Texplast Industries Ltd Directors Report

To,

The Shareholders,

TEXPLAST INDUSTRIES LTD

The Directors have pleasure in presenting their 46th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2017.

FINANCIAL RESULTS:

The Financial Results are stated as under:

		Amount in Rupees
PARTICULARS	Year Ended 31.03.2017	Year Ended 31.03.2016
Sales & Operating Income	31,40,813	2,30,76,197
Other Income	75,459	82,529
Total Income	32,16,272	2,31,58,726
Total Expenditure with Depreciation	2,73,73,989	25,66,72,234
Gross Income/ (Loss) before Taxation	(2,43,34,400)	(23,35,13,508)
Provision for Taxation	NIL	NIL
Net Profit/(Loss)	(2,43,34,400)	(23,35,13,508)

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis as required by the Listing Regulations is incorporated herein by reference and forms an integral part of this report as (Annexure 1).

OPERATIONS:

The Company has incurred Loss of Rs. 2,43,34,400/- as on year ended 31.03.2017 as against the Loss of Rs. 23,35,13,508/- of previous financial year ended on 31.03.2016, Loss is decreased by Rs. 20,91,79,108/- as compared with previous year. The Turnover of the Company decreased by Rs. 2,00,35,384/- in the current financial year as compared to previous year ended on 31st March, 2016.

ECONOMIC OUTLOOK:

The Global packaging industry was around $485 billion in 2004 with packaging of container for food and drink, healthcare, cosmetics, packaging like woven sacks & FIBC and other consumer goods as well as a range of industrial sectors, packaging has become an essential everyday item, with its usage growing broadly in line with the global economy, global packaging industry is poised to be $1500 billion by 2020, where world packaging is growing at 5% compared to India at 11% average.

The Indian Packaging Industry is expected to reach $75 billion by 2020 from present $44 billion. Out of above FIBC Industry (our) will be $1 billion by 2020 & woven sacks industry will be 2 Billion $.

The health of the packaging industry is linked to that of the world economy as a whole. However, reliant upon upstream industries for their raw materials, packaging converters have to cope with fluctuations in raw material prices, dependent upon levels of supply and demand. In a climate of low overall inflation, rising prices for raw materials (particularly plastic resin) have put something of a squeeze on converters. Downward pressure on prices is being exerted by brand owners and retailers alike-exacerbated by moves towards consolidation at all levels of the supply chain. In addition, moves towards central purchasing by packaging buyers have also impacted upon packaging margins. The growing use of ecommerce and reverse auctions has made the whole business of materials sourcing (especially in commodity areas) much simpler, promoting cost efficiency for users of consumables.

BUSINESS OVERVIEW DURING THE YEAR:

The financial year under reference was a year of struggle for the company as the Companies performance has declined this year, in comparison to last 3 financial year as the company was Not-operating Business due to strike, & due Lock-out in the factory unit, since 1st November 2013.

On the other hand the progression of packaging demand is influenced by a wide range of factors, from year to year and also factors with a much longer-term influence. While the economy plays a central role in influencing the size and growth of the market, there are a number of other factors which can be seen as having a direct or at least indirect influence on packaging demand or, at any rate, the nature of this demand, irrespective of the performance of the economy. These includes The ageing of the population, The trend towards smaller households, The increasing requirement for convenience among consumers, The trend towards on-the-go lifestyles among increasingly time- poor consumers, Growing requirements for brand enhancement/ differentiation in an increasingly competitive environment and new packaging material development Increasing awareness of environmental issues, and the adoption of new regulatory requirements on packaging recycling Out of all these factors, health awareness was regarded as the single most important driver to growth in the packaging industry. The ageing of the populations throughout the world was considered the least important driver to growth in the market, although even in this case, more than half of all respondents considered this to be important to some degree.

Your Directors (Management of the Company) are continuously looking for restart of the Company and once company start, we can expect robust growth. Sustained efforts of the Board would hopefully mitigate the accumulated losses of the Company as quickly as possible.

