BOARD'S REPORT & MANAGEMENT DISCUSSION AND ANALYSIS
THE MEMBERS OF TAMILNADU STEEL TUBES LTD.
The Directors are pleased to present the 38th Annual Report of the Company togetherwith the Audited Financial Statements for the year ended March 31 2017. The ManagementDiscussion and Analysis forms part of this report.
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| ||2016-17 ||2015-16 |
|Revenue from Operations (Net) and other income ||80.68 ||79.11 |
|Profit Before Tax (PBT) ||1.59 ||3.45 |
|Provision for Tax ||0.53 ||0.92 |
|Profit After Tax (PAT) ||0.99 ||2.53 |
|Balance brought forward from previous year ||4.14 ||1.61 |
|Profit available for Appropriations ||5.11 ||4.14 |
|Appropriations : || || |
|Interim Equity Dividend ||- ||- |
|Proposed Final Equity Dividend ||- ||- |
|Tax on Equity Dividends ||- ||- |
|Transfer to General Reserve ||- ||- |
|Surplus carried to the next years account ||5.11 ||4.14 |
2. OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE Consolidated Income
Consolidated income comprising Revenue from Operations (Net) and other income for theyear was Rs.80.68 crores as compared to Rs.79.11 crores in 2015 - 16.
Total consolidated Revenue from Operations (Net) increased to Rs.80.52 crores fromRs.78.40 crores in 2015- 16.
Other Operating Revenue
Other operating revenue for the year ended March 31 2017 includes Rs. 0.16 crore (lastyear Rs.0.70 crore)
Consolidated Profit Before Tax
Consolidated profit before tax for the year was Rs.1.50 crores as compared to Rs.3.45crores in 2015-16.
Consolidated Profit After Tax
Consolidated Profit after Tax for the year was Rs.0.97 crore as compared to Rs.2.53crores in 2015 - 16.
No material changes or commitments have occurred between the end of the calendar yearand the date of this Report which affect the financial statements of the Company inrespect of the reporting year.
3. TRANSFER TO RESERVES
The Company has not proposed to transfer any amount to the General Reserves. Thus anamount of Rs.0.97 crore is proposed to be retained in the Statement of Profit and Loss.
4. SHARE CAPITAL
The Companys paid up Equity Share Capital as on March 31 2017 was Rs.5.12Crores. The Company has neither issued shares with different rights as to Dividend Votingor otherwise nor issued shares (including sweat equity shares) to the employees orDirectors of the company under any Scheme. As on March 31st 2017 none of the Directorsof the Company hold shares of convertible instruments of the Company
No disclosure is required under Section 67(3)(c) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid Section are not applicable.
5. FINANCIAL LIQUIDITY
Cash and Cash Equivalent as at March 31 2017 was Rs.1.19 Crores. The Company Continuesto focus on judicious management of its working capital. Receivables inventories andother working capital parameters were kept under strict check through continuousmonitoring.
6. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
7. STANDALONE FINANCIAL STATEMENTS
The Standalone Financial Statements of the Company for the Financial Year Ended31.03.2017 are prepared in compliance with the applicable provisions of the ActAccounting Standards and as prescribed by Securities and Exchange Board of India (SEBI)under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(hereinafter referred to as the SEBI (LODR) Regulations 2015). The FinancialStatements have been prepared on the basis of the audited Financial Statements of thecompany its subsidiaries joint ventures or associate.
Pursuant to the provisions of Section 136 of the Act the Financial Statements of theCompany the Standalone Financial Statements along with all relevant documents and theAuditors Report thereon form part of this Annual Report. The Financial Statements asstated above are also available on the website of the company and can be accessed at theweblink: www. tamilnadusteeltubesltd.com
8. ECONOMIC SCENARIO AND OUTLOOK
Indian economy followed a path of recovery registering growth in the Financial Year201617. The prospect for economic growth became buoyant with the agrarian and ruraleconomy benefiting from a good monsoon after two successive rain deficient years. Thegrowth was affected in a few months during the year by the impact of the demonetizationscheme. The financial year is expected to end with GDP growth is estimated to have a rise.
