texmo pipes & products ltd share price Directors report


To,

The Members,

Your Directors have pleasure in presenting their 14r Annual Report on the business and operations of your Company together with the Audited Financial Statements and the Auditors Report for the year ended 31 March, 2022.

1. Financial summary or highlights/Performance of the Company (Standalone and Consolidated)

(Rs. In Lakhs)

Particulars

Standalone

Consolidated

2021-22 2020-21 2021-22 2020-21
Turnover 56.441.53 -42,694.49 56,441.53 -42.694.49
Profit before Interest, Depreciation and Tax 3,357.42 2,582.94 3,319.61 2,543.28
Less Interest 569.29 516.47 569.29 516.47
Less Depreciation 819.29 625.68 819.30 625.68
Profit before tax 1,968.84 1,440.79 1,931.02 1,401.13
Less Provision for tax
Current lax 525.00 370.00 525.00 370.00
Deferred tax (34.81) (18.60) (34.81) (18.60)
Excess provision for earlier year 17.74 (33.69) 17.74 (33.69)
Profit after tax 1.460.91 1,123.08 1,423.09 1.083.42
Prior year adjustment - - - -
Profit after lax & prior year adjustments 1.460.91 1,123.08 1,423.09 1.083.42
Profit after adjustment of discontinued operations 1,460.91 1,123.08 1,423.09 1.083.42
Balance of profit brought forward from earlier years 683.18 (447.32) 3,799.41 2,680.18
Transferred from Revaluation Reserve 11.38 4.52 11.38 4.52
Adjustment relating to Fixed Assets (net of Deferred Tax) - - - -
Unamortized cost written off on discounting of loans to subsidiary (33.79) (31.28) (2.70) (2.90)
Unamorlized Interest Expenses on Loans from related parties written off (0.86) - (0.86) -
Other comprehensive income 11.67 34.18 11.67 34.18
Exchange difference on translation of financial statements of foreignoperations - - 2.661.12 2,429.15
Profit available for Appropriations: 2,132.50 683.18 5,241.98 3,799.41
Appropriations
Transfer to General Reserves Proposed dividend:
Equity - - - -
Preference
Profit carried to Balance Sheet 2132.50 683.18 5,241.98 3,799.41

Includes Income from Sale of Services i.e. Freight and Logistics Income.

During the year under review, the Company recorded total revenue of Rs 56,441.53 Lakhs as compared to Rs. 42,694.49 Lakhs in the previous year which is increase by 32.20% The Company has earned a net profit of Rs.1,460.91 Lakhs as against profit of Rs. 1,123.8 Lakhs in the previous year which is increase by 30.08%. Your Directors are hopeful that the Company may continue showing better performance in coming year.

2. Change in nature of Business

During the year under review, there has been no change in the nature of business of the Company.

3. Dividend

Your Directors do not recommended any dividend for the year ended 31st March, 2022 and the available surplus be retained to strength the net worth of the company.

4. Transfer to Reserves

Your Directors do not proposed any amount to be transferred to the Reserves for the year ended 31st March, 2022.

5. Details of Subsidiary / Associate Companies

The Company had one subsidiary namely Tapti Pipes & Products Limited FZE (Overseas Subsidiary).

The consolidated financial statements of your Company for the financial year 2021-22, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (LODR) Regulations, 2015. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries, as approved by their respective Board of Directors.

A separate statement in Form AOC-1 containing the salient features of financial statements of subsidiaries of your Company forms part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013.

6. Commission received by Directors from Subsidiary.

During the year under review none of the directors of the Company are in receipt of the commission or remuneration from subsidiary of the Company, as provided under section 197 (14) of the Companies Act, 2013.

7. Details relating to remuneration of Director, KMPs and employees

Disclosure pertaining to remuneration and other details as required Section 197(12) of the Companies Act 2013 read with rule 5 (1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure - A.

8. Particulars of Employees

The statement of employees who receives remuneration exceeding the limits specified under Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is also provided in Annexure - A to this report.

9. Particulars of loans, guarantees, investments outstanding during the financial year

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 (Please refer to Note 7 and 8 to the standalone financial statement).

10. Annual Return

As required under Section 92(3) read with section 134(3)(a) of the Companies Act 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 including amendments thereunder, the Annual Return filed with the Ministry of Corporate Affairs (MCA) for the Financial Year 2020-21 is available on the web-link of the Company at https://texniopipe.com and the Annual Return for Financial Year 2021-22 will be made available on the website of the Company once it is filed with the MCA.

11. Deposits

Your Company has not invited/accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 and Rules made there under, during the year under review.

12. Conservation of energy, technology absorption, foreign exchange earnings and outgo

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and out-go. in accordance with the requirement of the Section 134(3Xm) of the Companies Act, 2013 read with rule 8 of the Companies (Account) Rules, 2014 forms part of this Boards Report and is annexed as Annexure - B.