EXTRACT OF ANNUAL RETURNS:

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return is annexed as (Annexure -III).

1. The Paid up capital of the Company is Rs. 5,11,03,000/-.

2. The Board of Directors of the company as on 31.03.2017 consists of 6 Directors namely Mr. Sukumar Nandlal Shah Managing Director, Mr. Bharat Nautamlal Doshi, Independent Director (Cessation dated 30-05-2017), Mr. Sunil Premshankar Tripathi, Independent Director (resigned on dated 30-05-2017), Mr. Madan Milan Gupta Independent Director (resigned on dated 30-05-2017), Mr. Anupkumar Murarilal Jhunjhunwala Independent Director, Mr. Sundeep Kumar Sahu, Independent Director.

3. The secured loan borrowed by the company is Rs. 31,56,19,699/-.

4. The Promoters holding is consists of 32,35,700 equity shares of Rs.10/- amounting to 63.32% of total share capital of Rs. 5,11,03,000 consisting of 51,10,300 eq. Shares of Rs. 10 each of the Company.

5. There was no un-paid dividend during the year.

DIVIDEND:

The board regrets its inability to declare any dividend for the year under review due to loss in business.

SHARE CAPITAL:

During the year under review, the Companys share capital remained unchanged. The Authorized Share Capital of the Company is Rs.5,50,00,000 (Five Crore Fifty Lakh only) divided into 54,60,000 (Fifty Four Lakhs Sixty Thousand) Equity Shares of Re. 10/- each and 8% 800 (Eight Hundred) Non-Cumulative Redeemable Preference Shares of Rs.500 each share.

The Issued, Subscribed & Paid-up Share Capital is Rs. 5,11,03,000/- (Rupees Five Crore Eleven Lakh Three Thousand only) divided into 51, 10,300 (Fifty One Lakh Ten Thousand Three Hundred) Equity Shares of Re.10/- each.

TRANSFER TO RESERVES:

Y our Company has not transferred any amount to the Reserve & Surplus.

SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANY:

Your Company does not have any subsidiaries, joint ventures and associate companies as on March 31, 2017 and therefore the requirements of sub Section (3) of Section 129 of Companies Act, 2013 will not be applicable to the Company.

The Company has in accordance with Sub Section (2) of Section 129 of the Companies Act, 2013 prepared Standalone financial statements of the Company.

Further, the report on the performance and financial position of the subsidiary, associate and joint venture and salient features of the financial statements in the prescribed Form AOC-1 does not form part of the report.

DETAILS OF CONTRACTS /ARRANGEMENTS WITH RELATED PARTIES:

As required in terms of provisions of Section 188 of the Companies Act, 2013 the details of certain contracts/arrangements with related parties are required to be disclosed in form AOC-2 as a part of this report, however during the year your Company has not entered into any such contract/arrangements with related parties, hence AOC-2 is not part of the report.

But the Company is having outstanding loan from related parties amounting Rs. 5,10,03,828.15/- as on the date.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

Details of the loans made by the Company to other body corporate or entities are given in notes to financial statements, loans, guarantee; Investments are under the prescribed limited as per the Companies Act.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

Company has borrowed money from Banks is being suspended from Trading on BSE from 26th August, 2014 on account of penal provisions under listing agreement and that is because of Non-operations of Business due to strike, Lock-out in the factory unit, since 1st Nov.2013 and thus the Company has not complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement/Listing Regulations, as applicable.