The second half of the financial year 2016-17 closed as a momentous year for thecountry marked by two landmark economic reforms even as the global economic scenario wasindifferent. The first is the Goods and Services Tax (GST) a single tax intended toreplace the existing Central and State indirect taxes which is expected to come intoforce in the financial year 2017-18.
The second reform was the rollout of the demonetization scheme in early November. Inthe long run this reform aims to usher in greater transparency in financial transactionsand a transition towards a cashless economy; in the short term it has squeezed liquidityand consumption across the economy notably in the Steel Pipe Industry.
The outlook for the current financial year 2017-18 brightens as liquidity in theeconomy moves towards normalization with expectations for early revival and growth inoverall consumption across several sectors including Steel Pipe Industry.
The Union Budget for 2017-18 was welcomed for its thrust on the rural sectorinfrastructure development housing and a boost to the overall investment climate. If2017-18 also experiences a normal monsoon GDP growth is likely to rebound in the currentfinancial year. Better liquidity and improved tax collections will enhance government'sability to spend on infrastructure and other development projects leading to fastergrowth.
9. STAINLESS STEEL PIPES INDUSTRY - OUTLOOK AND OPPORTUNITIES
Consistent with the positive outlook for the Indian economy we foresee a similarrevival in demand for pipes. Signs of increased demand activity have been witnessed inindustrial and commercial segments. Besides this there are healthy indicators of anuptrend in demand for pipes from various projects such as power plants irrigationschemes ports railways and metro rail projects.
TNT is one of the most trusted Stainless Steel Pipes and Tubes Manufacturing Company inSouth India. TNT was established in the year 1979 with a vision too manufacture andprovide Stainless Steel Tubular Pipes to the Industry. The Promoters of the Company withan ample experience and expertise sensed the Board in the fast emerging field and investedin the best available human resources technology infrastructure. TNT offers a widespectrum of Stainless Steel Pipes and Tubes for use in a diverse range of industryincluding Oil Gas Power Fertilizer and Heat Exchangers Paper and pulp watertreatment diary sugar and food processing unlike etc. With its model production andquality assurance facilities TNT provides its customers with effective reliable andqualitatively superior products which enjoy lasting reputation and ensures totalsatisfaction of its customers.
The critical challenges before your Company in 2017 would include the following:
To pursue a judicious value-cum-volume strategy so as to maximise utilization ofexisting capacity including the additional capacity from the newly expanded Jamul plant.
To continue to step up the sale of value creating Premium products
To further streamline channel management and strengthen marketing activities ina manner that leverages the Companys brand equity.
To continue promotion and facilitation of cashless transactions in the retailnetwork with a view to ensure uninterrupted retail offtakes.
To develop the means to foresee changes in the value chain and the agilityneeded to keep strict control on the costs of fuel and raw materials amid volatile globalprices.
The above initiatives together with your Companys continued focus on costefficiency and other customer excellence initiatives should help in presenting an improvedperformance.
10. G.I. PIPES & TUBES - PERFORMANCE
|PARTICULARS ||2016-17 ||2015-16 |
|Production - Metric Tonnes ||16300.090 ||18756.291 |
|Sales volume - Metric Tonnes ||16537.600 ||17345.623 |
|Net Sale Value - (in lakhs) ||8051.61 ||7839.55 |
|Operating EBITDA - (in lakhs) ||237.77 ||457.28 |
|Operating EBITDA - margin ||2.95 % ||5.83% |
10.1 Costs - Pipes & Tubes Business
During the year 2016-17 the Company maintained a close focus on effective costmanagement through various initiatives.
a) Cost of Materials consumed
Cost of materials consumed was Rs.6935.79 Lakhs in 2016-17 as against Rs. 6490.45Lakhs- during the year 2015-16.
b) Power & Fuel
Power & Fuel costs were reduced by 10 % in 2016-17 as compared to 2015-16. ThePower & Fuel spent in 2016 - 17 was Rs. 1.35 crores as compared to Rs.1.50 croresspent in 2015 - 16.
