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Directors Report of Refex Industries Ltd.

Mar 31, 2014

Dear Members,

The Directors have great pleasure in presenting the Twelfth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2014.

FINANCIAL PERFORMANCE

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

(Rs.In Lakhs)

Description 2013-14 2012-13

Turnover 2452.13 1693.23

Other Income 350.11 23.89

Total Income 2802.24 1717.12

Expenditure (other than Tax) 2683.44 2842.72

Exceptional Items 0.85 440.03

Profit before tax 117.94 (1565.63)

Provision for Income Tax - -

Profit after Income Tax 117.94 (1565.63)

EARNING PER SHARE (IN RS.) 0.76 (10.12)

During the year under review the company achieved a turnover of Rs. 2452.13 Lacs as against the previous year''s figure of Rs.1693.23 Lacs showing an improvement of 45% increase. Likewise earnings from other income amounted to Rs.350.11 Lacs as compared to Rs.23.89 Lacs in the previous year. As a result the company made a modest profit of Rs.117.94 Lacs which to some extent reduced the accumulated losses incurred by the company in the earlier years. Consequently net worth of the company increased by the amount of Profit made during the year under review and stands at Rs.137.13 Lacs.

Sale of Property and Settlement of Debt:

During the year your company after receiving the consent of the shareholders through Postal Ballot mode as required under Sec 293(1)(a) of Companies Act, 1956, disposed off its Land, Buildings and some of the Assets situated at one of its plant in Thiruporur, Kanchipuram Dist, TamilNadu. The amount so realized thereon was utilized to settle the dues payable to State Bank of India.

Having discharged the liability owed to the Bank your company is now a largely debt free and operating through its own resources and internal accruals.

Change of Name of the company and addition of an Object to the Main Object Clause of the Memorandum of Association.

Consequent to the significant increase in the Business from generation of Solar Energy since 2011 and taking into account the proposal to engage in the Real Estate Business and property development in the near future, your Directors decided to go in for a change of Name. Accordingly they obtained the consent of the members for

renaming the company as "Refex Industries Ltd" as well as inclusion of a New object relating to Real Estate and property development to the main object Clause through postal ballot during the year. The said change of name was also approved by the Central Government and a fresh certificate of incorporation dated 22nd November 2013 consequent to the change of name has been issued.

Dividend

In order to conserve resources of the company your Board has not recommended any dividend for the year under review.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance pursuant to Clause 49 of the Listing Agreement with the BSE and NSE along with the Auditors'' certificate on Compliance with the mandatory provisions on Corporate Governance is annexed to this report.

The Managing Director has issued necessary certificate to the Board in terms of Clause 49 (V) of Listing Agreement with Stock Exchanges for the Financial Year ended 31st March 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement with the BSE and NSE for the year under review is given as a separate statement in the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors confirm that

i) In the preparation of the Annual Accounts, the applicable Accounting Standards has been followed;

ii) They had selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the company at the end of the financial year March 2014 and of the Profit of the company for that year.

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) They have prepared the Annual Accounts on a going concern basis.

DIRECTORS

As per Article 35 of the Articles of Association of the company Shri.T. Jagdish jain Director retires by rotation in the forth coming Annual General Meeting and being eligible offers himself for re-appointment. The Board has recommended his re-election. A resolution is proposed for his re-appointment in the notice.

Sri N.D.Trivedi was appointed as an independent director pursuant to the provisions of Claue 49 of the listing agreement entered in the Stock Exchanges on 28.12.2006.

Your Board at its meeting held on 30th June 2014 recommended for approval of the Members the appointment of Sri.N.D.Trivedi as Non- Executive Director of the company. Appropriate resolution seeking your approval of the aforesaid appointment is appearing in the accompanying Notice.

Shri. D. Hem Senthil Raj was appointed by the Board at its meeting held on 11th February 2014 as Additional Non- Executive Director holding Independent Charge of your company with effect from 11th February 2014. By virtue of the provision of Article 34 of the Articles of Association of your company and section 161 of the Companies Act 2013. Shri. D. Hem Senthil Raj will vacate office at the ensuing Annual General Meeting of your company.

