Your Board of Directors is pleased to present the 24th Annual Report for the financialyear 2018-19 together with the Standalone Audited Financial Statements for the yearended on March 312019.
|Particulars || |
Amount (Rs In Crores)
| ||F.Y. 2019 ||F.Y. 2018 ||Increase/ (Decrease) |
|Total Revenue from Operations ||64.18 ||53.89 ||10.29 |
|Other Income ||(12.58) ||6.21 ||(6.37) |
|Total Expenditure (excl. depreciation interest and tax) ||35.60 ||31.05 ||4.55 |
|Profit before depreciation interest and tax ||16.00 ||29.04 ||(13.04) |
|Less: Interest ||0.24 ||0.41 ||(0.17) |
|Less: Depreciation and amortization expense ||2.93 ||3.16 ||(0.23) |
|Profit before tax ||12.83 ||25.47 ||(12.64) |
|Less: Net tax expense ||7.56 ||5.58 ||1.98 |
|Profit for the year ||5.27 ||19.89 ||(14.62) |
|Add: Surplus carry forward from the last year Balance sheet ||96.37 ||76.91 ||19.46 |
|Less: Dividend Paid (Incl. Tax) ||0.53 ||0.43 ||0.1 |
|Balance carried over to Balance Sheet ||101.11 ||96.37 ||4.74 |
|Paid-up share Capital ||10.67 ||1.78 ||8.89 |
|Reserves and Surplus ||97.88 ||102.15 ||19.47 |
|Earnings Per share (Rs) ||4.94 ||111.82 ||45.20 |
Results of Operations
The total revenue from operation for the F.Y. 2018-19 is Rs 64.18 crores markingincrease of 19.11% to last year's operational revenue generation of Rs 53.89 croresdespite slow growth during the second half of the year under review.
The working of both divisions of the Company is given as below:
Taps and Cutting Tools
During the year under review the turnover for Taps and Cutting Tools segment hasincreased by 19.68% from the last financial year. Cutting Tools Industry plays a majorrole in production of automobiles which includes 2 wheelers 4 wheelers & heavycommercial vehicles. Apart from automobiles there are many ancillaries to supply to theseauto companies and also expanding their capacities for exports.
The sales of cutting tools till November 2018 saw a robust growth. There has been aslow down in the auto sector which has resulted in corresponding slow down in our growth.We expect that this will continue till September 2019 and after that things are expectedto return to normalcy.
The company has two wind farm projects one at Shivapura Kavalu Village Belur TalukaHassan District in Karnataka and the other at Kita & Ugawa District Jaisalmer inRajasthan both are developed and maintained by Suzlon Energy Limited and Enercon (India)Limited respectively. The combine contribution of the two wind farm projects to the grossrevenues in the F.Y. 18-19 was Rs 1.32 crores from the power sale during the year underreview.
The paid up equity share capital as on 31st March 2019 was Rs106713000 due to issueof 8892750 bonus equity shares of Rs10/- each (Rupee Ten only) at par in the proportionof five bonus shares for every one existing fully paid up equity shares on September 272018 . Except this the Company has not issued any shares during the FY2018-19.
Your Board of Directors is pleased to recommend final dividend of Rs0.50 per equityshare on 10671300 total outstanding equity shares of Rs 10/- each amounting toRs5335650/- in respect of the financial year 2018-19 subject to approval of shareholdersin 24th AGM.
Material changes / developments during the year:
Expansion project started in F.Y. 2015 -16 is completed; however the effect of thisexpansion will be gradual.
Material commitments during the year:
Main Board Migration:
On September 27 2018 Board of directors approved migration to main board of NationalStock Exchange of India Limited (NSE). The decision is yet to be implemented due tounstable market condition for migration.
Material Changes / Events after the date of balance Date
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the Financial Year i.e. 31st March 2019 andthe date of Report.
Change in the nature of business
During the year under review there is no change in the nature of business of thecompany.
During the year under review the Company did not accept any deposits from the publicwithin the ambit of section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
Particulars of loans guarantees or investments under section 186 of the Companies Act2013
The Company has made compliance with the provisions of Section 186 of the CompaniesAct 2013 during the financial year under review. Please refer to Note 1314 and 19 to thefinancial statement for F.Y. 2018-19.
Subsidiary Associate and Joint Venture
The Company does not have any subsidiary Associate and Joint Venture Company during theyear under review.