The Company continues to focus on reducing the overall cost of fuel as well as shiftingits dependence on linkage by optimizing the fuel mix to enhance the use of alternativefuels.
c) Freight & Forwarding expenses
Freight and forwarding expenses during the year were Rs.0.50 crore as compared toRs.0.51 crore in 2015 - 16. Freight and forwarding expenses maintained comparable.
d) Employee costs
Overall employee costs as a share of total income from operations increased to 30..%in 2016 - 17 from 3.43 % in 2015 - 16.
e) Other Expenditure
Other expenditure constitutes Rs.493.13 Lakhs of total income from operations of theCompany as compared to Rs. 533.53 Lakhs in 2015-16.
The company does not have any CAPEX programme for the present.
12. SUSTAINABLE DEVELOPMENT
The Companys Sustainable Development programme continues to be comprehensive androbust.
12.1 CO2 Emissions:
Your Company is committed to cut its carbon footprint in line with the Low CarbonTechnology Roadmap for the Pipe Industry.
12.2 Green Energy
Controlling Emissions: The installation of dust monitors as per the statutoryrequirement of TNPCB was completed at our plant.
12.3 Water Performance:
Performance and to achieve a water positive status the Company has focused its effortson two approaches:
(i) Reduction of fresh water intake by lowering water demand in process and non-processareas and waste water recycling after treatment. Water metering and monitoring systemswere installed.
(ii) Conservation of water by rain water harvesting in plants and sustained waterharvesting measures undertaken over the years has helped our Plant become self-reliantwithout being dependent on natural water sources like rivers and bore wells. These twoapproaches have helped your Company reduce its specific water consumption.
Your Company is committed to the conservation of biodiversity. Efforts on biodiversityconservation are focused on following areas:
i) To study and assess the biodiversity operated by the Company.
ii) On-ground implementation of activities which conserves biodiversity:
iii) Afforestation activities in and around our plant premises with native species oftrees at our Plant.
13. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES :
For the present the company is not falling under compliance of the same. However theCompanys CSR Policy has been re-stated making it more comprehensive and in alignmentwith the requirements of the Act when applicable.
14. HEALTH & SAFETY (H & S Policy - Initiatives)
H&S business processes and information systems across the Company were furtherstrengthened with the proposed launch of an online H&S application called"Click2Safety". This application helps streamline reporting in a manner thatgives access to all employees is standardized is faster and enriches the H & SDatabase.
Logistics safety is one of the major focus areas for your Company. Ongoing initiativesundertaken in this regard included provisions of various plant and parking levelprotocols creation of certain hygiene factors for truck drivers and their crew such asamenities at truck parking yards improving tarpaulin tying practices improving PersonalProtective Equipment usage renewal of logistics contracts to include safety parametersand issue of "passports" for drivers as well
as vehicles which are informal internal databases that provide details of individualidentity registration roadworthiness and safety preparedness.
15. HUMAN RESOURCES
The Company adopted a functional organization structure which is intended to enable theorganization to be more collaborative agile and streamlined in implementing strategyharnessing internal functional expertise to the fullest and in enhancing stakeholder value
The HR policy is intended as a part of the Company's continuous efforts to offer one ofthe "Best Places to Work" in the Pipe Industry. This policy was designed toattract new talent and motivate existing employees to contribute to their peak performancelevels. The Companys HR function is recognized in the sector for its engagement andleadership development processes in nurturing talent necessary to keep theOrganizations talent pool future ready. The Company continued with efforts to ensurethat its pool of human resources is "future ready" through its robust processesof learning & development capability building and its development programmes for shopfloor associates. Efforts continued to be taken to develop leadership lines as well as toenhance technical and functional capabilities with special focus on nurturing youngtalent in order to meet future challenges.