NOTE-4 Long Term Borrowings

	Non-Current Portion		Current Portion
a) Secured. Borrowings-From Banks	As at 31st Mar, 2017	As at 31st March, 2016	As at 31st Mar, 2017	As at 31st March, 2016
i) Term Loan In INR (From Indian Overseas Bank)	Rupees	Rupees	Rupees	Rupees
Term Loan-1	15,98,711	15,98,711
Term Loan-2 ii) Term Loan in Foreign Currency From Indian Overseas Bank	74,93,249	74,93,249
FCTL-981300001	1,01,00,198	1,01,00,198
FCTL-981300002	58,89,257	58,89,257
FCTL-981300003	1,19,70,776	1,19,70,776
iii) Cash Credit Facilities from Indian Overseas Bank	19,67,53,871
iv) Packing credit Loan from Indian Overseas Bank	8,18,13,637
b) Unsecured Borrowings
- From Related Parties
Sukumar NT Shah (Managing Director)		4,41,72,603
Dipak NT Shah
Smita Shah Rahul Shah	1,23,81,225	1,23,81,225
-Intercorporates Loans	48,96,225	48,96,225
c) Deferred Sales Tax Liability	2,18,32,798	3,22,94,431
The above amount includes	26,69,971	26,69,971
Amount Disclosed, under the head "Other Current Liabilities" (Note- 9.1)
	39,11,26,296	14,71,32,110	-	-

Notes:

SECURED BORROWINGS:

i. Term Loan in INR from Indian Overseas Bank:

Term Loan-1 is repayable in sixty monthly instalments of Rs.55,620/- from December-2011 carry interest rate of 14.25% pa. The Loan is secured against Block assets of the Company and personal guarantee by Managing Director.

The facility is classified as NON PERFORMING ASSETS as on 12/05/2014 and possession of factory has been taken by bank for recovery proceeding.

Term Loan-2 is repayable in sixty monthly instalments of Rs.1,66,667/- each starting from six months after first disbursement carry interest rate of 14.25% pa.

-The facility is classified as NON PERFORMING ASSETS as on 12/05/2014 and possession of factory has been taken by bank for recovery proceeding.

ii. Foreign Currency Term Loan from Indian Overseas Bank:

Foreign Currency Term Loan from Indian Overseas Bank carries interest @ LIBOR + 7%.The loan is secured against Block assets of the Company and personal guarantee of Managing Director. Monthly two instalments is overdue. The facility is classified as NON PERFORMING ASSETS as on 12/05/2014 and possession of factory has been taken by bank for recovery proceeding.

iii. Foreign Currency Term Loan from Indian Overseas Bank:

Foreign Currency Term Loan from Indian Overseas Bank carries interest @ LIBOR + 7%.The loan is secured against Block assets of the Company and personal guarantee of Managing Director. Monthly two instalment is over-due. The facility is classified as NON PERFORMING ASSETS as on 12/05/2014 and possession of factory has been taken by bank for recovery proceeding.

iv. Packing credit is taken from Indian Overseas Bank which carries interest @ 8% p.a. up to 270 days & 16% p.a. beyond 270 days. It is secured against hypothecation of stock of RM/WIP/FG and personal guarantee of managing director.3. Packing credit overdue due to non-submission of export bills. The facility is classified as NON PERFORMING ASSETS as on 12/05/2014 and possession of factory has been taken by bank for recovery proceeding.

V. Collateral Security for all loans from Indian Overseas Bank

a) Working Capital limits is collaterally secured by residual value of the fixed assets of the Company, present and future.

b) Term loan is secured by residual value of fixed assets of the Company, present and future.

c) All loan from Indian Overseas Bank is secured by Equitable Mortage of the immovable property of the Company.

Gut NO.39 Hissa No. paiki 2 acers, Nehroli Village, Wada Taluka and District Thane and Hissa No. paiki 76.4 gunthas nehroli village, wada taluka District Thane and Gut No.40 admeasuring 1 acers 6.5 gunthas, nehroli Village, Wada Taluka and District Thane.

d) Fixed Deposits of Rs.1.00 Cr. (under lien to Indian Overseas Bank)

Residual value of residential property at Flat No.1301, admeasuring 550 sq. ft built up area on the 13th floor, in the building known as "Surya Apartment Co-op Housing Society Ltd" situated ated 53, Bhulabhai Desai Road, Mumbai-400026. valued at Rs.264.00 Lacs FMV and Rs.211.00 Lacs as FSV as per valuation report dated 09th November, 2009 of Shekhar Thite. This flat is already mortgaged for Housing Loan of Rs.152.50 Lacs for Sukumar N Shah at Indian Overseas Bank, Mahim Branch.