Your Board at its meeting held on 30th June 2014 recommended for approval of the Members the appointment of Sri. D. Hem Senthil Raj as Non- Executive Director of the company. Appropriate resolution seeking your approval of the aforesaid appointment is appearing in the accompanying Notice.

Your Directors are of the view that the reappointment of Sri. N.D.Trivedi and Sri. D. Hem Senthil Raj as Independent Directors are in the best interest of the company.

Sri. T. Anil Jain, Managing Director of your company since 01.07.2011 will be completing his term on 30.06.2014. In order to have the benefit of his guidance and wise counsel in conducting the day to day business of the company the board recommends his re-appointment for a further period of three years with effect from 01.07.2014.

In deference to the proposal made by Sri.T.Jagdish Jain, the Board relieved him from the duties and responsibilities associated with the position of Wholetime Director and redesignated him as a Non Executive Director without remuneration W.E.F .1.1.2014.

AUDITORS

The company''s Auditors M/S Bhandari & Keswani who retire at the conclusion of this AGM are eligible for reappointment

As per the provisions of Section 139 of the Act, No listed company can appoint or reappoint an audit firm as auditor for more than two terms of five consecutive years. Section 139 of the Act has also provided a period of three years from the date of commencement of the Act to comply with this requirement.

In view of the above, M/s. Bhandari & Keswani, Chartered Accountants being eligible for re-appointment and based on the recommendation of the Audit Committee, the Board of Directors has, at its meeting held on 30th June 2014 proposed the appointment of M/s Bhandari & Keswani, Chartered Accountants as the Statutory Auditors of the company for a period of three years to hold office from the conclusion of this AGM till the conclusion of fifteenth AGM of the company to be held in year 2017 (Subject to ratification of their appointment at every AGM) The said auditor has also given necessary certificate under section 139 of the Act confirming his eligibility for the appointment.

LISTING

Your Company''s Share are Listed in National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd. The Company has paid the Listing fees upto date.

INFORMATION AS PER SEC 217(2)(A) OF THE COMPANIES ACT, 1956

None of the Employees of the company were in receipt of remuneration which in the aggregate exceeded the Limits fixed under Sec 217(2)(A) of the Companies Act 1956

DETAILS IN ACCORDANCE WITH THE REQUIREMENTS OF SEC 217(1)(E) OF THE COMPANIES ACT 1956

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

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

Foreign Exchange Earnings ....

Foreign Exchange Outgo ....

PUBLIC DEPOSITS

The Company did not invite or accept any deposits from the Public under Sec 58Aof the Companies Act 1956.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the excellent support and co-operation extended by all the stake holders more particularly State Bank of India, Share holders, customers, dealers, regulatory and govt. authorities.

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

Place: Chennai By Order of the Board

Date : 30.05.2014 T. ANIL JAIN T. JAGDISH JAIN Managing Director Director


Mar 31, 2013

Dear members,

The directors have great pleasure in presenting the Eleventh Annual Report together with the Audited statement of accounts for the year ended 31st March 2013.

FINANCIAL PERFORMANCE

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

(Rs.ln Lakhs)

DESCRIPTION 2012 - 13 2011 - 12

Turnover 1693.23 4191.54

Other Income 23.89 76.30

Total Income 1717.12 4267.84

Expenditure (Other than tax) 2842.72 6597.49

Exceptional Items 440.03 11.09

Profit before tax (1565.63) (2340.74)

Provision for Income Tax --- ---

Profit after tax (1565.63) (2340.74)

Net Profit / (Loss) (1565.63) (2340.74)

Earnings per share (10.12) (15.13)



During the year, the turnover fell down drastically from Rs.4191.54 lacs in the previous year to Rs. 1693.23 lacs, the decline in sales being 59.60%. Likewise there was a steep reduction in the other income from Rs. 76.30 Lacs to Rs. 23.89 lacs.

The corresponding expenditure amounted to Rs.2842.72 lacs. As a result the company incurred an operating loss of Rs.1125.60 lacs. Besides this the company suffered a huge loss of Rs. 429 lacs on account of sale of fixed Assets. In addition amortization of brand building expenses to the extent of Rs.11 Lacs contributed its share to the overall loss incurred by the Company.

