To the Members
Your directors have pleasure in presenting the Thirty First Annual Report on thebusiness and operations of Company and the financial accounts for the year ended 31stMarch 2020.
The financial highlights of your Company for the year ended 31st March 2020 aresummarized below:
|Particulars || |
31st March 2019
|31st March 2019 |
|Net Revenue from Operations ||19882.67 ||27778.88 |
|Other Income ||14.60 ||22.04 |
|Profit before Tax and Exceptional Items ||(248.66) ||653.56 |
|Exceptional Items ||- ||(62.88) |
|Profit before Tax ||(248.66) ||590.67 |
|Tax ||57.47 ||69.56 |
|Profit After Tax ||(306.13) ||521.11 |
|Movement in Retained Earnings || || |
|Balance Brought Forward ||2008.14 ||1571.19 |
|Add: Profit after Tax ||(306.13) ||521.11 |
|Add: Other Comprehensive Income ||(2.05) ||(12.75) |
|Less: Dividend ||59.33 ||59.33 |
|Less: Dividend Tax ||12.08 ||12.08 |
|Less: Transfer to General Reserve ||0.00 ||0.00 |
|Balance Carried Forward ||1628.54 ||2008.14 |
COMPANY'S PERFORMANCE AND STATE OF THE COMPANY'S AFFAIRS
The Company mainly manufactures automobile parts for heavy commercial vehicles as wellas passenger vehicles. The Company recorded net revenue from operations of Rs 19882.67Lakhs in FY 2019-20 28.43% lower than Rs 27778.88 Lakhs in FY 2018-19. The Loss BeforeTax for FY 2019-20 was H (248.66) Lakhs for FY 2019-20 as compared to Profit Before Tax ofRs 589.79 Lakhs for FY 2018-19. The Loss After Tax for FY 2019-20 was H (306.13) Lakhs forFY 2019-20 as compared to Profit After Tax of Rs 521.11 Lakhs for FY 2018-19. Thefinancial performance was impacted due to several challenges in FY 2019-20 such as generaleconomy slowdown liquidity issue BS VI transmission and impact of COVID-19 pandemictowards the end of the year.
As there is no profit in FY 2019-20 therefore the Board of Directors has notrecommended dividend for the period under review.
Full version of the Annual Report 2019-20 containing complete Balance Sheet Statementof Profit & Loss other statements and notes thereto prepared as per the requirementsof Schedule III to the Companies Act 2013 Directors' Report (including ManagementDiscussion and Analysis Corporate Governance Report) are being sent via email to allshareholders who's email address are registered with Company.
Full version of Annual Report 2019-20 is also kept open for inspection by any member.The members can send an email to firstname.lastname@example.org upto the date of ensuingAnnual General Meeting (AGM). The same is also available at the Company's website at www.akartoolsltd.com.
The paid up equity share capital as on 31st March 2020 was Rs 53940050/- dividedinto 10788010 equity shares of face value of Rs 5/- each. There was no public issuerights issue bonus issue or preferential issue etc. during the year. The Company has notissued shares with differential voting rights sweat equity shares and has not grantedany stock options.
TRANSFER TO RESERVES
Due to losses in FY 2019-20 no amount has been transferred to Reserves during theperiod under review.
INVESTOR EDUCATION AND PROTECTION FUND
Dividend which was declared by the Company for the year ended 31st March 2013 at theAnnual General Meeting held on 27th September 2013 and remain unclaimed will betransferred to the Investor Education and Protection Fund (IEPF) of the Central Governmentpursuant to the provisions of Companies Act 2013. The last date for claiming the dividendis 26th September 2020. Thereafter no claim shall lie on dividend for the year endedMarch 2013 from the shareholders.
MCA has notified the Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund)
Rules 2016 (IEPF Rules). Pursuant Section 124(6) of the Companies Act 2013 read withIEPF Rules as amended all shares in respect of which dividend has not been paid orclaimed for seven consecutive years or more shall be transferred by the Company to theIEPF.
The Company does not have any subsidiary within the meaning of the Companies Act 2013.
The rating committee of CARE Ratings Limited has assigned a long term credit rating ofCARE BB (pronounced as CARE Double B) and a short term credit rating of CARE A4(pronounced as CARE A Four) to the line of credit facility enjoyed by the Company. Theoutlook on the long term and short term rating is stable.
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rules 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached to this Report as ANNEXUREI.
THE CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EARNINGS AND OUTGO
Information in accordance with the provisions of Section 134 (3) (m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is given in ANNEXURE II whichforms part of this Report.
