Trivikrama Industries Ltd Management Discussions.

1. INDUSTRY STRUCTURE AND DEVELOPMENT:

a. ECONOMY & MARKETS:

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). The Government of India has forecasted that the Indian economy will grow by 7.1 per cent in FY 2016-17. As per the Economic Survey 2016-17, the Indian economy should grow between 6.75 and 7.5 per cent in FY 2017-18. The improvement in Indias economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, Reserve Bank of India’s (RBI) inflation focus supported by benign global commodity prices.

India’s consumer confidence index stood at 136 in the fourth quarter of 2016, topping the global list of countries on the same parameter, as a result of strong consumer sentiment, according to market research agency, Nielsen.

Moody’s has affirmed the Government of India’s Baa3 rating with a positive outlook stating that the reforms by the government will enable the country perform better compared to its peers over the medium term.

India’s gross domestic product (GDP) grew by 7 per cent year-on-year in October-December 2016 quarter, which is the strongest among G-20 countries, as per Organisation for Economic Co-operation and Development (OECD) Economic Survey of India, 2017. According to IMF World Economic Outlook Update (January 2017), Indian economy is expected to accelerate to 7.7 per cent during FY 2017-18.

The tax collection figures between April 2016 and January 2017 show an increase in Net Indirect taxes by 16.9 per cent and an increase in Net Direct Taxes by 10.79 per cent year-on-year, indicating a steady trend of healthy growth. The total number of e-filed Income Tax Returns rose 21 per cent year-on-year to 42.1 million in 2016-17 (till 28.02.17), whereas the number of e-returns processed during the same period stood at 43 million.

Corporate earnings in India are expected to grow by over 20 per cent in FY 2017-18 supported by normalisation of profits, especially in sectors like automobiles and banks, while GDP is expected to grow by 7.5 per cent during the same period, according to Bloomberg consensus.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

India’s labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

India’s foreign exchange reserves stood at US$ 366.781 billion as at the end of March 2017 as compared to US$ 360 billion by end of March 2016, according to data from the RBI.

b. INDUSTRY OVERVIEW:

The year began with a sharp drop in commodity prices including crude and vegetable oils and these markets continued to remain volatile which posed a major challenge during the year. Manufacturers of consumer packaged goods (CPG) face two key challenges in 2015. The first is continued slow or negative growth in peoples disposable incomes. The second is changing consumer attitudes toward products and brands, as the great fragmentation of consumer markets takes another turn. In response, companies must dramatically shift the route they take to reach consumers in terms of both product distribution and communications.

In many markets, consumer wages have been static for five years. Even where economies are starting to perform better, the squeeze on after-tax wages, especially for the middle class, younger people, and families, is depressing consumer spending. Although growth in developing countries is still better than in the United States and Europe, a slowdown in emerging countries such as China — where many companies had hoped for higher sales — has translated quickly into lower-than-expected consumer spending growth. We expect continued weakness in consumer disposable income regardless of which way macro GNP uncertainties break.

Meanwhile, what we call the great fragmentation is manifested in consumer behavior and market response. In both developed and emerging markets, there is a wider variety among consumers now than at any time in the recent past. Growth is evident both at the top of the market (where more consumers are spending for higher-quality food and other packaged goods) and at the lower end (where an increasing number of consumers are concentrating on value). But the traditional middle of the market is shrinking.

2. OPPORTUNITIES & THREATS:

a. OPPORTUNITY:

The Company in the previous FY has taken the approval of the Shareholders to expand and diversify the business of the company in the segment of trading and dealing in raw and process materials, semi products and end products of carbon, chemicals, coal including coke in all its forms, lignite, limestone, molasses, non-ferrous metals and alloys, iron and steel and other allied items and industrial raw materials. Also deal with all kinds of scraps, ferrous and nonferrous scraps including but not limited to aluminium scraps, lead scraps, brass scraps, lead alloy scraps, copper scraps, copper alloy scraps, and all other scraps including their extrusions.

Current trends such as global and regional economic integration, urbanization, privatization and the diminishing role of national governments present both threats and opportunities to agro-industries. Penetration of the market economy into isolated areas opens up opportunities for the production and processing of new goods. However, this also poses great challenges, particularly for developing and transitional economies, where the agro-industrial sector is facing increasing competition and market volatility.

b. CONCERNS:

i. Economic conditions.

ii. Inflationary pressures and other factors affecting demand for our products.

iii. Increasing costs of raw material, transport and storage.

iv. Supplier and distributor relationships and retention of distribution channels.

v. Competitive market conditions and new entrants to the market.

vi. Shortages of Human Resource and attrition of key staff.

