Tirupati Starch & Chemicals Ltd Directors Report.

To,

The Members,

Tirupati Starch and Chemicals Limited, Indore

Your Directors have pleasure in presenting the 33rd Annual Report together with Audited Financial Statements of the Company for the Financial Year ended 31st March, 2019. Further, in compliance with the Companies Act, 2013 the Company has made requisite disclosures in this Boards Report with the objective of accountability and transparency in its operations to make you aware about its performance and future perspective of the Company.

FINANCIAL SUMMARY, STATE OF COMPANYS AFFAIRS AND CHANGE IN NATURE OF BUSINESS:

The Boards Report is based on the Standalone Financial Statements of the Company for the year ended 31st March, 2019:

(Amount in Rs.)

Particulars Current Year Previous Year
2018-2019 2017-18 .
Total Revenue 2,27,77,21,638.54 2,20,69,90,037.31
Total Expenses 2,23,65,41,214.93 2,18,46,66,953.29
Profit Before Tax 4,11,80,423.61 2,23,23,084.02
Tax Expenses : 87,79,373.00 45,93,941.00
Short / (Excess) provision of Income Tax of Earlier Years 0.00 (21,321.00)
Current Tax 90,25,685.00 47,91,715.00
Deferred Tax 83,73,401.00 48,68,941.00
MAT Credit Entitlement (86,19,713.00 (50,45,394.00)
Profit After Tax 3,24,01,050.61 1,77,29,143.02
Carried to Balance Sheet 3,24,01,050.61 1,77,29,143.02

PERFORMANCE REVIEW

The highlights of the Companys performance are as under:

During the year under review, the Companys total revenue was Rs. 2,27,77,21,638.54/- (Rupees Two Twenty Seven Crores Seventy Seven Lacs Twenty One Thousand and Six Hundred Thirty Eight Only) as compared to Rs. 2,20,69,90,037.31/-(Rupees Two Twenty Crores Sixty Nine Lacs Ninty Thousand Thirty Seven Only) and Company reported a profit of Rs. 3,24,01,050.61/- (Rupees Three Crore Twenty Four Lacs One Thousand and Fifty Only) as compared to a profit of Rs. 1,77,29,143.02/- (Rupees One Crore Seventy Seven Lacs Twenty Nine Thousand and One Hundred Forty Three Only) for the Financial Year ended 31st March, 2018.

CHANGE IN NATURE OF COMPANYS BUSINESS

During the Year under review, there was no change in Companys Business. The Company had carried on with its Expansion plans and commercial production of Starch and allied products throughout the year.

FUTURE OUTLOOK

We have constant focus on maintaining operational efficiency and optimum product mix. Your Company is utilizing its Manufacturing Unit to 100% capacity, by automating its existing production processes. By doing so, your Company will be able to achieve a higher top line and improve its bottom line in the years to come.

SHARE CAPITAL

During the year under review, the Company, neither increased nor decreased its Equity and Preference Share Capital.

The breakup of Equity and Preference Share Capital of your Company as on 31st March, 2019 is as following:

• The Authorized Equity Share Capital is Rs. 8,00,00,000/- (Rupees Eight Crores Only) divided into 80,00,000 (Eighty Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each.

• The Authorized Preference Share Capital is Rs. Rs. 4,00,00,000/- (Rupees Four Crores Only) divided into 40,00,000 (Forty Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each.

• The Paid Up Equity Share Capital is Rs. 6,09,31,760/- (Rupees Six Crore Nine Lacs Thirty One Thousand Seven Hundred Sixty Only) divided into 60,93,176 (Sixty Lacs Ninety Three Thousand One Hundred and Seventy Six) Equity Shares of Rs. 10/- (Rupees Ten) each.

• The Paid Up 0% Redeemable Preference Share Capital is Rs. 1,50,00,000 (Rupees One Crore Fifty Lacs Only) divided into 15,00,000 (Fifteen Lacs) 0% Redeemable Preference Shares of Rs. 10/- (Rupees Ten) each.

