Your Directors have pleasure in presenting their 23rd Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2015.
1. Financial summary or highlights/Performance of the Company
The financial results for the year are as under: [Rupees in Lacs]
| ||Year ended 31.03.2015 ||Year ended 31.03.2014 |
|Sales and other Income ||4016.02 ||4833.64 |
|Profit before depreciation ||(400.41) ||695.78 |
|Less: Depreciation ||388.61 ||279.82 |
|Profit/(Loss) of the year ||(789.02) ||415.96 |
|Less: Provision for tax of earlier year || ||84.87 |
|Provision for deferred tax ||(36.47) ||54.71 |
|Profit/(Loss) after taxation ||(753.94) ||276.38 |
|Balance brought forward from previous year ||1672.46 ||1396.08 |
|Balance carried to balance sheet ||918.52 ||1672.46 |
Your Board does not recommend any dividend for the financial year 2014-15.
Your Board does not propose to carry to any reserves for the financial year 2014-15.
4. Brief description of the Company's working during the year/State of Company's affair
Total turnover during the year 2014-15 decreased by Rs.820.90 lac (17.05%) compare toprevious year 2013-14 and there is loss of Rs.753.94 lac (aftertax) during the year2014-15 against net profit of Rs.276.40 lac (aftertax) in previous year 2013-14. Due torecession in domestic and international market sales has come down during the year 2014-15and loss accordingly due to decrease in sales and depreciation and overhead expenses.
5. Change in the nature of business if any
There is no change in the nature of business during the financial year 2014-15.
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 thefinancial year and or subsequent to the close of the financial year of the Company towhich the balance 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 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.
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 appropriatenotes to the Audited Statement of Accounts. No qualification reservation or adverseremark or disclaimer has been made by the auditor in their auditors report for theyear 2014-15.
14. Share Capital
Your Company has allotted 6155000 equity shares of Rs.10 each for cash at paraggregating Rs.61550000 on preferential basis to entities of promoters' group duringthe financial year ended 31st March2015.
During the year under review the Company has not issued any other shares nor hasgranted any 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 earnings andoutgo
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 March2014 section 135 of the Companies Act2013 is notapplicable and therefore the Company has not spent any sum towards Corporate SocialResponsibility during the financial year 2014-15.
A) Changes in Directors and Key Managerial Personnel
Your Company has appointed Smt. Anjali Harshavardhan Hedge (DIN -01683723) and ShriNikhil Ramesh Parikh (DIN - 01868080) as independent Directors during the year. ShriNeeraj Pathak Alternate Director to Shri Kirit Kumar Pathak ceased to be AlternateDirector on 6th January 2015.
Your Company has been received a notice under section 160(1) of the Companies Act 2013from members of the Company proposing to appoint Smt. Anjali Harshvardhan Hegde and ShriNikhil Ramesh Parikh as Independent Directors of the Company.
Your Company appointed Shri Vishal Sharma as Chief Financial Officer during the year.However due to his personal reason he resigned as Chief Financial Officer with effectfrom 16th May2015.
Your Company appointed Smt.Prerna Sudeep Bokil as Company Secretary during the year.
Shri Ameet Nalin Parikh and Shri Kirit Kumar Pathak retire by rotation at the ensuingannual general meeting and being eligible offered themselves for re-appointment asDirectors.
B) Declaration by an independent Director(s) and re- appointment if any
A declaration by Shri Sandeep Gul Lalwani Smt. Anjali Harshavardhan Hedge and ShriNikhil Ramesh Parikh Independent Directors that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 have been given andthe same have been displayed on Company's website.
The Board of Directors declare that the Independent Directors Shri Sandeep Gul LalwaniSmt. Anjali Harshavardhan Hedge and Shri Nikhil Ramesh Parikh in the opinion of the Boardare :
a) persons of integrity and they possess relevant expertise and experience;
b) not a promoter of the Company or its holding subsidiary or associate company;
c) not related to promoters or directors of the company or its holding subsidiary orassociate company;
d) have/had no pecuniary relationship with the company its holding or subsidiary orassociate company or promoters or directors of the said companies during the twoimmediately preceding financial years or during the current financial year;
e) none of their relatives have or had pecuniary relationship or transactions with thecompany its holding subsidiary or associate company or promoters or director of the saidcompanies amounting to two percent or more of its gross turnover or total income or fiftylakh rupees whichever is lower during the two immediately preceding financial years orduring the current financial year;
f) neither they or any of their relatives -
i. hold or have held the position of a key managerial personnel or are or have beenemployees of the Company or its holding subsidiary associate company in any of the threefinancial years immediately preceding the current financial year
ii. are or had been employee or proprietor or a partner in any of the three financialyears immediately preceding the current financial year of
a) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company or
b) any legal or consulting firm that has or had any transaction with the company itsholding subsidiary or associate company amounting to ten percent or more of grossturnover of the said firm;
iii) do not hold together with their relatives two percent or more of the total votingpower of the company or
iv) not a Chief Executive or director of any non-profit organization that receivestwenty-five percent or more of its receipts from the company any of the promoters ordirectors of the company or its holding subsidiary or associate company or that holds twopercent or more of the total voting powers of the company;
g) possess qualifications prescribed in Rule 5 of The Companies (Appointment andQualification of Directors) Rules 2014.