As a consequence the net worth of the company was severely affected and the accumulated losses stand at Rs. 4274.56 Lakhs.

DIVIDEND

In view of the loss incurred by the company the question of payment of Dividend does notarise.

CORPORATE GOVERNANCE

A detailed report on the corporate governance pursuant to Clause 49 of the listing agreement with the BSE and NSE along with the Auditors Certificate on compliance with the Mandatory provisions on corporate governance is annexed to this report.

The Managing Director has issued necessary certificate to the Board in terms of Clause 49 (v) of Listing Agreement with Stock Exchanges for the Financial Year Ended 31st March 2013.

MANAGEMENT DISCUSSION ANDANALYSIS REPORT

The Management Discussion and Analysis report pursuant to Clause 49 of the Listing Agreement with the BSE and NSE for the year under review is given as a separate statement in the Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT

Your Directors Confirm that

1 .In the preparation of Annual Accounts, the applicable accounting standard has been followed.

2.They 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 March 2013 and of the Loss of the company for that year.

3.They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4.They have prepared the Annual Accounts on a going concern basis.

DIRECTORS

As per Article 35 of the Articles of Association of the Company Sri. T. Anil Jain retires by rotation in the forth coming Annual general Meeting and being eligible offers himself for reappointment. Necessary resolution is submitted foryour approval.

AUDITORS

The company''s auditors M/s. Bhandari & Keswani Chartered Accountants, Chennai who retire at the conclusion of this Annual General Meeting are eligible for re- appointment. A resolution is proposed for their re- appointment in the Notice.

LISTING

Your Company''s shares are listed in National Stock Exchange Ltd and Bombay Stock Exchange Ltd. The company has paid the Listing fees up to date.

INFORMATION AS PER SECTION 217 (2) (A) OF THE COMPANIES ACT, 1956

None of the employees of the Company are in receipt of remuneration in excess of the limits specified in Section 217 (2) (a)oftheCompaniesAct, 1956.

S. No. Auditors Qualification Managements Reply

1. The Company is not providing for Provision towards Gratuity for the year has not liability for gratuity as per been made and the Board is of the opinion that actuarial valuation, which is in the same will not affect the result of the Contravention of Accounting standard Company significantly. on provision for gratuity (AS-15) (Refer Note 2(i) in notes forming part of Financial statements) issued by The Institute of Chartered Accountants of India and the impact of which is unascertainable

FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings Rs. NIL Foreign Exchange Out Go Rs. 131.02 Lacs

DETAILS IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 217 (1) (E) OF THE COMPANIES ACT, 1956.

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

Given the nature of process employed by the company, there is no technology absorption involved.

PUBLIC DEPOSITS

The Company did not invite or accept any deposits from the public under section 58 Aof the Companies Act, 1956.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the excellent support and co -operation extended by all the stakeholders, more particularly State Bank of India, share holders customers, Dealers, regulatory and govt, authorities.

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



Place : Chennai By Order of the Board

Dated : 30-05-2013 T. Anil Jain,

Chairman & Managing Director


Jun 30, 2010

The Directors have great pleasure in presenting the Eighth Annual Report together with the Audited Statement of Accounts for the 15 months period ended June 30, 2010.

FINANCIAL PERFORMANCE

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

(Rs.In Lakhs)

Description 2009-10 2008-09

Turnover 5164.10 8945.88

Otherlncome 106.15 116.22

Total Income 5270.25 9062.10

Expenditure (other than Tax) 4863.93 8728.53

Profit before tax 406.32 333.57

Provision for Income Tax 62.77 47.83

Profit after Income Tax 343.55 285.74

Provision for Dimunition in value of 1953.43 -

Investment

Deferred Tax 27.02 65.09

Net Profit/(Loss) (1636.90) 220.65

EARNING PER SHARE (IN RS.) (10.58) 1.43

FINANCIAL PERFORMANCE

During the period, the companys turnover fell from Rs.8945.88 Lakhs to Rs.5164.10 Lakhs due to fall in demand of consumer durables and air conditioning equipments.