CREDIT RATING:

Acuite Ratings & Research Limited vide their letter dated 05th July, 2019; have assigned the following ratings to the bank loan facilities of Rs. 10 Crores availed by the Company:

Total Bank Loan Facilities Rated Rs. 10 Crore (Rs. Ten Crores)
Long Term Rating ACUITE BBB - Outlook: Stable

DIVIDEND

The strength of your company lies in identification, execution and successful implementation of its projects. To strengthen the long term prospects and ensuring sustainable growth in assets & revenue, it is important for your company to evaluate various opportunities in different business verticals in which your company operates. Your company continues to explore newer opportunities. Your Board of Directors, considers this be in strategic interest of the company and believes that this will greatly enhance the long term shareholders value. In order to fund companys projects and assignments in its development, expansion and implementation stages, conservation of funds is of vital importance. Therefore, your Board has not recommended any dividend for the year under review.

RESERVES

The Company has been transferred Rs. 3,24,01,050.61/- to General Reserve during the year under review.

REVISION IN FINANCIAL STATEMENTS OR BOARDS REPORT U/S 131(1) OF THE COMPANIES ACT, 2013

In terms of Section 131 of the Companies Act, 2013, the Financial Statements and Boards Report are in compliance with the provisions of Section 129 or Section 134 of the Companies Act, 2013 and that no revision has been made during any of the three preceding financial years.

EXPORTS

During the year under review, the export turnover of your company is Rs. 1,47,59,705.52/- (Rupees One Crore Forty Seven Lacs Fifty Nine Thousand Seven Hundred Five and Fifty Two Paise only). The major export markets of the Company are South Africa, Kuwait, Dubai, Durban, Australia and Angola. Further, your Company intends to continue with its long term export oriented marketing policy by penetrating more in its existing international market and exploring new avenues for its high value products.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Directors and KMPs

The Company is having required Key Managerial Personnels as per section 203 of the Companies Act, 2013 as well as the SEBI (LODR) Regulations, 2015.

During the year under review, there were following changes that took place in the Directors and Key Managerial Personnel of the Company:

• Mr. Ramdas Goyal (DIN: 00150037), Chairman of the Company has tendered his resignation from the post of Managing Director due to some personal reasons on 20th May, 2019 and further the Board has appointed him as a Whole Time Director for the term of 3 years w.e.f. 01st June, 2019 at the duly convened Board Meeting held on 27th May, 2019 on the terms and conditions as discussed subject to the approval of Members in ensuing AGM.

• Mr. Amit Modi (DIN: 03124351), Whole Time Director of the Company was appointed as a Managing Director for the term of 3 years w.e.f. 01st June, 2019 at the duly convened Board Meeting held on 27th May, 2019 on the terms and conditions as discussed subject to the approval of Members in ensuing AGM.

• Mr. Prakash Chand Bafna (DIN: 00107070), Whole Time Director of the Company, who has attained the age of 70 Years in May, 2019, was re-appointed as a Whole Time Director for the term of 3 years w.e.f. 01st June, 2019 at the duly convened Board Meeting held on 27th May, 2019 on the terms and conditions as discussed subject to the approval of Members in ensuing AGM.

• During the year under review, Mr. Ramesh Goyal (DIN: 00293615) and Mr. Prakash Chand Bafna (DIN: 00107070) would retire by rotation at the ensuing Annual General Meeting of the Company. Proposals for their reappointment have been included in the Notice of Annual General Meeting for your approval.

All the intimations pertaining to the appointments and resignations made during the year has been given to Stock Exchange(s) where the shares of the Company are listed and also the relevant records are duly updated with the Registrar of Companies, Gwalior (M.P.), wherever required.

Declaration for Independency of Independent Directors

The Company has received necessary declaration from each independent director under Section 149(6) of the Companies Act, 2013 that they meet the criteria of Independence as per the SEBI (LODR) Regulation, 2015. In the Opinion of the Board, all the independent directors fulfills the criteria of the independency as required under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

Executive Directors seeking Re-appointment :

Mr. Prakash Chand Bafna (DIN: 00107070), Whole Time Director of the Company, who has attained the age of 70 Years in May, 2019, was re-appointed as a Whole Time Director for the term of 3 years w.e.f. 01st June, 2019 at the duly convened Board Meeting held on 27th May, 2019 on the recommendation of the Nomination and Remuneration Committee.