3. SEGMENT WISE PERFORMANCE:

The Company in the Current Year has not able been able to market its products in the Market and thus have not made much turnover in the Companys Product Segment. However, the Company has deployed its funds in interest bearing loans for get reasonable rates of returns.

4. OUTLOOK:

BUSINESS STRATEGY:

a) Taking advantages of wide distribution network:

A very simple way of increasing our companys market share is by developing a strong distributions network, preferably in terms of more locations. An extensive distribution system can be developed over time, or the company may acquire another company which has an extensive distribution network. The company shall use this distribution network to book its turnover in the New Business Segment.

b) Product Flanking:

Product flanking refers to the introduction of different combinations of products at different prices, to cover as many market segments as possible. It is basically offering the same product in different sizes and price combinations to tap diverse market opportunities. The Company plans to relaunch its existing products in the market under this scheme.

c) New Product Development:

The existing products are vulnerable to changing consumer needs and tastes, new technologies, shortened product life cycles and increased domestic and foreign competition. Our company can develop new products either through R&D in-house or by acquiring other company or both. Further the company is ventured in to new segment, this would help company increase its turnover.

5. RISK MANAGEMENT:

The Company has a robust Risk Management 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. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments. The Company has identified various risks and also has mitigation plans for each risk identified. The Risk Management Policy of the Company is available on our website: www.trivikrama.com.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

6. INTERNAL CONTROL SYSTEMS & ADEQUACY:

The Company has implemented a comprehensive system of internal controls and risk management systems for achieving operational efficiency, optimal utilization of resources, credible financial reporting and compliance with local laws. These controls are regularly reviewed by both internal and external agencies for its efficiency and effectiveness. Management information and reporting system for key operational activities form part of overall control mechanism.

The Company has retained the services of Independent firms of Professionals to function as internal auditors and provide reports and effectiveness of internal control measures are reviewed by top management and audit committee of the Board.

The Company believes that it has internal controls and risk management systems to assesses and monitor risks. The company has its management team which monitors and manages risks by monitoring trends that may have an effect on the economic environment and actively assesses on a routine basis the market value of the Company’s loan book. The Company seeks to monitor and control its risk exposure through a variety of separate be but complementary financial and operational reporting systems. The Company believes it has effective procedures for evaluating and managing the market, operationally and other risks to which it is exposed.

7. DISCUSSION ON FINANCIAL PERFORMANCE:

Standalone:

During the year under review, the Company has earned a profit before Interest, Depreciation & Tax of Rs. 6.12 lacs as compared to previous year Rs. 8.75 lacs. The net profit for the year under review has been Rs. 0.30 lacs as compared to the previous year net profit Rs. 2.85 lacs. Your Directors are continuously looking for avenues for future growth of the Company in Commercial Trading & Distribution Industry.

Consolidated:

During the year under review, the Company has earned a profit before Interest, Depreciation & Tax of Rs. 6.02 lacs as compared to previous year Rs. 8.98 lacs. The net loss for the year under review has been Rs. 0.28 lacs as compared to the previous year net profit of Rs. 2.67 lacs.

8. HUMAN RESOURCE:

The Company firmly believes that human resources is an important instrument to provide proper communication of the Company’s growth story to its stake holders and plays vital role in the overall prospects of the Company. So the Company takes possible steps for the welfare of its manpower. The employee relationship was cordial throughout the year. We as on 31st March, 2017 have 1 permanent employee on our rolls.

By Order of the Board of Directors

For TRIVIKRAMA INDUS TRIES LIMITED
Sd/- Sd/-
M SOUNDARARAJAN PURUSHOTHAM PREETHA
Date : 02.08.2017 (DIN: 07543168) (DIN: 07791399)
Place : Chennai Managing Director Director

