Refex Industries Ltd Directors Report.

To the Members,

Your Directors have great pleasure in presenting the Seventeenth Annual Report of your Company together with the Audited Statement of Accounts for the year ended March 31,2019.

FINANCIAL PERFORMANCE

The key financial parameters for the period under review are as follows.

(Rs. In Lakhs)

Standalone Results

Consolidated Result

Description 2018-19 2017-18 2018-19 2017-18
Turnover 46105.17 7737.25 46105.11 7737.25
Other Income 185.38 204.12 185.38 204.12
Total Income 46290.48 7941.37 46290.48 7941.37
Expenditure (other than Tax) 43403.51 7767.55 43403.97 7768.07
Exceptional Items - - - -
Profit before tax 2886.97 173.82 2886.51 173.31
Provision for Income Tax - - - -
Provision for deferred tax (276.44) (79.56) (276.44) (79.56)
Profit after Income Tax 3163.33 94.26 3162.95 93.74
Earnings Per Share (in Rs. ) 20.44 0.61 20.44 0.61

During the year under review the Company achieved a turnover of Rs. 46105.11Lakhs as against the previous year figure Rs. 7737.25 Lakhs, registering an increase of nearly 496%. The Board of Directors are happy to report a net profit after tax of Rs. 3163.41 as against Rs. 94.26 Lakhs for the earlier year registering an increase of more than Rs. 3069 Lakhs.

DIVIDEND

In order to conserve the resources of the Company your Board has not recommended any dividend for the year ended under review and has transferred the entire amount of profit to the General Reserves.

COMMITTEES OF THE BOARD:

The details of the Boards Committees - The Audit Committee, The Nomination & Remuneration Committee and The Stakeholders Relationship Committee have been disclosed separately in the Corporate Governance Report which is annexed to and forms part of this Annual Report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

No material changes and commitments have occurred after the close of the year till the date of this report which affects the financial position of the Company.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There are no changes in the nature of business of the Company during the financial year under review except that contribution from trading activities have gone upto 74% of total revenue as against 12.48% during the earlier year.

BOARD MEETINGS:

The Board during the Financial Year 2018-19 met four (4) times i.e. 25.05.2018, 13.08.2018, 13.11.2018 and 14.02.2019. All the Directors attended all the Board Meetings.

DIRECTORS AND KEY MANANGERIAL PERSONNEL:

As per Article 35 of the Articles of Association of the Company, Shri.Dinesh Kumar Agarwal, Director retires by rotation in the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board has recommended his re-election. A resolution is proposed for his re-appointment in the notice.

The Independent Directors of the Company have submitted a declaration under Section 149(7) of the Companies Act , 2013 stating that they meet the criteria of independence as provided in Section149(6) of the Act and there has been no changes in the circumstances which may affect their status as Independent Director during the year.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transaction with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Mr .T. Anil Jain, Managing Director, MRs. Uthayakumar Lalitha, Chief Financial Officer and Mr. Gopalakrishnan Srinivasan ,Company Secretary. There has been no change in the Key Managerial Personnel during the year .

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from all the Independent Directors i.e., Sri. D. Hem Senthil Raj and Smt. Jamuna Ravikumar under Section 149(7) of the Companies Act, 2013.

The said Independent Directors of the Company meet the criteria of their Independence as laid down under Section 149(6) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(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 the Company and that such internal financial controls are adequate and were operating effectively.

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Provisions of section 129 (3) of the Companies Act 2013 the Consolidated financial statements drawn up in accordance with the applicable accounting standards forms part of the report.

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES

M/s. Vituza Solar Energy Limited continues to be the wholly owned subsidiary of your Company. The necessary AOC - 1 as required under Sub Section (3) of Section 129 of the Companies Act, 2013 read with rule 5 of Companies (Accounts) Rules, 2014 is annexed to the Directors Report as Annexure No.IV.

EXTRACT OF ANNUAL RETURN:

Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an Extract of Annual Return in Form MGT 9 is annexed to this Report (Annexure I).