Your Board of directors recommends to pass special resolution as per the proviso of section 196 (3) (a) of the Companies Act, 2013 to that effect as set out in the notice of the Annual General Meeting and justification for re-appointing his is being annexed in the explanatory statement.

BOARD OF DIRECTORS

Composition

a) The composition of the Board of Directors during the year under review were as follows :

S.N. Name Category Designation
1 Mr. Ramdas Goyal* Executive Director Chairman & Whole Time Director
2 Mr. Amit Modi** Executive Director Managing Director
3 Mr. Prakash Chand Bafna*** Executive Director Whole-Time Director
4 Mr. Ramesh Goyal Executive Director Whole-Time Director
5 Mr. Yogesh Kumar Agrawal Non-Executive Director Director
6 Mrs. Pramila Jajodia Non-Executive Director Director
7 Mrs. Shashikala Mangal Non-Executive Director Director
8 Mr. Ashish Agrawal Independent Director Independent Director
9 Mr. Vinod Kumar Garg Independent Director Independent Director
10 Mr. Nitin Kumar Gupta Independent Director Independent Director
11 Mr. Ramesh Agrawal Independent Director Independent Director

* Mr. Ramdas Goyal has tendered his resignation from the post of Managing Director on 20th May, 2019 and further the Board has appointed him as Whole Time Director (WTD) w.e.f. 01.06.2019.

** Mr. Amit Modi has been appointed as Managing Director w.e.f. 01.06.2019.

*** The Board has re-appointed Mr. Prakash Chand Bafna, who has attained the age of 70 Years, as a Whole Time Director w.e.f. 01.06.2019.

b) During the financial year 2018-19 the Board of Directors met 5 (Five) times. The time gap between any two meetings did not exceed 120 (One Hundred Twenty) days.

Board Meetings and Attendance :

Name of Directors 30.05.18 14.08.18 01.11.18 27.12.18 13.02.19
Mr. Ramdas Goyal Present Present Present Present Present
Mr. Amit Modi Present Present Present Present Present
Mr. Prakash Chand Bafna Present Present Present Present Present
Mr. Ramesh Goyal Present Present Present Present Present
Mr. Yogesh Kumar Agrawal Present Present Present Present Present
Mrs. Pramila Jajodia Present Present Present Present Present
Mrs. Shashikala Mangal Present Present Present Present Present
Mr. Ashish Agrawal Present Present Present Present Present
Mr. Vinod Kumar Garg Present Present Present Present Present
Mr. Nitin Kumar Gupta Present Present Present Present Present
Mr. Ramesh Agrawal Present Present Present Present Present

c) Independent Directors Meeting:

In due compliance with the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of Independent Directors was held on 13th February, 2019.

d) Familiarization programmes for the Independent Directors:

Familiarization programmes for the Independent Directors was conducted to familiarize them with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc.

COMMITTEES OF THE BOARD (a) AUDIT COMMITTEE:

Audit Committee Composition

S.N. Name Designation Position in the Committee
1 CA. Ashish Agrawal Independent Director Chairman
2 Mr. Yogesh Kumar Agrawal Non Independent Director Member
3 Mr. Vinod Kumar Garg Independent Director Member

Audit Committee Meetings and Attendance :

Particulars 30.05.18 14.08.18 01.11.18 13.02.19
Mr. Ashish Agrawal Present Present Present Present
Mr. Yogesh K. Agrawal Present Present Present Present
Mr. Vindo Kumar Garg Present Present Present Present

The compliance officer who is a Member of the Institute of Company Secretaries of India is the secretary to the committee. The Chairman of the Committee was present at the 32nd Annual General Meeting of the Company held on September 22, 2018. The constitution of the Committee meets with the requirement of Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations.

The Audit Committee reviewed the reports of the internal auditors, the report s of the statutory auditors arising out of the quarterly, half-yearly, and annual audit of the accounts; considered significant financial issues affecting the Company and held discussions with the internal and statutory auditors and the Company Management during the year.