The Company has taken all necessary steps to implement the provisions of theRegulations and detailed Corporate Governance Report for the F.Y. 2018-19 forms integralpart of this Annual Report.
Management Discussion and Analysis [MDA]
Management Discussion and Analysis for the year under review as stipulated underRegulation 34 (2) (e) of SEBI (LODR) 2015 is presented in a separate section formingintegral part of this Annual Report.
Related party transactions
All contracts/ arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis. There were no materially significant transactions with related parties during thefinancial year which were in the conflict of interest of the Company. An "Annexure A-Form AOC-2''on Related Party disclosures for the year under review form part of thisAnnual Report.
During the year under review 5 (five) Board Meetings were convened and held thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013.
The details of Meetings of the Board and its Committees are given in the CorporateGovernance Report.
Pursuant to the provisions of the Act and Rules made there under and SEBI (LODR)regulation 2015 the board has constituted various committees. Composition and otherdetails on the committee are given in the Corporate Governance Report.
Extract of Annual Return
In accordance with section 134 (3) (a) of the Companies Act 2013 the extract of theAnnual Return in Form No. MGT-9 is attached as "Annexure-C" forms part of theBoard's Report and is also available on https://emkaytapsandtools.com/disclosure/.Directors and Key Management Personnel
I. Retirement by Rotation
In accordance with the provisions of section 152 of the Companies Act 2013 and interms of Articles of Association of the Company Mr. Ajayprakash Kanoria (DIN: 00041279)retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible offersoffers himself for reappointment. The Board recommends his reappointment by the members atthe ensuing AGM.
II. Re-appointment of Independent Directors
In accordance with the provisions of section 196  of the Companies Act 2013 Mr.Mahesh Mor and Mr. Ravindra Loiya has been appointed as Independent Directors on the Boardof the Company to be effective from 8th April 2015 and 24th April 2015 respectively for5 years (till April 7 2020 and April 23 2020 respectively) in view of the completion oftheir first term of five years the Board of Directors in their meeting held on July 202019 subject to approval of Members of the Company at the ensuing annual general meetinghas accorded their consent and recommended the same to the shareholders to re-appoint Mr.Mahesh Mr and Mr. Ravindra Loiya as Independent Directors on the Board of the Company foranother term of five years i.e. till April 7 2025 and April 23 2025 respectively.
III. Profile of the Directors seeking Appointment / Reappointment
As required under Regulation 36 (3) of SEBI (LODR) 2015 particulars of the Directorsretiring by rotation and seeking appointment / reappointment at the ensuing Annual GeneralMeeting is annexed to the notice convening 24th Annual General Meeting.
IV. Key Managerial Personnel
Pursuant to Section 2(51) and Section 203 of the Companies 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 following are the KeyManagerial Personnel and during the year there was no change in KMFs of the Company;
Mr. Ajayprakash Kanoria- Chairman Managing Director & CEO
Mrs. Alka Kanoria-Whole Time Director
Mr. Vishnu Sontakke- Chief Financial Officer (CFO)
Miss. Shruti Sohane- Company Secretary and Compliance Officer
V. Board Evaluation
Pursuant to the provisions of the Act and Rules made thereunder and as provided underSchedule IV of the Act and Regulation 17(10) of SEBI(LODR) 2015 annual performanceevaluation of the Directors individually as well as its committees has been carried out bythe Board.
The Policy for Evaluation of Performance of the Board of Directors was formulated byNomination and Remuneration Committee of the Board of Directors and same has been approvedand adopted by the Board of Directors in their Meeting held on March 122019.
The criteria for evaluation have been provided in the Corporate Governance Reportwhich forms integral part of this Report. Also the Policy for Evaluation of Performance ofthe Board of Directors is available on the website of the Company for reference visitwww.emkaytapsandtools.com.
VI. Declaration by Independent Directors
The Independent Directors have submitted their declarations of independence asrequired pursuant to the provisions of section 149(7) of the Act stating that they meetthe criteria of independence as provided in section 149.
VII. Familiarization Program for Independent Directors
With the commencement of SEBI (LODR) Regulation 2015 w.e.f. December 22015 the listedentity is required to conduct the prqgram for the new joining director of the company toget him/her familiarized with the company. No new Director joined the Board of the Companyduring the year under review; hence no such program has been conducted during the FY2018-19.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed companies.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions. All our corporate governance policies are available on our website(http://emkaytapsandtools.com/corporate-governance/). The policies are reviewedperiodically by the Board and updated based on need and new compliance requirement.