DETAILS OF DIRECTORS AND EMPLOYEE REMUNERATION

Information as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Sl. No. Particulars Details
Name of the Director Ratio of the Median
1. The ratio of the remuneration of each director to the median employees remuneration for the financial year. Mr. Soundararajan 0.59:1
As on 31st March, 2017, the Monthly remuneration being paid to Mr. M Soundararajan is Rs. 10,000/- per month and further the Median of the employees of the company as on 31st March, 2017 is Rs. 17,000/- per month.
2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company > The Director was appointed only w.e.f 22nd June, 2016, thus the comparison for increment of remuneration is not possible.
Secretary or Manager, if any, in the financial year. > Increment made in the remuneration of the M Suguna (CFO) is 30.77%.
3. The percentage increase in the median remuneration of employees in the financial year. The median remuneration of the employees as on 31.03.2016 was Rs. 13,000 & as on 31.03.2017 was Rs. 17,000, thus percentage increase in the median remuneration of employees in the financial year is 30.77%.
4. The number of permanent employees on the rolls of company. 1 Employee as on 31st March, 2017.
5. 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 any exceptional circumstances for increase in the managerial remuneration. Mr. M Soundararajan was appointed as the Manging Director w.e.f. 22nd June, 2016 and thus the percentile increase or decrease in the Managerial Remuneration cannot be calculated.

Thus the ratio between Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year with the average percentile increase in the managerial remuneration cannot be calculated.

6. If remuneration is as per the remuneration policy of the company. It is hereby affirmed that the remuneration paid is s per the remuneration policy of the Company.

 

By Order of the Board of Directors
For TRIVIKRAMA INDUSTRIES LIMITED
Sd/- Sd/-
M SOUNDARARAJAN PURUSHOTHAM PREETHA
Date : 02.08.2017 (DIN: 07543168) (DIN: 07791399)
Place : Chennai Managing Director Director

NOMINATION AND REMUNERATION POLICY

This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto, as amended from time to time and Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015. This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Nomination and Remuneration Committee (NRC or the Committee) and has been approved by the Board of Directors.

1. DEFINITIONS:

"Remuneration" means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961;

"Key Managerial Personnel" means:

i) Managing Director, or Chief Executive Officer or Manager and in their absence, a Whole-time Director;

ii) Chief Financial Officer;

iii) Company Secretary; and

iv) such other officer as may be prescribed.

"Senior Managerial Personnel" mean the personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management, of rank equivalent to General Manager and above, including all functional heads.

2. OBJECTIVE:

The objective of the policy is to ensure that

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnels and Senior Managerial Personnels of the quality required to run the company successfully;

b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration to directors, key managerial personnel 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.

3. ROLE OF THE COMMITTEE:

The role of the NRC will be the following:

1. To Ensure that the Company has formal and transparent procedures for the selection and appointment of new directors to the board and succession plans;

2. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.

3. To make recommendations for the appointment and removal of directors;

4. Ensure that our Company has in place a programme for the effective induction of new directors;

5. To review, on an ongoing basis, the structure of the board, its committees and their inter relationship;

6. To recommend to the Board, the remuneration packages of our Companys Managing / Joint Managing / Deputy Managing / Whole time / Executive Directors, including all elements of remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);

7. To implement, supervise and administer any share or stock option scheme of our Company; and

8. To attend to any other responsibility as may be entrusted by the Board.

4. APPOINTMENT AND REMOVAL OF DIRECTOR, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend his / her appointment, as per Companys Policy.

b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has authority to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the position.

c) The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution.

5. TERM / TENURE:

a) Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

b) Independent Director:

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

No Independent Director shall hold office for more than two consecutive terms of upto maximum of 5years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director.

Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.

6. EVALUATION:

The Committee shall carry out evaluation of performance of Director, KMP and Senior Management Personnel yearly or at such intervals as may be considered necessary.

7. REMOVAL:

The Committee may recommend with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the Companies Act, 2013, rules and regulations and the policy of the Company.

8. RETIREMENT:

The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

9. POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MANAGEMENT PERSONNEL:

a) Remuneration to Managing Director / Whole-time Directors:

i) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.

ii) The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.

b) Remuneration to Non-Executive / Independent Directors:

i) The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.

ii) All the remuneration of the Non-Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

iii) An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.

iv) Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:

• The Services are rendered by such Director in his capacity as the professional; and

• In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.

c) Remuneration to Key Managerial Personnel and Senior Management:

i) The remuneration to Key Managerial Personnel and Senior Management may consist of fixed pay and incentive pay, in compliance with the provisions of the Companies Act, 2013and in accordance with the Companys Policy.

ii) The Fixed pay shall include monthly remuneration and may include employers contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from to time.

iii) The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually or at such intervals as may be considered appropriate.

10. IMPLEMENTATION:

a) The Committee may issue guidelines, procedures, formats, reporting mechanism and manuals in supplement and for better implementation of this policy as considered appropriate.

b) The Committee may Delegate any of its powers to one or more of its members.