Your Board of Directors is pleased to present the 23rd Annual Report for thefinancial year 2017-18 together with the Standalone Audited Financial Statements for theyear ended on March 312018.
|Particulars || |
Amount (Rs In Crores)
| ||F.Y. 2018 ||F.Y. 2017 ||Increase/ (Decrease) |
|Total Revenue from Operations ||53.89 ||44.73 ||9.16 |
|Other Income ||6.21 ||2.13 ||4.08 |
|Total Expenditure (excl. depreciation interest and tax) ||31.05 ||29.20 ||1.85 |
|Profit before depreciation interest and tax ||29.05 ||20.83 ||8.22 |
|Less: Interest ||0.41 ||0.34 ||0.07 |
|Less: Depreciation and amortization expense ||3.15 ||2.84 ||0.31 |
|Profit before tax ||25.47 ||17.66 ||7.81 |
|Net tax expense ||5.58 ||5.81 ||(0.23) |
|Profit for the year ||19.89 ||11.85 ||8.04 |
|Add: Surplus carry forward from the last year Balance sheet ||76.91 ||65.06 ||14.05 |
|Less: Dividend Paid (Incl. Tax) ||0.43 ||- ||0.43 |
|Balance carried over to Balance Sheet ||96.37 ||76.91 ||19.46 |
|Paid-up share Capital ||1.78 ||1.78 || |
|Reserves and Surplus ||102.15 ||82.68 ||19.47 |
|Earnings Per share (Rs ) ||111.82 ||66.62 ||45.20 |
Results of Operations
The total revenue from operation for the F.Y. 2017-18 is Rs 53.89 crores markingconsiderable increase as compared to Rs 44.73 crores in last F.Y. 2016-17. Performanceaccelerated 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 21.54% 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.
Automobile industry has been seeing a very good growth during the last few years and itis presumed that going forward this tempo of growth will be maintained in the comingyears.
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. 17-18 was Rs 1.28 crores from the power sale during the year underreview.
The paid up equity share capital as on 31st March 2018 was Rs 1 77 85500. During theperiod under review the Company has not issued any shares with differential voting rightsor granted stock options or sweat equity during the FY2017-18.
Your Board of Directors is pleased to recommend final dividend of Rs 3.00 per equityshare on 1778550 total outstanding equity shares of Rs 10/- each amounting toRs5335650/- in respect of the financial year 2017- 18.
Bonus Issue of Shares
Your Board of Directors recommends Bonus Issue of shares in the ratio of 5:1 to theexisting shareholders of the company if same is approved by the shareholders in theensuing Annual General Meeting.
Material changes /commitments/ developments during the year
Introduction and Implementation of GST Regime:
The Board of Directors welcome the GST regime of the Government of India that has beenmade effective from July 1 2017 as One Nation One Tax and we hope that it will result indesirably positive changes in Goods and services industry of the country.
As phrased by Indian Machine Tool Manufacturers' Association (IMTMA) "From anend-customer's outlook the indirect tax cost applicable on machine tools was on the higherside attracting excise duty and VAT depending on the state. Additionally there was acascading of taxes which has been eliminated with the standard rate of GST at 18% formachine tools."
With the implementation of GST prices in the automobile sector are likely to go downand this may have positive impact on the demand of automobile industry and on our businessas well. However the financial impact of GST will vary from company to company and thoughthere are positive vibes in the industry we will have to wait and watch the real impactof GST on the machine tool industry.
In the F.Y. 2016-17 your Board of Directors reported for completion of major part ofthe expansion project that has been started inFY2015-16 with a capital outlay ofapproximately Rs 11 crores which will likely increase plant capacity to 17 lakhs unitsfrom 12 lakhs units with technology upgradation as well.
By the end of the FY 2017-18 the aforementioned project was on completion stage and theCompany shall be reaping the fruits of implementation of expansion in the years to come.
However the effect of this expansion will be gradual on the capacity expansion becauseof the initial teething troubles in starting up various machines.
Material Changes / Events after the date of balance Date There are no material changesand commitments affecting the financial position of the Company which has occurred betweenthe end of the Financial Year i.e. 31st March 2018 and the 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) Rules2014.
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. 2017-18.
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. 2017-18 is presented ina separate section forming integral part 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.
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 Mrs. Alka Ajayprakash Kanoria (DIN:00041346) retires by rotation at the ensuing Annual General Meeting (AGM) and beingeligible offers herself for re-appointment. The Board recommends her reappointment by themembers at the ensuing AGM.
II. Re-appointment of Managing Director and Whole time Director In accordance with theprovisions of section 196 of the Companies Act 2013 Mr. Ajayprakash Kanoria and Mrs.Alka Kanoria has been reappointed as Managing Director and Whole Time Directorrespectively to be effective from 1 st April 2019 for 5 years (till March 31 2024) bythe Board of Directors in their meeting held on August 18 2018 subject to approval ofMembers of the Company at this annual general meeting.
III. Profile of the Directors seeking Appointment / Reappointment As required underRegulation 36 (3) of SEBI (LODR) 2015 particulars of the Directors retiring by rotationand seeking appointment / reappointment at the ensuing Annual General Meeting is annexedto the notice convening 23rdAnnual General Meeting.