(b) NOMINATION AND REMUNERATION COMMITTEE:

Nomination and Remuneration Committee Composition:

S.N. Name Designation Position in the Committee
1 Mr. Vinod Kumar Garg Independent Director Chairman
2 Mr. Ashish Agrawal Independent Director Member
3 Mrs. Shashikala Mangal Non-Executive Director Member

Nomination and Remuneration Committee Meetings and Attendance:

S.N. Particulars Designation 14.08.2018
1 Mr. Vinod Kumar Garg Independent Director Present
2 Mr. Ashish Agrawal Independent Director Present
3 Mrs. Shashikala Mangal Non-Executive Director Present

The compliance officer who is a Member of the Institute of Company Secretaries of India is the secretary to the committee.

The Chairman of the Committee was present at the 32nd Annual General Meeting of the Company held on September 22, 2018. The constitution of the Committee meets with the requirement of Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations.

(c) STAKEHOLDERS RELATIONSHIP COMMITTEE:

Stakeholders Relationship Committee Composition:

S.N. Name Designation Position in the Committee
1 Mr. Vinod Kumar Garg Independent Director Chairman
2 Mr. Ashish Agrawal Independent Director Member
3 Mr. Yogesh K. Agrawal Non Executive Director Member

Stakeholders Relationship Committee Meetings and Attendance:

Particulars 30.05.18 28.09.18 25.10.18 14.11.18 08.12.18 20.12.18 07.01.19 08.02.19 28.02.19 27.03.19
Mr. Vinod Kumar Garg Present Present Present Present Present Present Present Present Present Present
Mr. Ashish Agrawal Present Present Present Present Present Present Present Present Present Present
Mr. Yogesh K Agrawal Present Present Present Present Absent Present Present Present Present Present

The compliance officer who is a Member of the Institute of Company Secretaries of India is the secretary to the committee. The Chairman of the Committee was present at the 32nd Annual General Meeting of the Company held on September 22, 2018. The constitution of the Committee meets with the requirement of Section 177 of the Companies Act, 2013 and Listing Regulations.

PERFORMANCE EVALUATION

Pursuant to section 134 (3) (p) of the Companies Act, 2013 and Rule 8(4) of Companies (Accounts) Rules, 2014, the Board in its meeting held on 27th May, 2019 has carried out an Annual evaluation for the financial year 2018-2019 of the performance of the Committees of the Board, of all the individual directors and of all the independent directors of the company including the evaluation of the board as a whole.

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of Boards knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

• In the preparation of the Annual Accounts for the financial year ended 31st March, 2019, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

• The Directors 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 of the company for that period;

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

• The Directors have prepared the Annual Accounts for the financial Year ended 31st March, 2019 on a going concern basis;

• The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and

• The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

• The Companys Internal Auditors have conducted periodic audits to provide reasonable assurance that the companys approved policies and procedures have been followed.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT - 9, as provided under Section 92 (3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed hereto as ANNEXURE - I with this report and shall form part of the Boards Report. The same shall be available on the website of the Company http://www.tirupatistarch.com.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 has mandated the formulation of certain policies for all listed companies. All the policies are available on our website (http:// www.tirupatistarch.com). The policies are reviewed periodically by the board and updated on need and new compliance requirement.