In spite of this declining trend, the Company made a higher operational profit (before tax) of Rs.406.32 Lakhs as against Rs. 333.57 Lakhs for the earlier year, mainly due to better planning and cost management resulting in increased profits.

However, the Company had to make one time provision towards the losses incurred by its Wholly Owned Subsidiary Company (WOS) M/S Sherisha Technologies (S) Pte Ltd, Singapore. Consequent to the write off of the entire investments made by the said (WOS) in its step down Subsidiary Companies viz Kaltech Engineering £t Refrigeration Pte Ltd and Global Refrigerants (S) Pte Ltd. Singapore. As a result your Company has to bear a net lossofRs 1636.90Lakhs. .

Although the loss arising out of disposal of such investment primarily pertain to the books of WOS, the Company has also recognized the loss by writing off its investment in the WOS to a substantial extent .Accordingly the provision for diminution in value of Investment has been made in the books of your Company at Rs. 1953.43 Lakhs, dealt more clearly in the notes on accounts forming part of schedules to the financial statements.

Due to this one time provisioning, the Company had to report a net loss of Rs. 1636.90 Lakhs for the financial period under consideration.

DIVIDEND

The Board of Directors have very carefully considered the present industry position vis a vis the Companys fund requirement for future growth. The Board after taking into account the present recessionary trend in the economy and the possibilities of recessionary factors continuing into the major portion of next financial 2010-11 also, have not recommended any dividend for this fiscal period.

The Board hopes that with recessionary trends weaning away in the next financial year, the Company would be in a position to record better growth in the years to come and endeavor to reward the shareholder.

EXTENSION OF FINANCIAL YEAR

Your Company had extended its financial year 2009-10 by three months so as to close on 30"1 June 2010. Accordingly the accounts of the Company reflect transactions for a period of fifteen months with effect from 1 April 2009. The said extension is also line with the relevant provisions of the Companies Act 1956, which permits a Company to have fifteen months period in a financial year.

CURRENT INDUSTRY AND FUTURE OUTLOOK

During the period, your Companys sales had fallen drastically due to the fall in demand in Consumer durable and Air-Conditioning Industry. In spite of tough competition from the industry your Company has been steadily trying to maintain its market share. Your companys new product Refrigerant Gas in small cans have become a big hit in the market and have started supplementing the Cylinder sales. In few years time these Cans would reduce Marketing cost in Refrigerant gases by reducing the investment on cylinders and freight for movement of cylinders to and fro. Though your Company has tied up with many OEMs for supply of Refrigerant gases, your Company will be concentrating more on after Sales, Trade and Service Markets as the margins in this sector is much higher than the OEMs. Refex has become a brand which speaks of its quality in the Industry. Your Company has been successful in its endeavor to make Refrigerant gases a consumer product. Your Company with a state of the art refilling facility have earned a name with international manufacturers across the globe to market their products. In the current period the company has tied up with Daiken Arkema Refrigerants Asia Limited for exclusively marketing their specialty Refrigerant gases in India. This will increase the sale of speciality Refrigerants in the newer markets.

With rupee getting stronger the margins for the next season looks better. With Auto Consumer Durables, Cold storage, Refrigerated transportation etc looking up, the demand for your Companies product is set to go up. Your Company plans to increase its domestic market share of the HFC Brand Refrigerant in the next Two years, by continuously introducing new packing and products to cater to different segments. By following this line of approach your Company will contribute immensely to the non-ozone depleting products to the community at large.

During the financial period, the Company, secured members consent by way of postal ballot for amending the Memorandum of Association by inclusion of energy ventures as one of the Main objects, apart from its existing objects.

Your Company has been one of the first few to be awarded a project to set up a 5Mwp Solar Power plant under the Jawaharlal Nehru National Solar Mission (JNNSM) by NTPC Vidyut Vyapar Nigam Limited (NVVN). Your Company has already signed an MOU for the same on 24th July 2010 and the plant will be installed and commissioned within a period of 15 months. This is another endeavor by the Company to produce green energy and create a safer environment for our future generation.