During the financial year 2015-16 the Company has introduced Stainless Steel Pipes (SSPipes) production and took initiative to introduce a more responsive efficient and leanorganization design in the Plant. This is continued to show its production withimprovement in the future years.
India Manufacturing Transformation (IMT)
The IMT Programme aims to make the work-culture in the core areas of production andmaintenance in the Steel Pipe Plant more contemporary. This envisages a lean manufacturingorganization design with multitasking standardization and simplification of manufacturingprocesses improved productivity standards introduction of a centralized maintenancedesign with better planning and benchmarking with the best-in-class. These initiativeswill enable the Steel Pipe Plant operate more efficiently in a competitive environment andrender them compatible with National manufacturing standards.
Employee Relations at all the Units remained cordial. This has helped to build ahealthy relationship and resolve issues through mutual dialogue. A major achievement inthis area was the successful conclusion of a common long term wage settlement between theCompany and the employees. This accord incorporates novel elements such as a productivityenhancement scheme improvement in housekeeping elimination of waste and effectiveutilization of time. The settlement is expected to contribute towards enhancingproductivity at the Plant besides enjoining employees and shop-floor associates at Plantto adapt to a richer work culture.
Prevention of Sexual Harassment of Women at Workplace
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment
of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and Rulesframed thereunder the Company has implemented a policy on prevention prohibition andredressal of sexual harassment at the workplace. All women permanent temporary orcontractual including those of service providers are covered under the policy. An InternalComplaints Committee comprising five management staff has been set up to redresscomplaints relating to sexual harassment. Besides in the Unit there is one nodal personto receive and forward complaints to the "first instance person (FIP) who is awoman" or directly to the Committee.
During the year the Company has not received any complaint on sexual harassment andthere are no complaints pending.
Awareness programmes were conducted across the Company to sensitize the employees touphold the dignity of their colleagues at workplace particularly with respect toprevention of sexual harassment.
16 . BUSINESS RISKS & OPPORTUNITIES
The Business Risk Management Committee chaired by an Independent Director isfunctioning as required under SEBI Regulations. The Committee met twice during the year.Details of this Committee its terms of reference and functioning are set out in theCorporate Governance Report.
The Company has implemented a Business Risk Management Policy which lays down theframework to identify business risks at both Corporate level and at Business Segmentlevel.
The Companys approach to addressing business risks is comprehensive and enablestimely anticipation of risks and identification of opportunities enabling appropriateresponses thereby enhancing the Companys competitive advantage. Separate approachesare defined for each of the main business segments of Steel Pipes and forms an integralpart of the companys Mid Term Planning cycle.
The South India steel Industry is presently facing intense competition with the entryof new players and some existing manufacturers growing inorganically. We expect thissituation to continue. To mitigate this risk the Company is leveraging on its expertiseexperience and the additional Stainless Steel Pipes which are commissioned in Q1 2016.This enableed the Company to maintain its market share particularly in the SouthernRegion. Simultaneously the Company is implementing measures to enhance its brand equityvisibility and comparative advantage broaden its product portfolio and service offeringswhile leveraging on its ICI (Infrastructure Commercial and Institutional) Sales Team tooffer value to large customers. The Company is also closely monitoring its costs so as tobe more competitive in the Market Place.
Proactive Safety Culture
Your company has identified Health & Safety of employees and workmen as one of itskey focus areas. These include possibilities in the areas of the availability and souringof Raw Materials Energy Efficiency and Conservation Logistics and productiondevelopment and market segmentation based on research imbibing best practices inmanufacturing and other areas leading productivity improvement.
Safety on National roads is largely dependent on various factors such as the overallcondition and maintenance of roads vehicle road-worthiness and general observance of roadtraffic laws. As part of its Logistics Safety function and Indian Road Safety Programmethe Company has taken several initiatives including regular simulator-based drivertraining vehicle inspection for road-worthiness and the use of Global Positioning Systems(GPS) to monitor outbound movement of Steel Pipes to the end user.