Name of the Policy Brief Description Web Link
Nomination Remuneration and Evaluation Policy This policy formulates the criteria for determining qualifications, positive attributes, independence of the Directors and recommends to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees http://tirupatistarch.com/wp-content /uploads/2016/08/NOMINATION- REMUNERATION-AND-EVALUATION- POLICY.pdf
Policy for determining materiality of event The policy applies for disclosures of material events affecting company and its associates. http://tirupatistarch.com/wp-content/ uploads/2016/08/Policy-on-Materiality- of-Events.pdf
Policy on document preservation The policy outlines that the Company intends to safeguard significant documents and preserve them to ensure durability of documents including documents in electronic form. http://tirupatistarch.com/wp-content/ uploads/2016/08/Policy-on-Documents- Preservation.pdf
Related Party Transactions Policy The policy regulates all transactions between the Company and its related parties. http://tirupatistarch.com/wp-content/ uploads/2016/08/POLICY-ON- RELATED-PARTY-TRANSACTIONS.pdf
Whistle Blower and Vigil Mechanism Policy The policy outlines the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct and ethics. http://tirupatistarch.com/wp-content/ uploads/2016/08/WHISTLE-BLOWER- VIGIL-MECHANISM-POLICY.pdf
Policy on prevention of sexual harassment at workplace The policy that the Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. http://tirupatistarch.com/wp-content/ uploads/2016/08/POLICY-ON- PREVENTION-OF-SEXUAL- HARASSMENT-AT-WORKPLACE.pdf
Risk Management Policy The policy that builds a strong risk management culture to better understand a risk profile and to better manage the uncertainties. http://tirupatistarch.com/wp-content/ uploads/2016/08/ RISK_MANAGEMENT_POLICY.pdf

APPOINTMENT/RE-APPOINTMNET OF INDEPENDENT DIRECTORS AND STATEMENT OF DECLARATIONS BY INDEPENDENT DIRECTORS UNDER SECTION 149(6) OF THE COMPANIES ACT, 2013

Mr. Ashish Agrawal, DIN: 00335575
Mr. Vinod Kumar Garg, DIN: 00266341
Mr. Nitin Kumar Gupta, DIN: 07260449
Mr. Ramesh Agrawal, DIN: 07599354

All the Independent Directors are well appointed on the Board of Company in compliance with the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, all Independent Directors shall hold office for a term up to five consecutive years on the Board of a Company, and are not liable to retire by rotation but shall be eligible for reappointment for next five years after passing a special resolution by the Company and disclosure of such appointment in the Boards Report. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence under sub-section (6) of section 149 of the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

FAMILIARIZATION PROGRAMMES FOR THE INDEPENDENT DIRECTORS:

Familiarization programmes for the Independent Directors was conducted to familiarize them with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc.

INDEPENDENT DIRECTORS MEETING:

In due compliance with the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of Independent Directors was held on 13th February, 2019.

AUDITORS:

Statutory Auditors

M/s. A. P. G. and Associates, Chartered Accountants, Indore having ICAI Firm Registration Number 119598W and Membership Number 411569, were appointed as Statutory Auditors of the Company in the 29th Annual General Meeting of the company upto conclusion of 34th Annual General Meeting subject to ratification by the members at every Annual General Meeting, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed P.S. Tripathi & Associates, Company Secretaries, Indore (M.P,) to undertake and conduct the Secretarial Audit of the Company for Financial Year 2018-2019. The Secretarial Auditor of the Company have submitted their Report (Form MR- 3) for Financial Year 2018-2019 and the same is annexed with this Boards Report as ANNEXURE - II.

Internal Auditors

Pursuant to Section 138 of the Companies Act, 2013 and Rule 13 of The Companies (Accounts) Rules, 2014, the Board, has appointed M/s Sunil Chandra Goyal And Company, Chartered Accountants, Indore, having Institute of Chartered Accountants of India (ICAI) Firm Registration Number: 002658C, as Internal Auditors of the Company. During the year the company continued to implement their suggestions and recommendations to improve the internal control environment. Their scope of work includes review of processes for safeguarding the assets of the company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the management and suitable corrective actions have been taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

STATUTORY AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

The Statutory Auditors and the Secretarial Auditor of the Company have submitted their respective reports; the same have been attached with this Annual Report.

The statutory auditors report does not contain any qualifications, reservations, or adverse remarks or disclaimer.

The Boards comments on the qualifications, reservations and adverse remarks, so given in the Statutory Audit Report are as under:

Composition of Board with regard to minimum number of independent directors are not as per the Regulation 17(1)(b) SEBI (LODR) Regulation, 2015.

Reply: Company has complied with the requirement of the Companies Act, 2013 and efforts are being made to comply with the of SEBI (LODR) Regulation, 2015 in this regard. Further, the management ensures that in future, all the provisions shall be complied with the fullest extent.

Non-filings of FLA Return as per (Foreign Exchange and Management Act, 1999) with RBI.