V. As on 12/05/2014 Indian Overseas Bank issued Demand Notice under Sub-Section (2) of Section 13 of The Sarfaesi Act, 2002 and classified all credit facilities from bank as NON PERFORMING ASSETS.Following are details of Credit facility Nature, Limit & Dues as on 12/05/2014-

Nature of Facilities	Limit	O/s as on 12/05/14
Cash Credit	10 crore	19.51 crore
Packing Credit	8.50 crore	8.18 crore
Term Loan	0.20 lacs	0.16 lacs
Term Loan	0.82 lacs	0.75 lacs
FCTL-1	1.36 crore	0.98 lacs
FCTL-2	0.67 lacs	0.57 lacs
FCTL-3	1.28 crore	1.16 lacs

DEPOSITS:

As on 31.03.2017, the company held no deposit in any form from anyone. There was no deposit held by the company as on 31.03.2017, which was overdue or unclaimed by the depositors. For the present the broad of directors have resolved not to accept any deposits from public.

LISTING:

The equity shares of the Company are listed at the Bombay Stock Exchange Ltd.

LISTING AGREEMENT:

SEBI notified the Listing Regulations and the same were effective December 1, 2015. The Listing Regulations aim to consolidate and streamline the provisions of the erstwhile listing agreement for different segments of capital markets to ensure better enforceability. In terms of the Listing Regulations, all listed entities were required to enter into a new listing agreement with the stock exchanges.

In compliance with the requirement, the Company has executed the listing agreement with the BSE Limited.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197 (12) of the Companies Act, 2013 read with the Rule 5(2) of the Companies (Appointment and Remuneration) Rules, 2014, as amended from time to time, the Company is required to disclose the ratio of the remuneration of each director to the median employees remuneration and such other details, however the company has not paid any remuneration to its KMP and other Directors during the financial year hence there are no such details for reporting but some details has mentions in Extract of Annual Return. .

CORPORATE GOVERNANCE:

In accordance with SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014 and as per the Regulation 15 of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 provisions of regulation 27, reporting on Corporate Governance, shall not apply to the listed entity having paid up share capital not exceeding Rs. 10 crore and the Net Worth not exceeding Rs. 25 crore as on the last day of the previous financial year i.e. March 31, 2017, the Company even though being an listed entity since does not falls under the criteria attracting the obligations to adhere to the compliance with the compliances of Clause 49 of Listing Agreement amended (under Regulation 27(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

However the Board has decided to continue to comply with the requirements of for best secretarial practice of Corporate Governance as stipulated under Regulations of the Equity Listing Regulations and accordingly, the summary Report on Corporate Governance forms part of the Annual Report as (Annexure-IV).

The requisite Certificate from the Secretarial Auditors of Company M/s Vinesh K Shah & Associates, Practicing Company Secretary Mumbai, regarding compliance with the conditions of Corporate Governance as stipulated in regulation 27 of Equity Listing Regulations is annexed to this Report.

BOARD OF DIRECTORS:

During the year the Board of Company as on 31.03.2017 comprises of the following

Directors: Mr. Sukumar Nandlal Shah	-Managing Director
Mr. Bharat N. Doshi	- Independent Director
Mr. Sunil Premshankar Tripathi	-Independent Director
Mr. Sandeep Kumar Sahu	-Independent Director
Mr. Milan Madan Gupta	- Independent Director
Mr. Anupkumar Jhunjhunwala	- Independent Director

RE-APPOINTMENT (RETIRE BY ROTATION):

As per the provisions of sub section 6 of Section 152 of the Companies Act, 2013, none of the Directors are liable to be retire by rotation from the board of the Company.

