To the Members ofTaparia Tools Limited
Your Directors have pleasure in presenting the 53rd Annual Report on the operations ofthe Company together with the Audited Financial Statements for the year ended March 312019.
FINANCIAL PERFORMANCE (as per Ind AS)
| || ||(Rs in Lakhs) |
| ||2018-2019 ||2017-2018 |
|Revenue (Net) ||47283.16 ||40918.28 |
|Profit before interest and depreciation ||3707.14 ||2264.47 |
|Less : Interest ||4.95 ||12.15 |
|Gross Profit ||3702.19 ||2252.32 |
|Less : Depreciation ||64.75 ||49.01 |
|Profit for the year before tax ||3637.44 ||2203.31 |
|Less : Provision for taxation || || |
|Current Tax ||1262.95 ||760.64 |
|Deferred Tax ||23.54 ||(11.96) |
|Profit after tax ||2350.95 ||1454.63 |
|Other Comprehensive Income || || |
|Gain on || || |
|Remeasurements of the de ned benefit plans || || |
|Income Tax effect ||(17.16) ||(20.69) |
|Total other comprehensive Income ||6.00 ||7.16 |
| ||(11.16) ||(13.53) |
|Total comprehensive Income for the period ||2339.79 ||1441.10 |
The Directors have not recommended any dividend for the year under review. The Companyhas retained the funds for expansion of the activities of the Company by introducingadditional product range and purchase of Machinery & Equipment erecting premises atValvada (Gujarat State) etc.
REVIEW OF OPERATIONS
The Company's working during the year is satisfactory. The Company's total revenue wasRs 47283.16 Lakh that represents an increase of 15.56 % over the sales of Rs 40918.28 Lakh(Net of excise duty) in the previous year. Profit earned after tax is Rs 2350.95 Lakh inthe current year represents an increase of 61.62% against 3 1454.63 Lakh in the previousyear.
The company has entered into a Wage Settlement Agreement with the Workers Union. Due towhich the labour cost has been increased by 30% approx. which has increased the input costof the company. Despite of the rise in input cost and keen competition in the hand toolsmarket the current results of the Company are fair and satisfactory.
REFORMS IN INDIAN ECONOMY
The host of reforms undertaken by the government has transformed India into the fastestgrowing major economy along with the macroeconomic stability not witnessed in the past asper note of Niti Ayog.
Against the world GDP growth of 3.7% India's GDP growth is likely to be of 7.2 percent. The uptick in economic growth has come from various economic reforms undertaken bygovernmentsuch as improvement in ease of doing business opening up to foreign directinvestments the push for infrastructure development and a stable and decisive policyenvironment.
The World Bank reportsaid thatthe recent introduction of the GST and stepstowarddemonetisation are expected to encourage a shift from the informal to the formal sector.Its representative also said that: India's recent growth numbers suggest that theeconomy remains robust despite temporary setbacks (due to demonetisation and GST)".
Your Company is committed to follow the best practices of Corporate Governance and theBoard is responsible to ensure the same from time to time.
Your Company has duly complied with the Corporate Governance requirements as set outunder Chapter IV of the SEBI Listing Regulations from time to time and the SecretarialAuditor of the Company vide his Certi cate dated 28'11 May 2019 has con rmed that theCompany is and has been compliant with the conditions stipulated in the Chapter IV of theSEBI Listing Regulations. The said Certi cate is annexed as Annexure D to this Report.
It has been the endeavor of your Company to follow and implement best practices incorporate governance in letter and spirit. A report on Corporate Governance together witha certi cate from the auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of this Annual Report is attached.
The equity shares of the company are listed on the Bombay Stock Exchange. The listingfees for the year 2019-2020 have been paid to BSE.
DEMATERIALISATION OF SHARES
Since the initiation of the dematerialization of shares of the Promoter and Promotergroup the Company has dematerialized 75.83% of their shareholding as on date. ThePromoters and Promoter Group have finished the dematerialization of their shareholdingwhatever has been possible.
During the financial year 2018-2019 the Company has not accepted any deposit withinthe meaning of Sections 73 and 74 of the Companies Act 2013 (the Act") readtogether with the Companies (Acceptance of Deposits) Rules 2014.
LOANS GUARANTEES AND INVESTMENT
During the financial year 2018-2019 the Company has not given any guarantee for loanstaken by others from banks or other financial institutions. The Company has not taken anyTerm Loan.
During the financial year 2018-2019 the company invested surplus fund generated fromits operating activities in the Plans of HDFC MUTUAL FUND. However the balance as on31.03.2019 was NIL.
HUMAN RESOURCE DEVELOPMENT
The motivated and engaging workforce which has served the company for more than fourdecades lies at the very foundation of the company's major achievements and shall wellcontinue for the years to come.
The Company has been taking honest efforts in training of individuals providing themnew and eamest opportunities in brushing developing and polishing skills that are benecial for the employees as well as the Organisation as a whole.
The Company's focus on retention through employee engagement initiatives and providinga holistic environment gathers opportunities for employees to realize their potential.Company's performance driven culture helps and motivates employees to excel in theirrespective areas and progress within the organization.