Reply: - Company is under process of filing FLA return as presecribed (Foreign Exchange and Management Act, 1999) with RBI.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES U/S 188(1) AND 188(2) OF THE COMPANIES ACT, 2013.

During the year under review Company has not entered any contract or arrangement with related parties. However, pursuant to the omnibus approval given by the audit committee, certain transactions of sale/ purchase were executed with them which were at Arms Length basis and were in the ordinary course of business, the same were placed before the Audit Committee for the review and noting, in their respective meetings. The quarterly disclosures of transactions with related parties are made to the audit Committee of the Board. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

Further, as there are no such transactions falling under sub-section (1) of section 188 of the Companies Act, 2013, so no AOC-2 is required to be given in this report.

ORDER(S) PASSED BY REGULATOR(S), COURT(S), TRIBUNAL(S) IMPACTING THE GOING CONCERN STATUS AND COMPANY STATUS

During the year under review, no order was passed by any Regulator(S), Court(S), Tribunal(S) that could affect the going concern status of the Company and the Company is operating in an efficient manner.

SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year under review, the Company neither had any Subsidiaries nor Joint Ventures nor Associate Companies.

DEPOSITS

Your Company has neither accepted nor invited any deposit from the public during the year under review and hence directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of deposits by Companies) of the Companies Act, 2013 and rules framed there under are not applicable for the year. However, Unsecured loans from Directors of the company are Rs. 3,22,43,631/- and from Promoters and their relatives are Rs. 7,28,87,084/- as on 31.03.2019 pursuant to stipulation made by lenders of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has a proper internal control system, which provides adequate safeguards and effective monitoring of the transactions and ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition. The Company has an internal audit system from an outside agency, which ensures that the Companys control mechanism is properly followed and all statutory requirements are duly complied with. Moreover, the audit committee of the Company comprising majority of independent directors regularly reviews the audit plans, adequacy of internal control as well as compliance of accounting standards. Also the Whole Time Directors/CFO has the responsibility for establishing and maintaining internal controls for financial reporting and that they also have the overall responsibility to evaluate the effectiveness of internal control systems of the company pertaining to financial reporting and they have to disclose to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify the deficiencies.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the company occurred during the financial year ended as on 31st March, 2019, to which the financial statements relates as on the date of this report.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY AND ASSOCIATE COMPANIES:

As per the Companies Act, 2013 and as on date the company is neither having any Subsidiary Company u/s 2(87) nor any Associate Company u/s 2(6) and hence, do not required for any disclosure under this head.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

During the year under review, the Company, has neither given any Loans nor provided any Guarantees nor made any Investments under Section 186 of the Companies Act, 2013 and hence the said provisions are not applicable.

CORPORATE SOCIAL RESPONSIBILTY

The Company has adopted good practices under its Code of Conduct with respect to its responsibility towards society. However, the Company was neither required to constitute the Corporate Social Responsibility Committee nor was required to contribute any amount on Corporate Social Responsibility Initiatives as the said provisions of section 135 and Schedule VII of The Companies Act, 2013 are not applicable to the company.

CORPORATE GOVERNANCE

As per Regulation 15(2)(a) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the Corporate Governance provisions as specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C , D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the company because the paid up equity share capital of the company is not exceeding Rupees Ten Crore and the net worth of the company is not exceeding Rupees Twenty Five Crore, as on the last day of the previous financial year.

However in this respect, the company has submitted the Certificate for all the four quarters to Bombay Stock Exchange (BSE) duly signed by the Company Secretary and Compliance Officer of the company for Non Applicability of the Corporate Governance provisions and certifying that the Paid Up Capital was below 10 Crore and Net worth was below 25 Crore as on the last day of the previous financial year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo under Section 134 (3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the ANNEXURE III.

RISK MANAGEMENT

Your Directors have adopted a Risk Management Policy for the Company. The Audit Committee and the Board of Directors of the Company reviewed the risks, if any, involved in the Company from time to time, and took appropriate measures to minimize the same. The Audit Committee ensures that the Policy for Risk Management is adopted across the Company in an inclusive manner.