Smt. Anjalj Harshavardhan Hedge and Shri Nikhji Ramesh Parikh are eligible forre-appointment at the ensuing annual general meeting.
Details of director seeking re-appointment as per clause 49 of listing agreement withthe 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 01st April 2014 to 31st March 2015 the Board of Directors metseven times on the following dates :
|Sr ||Date ||Board Strength ||No. of Directors Present |
|1 ||30-05-2014 ||7 || |
|2 ||04-06-2014 || ||4 |
|3 ||11-08-2014 || ||4 |
|4 ||12-11-2014 ||7 ||6 |
|5 ||07-01-2015 ||7 ||3 |
|6 ||13-02-2015 ||7 ||6 |
|7 ||30-03-2015 ||7 ||.... 4 |
20. Audit Committee
Audit Committee comprising of the following Directors of the Board re-constituted on30.03.2015:
|Name of Director ||Status |
|Shri Sandeep Gul Lalwani ||Non-Executive Independent Director |
|Shri Nikhil Ramesh Parikh ||Non-Executive Independent Director |
|Shri Ameet Nalin Parikh ||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 Boardhas appointed the following persons as members of vigil committee:
1. Shri Ajay Naishad Desai
2. Shri Sandeep Gul Lalwani
3. Shri Ameet Nalin Parikh
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
Nomination and Remuneration Committee comprising of the following Directors of theBoard re-constituted on 30.03.2015;
|Name of Director ||Status |
|Shri Sandeep Gul Lalwani ||Non-Executive Independent Director |
|Shri Nikhil Ramesh Parikh ||Non-Executive independent Director |
|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/lndependent 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.
The Committee met on 12/11/2014 and 30/03/2015 during the year.
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 the Regional Director North- Western Region Ahmedabad underletter no. RD(NWR) / Sec.297/183/2011 -12/1564 dated 9th August2012 for a period of threeyears with effect from 01.08.2012 to 31.07.2015. Form No. AOC -2 regarding transactionsunder section 188 of the Companies Act 2013 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 Act 2013given by 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 except i) the allotment of 6155000 equity shares on preferential basis toprompters' group entity in violation of SEBI (Substantial Acquisition of Shares andTakeovers) Rules 2011 and ii) filing of two form MGT-14 and DIR-12 after due date underthe Companies Act2013.
Explanation: i) The entities of the promoters' group to whom the aforementioned equityshares have been allotted have appointed the merchant banker to offer 26% of equity sharesof the company to the shareholders of the company as required under The Securities andExchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations2011 and the said offer is under process with the merchant banker as on the date of thisreport.
ii) Two form MGT-14 and DIR-12 under the Companies Act2013 were filed after due datewith additional fee through oversight.
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 inClause 49 of the Listing agreement has been annexed with corporate governance report.
28. 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 heed 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 minimum. |
|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 we do not anticipate any major issue for the coming years. |
|Competition Risk ||Every company is always exposed to competition risk from Europeion Countries. 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. |
29. 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; and
(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 provisionsof all applicable laws and that such systems were adequate and operating effectively.
30. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
The Company has been employing about 5 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 2014-15 and hence no complaint is outstanding as on 31.03.2015 forredressal.
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 and appreciation tothe members for their trust and confidence shown in the Company.
The Board of Directors would like to especially thank all the employees of the Companyfor their dedication and loyalty.
On behalf of the Board of Directors
|Date : 29.05.2015 || |
|Registered Office : || |
|Plot No.43/1 Village: Nurpura ||[Ajay Naishad Desai] |
|P.O. Baska Tal. Halol - 389 350 ||Executive Director |
|Dist. Panchmahals Gujarat ||DIN : 00452821 |
| ||[Ajay Nalin Parikh] |
| ||Executive Director |
Particulars regarding Conservation of Energy Technology Absorption and ForeignExchange Income and Outgo as per rule 8 (3) of the Companies (Accounts) Rules 2014
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 Wholetime 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] ||Current |
| ||(2014-15) ||(2013-14) |
|[iv] Total foreign exchange used ||26.36 ||120.74 |
|[v] Total foreign exchange earned ||775.03 ||215.68 |
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 subsection (1) of section 188 of the CompaniesAct 2013 including certain arm's length transactions 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 arms lengthbasis:
(a) Name(s) of the related party and nature of relationship: Tranzmute Capital &Management Private Limited. Mr. Ameet Nalin Parikh Director of the Company is Director inthe said company
(b) Nature of contracts/arrangements/transactions: Availing professional service inconnection with growth value creation and financial security.
(c) Duration of the contracts / arrangements/transactions: from 01.08.2012 to31.07.2015.
(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 12th April.2012 and the RegionalDirector North- Western Region
Ahmedabad under letter no. RD(NWR) / Sec.297/183/2011 -12/1564 dated 9th August2012for a period of three years with effect from 01.08.2012 to 31.07.2015. /
(g) Amount paid as advances if any: No advance is paid.
Note: Form shall be signed by the persons who have signed the Board's report.
On behalf of the Board of Directors
|Ajay Naishad Desai ||Ajay Nalin Parikh |
|Executive Director ||Executive Director |
|DIN:00452821 ||DIN: 00453711 |