M/s Jaju & Kabra Chartered Accountants Aurangabad were appointed as the statutoryauditors of the Company for the period of five (5) years at the 28th Annual GeneralMeeting of the Company held on 22nd September 2017. They have confirmed that they are notdisqualified from continuing as Statutory Auditors of the Company. The IndependentAuditors Report for the financial year ended 31st March 2020 does not contain any adverseremark or reservation and therefore do not call for any further explanation or commentsfrom the Board under Section 134(3) of the Companies Act 2013.
As per the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company appointed M/s Nitin S. Sharma & Associates (CP No. 9761) PractisingCompany Secretaries Aurangabad to undertake the Secretarial Audit of the Company for theFinancial Year 2019-20. The Secretarial Audit Report in Form No MR-3 for the FinancialYear 2019-20 is annexed herewith as ANNEXURE III and forms a part of this report. TheSecretarial Auditors in their report have made an observation stating the eligible amountrequired to be spent during the financial year 2019-20 towards Corporate SocialResponsibility (CSR) is Rs 9.82 Lakhs however the Company has spent Rs 2.50 Lakhstowards CSR during the said financial year. The justification for the unspent amounttowards CSR is given under ANNEXURE VII of this report.
As per the provisions of Section 148 (3) of the Companies Act 2013 the Board ofDirectors of the Company had appointed M/s B R Chandak & Co. (Registration No. 21959)as Cost Auditors of the Company for conducting the audit of cost records for thefinancial year ended 31st March 2020. The Cost Auditor has submitted its report for thefinancial year 2019-20 to the Board of Directors and the same has been approved by theBoard of Directors in their meeting held on 29th August 2020. A proposal for ratificationof remuneration of the Cost Auditors for the financial year 2020-21 is placed before theshareholders for ratification / approval.
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
Rule 8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regardingadequacy of Internal Financial Controls with reference to the financial statements to bedisclosed in the Board's report. The
Company has a well placed proper and adequate IFC system which ensures that all assetsare safeguarded and protected and that the transactions are authorised recorded andreported correctly. The Internal Auditors are an integral part of the internal controlsystem of the Company. To maintain its objective and independence the Internal Auditorsreport to the Audit Committee of the Board. The Internal Auditors monitor and evaluate theefficacy and adequacy of internal control systems in the Company.
Director retiring by rotation:
Mr. P. M. Nijampurkar (holding DIN 01805132) retires by rotation under Section 152 ofthe Companies Act 2013 and being eligible offers himself for re-appointment. The briefresume of Mr. P. M. Nijampurkar the nature of his expertise in specific functional areasnames of the companies in which he has held directorships committee memberships /chairmanships his shareholding etc. are furnished in the explanatory statement to thenotice of the ensuing AGM.
Re-appointment of Managing Director:
Upon the recommendation of Nomination &
Remuneration Committee the Board of Directors reappointed Mr. Sunil Todi as ManagingDirector of the Company for a period of five years with effect from 16th September 2020up to 15th September 2025 not liable to retire by rotation. The Board approved thereappointment of Mr. Sunil Todi based on his significant contributions to the Company andthe same is subject to the approval of the Members of the Company.
Re-appointment of Independent Director:
Upon the recommendation of Nomination &
Remuneration Committee the Board of Directors proposed to re-appoint Mrs. Bhavna Sabooas an Independent Director of the Company not liable to retire by rotation to holdoffice for a second term commencing with effect from 30th September 2020 up to 29thSeptember 2025 not liable to retire by rotation.
Declaration by Independent Directors:
Your Company has received declarations from Mr. B. R. Galgali Mrs. Bhavna Saboo Mr.Anil Kumar Gupta and Mr. Ulhas Gaoli Independent Directors under provisions of Section149(7) of the Companies Act 2013 stating that they meet the criteria of independence asprovided under sub-section (6) of Section 149 of the Companies Act 2013.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) of the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:
|Mr. Sunil Todi ||Managing Director |
|Mr. P. M. Nijampurkar ||Whole-time Director |
|*Mr. Pawan Gupta ||Chief Financial Officer |
|Mr. Mitesh Gadhiya ||Company Secretary |
*Mr. Pawan Gupta has been appointed as the Chief Financial Officer of the Company witheffect from 29th June 2020.
* Mr. Vinay Joshi resigned as Chief Financial Officer of the Company with effect from11th January 2020.
EXTRACT OF THE ANNUAL RETURN
In accordance with requirements under Section 134(3)
(a) and Section 92(3) of the Companies Act 2013 the details forming part of theextract of the Annual Return in form MGT 9 is given in ANNEXURE IV which forms part ofthis report. The same is also available on the Company's website www.akartoolsltd.com.