13. Particulars of contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013 for the financial year 2021-22 in the prescribed format, AOC 2 has been enclosed with the report as Annexure - C.

The Policy on materiality of related party transactions and manner of dealing with related party transactions as approved by the Board may be accessed on the Companys website at the link: https://texmooipe.com

14. Auditors:

A. Statutory Auditors:

The Statutory Auditors M/s Anil Kamal Garg & Company, Chartered Accountants, Indore (Firm Registration No. 004186C) was appointed in 10th Annual General Meeting to hold office from the conclusion of the 10" Annual General Meeting for a term of five consecutive years till conclusion of 15‘" Annual General Meeting (subject to ratification of the appointment by the members at every Annual General Meeting).The requirement of seeking ratification of the members for the continuous of their appointment has been withdrawn consequent upon the changes made by the Companies (Amendment) Act, 2017 with effect from May 07,2018.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.

B. Secretarial Auditor:

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014, the Company has appointed CS Dinesh Kumar Gupta, Company Secretary in Practice, Indore (M.P.), to undertake the Secretarial Audit of the Company for the Financial Year 2022-23.

C. Cost Auditors:

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. Saurabh Parikh and Associates, Cost Accountants, (Firm Registration No. 101495) as Cost Auditor of the Company, for the financial year ending 31st March 2023, on a remuneration as mentioned in the Notice convening the 14T Annual General Meeting for conducting the audit of the cost records maintained by the Company.

A Certificate from M/s. Saurabh Parikh and Associates, Cost Accountants has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 oftheAcland Rules framed thereunder.

A resolution seeking Members approval for remuneration payable to Cost Auditor forms part of the Notice of the 14th Annual General Meeting of the Company and same is recommended for your consideration.

The Company is required to maintain Cost Records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

Accordingly, the Company has made and maintained such accounts and records.

15. AUDITORS REPORTS

A. Statutory Auditors Report:

The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

B. Secretarial Auditors Report:

Pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personal) Rules, 2014, the Company has obtained a Secretarial Audit Report in the prescribed Form MR-3, from CS Dinesh Kumar Gupta, Company Secretary in practice, Indore (MP.). The Company has also taken Secretarial Compliance Report during the year from Secretarial Auditor as per SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 requirement. The Secretarial Auditor Report dated is annexed herewith as Annexure - D. The Secretarial Auditor has observed qualifications as above in the report as under

a) The company has filed Form MGT-14 for Board Resolutions dated 14.02.2022 after the closure of financial year on 13.06.2022 with additional fees.

b) The Company received a Show Cause Notice ref.SEBI/HO/EAD-8/KSA/C/17934/2019 dated 16.07.20219 from the Office of Adjudicating Officer. SEBI pertaining to GDR issue of the Company. The company has filed a reply against the said notice on 08.03.2021.

Accordingly, a hearing before the Ld. Adjudicating Officer has been held on 18.05.2022. The Adjudicating Officer of SEBI passed an ORDER NO. Order/W/NK/2022-23/17383- 17389 on 28.06.2022 imposed penalty under Section 15HA of SEBI Act of Rs.10.00 Crore on the company and Rs.87.00 Lacs on Directors/others and under Section 23E of SCRAof Rs. 25.00 Lacs on the company.

However, as per explanation given by the company, it has filed appeal with Honble Securities Appellate Tribunal (SAT) against the said order.

The comments of the Board on the above are as under:

a) The Company has filed the form on the said date due to inadvertence and owing to gap in internal office information.

b) The Company after perusal and analysis of the said order and in consultation with the Counsel with their due advice and legal opinion has filed an appeal before the Honble Securities Appellate Tribunal (SAT) and challenged the said order.

16. Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made there under.

17. Share Capital

During the Financial Year 2021-22, there has been no change in the Authorized Share Capital of the Company & there has been no change and increase in issued, subscribed and paid-up share capital of the Company.

As on 31.03.2022, the Company has authorized share capital of Rs. 36,00,00,000/- divided into 3,60,00,000 Equity Shares of Rs. 10/- each & issued, subscribed and paid-up share capital stands at Rs. 29,19,50,000/-divided into 2,91,95,000 Equity Shares of Rs. 10/-each.

18. Disclosure regarding issue of employee stock options

The Company has not issued any shares under employees stock options scheme pursuant to provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.

19. Disclosure regarding issue of sweat equity shares

The Company has not issued sweat equity shares pursuant to provisions of Section 54 read with Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014 during the Financial Year.

20. Details of Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013 Smt. Rashmi Agrawal (DIN: 00316248), retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. Smt Rashmi Agrawal has given declaration in terms of Section 164(2) of the Companies Act, 2013 to the effect that she is not disqualified from being reappointed as a Director of the Company.