APPOINTMENT AND CESSATION:

Two Directors (Mr. Anupkumar Jhunjhunwala and Mr. Milan Madan Gupta) was appointed and none of Directors ceased from Directorship in the Board of the Company, during the year.

BOARD MEETINGS:

The Company scheduling of meetings of Board with proper notices and agenda & calendar is prepared and circulated in advance. The Board met Four (5) times during the year 2016-17, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Nomination and Remuneration Committee (NRC) works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, education. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Subsection (3) of Section 178 of the Companies Act, 2013, adopted by the Board, are stated in this Board report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

FAMILIARISATION AND TRAINING PROGRAMME FOR INDEPENDENT DIRECTORS:

Every new independent director of the Board attended an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors/senior managerial personnel make presentations to the inductees about the Companys strategy, operations, product and service offerings, markets, software delivery, organization structure, finance, human resources, technology, quality, facilities and risk management.

The Company has organized the following workshops for the benefit of Directors and Independent Directors:

(a) a program on how to review, verify and study the financial reports;

(b) a program on Corporate Governance;

(c) Provisions under the Companies Act, 2013; and

(d) SEBI Insider Trading Regulation, 2015;

(e) SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015

Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment.

BOARD EVALUATION:

The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors. The Board, through Nomination and Remuneration Committee, sought the feedback of Directors on various parameters such as:

• Degree of fulfilment of key responsibilities towards stakeholders;

• The structure, composition and role clarity of the Board and Committees;

• Extent of co-ordination and cohesiveness between the Board and its Committees;

• Effectiveness of the deliberations and process management;

• Board/Committee culture and dynamics; and

• Quality of relationship between Board Members and the Management.

The Chairman of the Board had one-on-one meeting with the Independent Directors and the Chairman of NRC had one-on- one meeting with the Executive and Non-Executive Directors. These meeting were intended to obtain Directors inputs on effectiveness of the Board/Committee processes.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting, reviewed the performance of the Board, Chairman of the Board and that of Non-Executive Directors.

COMMITTEES OF THE BOARD:

Currently, the Board has three committees:

1. Audit Committee,

2. Nomination and Remuneration Committee,

3. Stake Holders Relationship Committee & Share Transfer Committee.

A detailed note on the Board and its committees is provided under the corporate governance report section in this Annual Report.

COMPENSATION POLICY FOR THE BOARD AND SENIOR MANAGEMENT:

Based on the recommendations of NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (KMP) and all other employees of the Company. As part of the policy, the Company strive to ensure that the remuneration paid to the Board members and Senior Management should be appropriate and under the limit of the act.

The Remuneration Policy for Directors, KMP and other employees was adopted by the Board during the F.Y. 2014-15, during the year, there have been no changes to the Policy.

INDEPENDENT DIRECTORS DECLARATIONS:

The Company has received necessary declaration from independent director under Section 149(7) of the Companies Act, 2013, that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and the Listing Agreement.

In the opinion of the Board, the independent directors are, individually, person of integrity and possess relevant expertise and experience.

The Independent Directors under section 149(6) of the Companies Act, 2013 declared that:

1. They are not a promoter of the Company or its holding, subsidiary or associate company;

2. They are not directors in the company, its holding, subsidiary or associate company.

3. The independent Directors have/had no pecuniary relationship with company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;

4. None of the relatives of the Independent Directors have or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two percent. or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

5. Independent Director, neither himself nor any of his relatives —

• holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;

• is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of—

> a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(3) (c) OF THE COMPANIES ACT, 2013:

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis.

GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (the Act), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI).

Based on the framework of internal financial controls established and maintained by the Company, work performed by the Internal Audit Team, statutory Auditors and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during Financial Year 2015-16.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm:

a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) That we have 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;

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the annual accounts have been prepared on a going concern basis;

e) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively; and

f) That proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively.