The company has always recognized talent and has judiciously followed the principle ofrewarding performance.
CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri M.P. Taparia (DIN: 00126971) Director of the Company retires by rotation at theensuing Annual General Meeting and being eligible offer himself for reappointment. Briefpro le of Shri M.P. Taparia is given in the Annexure I to the Notice.
Shri B.B. Ladda (DIN: 01679989) resigned w.e.f. August 23 2018 due to his personalreasons.
Shri Raviprakash Vyas (DIN: 07893486) had been appointed as an Independent Director ofthe Company on 3rd November 2018 to ll up the casual vacancy caused due to Shri B.B. Laddavacated his office as an Independent Director of the Company before the expiw of his termof of ce. Shri Raviprakash Vyas was to hold office till the date the outgoing DirectorShri B.B. Ladda would have held office (i.e. till 53rd Annual General Meeting). Howeverdue to personal reasons Shri Raviprakash Was resigned w.e.f. November 20 2018.
Then Shri Jugalkishore Ramchandra Jaju (DIN: 00527193) has been appointed as anIndependent Director of the Company on February 11 2019 to ll up the casual vacancycaused due to Shri Raviprakash Was vacated his office as an Independent Director of theCompany before the expiry of his term of of ce. Shri Jugalkishore Ramchandra Jaju was tohold office till the date the outgoing Director Shri Raviprakash Vyas would have heldoffice (i.e. till 53rd Annual General Meeting).
Brief pro le of Shri Jugalkishore Ramchandra Jaju (DIN: 00527193) is given as under:
|Date of Birth ||: 15-07-1949 |
|Quali cations Experience (including expertise in Speci c functional area) ||Graduate in Commerce More than 40 years in Business |
|Date ofAppointment! Re-appointment ||11-02-2019 |
|Relationship with other Directors/ Key Managerial Personnel ||N.A. |
|Shareholding in the Company as on March 31 2019 ||Nil |
During the year the Independent directors of the Company had no pecuniary relationshipor transactions with the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and based on the information andrepresentations received from the operating management your Directors make the followingstatements in terms of Section 134(3)(c) ofthe Companies Act 2013:
(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with the proper explanation relating to material departures;
(b) that such accounting policies as mentioned in Notes to the annual accounts havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31St March 2019 and of the profit of the Company for the year ended on thatdate;that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordancewith the provisionsoftheCompaniesAct 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(cl) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls are in place and that the internalfinancial controls are adequate and are operating effectively;
(f) that proper systems to ensure compliance with the provisions of all applicable lawsare in place and that such systems are adequate and operating effectively.
INDEPENDENT DIRECTORS' DECLARATION
The Company has received necessary declaration from each ofthe independent directorsunder Section 149(7) of the Companies Act 2013 that he ;' she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.
ANNUAL EVALUATION OFTHE BOARDAND BOARD COMMl'I'I'EES
The Board carried out an annual evaluation of its own performance of the IndependentDirectors individually as well as ofthe working ofthe Committees ofthe Board.
The evaluation of performance of the Board and its Committees Independent DirectorsNon-Independent Directors and Chairperson carried out by the Board found to be highlysatisfactory. The Board also noted that all the independent Directors of the Company areJl lling the criteria of their independence as per the provisions of section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations 2015.
RELATED PARTY TRANSACTIONS
The company has formulated a policy on Related Party Transactions for purpose of identication and monitoring ofsuch transactions. There were no materially significant RelatedParty transactions made by the Company with Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict with the interest of the company atlarge.
There were no contracts or arrangements entered into by the company in accordance withprovisions of section 188 of the Companies Act 2013 which require reporting in Form AOC -2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014.
The Company has in place Internal Control Systems commensuratewiththesizeandcomplexityofiisoperations to ensure proper recording of financial and operationalinformation compliance of various internal controls and oiher regulatory and statutorycompliance. During the year under review no material or serious observation has beenreceived from me Internal Auditors of me Company for inef ciency or inadequacy ofsuchcontrols.
On me basis ofgood internal control company ensures: Orderly and efficient conductofoperations Security ofis assets Prevention of 'auds and errors Reliable and accuracy ofnancial records
PARTICULARS OF EMPLOYEES
The Information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is annexed herewith as Annexure - A'.
MEETINGS OF THE BOARD
Four meetings ofthe Board of Directors were held during the year. For further detailsof the meetings please refer to the Corporate Governance Report which forms part of thisreport.
The composition terms of reference meetings held etc. of the Audit Committee isprovided in Corporate Governance Report which forms part of this Annual Report.
There have been no instances of non-acceptance of any recommendations of the AuditCommittee by the Board during the financial year under review.
NOMINATION AND REMUNERATION COMMl'I'I'EE
The composition terms of reference etc. of the Nomination and Remuneration Committeeis provided in the Corporate Governance Report which forms part of this Annual Report.