Key policies that have been adopted by the Company are as follows.
|POLICY NAME ||BRIEF DESCRIPTION ||VEB LINK |
|Insider Trading Policy ||The Company has adopted the Code of Conduct to regulate monitor and report trading by insiders and Code of fair disclosure of unpublished price sensitive information for the Directors KMP and other designated officers and connected persons of the Company. ||http://emkaytapsandtools.com/ insider-trading-policy/ |
|Code of Conduct ||The Company has formulated and adopted Code of Conduct for the Senior Management and officers of the Company. ||http://emkaytapsandtools.com/ code-of-conduct/ |
|Policy on Vigil Mechanism (Whistleblower Policy) ||The Company has adopted the Vigil Mechanism for directors and employees to report concerns about unethical behavior actual or suspected fraud or violation of the Company's code of conduct and ethics. ||http://emkaytapsandtools.com/ vigil-mechanism-policy/ |
|CSR Policy ||The company believes in the Philosophy of moving together and growing together. The Directors have adopted policy on CSR to spend as required under the Companies Act 2013 for activities those are benefiting to the Society as a Whole. ||http://emkaytapsandtools.com/ csr-policy/ |
|Nomination & Remuneration Policy ||As required under the provisions of the Companies Act 2013 Board of Directors has adopted policy for appointment of the Director and for determination of remuneration payable to them. ||http://emkaytapsandtools.com/ nomination-remuneration-policy/ |
|Policy for Determination of Materiality of Event or Information ||This policy has been formulated by the Board of Directors deals with the determination of materiality of the Event/ Infor^mation and its dissemination to the Stakeholders at large. ||http://emkaytapsandtools.com/ corporate-governance/policy-for- determination-of-materiality-of -event-or-information/ |
|Archival Policy ||This policy is for retention and preservation of documents and records of the Company. ||http://emkaytapsandtools.com/ corporate-governance/archival -policy-for-retention-of- documents etctl/ |
|Prevention of Sexual Harassment at workplace policy ||This policy has been formulated define the guidelines and the process to be followed in order to provide protection against sexual harassment of women at workplace and for the prevention and redressal of complaints of sexual harassment in addition to the matters connected therewith or incidental thereto. ||http://emkaytapsandtools.com/wp- content/uploads/2016/02/Policy- on-Prevention-Prohibition-and- Redressal-of-Sexual- Harassment_EMKAYTOOLS.pdf |
|Policy for Evaluation of Performance of the Board of Directors ||The company has formulates this policy for annual performance evaluation of the Directors individually as well as its committees has been carried out by the Board in compliance of SEBI (LODR) Regulations 2015 ||http://emkaytapsandtools.com/wp- content/uploads/2016/02/POLICY- FOR-EVALUATION-OF- PERFORMANCE-OF-THE-BOARD- OF-DIRECTORS_ETCTL.pdf |
Directors Responsibility Statement
In terms of section 134 [c] of the Act your Directors state that:
i. in the preparation of the annual financial statements for the year ended on March312019 applicable accounting standards read with requirements set out under scheduleIII of the Act have been followed along with proper explanation relating to materialdepartures if any
ii. such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the company as at 31st March 2019 and of the profit of thecompany for the year ended on that date
iii. proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for prevention and detection of fraud and other irregularities
iv. the annual financial statements are prepared on a going concern basis
v. proper internal financial controls are in place and that the financial controls areadequate and are operating effectively and
vi. the systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.
In accordance with provisions of Section 139(1) of the Companies Act 2013 M/s. P.S.Thakare & Co. Chartered Accountants 128572W) has been appointed as statutoryauditors of the company for 5 consecutive financial years i.e. from conclusion of 23rd AGMtill the conclusion of 28th AGM.
M/s P.S. THAKARE Chartered Accountants Nagpur 128572W) has submitted theireligibility and under section 141 of the Companies Act 2013 and the rules madethereunder to the Board of Directors on May 27 2019 and are eligible to continueappointment as Statutory Auditors for the FY 2019-20.