During the year under review, there has been no change taken place in Directors or KMPs of the Company.

21. Declaration given by Independent Director(s) and reappointment.

In compliance with Section 149(7) of the Act. all Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company in its 13th Annual General Meeting passed a Special Resolution to re-appoint Mr. Amber Chaurasia (DIN- 07729278) as Non-Executive Independent Director for a second term of five consecutive years with effect from 10th February, 2022.

The Board of Directors also stated that the re-appointment of Independent Director done was in consideration and regard to his Integrity, Expertise and Experience (including the proficiency).

Other than the above, there are no other appointment / re-appointment of Independent Directors of the Company in the Financial Year 2021-22.

22. Internal Financial Controls

The Company believes that internal control is necessary principle of prudent business governance that freedom of management should be exercised within a framework of appropriate checks and balances. The Company remains committed to ensuring an effective internal control environment that inter alia provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Companys independent and Internal Audit processes, both at the Business and Corporate levels, provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements.

The Financial Statements of the Company are prepared on the basis of the Significant Accounting Policies that are carefully selected by management and approved by the Board. These, in turn are supported by a set of divisional Delegation Manual & Standard Operating Procedures (SOPs) that have been established for individual units/ areas of operations.

The Company uses SAP Systems as a business enabler and also to maintain its Books of Account. The SOPs in tandem with transactional controls built into the SAP Systems ensure appropriate segregation of duties, tiered approval mechanisms and maintenance of supporting records. The systems, SOPs and controls are reviewed by Senior management and audited by Internal Auditor whose findings and recommendations are reviewed by the Audit Committee of Board of Directors and tracked through to implementation.

The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless the Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

23. Number of meetings of Board of Directors and committees

The details of Board and Committee meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period as prescribed under the Companies Act, 2013.

24. Committees of the Board

The details with respect to the compositions, powers, roles and terms of reference etc. of relevant Committees of the Board of Directors are also given in the Corporate Governance Report which forms a part of this Annual Report. All recommendations made by the Audit Committee during the year were accepted by the Board on 25.

Familiarization Programme.

The Company has conducted the programme through its Managing Director, Whole-time Director, Company Secretary and other Senior Managerial Personnel to familiarize the Independent Directors with Company in following areas:-

Familiarization with the Company;

Independent directors roles, rights and responsibilities;

Board dynamics & functions;

Nature of the Industry in which the Company operates;

Business Model of the Company;

Compliance management.

The Policy on Familiarization Programme may be accessed on the Companys website at the link; https://texmopipe.com

26. Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 is applicable to the Company, accordingly the Company has developed and implemented Corporate Social Responsibility initiatives. The Board in its meeting held on October 28, 2020 adopted Corporate Social Responsibility (CSR) Policy of the Company and the composition of the CSR Committee is as under;

1) Dr. Smita Hajari, Chairperson

2) Mr. Sanjay Kumar Agrawal, Member

3) Mr. ParvezAnjum, Member.

In addition to the above the Corporate Social Responsibility Committee of the Company has recommended for incorporation of a Section 8 Company for undertaking CSR activities in the future. The same was considered and approved by the Board of Directors of the Company. The details of the Section 8 Company incorporated by the Company is appended below as hereunder.

S. no. Title Details
1 Name of the Section 8 Company Texmo Pipes Foundation
2 Corporate Identification Number (CIN) U85300MP2022NPL061022
3 Date of Incorporation 24th May. 2022
4 Registered Address 98. Bahadarpur Road. Burhanpur. Madhya Pradesh - 450 331

The Report on CSR activities is annexed herewith as Annexure - E.

27. BOARD EVALUATION:

Pursuant to provisions of the section 134(3)(p), 149(8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations, annual performance evaluation of Directors as well as of the Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee of the Board has been carried out.

The performance evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of Chairman and Non-Independent Directors was carried out by the Independent Directors.

The manner in which the evaluation has been carried out has been provided in the Corporate Governance Report.

28. Corporate Governance

The Company continue to imbibe and emulate the best corporate governance practices aimed at building trust among all stakeholders - shareholders, employees, customers, suppliers and others. The Company believes that fairness, transparency, responsibility and accountability are the four key elements of corporate governance. The Corporate Governance Report presented in a separate section forms an integral part of this Annual Report as Annexure - F.

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

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Regulations, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at https://texmopipc.com. During the year under review no complaint was received in vigil mechanism.

30. Nomination and Remuneration Policy

The Company framed a policy for Nomination and Remuneration of all Directors & KMPs etc in accordance with provisions of section 178 of Companies Act, 2013 and Rules made thereunder and other applicable provisions of Companies Act, 2013, provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to harmonize the aspirations of human resources consistent with the goals of the Company. Board of Directors of the Company approved and updated the said policy as and when required. The same may be accessed on the Companys website at: https://texmopipe.com

The Nomination and Remuneration Committee works with the entire Board to determine the appropriate characteristics, skills and experience required for the Board as a whole and for individual members. Members are expected to possess the required qualifications, integrity, expertise and experience for the position. They should also possess the deep expertise and insights in sectors / areas relevant to the Company and ability to contribute to the Companys growth.