All the requirements of the Corporate Governance are adhered to both in letter andspirit. All the committees of the Board of Directors meets at regular intervals asrequired in terms of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. Board of Directors have taken all necessary steps to ensure compliance with allstatutory requirements. The Directors and Key Managerial Personnel of your Company havecomplied with the approved 'Code of Conduct for Board of Directors and Senior Executivesof the Company'.
The report on Corporate Governance as required under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this report and is annexed asANNEXURE V.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The details regarding the number of meetings of the Board of Directors and Committeemeetings during the period under review is given in the Corporate Governance Report.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations 2015 the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter-alia the criteria for performanceevaluation of the entire Board of the Company its Committees and Individual Directorsincluding Independent Directors. The detailed information in this regard has been given inthe Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and analysis is annexed as ANNEXURE VIand forms part of this report.
VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Pursuant to the provisions of Section 177(9) and (10) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 the Company has in place a vigil mechanism forDirectors and employees of the Company.
NOMINATION AND REMUNERATION POLICY
Pursuant to the requirement under Section 134(3) (e) and Section 178(3) of theCompanies Act 2013 the Nomination and Remuneration Committee of the Board of Directorshas in place a policy which deals with the manner of selection of Board of Directors andManaging Director and their remuneration. The objectives and key features of this policyare:
(a) Formulation of the criteria for determining qualifications positive attributes ofdirectors Key Managerial Personnel (KMP) and senior management personnel and alsoindependence of Independent Directors;
(b) Aligning the remuneration of Directors KMPs and senior management personnel withthe Company's financial position remuneration paid by its industry peers etc.;
(c) Performance evaluation of the Board its committees and Directors includingIndependent Directors;
(d) Ensuring Board diversity;
(e) Identifying persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down; and
(f) Directors' induction and continued training.
The Nomination and Remuneration policy of the Company is available on Company's websitewww. akartoolsltd.com.
RELATED PARTY TRANSACTIONS
All related party transactions those were entered during the financial year were in theordinary course of business and on arm's length basis. All related party transactions areplaced before the Audit Committee for review and approval. Prior omnibus approval is alsoobtained from the Audit Committee for the related party transactions which are ofrepetitive nature and which can be foreseen and accordingly the required disclosures aremade to the Audit Committee on quarterly basis in terms of the omnibus approval of theCommittee.
Since all the related party transactions entered into by the Company were in ordinarycourse of business and were on an arm's length basis during the period under reviewtherefore Section 188 (1) of Companies Act 2013 is not applicable to the said relatedparty transactions. Thus the Company is not required to prepare Form AOC-2.
The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the web-site of the Company "www.akartoolsltd.com" under the tab"Policies".
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
There is no loan given or guarantee provided or security provided or investment made bythe Company during the financial year 2019-20 as per Section 186 of the Companies Act2013.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid. Ason 31st March 2020 98.67% of the share capital stands dematerialized
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The net profit of the Company for the FY 2018-19 was above Rupees Five Croretherefore the provisions of Section 135 of the Companies Act 2013 and rules relatedthereto relating to Corporate Social Responsibility are applicable to the company forthe period under review.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year isannexed as ANNEXURE VII. The Policy is available on the website of the Company at the weblink https:// www.akartoolsltd.com/investor/policies.html
DISCLOSURE ON AUDIT COMMITTEE
The Audit Committee as on March 312020 comprises of the following Directors:
i. Mrs. Bhavna Saboo (Chairperson)
ii. Mr. B. R. galgali (Member)
iii. Mr. Sunil Todi (Member)
All the recommendations of the Audit Committee were accepted by the Board of Directors.
RISK ASSESSMENT AND MANAGEMENT
Your company is exposed to various business risks. These risks are driven throughexternal factors like economic environment competition regulations etc. The Company haslaid down a well defined risk management mechanism covering the risk mapping and trendanalysis risk exposure potential impact and risk mitigation process. A detailed exerciseis being carried out to identify evaluate manage and monitor business and non-businessrisks. The Audit Committee and Board periodically review the risks and suggest steps to betaken to manage/mitigate the same through a properly defined framework.