SUBSIDARY COMPANIES

During the financial period your Company further acquired 25,66,968 Equity shares of its Wholly Owned Subsidiary M/S Sherisha Technologies (S) Pte Limited, Singapore. The said WOS in the very same period has completely disposed of its investment in its two step-down subsidiaries viz Kaltech Engineering and Refrigeration Pte Limited, Singapore and Global Refrigerants (S) Pte Limited, Singapore. Accordingly these two Companies cease to be the Subsidiary Companies of your Company as at the end of financial period under consideration.

The audited financial statements of the WOS namely, Sherisha Technologies (S) Pte Ltd, has been appended to this annual report as required under the Companies Act, 1956 and along with the statement under Section 212 of the Companies Act.

However, since the investments made by Sherisha Technologies (S) Pte Ltd, Singapore are not proposed to be held on a long term basis, the Board is of the opinion that in terms of Para 11 of Accounting Standard 21 (AS 21) issued by Institute of Chartered Accountants of India, the financial statement of the said Subsidiary Company, have to be excluded from Consolidation of Accounts and hence no consolidated financial statements in terms of AS-21 have been prepared.

CORPORATE GOVERNANCE

A detailed Report on the Corporate Governance pursuant to Clause 49 of the Listing Agreement with the BSE and NSE along with the Auditors Certificate on Compliance with the mandatory provisions on Corporate Governance is annexed to this Report.

The Managing Director and Chief Financial Officer of the Company have issued necessary certificate to the Board in terns of Clause 49(v) of Listing Agreement with Stock Exchanges for the financial period ended 30" June 2010.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement with the BSE 6 NSC for the period under review is given as a separate statement in the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that

I. In the preparation of the Annual Accounts, the applicable Accounting Standards has been followed,

II. They 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 Period and of the Loss of the Company for that period.

III. They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

IV. They have prepared the Annual Accounts on a going concern basis.

DIRECTORS

During the period under review, Shri Anil K Dhar resigned from the Board citing personal reasons. The Board expresses its sincere appreciation and gratitude to the outgoing Director for his valuable assistance and advice rendered by him during the tenure of his association with the Board.

Apart from this, Shri T Jagdish Jain and Ms Abinandhna Papi Setty, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment. Necessary resolutions are submitted for your approval.

AUDITORS

The Companys auditors M/s. Bhandari & Keswani, Chartered Accountants, Chennai who retire at the conclusion of this Annual General Meeting are eligible for re-appointment. A resolution is proposed for their reappointment in the Notice.

As regards qualification of auditors in their report dated 30th June 2010, regarding non compliance with AS 21 (Accounting Standard on Consolidation of financial statement of subsidiaries) the reasons for non furnishing of consolidated financial statement is already given in the para relating to Subsidiary Companies, above.

LISTING

During the financial period, the Companys shares were listed in National Stock Exchange of India Ltd, Mumbai apart from its initial listing with Bombay Stock Exchange Ltd. Mumbai The Company has paid the listing fees up to date.

INFORMATION AS PER SECTION 217(2)(a) OF THE COMPANIES ACT 1956:

None of the employees of the Company are in receipt of remuneration in excess of the limits specified in Section 217(2) (a) of the Companies Act, 1956.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

FOREIGN EXCHANGE EARNINGS Rs. 46,96, 382/-

FOREIGN EXCHANGE OUTGO Rs. 17,95,600/-

TOWARDS DIVIDEND Rs. 14,400/-

DETAILS IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 217 (1)(e) OF THE COMPANIES ACT 1956:

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

Given the nature of process employed by the company, there is no technology absorption involved.

PUBLIC DEPOSITS

The Company did not invite or accept any Deposits from the Public under Section 58A of the Companies Act, 1956.

ACKNOWLEDGMENT

Your Directors gratefully acknowledge the excellent support and co-operation extended by all the stake holders, more particularly, State Bank of India, Shareholders, Customers, Dealers, Bankers, regulatory and Govt. Authorities.

Your Directors also place on record their appreciation for the contributions of the members of the Management Team and all Employees in achieving an Impressive performance, during the period under review.

Place: Chennai By Order of the Board

Dated: 28.08.2010 A.TARACHAND JAIN

CHAIRMAN

 
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