AUDITORS AND AUDITORS' REPORT
M/s. M. M. Parikh 81 Co. (Regd. No.107557W) Chartered Accountants were appointed asStatutory Auditors of the Company for a term of 5 ( ve) consecutive years subject torati cation by members every year at the annual General Meeting held on 2711September 2017.
However as per sec. 139 of the Companies (amendment) Act 2017 the resolution forrati cation of appointment of auditors is not required to be placed in the Annual GeneralMeeting w.e.f. 'om 711 May 2018.
They have con rmed that they are not disquali ed from continuing as auditors of theCompany.
There has been no quali cation reservation adverse remark or disclaimer given by theStatutow Auditor in their Report for the year under review.
Also no frauds in terms of the provisions of Section 143(12) ofthe CompaniesAct 2013have been reported by the Statutory Auditors in their report for the year under review.
The Notes to the Financial Statements are self-explanatory and do not call for anyfurther comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board appointed CSSagar Khandelwal Practicing Company Secretary to conduct Secretarial Audit for the F.Y.2018-2019.
Secretarial Auditors' Report
The Secretarial Audit Report for the Financial Year ended March 31 2019 isannexedasAnnexure -D'to the Report and Management Reply on the observations stated in theSecretarial Audit Report is annexed as Annexure E'.
The maintenance of cost records is not applicable to the Company as per the amendedCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148(1) ofthe Companies Act 2013.
Internal Financial Controls Audit
The Board has laid down Internal Financial Controls within the meaning of theexplanation to Section 134 (5) (e) (IFC") of the Companies Act 2013. The Boardbelieves the Company has sound IFC commensurate with the nature and size of its business.Business is however dynamic. The Board is seized of the fact that IFC are not static andare in fact a uid set of tools which evolve over time as the business technology andfraud environment changes in response to competition industry practices legislationregulation and current economic conditions. There will therefore be gaps in the IFC asBusiness evolves. The Company has a process in place to continuously identify such gapsand implement newer and or improved controls wherever the effect of such gaps would have amaterial effecton the Company's operations.
Details of Internal Financial Control and its adequacy are included as an AnnexureB' to the Independent Auditors' Report.
The Board of the Company has framed a risk management policy and monitors the riskmanagement plan for the Company. The Board reviews the risk management plan and ensuringits effectiveness.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Intermsofsection 135and ScheduleVIIoftheCompanies Act 2013 the Board of Directors ofthe Company has constituted a CSR Committee. CSR Committee of the Board has developed aCSR Policy which is enclosed as part of this report Annexure B'. Additionally theCSR Policy has been uploaded on the website ofthe Company at www.tapariatools.com.
ENERGY TECHNOLOGY & FOREIGN EXCHANGE
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under section 134(3) (m) of theCompanies Act 2013 read with Companies (Accouns) Rules 2014 are given in the AnnexureC' and forms part of this Report.
In pursuance to the provisions of section 177(9) 81 (10) of the Companies Act 2013 aVigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww. tapariatools.com
DISCLOSURES UNDERTHE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL)
In accordance with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules made there under theCompany formulated an internal policy on Sexual Harassment at Workplace (PreventionProhibition and Redressal) during the year under review.
The policy aims at educating employees on conduct that constitutes sexual harassmentways and means to prevent occurrence of any such incident and the mechanism for dealingwith such incident in the unlikely event of is occurrence. A Sexual Harassment Committeehas been constituted in accordance with the Act.
The Sexual Harassment Committee is responsible for redressal of complains related tosexual harassment of women at the workplace in accordance with procedures regulations andguidelines provided in the Policy.
During the year under review there were no complains referred to the Sexual HarassmentCommittee.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return ofthe company is annexedherewith as Annexure G' to this report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant or material orders passed by the Regulators/ Courts/ Tribunalswhich could impact the going concern status of the Company and is future operations.
INTERIM ORDER BY SEBI
The Company has received an Interim Order from SEBI on 20/05/2015 for the allegedNon-Compliance of the Minimum Public Shareholding. The Company is of the view that therehas been no violation with reference to Promoter Shareholding. The said stand of theCompany has been intimated to SEBI vide Company's letter dated 14/10/2015. Personalhearing on the same was held on 03rd October 2018. Thereafter the details required bySEBI were submitted.
Asdirected inthe Order Companyhas regularlysubmitted compliance repors on quarterlybasis to BSE.
There were no material changes and commitments affecting the financial position of yourCompany between end of the financial year and the date of this report.
Your Company has not issued any equity shares or shares with differential voting rightsduring the financial year.
Your Company did not issue any sweat equity shares debentures or bonds during theyear.
For expansion of business company has initiated and started plant at Valvada GujaratState) which is under construction.
We take this opportunity to express sincere appreciation for the cooperation andassistance of Central and State Government authorities bankers customers suppliers andbusiness associates. We also wish to place on record our sincere appreciation for thecommitted services by each and every employee of the Company in driving the growth oftheCompany. We acknowledge with gratitude the encouragement and support extended by ourvalued shareholders.
For and on behalf of the Board of Directors
Chairman & Managing Director
Mumbai 28th May 2019