VIGIL MECHANISM

Pursuant to section 177 (9) the Companies Act, 2013 and rules made there under, the company has established a Vigil Mechanism, which also incorporates a Whistle Blower Policy for directors and employees to report genuine concerns, to provide a framework to promote responsible and secure whistle blowing and its commitments to open communication. The Company believes in the conduct of its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The Company is committed to develop a culture in which every employee feels free to raise concerns about any poor or unacceptable practice and misconduct.

EMPLOYEES

Employees relation continued to be cordial throughout the year. Your Directors wish to place on record their sincere appreciation for the excellent spirit with which the entire team of the Company worked at factory and office premises and achieved commendable progress.

During the year under review, none of the employee has received remuneration of Rs. 8.50 Lacs per month or Rs. 1.02 Crores per year or at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence, do not call for any further details referred to in Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

MANAGERIAL REMUNERATION

Disclosures Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

1. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name Designation Remuneration 2018-19 Remuneration 2017-18 Change (Rs.) Change (%)
Mr. Ramdas Goyal WTD 9,00,000 3,00,000 6,00,000 200
Mr. Amit Modi MD 8,55,000 3,00,000 5,55,000 185
Mr. Ramesh Goyal WTD 8,55,000 3,00,000 5,55,000 185
Mr. Prakash Chand Bafna WTD 8,55,000 3,00,000 5,55,000 185
Mr. Rohit Mangal CFO 8,55,000 3,50,000 5,05,000 144.29
Ms. Chandani Saruparia* CS 45,293 98,400 (53,107) (53.97)
Ms. Priyanka Sengar* CS 2,02,032 - - 100.00

* During the year under review, Ms. Chandani Saruparia, CS resigned w.e.f. 26th June, 2018 and Ms. Priyanka Sengar, CS joined the Company w.e.f. 01st July, 2018.

• The percentage increase in the median remuneration of employees in the financial year; 16.48%.

• The number of permanent employees on the rolls of company; 308

• Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

Remuneration paid to employees (Excl. Managerial Personnel) 2018-19 Remuneration paid to employees (Excl. Managerial Personnel) 2017-18 % Change Remuneration paid to Managerial Personnel 2018-19 Remuneration paid to Managerial Personnel 2017-18 % Change
4,95,75,477 4,25,60,945 16.48% 34,65,000 13,50,000 156.67%

• During the year under review no variable component of remuneration availed by Directors of the Company;

• It is hereby affirmed that the remuneration paid by the Company to its Directors, KMPs and Employees during the year under review is as per the Nomination, Remuneration & Evaluation Policy of the company

PROVISION OF VOTING BY ELECTRONIC MEANS :

Your Company is providing E-voting facility under section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015. The details regarding e-voting facility is being given with the notice of the Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, in terms of Regulation 34 (2)(e) Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, are annexed as ANNEXURE - IV, with this report and shall form part of the Boards report.

INDIAN ACCOUNTING STANDARDS (IND AS) –IFRS CONVERGED STANDARDS:

Your Company adopted IND-AS with effect from 1 April, 2017 pursuant to Ministry of Corporate Affairs notification dated 16 February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015. The Financial Statements which are part of the Annual Report are being prepared as per the Companies (Indian Accounting Standard) Rules, 2015.

COMMISSION RECEIVED BY DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY

The Company neither has any holding nor is any subsidiary company, therefore, disclosure under Section 197 (14) of the Companies Act, 2013 not applicable.

EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS

The company has not issued any shares with differential voting rights and accordingly the provisions of Section 43 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

DETAILS OF SWEAT EQUITY SHARES

The company has not issued any sweat equity shares and accordingly the provisions of Section 54 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

DETAILS OF EMPLOYEES STOCK OPTION SCHEME

The company has not granted stock options and accordingly the provisions of Section 62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

BUY BACK OF SECURITIES

The company has not bought back any of its securities during the financial year 2018-19.

BONUS SHARES

No Bonus shares were issued during the financial year 2018-19.