DISCLOSURES AS PER SECTION 134 (3) (M) OF THE COMPANIES ACT, 2013:

i) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:

As there was Non-operations of Business due to strike, Lock-out in the factory unit, since 1st Nov.2013 so there is no particulars available regarding conservation of energy and technology absorption prescribed by the rules.

ii) FOREIGN EXCHANGE EARNING:

The Company has made sale/export in foreign exchange and the export sales for the F.Y. 2016-17 is Rs. 3911220/- inflow during the year under review.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company does not met any of the criteria mentioned in Section 135 of Companies Act, 2013 and therefore is not required to comply with the requirements mentioned therein.

AUDITORS:

STATUTORYAUDITORS:

Pursuant to Section 139 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, as amended from time to time, M/s. P. C. RATHI & Co., Chartered Accountants, Mumbai (FRN-111799W), as Statutory Auditors of the Company to hold office from the conclusion of this 45th Annual General Meeting (AGM) till the conclusion of the 47th Annual General Meeting be held in the year 2018, to examine and audit the accounts of the Company for the Financial Year 2017-18 at such remuneration as may be mutually agreed between the Board of Directors and the Auditors.

AUDITORS REPORT:

Statutory Auditors has given Qualifications On the financial statement as on 31.03.2017 of the Company as follows:

i) Balances of debtors, creditors, secured loans including interest payable thereon and loans and advances are subject to confirmation.

ii) Company has not made Provision for Interest on Working Capital Facility and Term Loan availed from Banks and Financial Institution pursuant to classification of its account by the concerned Banks and Financial Institution as Nonperforming Assets (NPA).

iii) In absence of availability of net realizable value of items of inventories to the tune of 33.18 Lakh, these have been valued at management estimate instead of lower of cost and net realizable value. We are relying on value of closing stocks as certified and provided by the management. The impact of valuation on loss and current assets is not ascertainable.

iv) Excise records are not available for verification due to non-functioning of the factory because of the strike undertaken by the workers and seizure of the factory by the bank under the SARFEASI Act 2002. We are unable to comment on excise records and liability.

v) As the Factory is not functional due to strike and seizer of Factory and Plant by Bank as the Bank Loan became NPA as on 31.03.2014 w.e.f. 28.01.2014 thereafter the strength of Employees, labour and Workers has been reduced. As on date the employees of the company below 10 only hence there is no Long term Employees Benefits provisions made by the Company AS 15 Employee Benefits (revised 2005) issued by ICAI.

vi) As we are unable to verify/check conditions of Fixed Assets to determine the life of Plant, Machinery, furniture and Fixture of the Company due to Seizer of possession by bank as the loans become NPA the Depreciation calculation done as per Income tax Act instead of Companies Act, 2013.

vii) The fact of Banks classifying the company as a NPA and seizure of factory by the bank for recovery proceedings has raised substantial doubt as to the Companys ability to continue as going concern and therefore, the Company may not be able to realize its assets and discharged its liabilities in the normal course of business. The financial statement does not include any adjustment relating to the recoverability and classification of recorded assets amount. Further, the Financial statement which indicates that the Company has accumulated losses and its Net worth has been fully eroded, the Company has incurred Net Loss of Rs.2.43 Crore during the current financial year (Previous Year Rs.23.35 Crore) and net cash Loss during the current year of Rs. 2.03Crore (Previous year net Cash Profit of Rs. 1.28 Crore) also, the Company current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note No. 28.11 also indicate the existence of a material uncertainty that cast significant doubt about the Companys ability to continue as a going concern.

Management Clarification on the Auditors Qualification:

Management of the Company taken on record the Observations & Qualifications given by Statutory Auditors on Financial Statements as on 31st March, 2017 and clarification of the Board and Management is as follows:

In our opinion and to the best of our information and according to the explanations given to us except for the effect of the matter described in Basis of Qualified Opinion, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles general accepted in India, of the state of affairs of the Company as at 31 March 2017 and its profit and its cash flows for the year ended on that date.