31. Risk Management Policy

The Company, like any other enterprise, is exposed to business risk which can be an internal risks as well as external risks. One of the key risks faced by the Company in todays scenario is the wide and frequent fluctuations in the prices of its raw material. Any further increase in prices of raw materials could create a strain on the operating margins of the Company. Inflationary tendencies in the economy and deterioration of macroeconomic indicators can impact the spending power of the consumer because of which down trading from branded products to non- branded can occur which can affect the operating performance of the Company.

Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issue can affect our operations and profitability.

However the Company is well aware of the above nsks and as part of business strategy has put in mechanism to ensure that they are mitigated with timely action. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

In the opinion of the Board of Directors, none of the aforementioned risks affect and/or threaten the existence of the Company.

32. Transfer to Investor Education and Protection Fund

During the year under review the Company has no liability to transfer to Investor Education and Protection Fund.

33. Management Discussion and Analysis Report

Management Discussion and Analysis, as required under Regulation 34(3) of SEBI (LODR) Regulations, 2015 read with Schedule V of said Regulations, forms part of this Boards report as Annexure -G.

34. Directors Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors Confirm that:

(I) In the preparation of the annual accounts for the financial year 2021-22, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) 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 and loss of the company for that period;

(iii) 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;

(iv) The directors had prepared the annual accounts on a going concern basis;

(v) 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; and

(vi) 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.

35. Insolvency and Bankruptcy Code, 2016

During the year under review, there are no proceedings initiated against the Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company.

36. Details of difference between Amount of the valuation done at the time of One Time Settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

During the year under review, there were no instances where the Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

37. Secretarial Standards

The Company is in compliance with the Secretarial Standards i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively as specified by the Institute of Company Secretaries of India.

38. Revision of Annual Financial Statements

There was no case of revision in financial statement during the year.

39. Voting Rights of Employees

There were no voting rights exercised by any employee of the Company pursuant to the section 67(3) read with the Rule 16 of the Companies (Share Capital and Debenture) Rules, 2014.

40. Material changes and commitments affecting the financial position of the Company.

There have been no material changes and commitments affecting financial position of the Company that have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

41. Details of significant and material orders passed by the regulators or courts or tribunal

There were no significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and Companys operations in future.

However, the Company was in receipt of show cause notice from SEBI dated 16.07.2019 from the Office of Adjudicating Officer pertaining to GDR issue of the Company. Accordingly, the Company has filed a reply against the said notice on 08.03.2021. Also, a hearing before the Ld. Adjudicating Officer has been held on 18.05.2022. However, the Adjudicating Officer of SEBI passed an order on 28.06.2022 imposed a penalty of Rs. 10.25 Cr. on the Company. The Company after perusal and analysis of the said order and in consultation with the Counsel with their due advice and legal opinion signified that the order has been passed on inaccurate assessment of facts and on disproportionate grounds.and accordingly filed an appeal before the Honble Securities Appellate Tribunal (SAT) against the said order.

42. Code of Conduct

The Board has adopted the Code of Conduct for members of the Board and Senior Management personnel of the Company. The Code lays down, in details, the standards of business conduct, ethics and governance. The compliance of the same has been affirmed and a declaration signed by the Managing Director to this effect is given below. Code of Conduct has also been posted on the Companys Website. https://texmopiDe.com

Declaration

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company hereby confirms that it has obtained from all the Members of the Board and senior management personnel, affirmations that they have complied with the code of conduct in respect of financial year ended on March 31,2022.

43. Anti-sexual harassment policy

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. An Internal Committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees including trainees are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed off during the current financial year.

Number of Complaints pending at the beginning of the financial year: Nil

Number of Complaints received during the financial year: Nil

Number of Complaints disposed off during the financial year: Nil

Number of Complaints pending at the end of financial year: Nil

44. Acknowledgement

Your Directors would like to gratefully acknowledge and place on record their sincere appreciation for the cooperation and assistance received from its stakeholders, advisors, valued customers, suppliers, banks, consultants, financial institutions, government authorities and stock exchanges. The Directors also wish to place on record their sincere appreciation of the devoted and dedicated services rendered by all Executives, Staff Members and Workmen of the Company.

For and on behalf of the Board of Directors

Sd/- Sd/-
Sanjay Kumar Agrawal Vijay Prasad Pappu
Place:-Burhanpur Managing Director Whole Time Director cum CFO
Date: 10.08.2022 (DIN.: 00316249) (DIN.: 02066748)