M/s P.S. THAKARE Chartered Accountants has submitted Auditor's Report with unmodifiedopinion and unmodified figures for the F.Y. March 31 2019 in compliance of of SEBI (LODR)Regulations 2015. The Board has duly reviewed the Auditor's Report and the Observationsand comments appearing in the Auditor's Report are self-explanatory and do not call forany further explanation/ clarification by the Board of Directors.
Pursuant to the provisions of section 204 of the Act read with rule 9 of The Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 company isrequired to annex the Secretarial Audit report 'with its Board Report. Accordingly theappointment of M/s H. Roshan & Associates Nagpur has been made by the Board in theirmeeting held on August 18 2018 to conduct Secretarial Audit and report thereon for F.Y.2018-19.
Accordingly the Secretarial Audit Report given by M/s H. Roshan & AssociatesNagpur for the F.Y. 2018-19 is annexed herewith as Annexure B". The Board has dulyreviewed the Secretarial Auditor's Report and the observations and comments appearing inthe report are self- explanatory and do not call for any further explanation/clarification by the Board of Directors as provided under Section 134 of the CompaniesAct 2013.
Maintenance of Cost Records
In compliance with rule (8) sub-rule (5) clause (ix) of Companies (Accounts) amendmentRules 2018 the Board of Directors of your company confirms the maintenance of costrecords as specified by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013 is required by the Company and accordingly such accounts and recordsare made and maintained by the Company. Business Risk Management
The Company has in place a comprehensive Risk Management framework to identifymonitor review various risk elements. On a periodic basis all necessary steps towardsmitigation of various risk elements which can impact the existence of the Company aretaken by the Management of the Company. All the identified risks are managed throughcontinuous review of business parameters by the Management and the Board of Directors arealso informed of the risks and concerns.
Discussion on risks and concerns is covered separately under section the ManagementDiscussion and Analysis Report which forms integral part of this Annual Report.
The Board of Directors has formulated a Vigil Mechanism /Whistle Bl ower Policy 'whichprovides a robust framework for dealing 'with genuine concerns & grievances.
Internal Control Systems
The Internal Financial Control systems of the Company are adequate with reference tothe Financial Statement size and operations of the Company. Internal Auditor of theCompany observes the effective functioning of internal financial controls. The scope andfunctions of Internal Auditor is defined and reviewed by the Audit Committee.
During the year under review the Internal Financial Control were tested and noreportable material weakness in the design or operation were observed.
Insider Trading Code
In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 (" the PIT Regulations") and amendments thereto onprevention of Insider Trading your Company has a comprehensive Code of Conduct forRegulating monitoring and reporting of trading by Insiders along with policy onlegitimate purpose. Your Company also has a Code of Practices and Procedures of fairdisclosures of unpublished price sensitive information and these code(s) are in line 'withthe PIT regulations.
Corporate Social Responsibility
The Annual Report on the CSR activities of the Company pursuant to Rule 8 of theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed to this reportin "Annexure D".
Particulars of Employees
The information required under section 197 of the Act read with Rule 5 of theCompanies [Appointment and Remuneration of Managerial Personnel] Rules 2014 is given in"Annexure E" that forms part of the Boards Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Information on conservation of energy technology absorption foreign exchange earningsand outgo as required to be disclosed under section 134[^n] of the Act read 'with theCompanies [Accounts] Rules 2014 are provided in the Annexure-"F" that formspart of this Report.
Obligation of Company under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
In terms of provisions of the Sexual Harassment of Women at ^Workplace (PreventionProhibition and Redressal) Act 2013 and rule (8) sub-rule (5) clause (x) of Companies(accounts) amendment Rules 2018 the Company has formulated a Policy to prevent SexualHarassment of Women at ^Workplace and Internal complaint Committee has been constitutedfor the prevention and redressal of complaints of sexual harassment and to look after thematters connected therewith or incidental thereto.
Significant and material Orders
There are no significant material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperation.
Details of Frauds Reported by Auditors
There are no frauds against the Company reported by the Auditors for the period underreport.
The Directors express their gratitude and warm appreciation for the sincereco-operation to the Dealers Suppliers Shareholders NSE Bankers Workers and Employeesand various government authorities for their support and look forward to their continuedsupport in the future.
| ||For and on behalf of the Board of Directors |
| ||EMKAY TAPS AND CUTTING TOOLS LIMITED |
|Nagpur Saturday July 20 2019 || |
| ||Ajayprakash Kanoria |
| ||Chairman Managing Director & CEO |