Management Clarification on the Auditors Qualification:

Management of the Company take on record the Observations & Qualifications given by Statutory Auditors on Financial Statements as on 31.03.2017 and clarification of the Board and Management is as follows:

i) Balances of debtors, creditors, secured loans including interest payable thereon and loans and advances are subject to confirmation.

ii) As the matter is pending with DRT Court for one time settlement of Loan Amount hence the Company has not made Provision for Interest on Working Capital Facility and Term Loan availed from Banks and Financial Institution pursuant to classification of its account by the concerned Banks and Financial Institution as Non-performing Assets (NPA).

iii) As the Companies Plant & Registered office is sealed & locked by authority due to case pending with DRT Court therefore In absence of availability of net realizable value of items of inventories to the tune of 33.18 Lakh, these have been valued at management estimate instead of lower of cost and net realizable value. We are relying on value of closing stocks as certified and provided by the management. The impact of valuation on loss and current assets is not ascertainable.

iv) the company and its management is unable to excess the Excise Records due to non-functioning of the factory because of the strike undertaken by the workers and seizure of the factory by the bank under the SARFEASI Act 2002 as the Bank loans became NPA.

v) In the F.Y. 2016-17 the total employee strength is below 10 since the Companies Factory/plant is non functionable due to strike and seizer of possession by Bank, hence the Long term Employees Benefits provisions not made.

vi) Since the possession of Assets taken by Bank, assets are not in use and the Factory is non-functional hence there is no possibility to physical verification of Fixed Assets therefore Depreciation has accounted as per Income tax, Act.

vii) AS the case is still pending and the company has not received any final order hence company has not disclosed the fact of Banks classifying the company as a NPA and seizure of factory by the bank for recovery proceedings has raised substantial doubt as to the Companys ability to continue as going concern and therefore, the Company may not be able to realize its assets and discharged its liabilities in the normal course of business.

The management of the Company is putting its efforts for One Time Settlement with Bank for outstanding dues related to Loans and Interest on loan and the management is in hope if OTS with bank will finalize the same will be beneficial for

the revival of the Company to continue its business as going concern.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

Mr. Vinesh K. Shah, Practicing Company Secretaries was appointed to conduct the secretarial audit of the Company for the financial year 2016-17, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.

Secretarial Auditors have made following qualification in secretarial audit Report.

The Company is being suspended from Trading on BSE from 26th August, 2014 on account of penal provisions under listing agreement and that is because of Non-operations of Business due to strike, Lock-out in the factory unit, since 1st Nov.2013.

-The Company not completed its filings of Financial Statements with the Registrar of Companies for the financial year ended 31st March, 2014 and 31st March, 2015 and 31st March 2016 and there were delayed submissions with Registrar of Companies during the audit period.

-There has been no submissions to the BSE Limited at various instances under listing agreement during the audit period.

-There were no proper secretarial records maintained as required under the companies act, 2013 and rules made thereunder to our satisfaction.

-There is default of making repayment of Loans of banks and discussions are going on for the settlement of said dues.

I further report that:

-The Board of Directors of the Company is not duly constituted with proper balance of Woman Directors.

DIRECTORS EXPLANATION FOR THE OBSERVATIONS OF SECRETARIAL AUDITOR:

With respect to the observations of the Secretarial Auditor in their report, the Management has given following Explanations:

Management of the Company taken on record the Observations & Qualifications given by Statutory Auditors on Financial Statements as on 31st March, 2017 and clarification of the Board and Management is as follows:

- The Company is being suspended from Trading on BSE from 26th August, 2014 on account of penal provisions under listing agreement and that is because of Non-operations of Business due to strike, Lock-out in the factory unit, since 1st Nov, 2013 the Management is putting its all efforts to comply all the Due Compliances as per Companies Act, SEBI (LODR) Regulation, 2015 (Listing Agreements) and all other applicable acts and laws on the company.