During the year a risk analysis and assessment was conducted and no major risks werenoticed which may threaten the existence of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual financial statements for the year ended 31st March2020 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) the Directors have in consultation with Statutory Auditors selected suchaccounting policies and applied them consistently and made judgements and estimates thatare reasonable and prudent so as to give true and fair view of the state of affairs of theCompany at the end of the financial year and of the net profit of the Company for thefinancial year ended 31st March 2020;
(c) the Directors have taken proper and sufficient care to maintain adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for the maintenance of adequate accounting records in accordancewith the provisions of the Companies
Act 2013 for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down adequate internal financial controls to be followed bythe Company and such internal financial controls were operating effectively during thefinancial year ended 31st March 2020; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively throughoutthe financial year ended 31st March 2020.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 (12) OF COMPANIESACT 2013
During the financial year ended 31st March 2020 there were no frauds reported by theauditors to the Audit Committee or the Board under Section 143 (12) of the Companies Act2013.
Your Company has not accepted any deposits under Chapter V of the Companies Act 2013read with Companies (Acceptance of Deposits) Rules 2014 during the period under review.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India i.e.Secretarial Standard-1 (SS-1) on the meetings of Board of Directors and SecretarialStandard-2 (SS-2) on General Meetings.
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
The impact of Covid-19 on the Company has been explained in the Management Discussionand Analysis which forms part of the Annual Report.
There is no order passed by any regulator or court or tribunal against the Companyimpacting the going concern concept or future operations of the Company.
The details of contingent liabilities are given in Note No. 31 of the Notes toFinancial Statements.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The details of familiarisation programmes imparted to Independent Directors isavailable on the website of the Company 'www.akartoolsltd.com' under the head 'Board ofDirectors' under 'Familiarisation Programme'.
Your Company believes in engaging human resources as they are the key differentiatorfor the success of the Company. Keeping the employees engaged and committed can go a longway in attainment of objectives and ensuring sustained business performance. In line withthis your Company has initiated several interventions that will enhance the engagement ofthe employees. Being a people centric organisation your Company recognises thesignificance of building next generation leadership by developing internal talent to meetthe organisational objectives. Through this the human resources function continues toalign its strategic interventions and processes while simultaneously addressing the needsof multiple stakeholders and maintaining a competitive employee cost. Your Companycontinues to have cordial and harmonious industrial relations across all the manufacturingunits. The total number of employees of the Company as on March 31 2020 stood at 434.
OCCUPATIONAL HEALTH SAFETY ENVIRONMENT AND INDUSTRIAL RELATIONS
Your Company has effectively deployed policies on Safety Occupational Health &Environment at all locations. It continually focuses on improving the effectiveness ofsystem processes through globally accepted standards. Your Company develop andmanufacture products that are safe eco-friendly and economical. Your Company reviews itsprocesses and its behaviour on a regular basis and measures its effect on people's healthand on the nature.
During the year the Company had cordial relations with workers staff and officers. Theshop floor management is done through personal touch using various motivational tools andmeeting their training needs requirements. The Company has taken initiative for safety ofemployees and implemented regular safety imparted machine safety training wearingprotective equipment etc.
Your Company's shares continue to be listed on BSE Limited and are actively traded. Thelisting fee to BSE Limited for the year 2020-21 has been paid by your Company.
POLICY AGAINST SEXUAL HARASSMENT AT WORKPLACE
Pursuant to the provisions of Section 4(1) of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 the Company has in place anInternal Complaints' Committee. The following is a summary of sexual harassment complaintsreceived and disposed off during the year
No. of complaints received: Nil No. of complaints disposed off: NA
CODE OF CONDUCT
Directors Key Managerial Personnel and Senior Management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany. The Code of Conduct is available on the Company's Website www. akartoolsltd.com.
POLICY FOR PRESERVATION OF DOCUMENTS AND ARCHIVAL POLICY
In compliance with Regulation 9 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended from time to timethe Company has in place the policy for preservation of document and archival policy.
LOAN FROM DIRECTORS
The Company has received a loan of Rs 165000/- (Rupees One Lakh Sixty Five Thousandonly) from Mr. R. L. Gupta Non-Executive Director of the Company during the financialyear 2019-20. The Company has also received a declaration from him stating that the loangiven by him is not being given out of funds acquired by him by borrowing or acceptingloans or deposits from others. This disclosure is being made pursuant to Rule 2 (1) (c)(viii) of the Companies (Acceptance of Deposits) Rules 2014.
Your Directors are pleased to express their gratitude for all the co-operation andassistance received from bankers members customers vendors various Governmentauthorities and employees for their support and faith in the Company.
| ||For and on Behalf of Board |
| ||Sd/- |
|Date: 29th August 2020 ||R.L.Gupta |
|Place: Aurangabad ||(Chairman) |
| ||DIN:00061861 |