Internal Audit and their adequacy
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the same were operating effectively throughout the year.
The company has an in-house Internal Audit (IA) function. The scope and authority ofthe Internal Audit function is defined in the Internal Audit Charter. To maintain itsobjectivity and independence the IA function reports to the Chairman of the AuditCommittee of the Board. The IA Department evaluates the efficacy and adequacy of InternalControl System its compliance with operating systems and policies of the Company andaccounting procedures at all locations of the company. Based on the report of IA functionprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.
Internal Controls Over Financial Reporting
The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed. The Companyhas policies and procedures in place for ensuring for proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.
The Company has adopted Accounting Policies which are in line with the AccountingStandards and the Act. These are in accordance with generally accepted accountingprinciples in India. Changes in policies if required are made in consultation with theAuditors and are approved by the Audit Committee.
The company has a robust financial closure certification mechanism for certifyingadherence to various accounting policies accounting hygiene and accuracy of provisionsand other estimates.
18. INDIAN ACCOUNTING STANDARDS ( IND AS) - IFRS CONVERGED STANDARDS
The Ministry of Corporate Affairs vides its Notification dt. February 15 2015 hasnotified the Companies (Indian Accounting Standard) Rules 2015.
In pursuance of this notification the Company will adopt IND AS with effect from April01 2017 with the comparatives for the periods ending March 31 2017.
The implementation of IND AS is a major change process for which the Company hasestablished a project team and is dedicating considerable resources. The impact of thechange on adoption of IND AS is being assessed.
19. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism named Ethical View Reporting Policy (EVRP) to reportconcerns about unethical behaviour actual/suspected frauds and violation ofcompanys code of Conduct . Protected disclosures can be made by a whistle blowerthrough several channels. An Ethical View Committee has been constituted to discuss thefinding of the investigations of the complaints and to recommend remedial actions. TheAudit Committee of the Board oversees the functioning of the Ethical View Committee.
Also during the year your Company reached out extensively to employees to conductgreater awareness on Value Creation in Competitive Environment (VCCE) and on Anti Briberyand Corruption Directive (ABCD) through e-learning modules and face to face sessionsachieving a high level of engagement and compliance. This reflects your companysstrong commitment to Zero tolerance" for non-compliances in this regard and to doingbusiness the right way and with integrity.
20. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs)
Appointment of Directors / Change in Directors
There was no change / appointment of Directors during the financial year 2016-17
Mr. M.T.Elumalai Mr.Mahveer Singn and Mr.Bivashwa Das Directors retire by rotationand being eligible offer for re-appointment.
Mr.M.J.Lakshminarasimha Rao Independent Director (DIN: 01275880) who was reappointedfor a period of 3 years from the 35th AGM ( 25.09.2014) is retiring at the conclusion ofthe ensuing 38th AGM and is proposed to be re-appointed as Non-Executive IndependentDirector for a further period of 5 years 04.09.2017 to 03.09.2022)
Mrs. Seshadhri Rajalakshmi Independent Director (DIN: 06927846) holds office for afixed term of five years ( from 19.07.2014 to 18.07.2019) and is not liable to retire byrotation.
Mr.Gopal Singh Independent Director ( Small Shareholders Director) holds officefor a term of three years ( from 25.9.2014 to 24.9.2017) and shall vacate office oncompleting three year term on 24th September 2017.
It is proposed to appoint Mr.Rajesh Sai Iyer as an Independent Director for a periodof 5 years from 4th September 2017 and Mrs.Renuka Ramesh as Small Shareholder Director fora period of 3 years from 4th September 2017.
In accordance with section 149(7) of the Act each Independent Director has given awritten declaration to the company confirming that he/she meets the criteria ofindependence as mentioned under section 149(6) of the Act and SEBI (LODR) Regulations.