- As the plant of the company is non-operational due to strike by workers after 1st November 2013 therefore the properties of the company which is mortgaged with Banks against loan became NPA since the financial position of the Company was not good therefore company could not complete the filings of Financial Statements and Annual Returns with the Registrar of Companies for the financial year ended 31st March, 2014 and 31st March, 2015, as on date the Company is in the Process to Complete the Filing at the earliest.

due to strike by workers after 1st November 2013 therefore the properties of the company which is mortgaged with Banks against loan became NPA since the financial position of the Company was not good and management of the company was concentrating on the revival of the companies working hence cold not concentrate on the Compliance Parts of some applicable compliances under Listing Agreements and other applicable laws.

- The Board of your Company ensure that the compliances will be complied with at the earliest

- In this regard, Management is of the opinion that the companies matter related to Bank Loan which is become NPA is lying with Debt Recovery Tribunal (DRT) and it will be settle at the earliest.

- In this regard, Management is of the opinion that the company was in the process of proper composition of board during the year 2016-17 but Management was appointed Woman Director on 30th May, 2017.

INTERNAL FINANCIAL CONTROLS SYSTEM WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down in the Company and that such controls are adequate and operating effectively. The foundation of Internal Financial Controls (IFC) lies in the Companies Code of Conduct, policies and procedures adopted by the Management, corporate strategies,

annual management reviews, management system certifications and the risk management framework.

The Company has IFC framework, commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws.

The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The framework on Internal Financial Controls over Financial Reporting has been reviewed by the internal and external auditors.

The Company has its own Internal Audit system, the scope and authority of the Internal Audit function is to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, accounting procedures and policies of the Company. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s). Significant audit observations and corrective action(s) thereon are presented to the Audit Committee. The Audit Committee reviews the reports submitted by the Internal Auditors annually.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/behaviours of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Companys website www.texplast.com

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL) ACT, 2013:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. During the year, the Company has not received complaint of sexual harassment.

RISK MANAGEMENT:

As the year ending on 31st March, 2017 the Company is having aggregate outstanding Loan of Rs. 39,11,26,296/- including loan amounting Rs. 5,10,03,828/- from related parties out of which 31,56,19,699/- is secured debt and on the other hand loan amounting Rs. 7,55,06,597/- is unsecured loan.

The term loan and Working Capital limits is collaterally secured by residual value of the fixed assets of the Company, present and future and all loan from Indian Overseas Bank is secured by Equitable Mortgage of the immovable property of the Company.

As on 12/05/2014 Indian Overseas Bank issued Demand Notice under Sub-Section (2) of Section 13 of The SARFAESI Act, 2002 and classified all credit facilities from bank as NON PERFORMING ASSETS.

VIGIL MECHANISM:

The Company has formulated the Whistle Blower Policy and adopted by board for Directors & Employees, Whistle Blower Policy for Vendors and Whistle Blower Reward and Recognition Policy for Employees to deal with instance of fraud and mismanagement, if any, in staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India.

The Whistle Blower Policy for Directors & employees is an extension of the Companies Code of Conducts that requires every Director or employee to promptly report to the Management any actual or possible violation of the CoC or any event wherein he or she becomes aware of that which could affect the business or reputation of the Company.

The Whistle Blower Policy for Employees has been implemented in order to whistle on any misconduct, unfair trade practices or unethical activity taking place in the Company, the Committee reports to the Audit Committee and the Board.

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board of Directors and the designated employees have confirmed compliance with the Code.

ACKNOWLEDGEMENTS:

We thank our investors/Members, dealers, customers, business associates and bankers for their continued support during the year and we look forward to their continued support in the future. We place on record our appreciation of the contribution made by employees at all levels.

Our resilience to meet challenges was made possible by their hard work, team spirit, co-operation and support.

	By order of the Board
	For TEXPLAST INDUSTRIES LIMITED
Place: Mumbai
Date: 14thAugust, 2017	Sd/-	Sd/-
Regd. Off.: Gut No 39/40	Sukumar Nandlal Shah	Anupkumar Jhunjhunwala
Village Nehroli Taluka,	(Managing Director)	(Director)
Wada Thane-421312	Din: 00202546	Din: 01914605