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Axtel Industries Ltd.

BSE: 523850 Sector: Others
NSE: N.A. ISIN Code: INE767C01012
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(-2.32%)
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OPEN 82.95
PREVIOUS CLOSE 81.90
VOLUME 9869
52-Week high 107.00
52-Week low 18.65
P/E 18.96
Mkt Cap.(Rs cr) 129
Buy Price 79.00
Buy Qty 100.00
Sell Price 80.00
Sell Qty 6.00
OPEN 82.95
CLOSE 81.90
VOLUME 9869
52-Week high 107.00
52-Week low 18.65
P/E 18.96
Mkt Cap.(Rs cr) 129
Buy Price 79.00
Buy Qty 100.00
Sell Price 80.00
Sell Qty 6.00

Axtel Industries Ltd. (AXTELINDUSTRIES) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 24th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 312016.

1. Financial summary or highlights/Performance of the Company

The financial results for the year are as under:

[Rupees in Lacs]
PARTICULARS YEAR ENDED 31.03.2016 YEAR ENDED 31.03.2015
Sales and other Income 6734.86 4016.02
Profit before depreciation 916.52 (400.41)
Less: Depreciation 344.58 388.61
Profit/(Loss) of the year 571.94 (789.02)
Less: Provision for tax 124.00 1.39
Provision for deferred tax (32.18) (36.47)
Profit/(Loss) after taxation 480.12 (753.94)
Balance brought forward from previous year 918.52 1672.46
Arrears of Depreciation 28.88 NIL
Balance carried to balance sheet 1369.76 918.52

2. Dividend

Your Board does not recommend any dividend for the financial year 2015-16.

3. Reserves

Your Board does not propose to carry to any reserves for the financial year 2015-16.

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

Total turnover during the year 2015-16 increased by Rs.2719.90 lac (68.12%) compare toprevious year 2014-15 and there is profit of Rs.480.12 lac (after tax) during the year2015-16 against loss of Rs.753.94 lac (after deferred tax) in previous year 2014-15.

5. Change in the nature of business if any

There is no change in the nature of business during the financial year 2015-16.

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 courtsor tribunals 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 referenceto the Financial 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 Subsidiary/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

M/s. V.K. Shastri & Co. Chartered Accountants Auditors of the Company retire atthe ensuing Annual General Meeting and are eligible for reappointment.

The Company has obtained a letter of consent and also a certificate under section 139and 141 of the Companies Act 2013 from the Auditors to the effect that theirappointment 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 2015-16.

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-E)

16. Conservation of energy technology absorption and foreign exchange earningsand outgo

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

17. Corporate Social Responsibility (CSR)

As net worth of the Company is below rupees five hundred crore or turnover is belowrupees one thousand crore or a net profit is below rupees five crore during the precedingfinancial year ended on 31st March 2015 section 135 of the Companies Act 2013 is notapplicable and therefore the Company has not spent any sum towards Corporate SocialResponsibility during the financial year 2015-16.

18. Directors & Key Managerial Personnel

(A) Shri Ajit Singh Bubber Non-Executive Director and Shri Hardip Singh BubberNon-Executive Director retire by rotation at the ensuing annual general meeting and beingeligible offered themselves for re-appointment as Directors.

Mr. Vishal Sharma Chief Financial Officer resigned on 15.05.2015. Your Companyappointed Shri Rajendra Kantilal Bhavsar as Chief Financial Officer during the year.

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 Ajit Singh Bubber Non-Executive Director and Shri Hardip Singh Bubber Directorsof the Company retiring by rotation and eligible for re-appointment have given theirconsent and declaration under form DIR-8 pursuant to Section 164(2) read with Rule 14(1)of Companies (Appointment and Qualification of Directors) Rules 2014. Details of ShriAjit Singh Bubber and Shri Hardip Singh Bubber seeking re-appointment as per Regulation 36of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulation 2015 with the Bombay stock exchange is attached herewith(Annexure- F)

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 the suitability of individual Board members the Committee may take intoaccount factors such as:

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 2015 to 31st March 2016 theBoard of Directors met five times on the following dates:

Date Board Strength No. of Directors Present
1 29-05-2015 9 6
2 12-08-2015 9 5
3 02-11-2015 9 6
4 03-02-2016 9 3
5 12-02-2016 9 7

20. Audit Committee

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

Name of Director Designation
1 Shri Sandeep Gul Lalwani Non-Executive Independent Director
2 Shri Nikhil Ramesh Parikh 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 investments under section 186 to anyperson or body corporate except loan to employees of the Company as per Company's policyfor employees.

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 Act2013 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 Act2013 givenby M/s. Dinesh Mehta & Co. a company secretary in practice enclosed herewith(Annexure-D).

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.

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 agreed tofollow 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 we 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 be 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. D irectors' 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 line 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 2015-16 and hence no complaint is outstanding as on 31.03.2016 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 Naishad Desai Ajay Nalin Parikh
Executive Director Executive Director
Dated : 01.08.2016 DIN: 00452821 DIN: 00453711
Registered Office:
Plot No.43/1 Village: Nurpura P.O. Baska
Tal. Halol - 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 mprovement 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. 2015-16 F.Y. 2014-15
Total foreign exchange used 264.57 26.36
Total foreign exchange earned 90.65 775.03