Appointment of Independent Director/s :- In view of Resignation of Mr Gopal Singh(Small Shareholder Director) the Company has decided to appoint to induct IndependentDirector and accordingly the necessary appointment of Independent Directors are beingmade in the ensuing AGM.
a. Familiarization Programme for the Independent Directors
In compliance with the requirements of SEBI (LODR) Regulations 2015 the Company hasput in place of familiarization programme for the Independent Directors to familiarizethem with their role rights and responsibility as Directors the working of the Companynature of the industry in which the company operates business model etc. The details ofthe familiarization programme are explained in the Corporate Governance Report.
Pursuant to the provisions of the Act and the SEBI (LODR) Regulations 2015 the Boardhas carried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and Compliance Committee. The criteria applied in the evaluation process areexplained in the Corporate Governance Report.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Companypursuant to section 2(51) and section 203 of the Act read with the Rules framedthereunder.
|1. Mr RAKESH GOYAL ||- CEO & Managing Director |
|2. Mr KAMALA LOCHAN RAY ||- Company Secretary & Head Compliance |
|3. Mr N. SUDHARSAN ||- Chief Financial Officer |
|4. Mr. M.T.ELUMALAI ||- Whole Time Director |
|5. Mr.PRADIP KUMAR DUBEY ||- Whole Time Director |
|6. Mr. BIVASHWA DAS ||- Whole Time Director |
|7. Mr. MAHAVEER SINGH ||-- Whole Time Director |
None of the key Managerial Personnel have resigned during the year under review.
Criteria for selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior leadership positions
Your company has laid down well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and senior leadership positions. Therelevant information has been given in Annexure. which forms part of the BoardsReport.
Remuneration Policy for Directors
The policy for Remuneration of Directors Key Managerial Personnel and Senior ManagementPersonnel is set out in Annexure .which forms part of the Boards Report.
21. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofsection 134 of the Act.
a) that in the preparation of the annual accounts for the year ended March 31 2017the applicable Accounting Standards have been followed along with proper explanationrelating to material departures if any:
b) that such Accounting Policies as mentioned in Note 2 of the Notes to the FinancialStatements have been selected and applied consistently and judgement and estimates
have been made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company as on March 31 2017 and of the Profit of the Companyfor the year ended on that date.
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the Assets of the Company and for preventing and detecting fraud and otherirregularities.
d) that the Annual Accounts have been prepared on a going concern basis;
e) that proper Internal Financial Controls laid down by the Directors were followed bythe Company and such Internal Financial Controls are adequate and were operatingeffectively; and ;
f) That proper system to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and were operating effectively.
22. MEETINGS Board Meetings
During the year Seven (7) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report.
The Audit Committee comprises Six (6) members of which three including the chairman ofthe committee are Independent Directors. During the year Six (6) Audit Committee Meetingswere convened and held. Details of the committee are given in the Corporate GovernanceReport.
The CSR Committee comprises Five (5) members of which three including the Chairman ofthe Committee are Independent Directors. The Committee met twice during the reportingperiod. Details of the Committee are given in the Corporate Governance Report.
23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions with related parties are placed before the Audit Committee as also theBoard of approval prior omnibus approval of the Audit Committee and the Board is obtainedfor the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis. The statement is supportedby a Certificate from the CEO & MD and the CFO. Your Company has developed a relatedparty transactions manual standard operating procedures for the purpose of identificationand monitoring of related party transactions.
The policy on related party transactions as approved by the board is available on theCompanys website and can be accessed through weblink: http://www.tamilnadusteeltubesltd. Alltransactions entered into with related parties during the year were on an armslength pricing basis and were in the ordinary course of business. There were no materialrelated party transactions i.e transactions exceeding ten percent of the annualconsolidated turnover as per the last Audited Financial Statements entered into during theyear. Accordingly there are no transactions that are required to be reported in form AOC2.