AUDITORS

Pursuant to provisions of Section 139 of the Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014, as amended M Krishnakumar & Associates was appointed as Statutory Auditors of your Company at the 15 th AGM held on 26th September 2017 for a term of five years till the conclusion of 20th Annual General Meeting. In accordance with the Companies( Amendment Act 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is no longer required to be ratified at every Annual General Meeting. There are No qualifications, reservations or adverse remark given by the Auditors in the report which requires an explanation or comments by the Board.

SECRETARIAL AUDIT:

Pursuant to Section 204(1) of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directors had appointed Mr. R Muthukrishnan, Practising Company Secretary Chennai as the Secretarial Auditor of the Company for conducting the Secretarial Audit for the financial year 2018-19. The Secretarial Audit report for the Financial year ended March 31, 2019 is annexed herewith marked as Annexure II and same forms part of this report.

Reply to the observation made in the Secretarial Auditors Report:

1. As regards delayed filing of Forms with RoC as required under the Companies Act, 2013, the Company shall ensure that such delays do not recur.

2(a). The Amount advanced is in the nature of Advances for a proposed commercial transaction and shall not fall under the provision of Sec 185 of the Act.

2(b). With regard to issue of Corporate Guarantee by the Company for Rs. 3748 Lacs, the Non - Compliance U/s 185 of the Act no longer holds good by virtue of obtaining the shareholders approval in the AGM held on 31.07.2018 permitting the Company to invest/ lend / issue of Guarantee upto Rs. 200 Crores. The Board also reiterates that the Director has ceased his concern or interest from the Company which was coming under the purview of Section185 (1) of the Companies Act, 2013. Hence, the said transaction shall not fall under the provision of Sec 185 of the Act.

3. In view of the Company getting the required approval from the Shareholders in the AGM held on 31.07.2018, the Non Compliance under Sec 186 of the Act is not continuing.

4. The default happened entirely out of the control of the Company. The Minimum penalty paid was as per the requirement of the Stock Exchange

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

OUTGO:

(A) Conservation of energy & Technology absorption:

The Company does not engage in manufacturing activity involving energy intensive processes. However, the Company has taken sufficient steps towards general energy saving techniques and conservation.

Given the Nature of Process employed by the Company, there is no technology absorption involved.

(B) Foreign Exchange Earnings and Outgo:

Foreign Exchange Earnings = INR 123.46 (In lakhs)
Foreign Exchange Outgo = INR 993.20 (In lakhs)

PUBLIC DEPOSITS:

The Company did not invite or accept any deposits from the Public under Sec 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

During the year under review No significant and Material orders were passed by the regulators impacting the company as a going concern and its operations.

INTERNAL FINANCIAL CONTROLS

The Company has appointed an Internal Auditor, a Chartered Accountant, to ensure the effective functioning of internal financial controls and check whether the financial transaction flow in the organization is being done based on the approved policies of the Company. The Management based on the internal audit observations gives their comments. Further, the Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Vigil Mechanism , Material Subsidiary Policy for ensuring the orderly and efficient conduct of its business, for safeguarding of its assets for the prevention and detection of frauds and errors and for the maintenance of adequate accounting records and timely preparation of reliable financial information. A Report of the Auditors Pursuant to Section 143(3) (i) of the Companies Act 2013 certifying the adequacy of Internal Financial controls in annexed with the Auditors report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177 (9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same was hosted on the website of the Company.

This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statement under Note 10 to the Standalone Financial Statement).

RISK MANAGEMENT POLICY:

The Company has a Risk Management Committee in place although it is not applicable to it both under the SEBI LODR Regulations 2015 and the Companies Act, 2013. However, the Company has an adequate Risk Management Policy commensurate with its size and operation. Risk Management includes identifying types of risk and its assessment, risk handling, monitoring and reporting.

CORPORATE SOCIAL RESPONSIBILITY POLICY

At Refex , Corporate Social Responsibility has been integral part of the business since its inception. Refex believes in making a difference to the lives of millions of people who are under privileged. It promotes Social and Economic inclusion by ensuring that marginalised communities have equal access to health care services, educational opportunities and proper civic infrastructures. Corporate Social responsibility is embedded in the Refex ethos going hand in hand with the core business of the Company.

