLP
Chatrman/member of the Committee of the Board of Directors of this Company Member- Audit committee

Member- Stakeholders Relationship committee

Member- Vigil Mechanism committee.

NIL
Chairman/member of the Committee of the Board of Directors of other Companies NIL NIL
Relation with Key Managerial Personnel and Directors Brother of Mr. Ajay Nalin Parikh Brother in law of Mr. Ajay Naishad Desai
Justification for appointment Excellent knowledge in Risk management & finance Excellent knowledge in business