IV. Resignation of Director
Mr. Rahul Bagadia an Independent Director on Board of the Company has resigned fromthe Board w.e.f. December 112017. The Board has noted his resignation and places theirthanks for his contribution as Independent Director on Board of the Company.
V. 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 ICMP's of the Company;
Mr. Ajayprakash Kanoria- Chairman and Managing Director
Mrs. Alka Kanoria-Whole Time Director
Mr. Vishnu Sontakke- Chief Financial Officer (CFO)
Miss. Shruti Sohane- Company Secretary and Compliance Officer
VI. 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 by the Board. The Policyfor Evaluation of Performance of the Board of Directors was formulated by Nomination andRemuneration Committee of the Board of Directors and same has been approved and adopted bythe Board of Directors in their Meeting held on March 82018.
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.enikaytapsandtools.com
VII. 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 .
VIII. Familiarization Pregram for Independent Directors
With the commencement of SEBI (LODR) Regulation 2015 w.e.f. December 2 2015 thelisted entity is required to conduct the pregram for the new joining director of thecompany to get him/her familiarized with the company. No new Director joined the Board ofthe Company during the year under review; hence no such pregram has been conducted duringthe FY2017-18.
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 ||WEB 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/ Information 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-Frohibition-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 evaluatioi l of the Directors individually as well as its committees has been carried out by the Board in compliance of SEBI (LODR) Regulations2015 ||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 March312018 applicable accounting standards read with requirements set out under schedule IIIof 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 2018 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. VijayAgrawal & Co. Chartered Accountants (FRN No. 138350W) has been appointed asstatutory auditors of the company for 5 consecutive financial years i.e. from conclusionof 191 AGM till the conclusion of 241 AGM. Pursuant to Listingof the Company tenure of said Statutory Auditor shall end at the conclusion of 23rd AGM.They have completed consecutive tenure of 10 (ten) year (including transition period) asprovided under section 139(2) of the Companies Act 2013and the rules made thereunder.
M/s P.S. THAKARE Peer Reviewed Chartered Accountants Nagpur (FRN No.l28572W)hassubmitted their eligibility and consent under section 141 of the Companies Act 2013 andthe rules made thereunder to the Board of Directors on May 272017 and are eligible forappointment as Statutory Auditors for the FY2018-19.
Section 139(1) of the Companies Act 2013 further provides that the appointment ofstatutory auditors shall be placed before the members for their approval. Accordingly aresolution seeking members approval for the appointment of M/s. P.S. Thakare & Co.Chartered Accountants (FRN No. 128572W) as statutory auditors of the company is includedat Item No. 4 of the Notice convening the AGM.
In view of the above and on recommendation of Audit Committee the Board of Directorsapproves and recommends their appointment as Statutory Auditors at the ensuing AnnualGeneral Meeting from the conclusion of the 23rd AGM till the Conclusion of 28lhAGM and to conduct statutory audit and report thereon from FY 2018-19 till FY 2022-23.
M/s. Vijay Agrawal & Co. Chartered Accountants being the Statutory Auditor of theCompany for the year under review has audited books for the F.Y. March 31 2018 andaccordingly has submitted Independent Auditor's Report on the same for F.Y. 2017-18.
The Board has duly reviewed the Statutory Auditor's Report on the Accounts. TheObservations and comments appearing in the Auditor's
Report are self-explanatory and do not call for any further explanation/ clarificationby the Board of Directors as provided under section 134 of the Act.
Peer Review Audit
M/s K.P.R.K. & Associates Chartered Accountants from Nagpur (Peer Reviewed by theICAI New Delhi) being the Peer Review Auditor of the Company has submitted Auditor'sReport with unmodified opinion and unmodified figures for the F.Y. March 312018 incompliance of Reg. 33 (1) (d) of SEBI (LODR) Regulations 2015. The Board has dulyreviewed the Peer Review Auditor's Report and the Observations and comments appearing inthe Auditor's Report are self-explanatory and do not call for any further explanation/clarification by the Board of Directors.
Pursuant to the provisions of section 204[ 1 ] of the Act read with rule 9 of TheCompanies (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 July 182017 to conduct Secretarial Audit and report thereon for F.Y.2017-18.
Accordingly the Secretarial Audit Report given by M/s H. Roshan & AssociatesNagpur for the F.Y. 2017-18 is annexed herewith as "Annexure B". The Board hasduly reviewed the Secretarial Auditor's Report and the observations and commentsappearing in the 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 Blower 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") on prevention of InsiderTrading your Company has a comprehensive Code of Conduct for Regulating monitoring andreporting of trading by Insiders. Your Company also has a Code of Practices and Proceduresof fair disclosures of unpublished price sensitive information and these code(s) are inline with the 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 Board's 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[m] of the Act read with theCompanies [Accounts]
Rules 2014 are provided in the Annexure-"F" that forms part 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 constituted forthe 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 to the Dealers Suppliers and Banks for theirsupport and express their warm appreciation for the sincere co-operation and dedicatedwork by a majority of the employees of the Company. Our consistent growth was madepossible by their hard work solidarity cooperation and support and look forward to theircontinued support in the future.
| ||For and on behalf of the Board of Directors |
| ||EMKAYTAPS AND CUTTING TOOLS LIMITED |
|Nagpur Saturday August 182018 || |
| ||Ajayprakash Kanoria |
| ||Chairman & Managing Director |