None of the Directors nor the Key Managerial Personnel has any pecuniary relationshipsor transactions vis-a-vis the Company.
24. AUDITORS Statutory Auditors
As per the provisions of section 139 of the Companies Act 2013 the term of office ofM/s.Abhay Jain & Co. as Statutory Auditors of the Company will conclude from theclose of the forthcoming Annual General Meeting of the Company.
The Board of Directors places on record its appreciation for the services rendered byM/s.Abhay Jain & Co as the Statutory Auditors of the Company.
Subject to the approval of the Members the Board of Directors of the Company hasrecommended the re-appointment of Mrs.Abhay Jain & Co (Firm Registration Number :000008S) as the Statutory Auditors of the Company pursuant to Section 139 of the CompaniesAct 2013.
Members attention is drawn to a Resolution proposing the appointment of Mrs.AbhayJain & Co (Firm Registration Number : 000008S) as Statutory Auditors of the Companywhich is included at Item No. 5 of the Notice convening the Annual General Meeting.
The Auditors have given an unqualified Audit Report
On the recommendation of the Audit Committee the Board of Directors appointed CMALatha Venkatesh Cost Accountants (Firm Registration No. 101017) as Cost Auditor of theCompany for the financial year 2017-18 under Section 148 of the Companies Act 2013 readwith The Companies (Cost Records and Audit) Amendment Rules 2014. CMA Latha Venkatesh hasconfirmed that they are free from disqualification specified under Section 141 (3) andproviso to Section 148 (3) read with Section 141 (4) of the Companies Act 2013 and thattheir appointment meets the requirements of Section 141 (3) (g) of the Companies Act 2013.They have further confirmed their independent status and an arms length relationshipwith the Company.
The remuneration payable to the Cost Auditor is required to be placed before theMembers at the ensuing AGM for their ratification. Accordingly a Resolution for seekingMembers ratification for the remuneration payable to CMA Latha Venkatesh CostAuditor is included at Item No. 9 of the notice convening the Annual General Meeting.
The Company has appointed Mr VS Sowrirajan (FCS 2368) / Company Secretaries inPractice to undertake the Secretarial Audit of the Company pursuant to the provisions ofSection 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Report of the Secretarial Auditor is annexed to theBoards Report as Annexure .
In two consecutive years the company has conferred Export Award from EEPC for highestexport of their products. In a career that spans over two decades he has beenacknowledged for his vision in TNT. He has formulated value best strategies to create aunique quality control
model. He has handled various sizes of products to establish the Brand Management andthe Product Developments for the TNTs companies products.
25. ENHANCING SHAREHOLDER VALUE
Your Company firmly believes that its success in the marketplace and a good reputationare among the primary determinants of value to the Shareholder. The organizational visionis founded on the principles of good Governance and by the resolve to be acustomer-centric organization which motivates the Companys Management to be alignedto deliver leading-edge building products backed with dependable after sales services.
Your Company is committed to creating and maximizing long-term value for Shareholdersand essentially follows a four pronged approach to achieve this end.
a) by increasing all-round operational efficiencies.
b) by identifying strategies that enhance its competitive advantage.
c) by managing risks and pursuing opportunities for profitable growth and
d) by cementing relationships with other important Stakeholder Groups throughmeaningful engagement processes and mutually rewarding associations that Enable it tocreate positive impacts on the economic societal and environmental dimensions of theTriple Bottom Line.
Underlying this is also a dedication to value-friendly financial reporting that assuresthe Shareholder and investor of receiving transparent and unfettered information on theCompanys performance.
26. CORPORATE GOVERNANCE
A separate Section on Corporate Governance practices followed by the Company togetherwith a Certificate from the Companys Auditors confirming compliance forms a part ofthis Annual Report as per SEBI (LODR) Regulations 2015.
27. BUSINESS RESPONSIBILITY REPORTING
A separate Section on Business Responsibility forms part of this Annual Report asrequired by SEBI (LODR) Regulations.
28. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology absorption and Foreign Exchangeearnings and outgo as stipulated in Section 134(3)(m) of the Act and the Rules framedthereunder is annexed herewith as Annexure to the Boards Report.
29. EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Act and the Rules framed thereunder the extract ofthe Annual Return in Form MGT 9 is enclosed as Annexure to the Boards Report.
30. PARTICULARS OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act and the Rules framed thereunder is enclosed as Annexure to theBoard s Report. The information on Employees who were in receipt of remunerationwill be provided to any Member on a written request to the Company Secretary. In terms ofSection 136 of the Act the Report and Accounts are being sent to the Members and othersentitled thereto excluding the aforesaid Annexure which is available for inspection bythe Members at the Registered Office of the Company during business hours on working daysof the Company up to the date of the ensuing Annual General Meeting.
31. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013:
a) that in the preparation of the Annual Financial Statements for the Financial YearEnded March 31 2017 the applicable accounting standards have been followed along withproper explanation relating to material departures if any;
b) that such accounting policies as mentioned in Note 2 of the Notes to the Accountshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as on March 31 2017 and of the Profit of the Company for the year ended onthat date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) That the annual accounts have been prepared on a going concern basis;
e) That proper internal financial controls laid down by the Directors were followed bythe Company and such internal financial controls are adequate and were operatingeffectively; and
f) That proper systems to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and were operating effectively
32. INTEGRATED REPORTING
Your company believes in transparent reporting that is value-friendly to shareholdersand investors. The Annual Report carries a detailed section containing the "BusinessResponsibility Report". The companies studying the requirements of the IntegratedReporting Frame work.
Your Directors are thankful to the Central and State Government DepartmentsOrganizations and Agencies for their continued guidance and co-operation. The Directorsare grateful to all valuable Stakeholders of the Company viz. our Customers ShareholdersDealers Vendors Banks and other Business Associates for their excellent support and helprendered during the year. The Directors also acknowledge the unstinted commitment andvalued contribution of all employees of the Company.
33. CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysisdescribing the Companys objectives expectations or forward-looking within themeaning of applicable Securities Laws and Regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influencethe Companys operations with regard to demand and supply conditions affectingselling prices of finished goods input availability and prices changes in GovernmentRegulations Tax Laws Economic Developments and other factors such as litigation andindustrial relations.
| ||For and on behalf of the Board |
| ||MAHAVEER SINGH ||RAKESH GOYAL |
|PLACE : CHENNAI ||Director ||Managing Director |
|DATE : 30.05.2017 ||(DIN :01907248) ||(DIN : 00990310) |
ANNEXURES TO BOARD'S REPORT I N D E X
|Annexure ||Content ||Page no. |
|I ||Annexure - I : CSR Policy Statement ||54 |
|II ||Annexure - II : Amount spent on CSR Activities ||55 |
|III ||Annexure - III : Policy for selection of Directors KMPs and Determining Directors Independence ||56 |
|IV ||Annexure - VI : Remuneration Policy for Directors KMPs & other Employees ||60 |
|V ||Annexure - V: Form No. MR-3 Secretarial Audit Report ||62 |
|VI ||Annexure - VI : Particulars of Energy Conservation Technology etc. ||66 |
|VII ||Annexure - VII : Form No. MGT-9 - Extract of Annual Return ||70 |
|VIII ||Annexure - VIII : Information pursuant to Section 197(2) red with Rule 5 of the Companies Act (Appointment &Remuneration of Managerial Personnel) Rules 2014 ||78 |
|IX ||Annexure - IX : Related Party Transactions - AOC-2 ||79 |
|X ||Annexure - X : Corporate Governance Report ||80 |
|XI ||Annexure - XI : General Information to Shareholders ||103 |
|XII ||Annexure - XII: Disclosures with respect to Employees' Stock Option scheme 2006 ||108 |