During the year the Company has voluntarily donated a sum of Rs 59,61,000 towards various Economic and Social causes.

RELATED PARTY TRANSACTIONS:

All transactions entered into by the Company with its related parties during the year were in ordinary course of business and on an arms length basis and did not attract the provisions of Section 188 of the Companies Act, 2013. During the year, the Company had not entered into any arrangement / transaction with related parties which could be considered material in accordance with the Companys Policy on Related Party Transactions and accordingly, the disclosure of Related Party Transactions in Form AOC 2 is not applicable, However, names of Related Parties and details of transactions with them are included in Note no. 36 to the financial statements provided in the Annual Report.

DISCLOSURE ABOUT COST AUDIT:

Maintenance of Cost Records and requirements of Cost Audit as prescribed under the provisions of section 148 (1) of the Companies Act are not applicable for the Business activities of the Company.

PARTICULARS OF EMPLOYEES:

Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act, the Rules framed there under is given in Annexure-III to the Board Report and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Harassment Policy in line with the requirements of the Sexual Harassment of Women at work place ( Prevention , Prohibition and Redressal ) Act 2013. An Internal Complaint Committee has been set up to redress complaints received regularly. There was no complaint received from any Women employee during the financial year 2018-19 and hence no complaint is outstanding as on 31.03.2019 for redressal.

LISTING WITH STOCK EXCHANGES:

The Equity Shares of the Company are listed on the following Stock Exchanges:

i. BSE Limited (BSE)

25th Floor, PJ. Towers, Dalal Street, Fort, Mumbai- 400 001.

ii. National Stock Exchange of India Limited (NSE)

Exchange Plaza, BandraKurla Complex, Bandra East, Mumbai- 400 051.

The Stock Codes allotted by these Stock Exchanges are as under:

Name Code
BSE Limited 532884
National Stock Exchange of India Limited REFEX

The Company has paid listing fees to the stock exchanges for financial the year 2018-19

CORPORATE GOVERNANCE

A detailed report on Corporate Governance pursuant to Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with the Auditors certificate on Compliance with the mandatory provisions on Corporate Governance is has been furnished in the Annual Report.

The Managing Director has issued necessary certificate to the Board in terms of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the Financial Year ended 31 March 2019.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

Pursuant to the provisions of the Companies Act of 2013 and Regulation 17 (10) of SEBI (Listing Obligation and Disclosure Requirement) , Regulation 2015 (" The Listing Regulation ") the Board has carried out a formal process of performance evaluation of the Board, Committees and Individual DirectoRs. The performance was evaluated based on the parameters such as Composition and Quality of Board members, effectiveness of Board/ Committee process and functioning, Contribution of the Members, Board Culture and dynamics, fulfilment of Key responsibilities, ethics and compliance etc. A Structured questionnaire was prepared covering the above areas of competencies. All the responses were evaluated by the Nomination & Remuneration committee as well as by the Board of Directors and the results reflected high satisfactory performance.

MEETING OF THE INDEPENDENT DIRECTORS

The Independent Director of your Company met once during the year without the presence of NonIndependent DirectoRs. The meeting was conducted in an informal and Flexible manner to enable the Independent Directors Inter alia to discuss matters pertaining to performance of Non-Independent Directors and the Board as a whole, as well as the performance of the Chairperson of the Company after taking inputs from the executive and Non- Executive DirectoS.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report pursuant to Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year under review is given as a separate statement in the Annual Report.

INSURANCE

The assets of the Company are adequately insured.

INDUSTRIAL RELATIONS

Your Companys Industrial relations continues to be harmonious and cordial.

ACKNOWLEDGEMENTS:

Your Directors gratefully acknowledge the excellent support and co - operation extended by all the stakeholders more particularly Bankers, Shareholders, Customers, dealers, regulatory and Govt. authorities.

Your Directors also wish to place on record their appreciation of the contribution made by the members of the management team and the employees across all levels for the good work put in, during the year under review.

Place: Chennai For and on behalf of the Board
Date: 30.05.2019 T. Anil Jain
Managing Director
DIN:00181960