DISCLOSURE OF VOTING RIGHTS NOT EXCERCISED

The company has not made any provision of money for the purchase of, or subscription for, shares in the company or its holding company, if the purchase of, or the subscription for, the shares by trustees is for the shares to be held by or for the benefit of the employees of the company and accordingly the provisions of Chapter IV (Share Capital and Debentures) of the Companies Act, 2013 and rules framed there under are not applicable for the year.

PAYMENT OF LISTING FEE AND DEPOSITORY FEE

Annual Listing Fee for the year 2019 - 2020 has been paid to Bombay Stock Exchange. The Annual Custodial Fees for the year 2019 - 2020 has been paid to National Depository and Securities Limited and Central Depository Services (India) Limited.

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

Your Company has approved and adopted the "Policy on Prevention of Sexual Harassment at Workplace" to provide equal employment opportunity and is committed to provide a work environment that ensures every woman employee is treated with dignity and respect and afforded equitable treatment. The Company has formed an Internal Complaints Committee where employees can register their complaints against sexual harassment. This is supported by the Sexual Harassment Policy which ensures a free and fair enquiry process with clear timelines. The policy provides for protection against Sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year no complaints have been received under the policy

DEMATERIALISATION

The companys shares are presently held in both electronic and physical modes.

TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND

During the year under review, the Company was not required to transfer any amount in the Investors Education and Protection Fund.

CODE OF FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION AND CODE OF CONDUCT UNDER SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015

Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors has formulated and adopted the "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" (Code of Fair Disclosure) of the Company. The Board has also formulated and adopted "Code of Conduct for Prohibition of Insider Trading" (Code of Conduct) of the Company as prescribed under Regulation 9 of the said Regulations.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company has adopted a comprehensive policy on Nomination and Remuneration of Directors on the Board. As per such policy, candidates proposed to be appointed as Directors on the Board shall be first reviewed by the Nomination and Remuneration Committee in its duly convened Meeting. The Nomination and Remuneration Committee shall formulate the criteria for determining the qualifications, positive attributes and independence of a Director and other matters as provided under section 178(3) of the Companies Act, 2013 and recommend to the Board the policy, relating to the Remuneration for the Directors, Key Managerial Personnel and other employees.

The Nomination and Remuneration Committee shall ensure that—

• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• Remuneration to directors, KMPs and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

DISCLOSURE OF FRAUDS IN THE BOARDS REPORT U/S 143 OF THE COMPANIES ACT, 2013

During the year under review, your Directors do not observe any contract, arrangement and transaction which could result in a fraud; your Directors hereby take responsibility to ensure you that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2018-2019.

ENHANCING SHAREHOLDER VALUE

Your Company firmly believes that its success in the marketplace and a good reputation are among the primary determinants of value to the shareholder. The organizational vision is founded on the principles of good governance and by the resolve to be a customer-centric organization which motivates the Companys Management to be aligned to deliver leading-edge building products backed with dependable after sales services. Your Company is committed to creating and maximizing long term value for shareholder and essentially follows a four pronged approach to achieve this end. a) By increasing all round operational efficiency, b) by identifying strategies that enhance its competitive advantage, c) by managing risks and pursuing opportunities for profitable growth d) by cementing relationships with other important stakeholder groups through meaningful engagement processes and mutually rewarding associations that enable it to create positive impacts on the economic, societal and environmental dimensions of the Triple Bottom Line.

Underlying this is also a dedication to value-friendly financial reporting that assures the shareholder and investor of receiving transparent and unfettered information on the Companys performance.

INDUSTRIAL RELATIONS:

Companys Industrial relations continued to be healthy, cordial and harmonious during the period under review.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the contribution made by employees at all levels to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation to the companys bankers viz. State Bank of India, Financial institutions, shareholders, dealers and customers for their wholehearted and continued support, assistance and co-operation which had always been a source of strength for the Company. Without this appreciable support it would not have been possible for the company to stands in competitive market, therefore company seeks this support in future too.

Your directors would also like to thank all their shareholders for their continued faith in the company and expect the same in future.

For and on behalf of the Board of Directors
Place: INDORE RAMDAS GOYAL AMIT MODI
Date: 12.08.2019 CHAIRMAN MANAGING DIRECTOR
DIN: 00150037 DIN: 03124351