Talbros Engineering Ltd Directors Report.
To The Members,
The Directors have pleasure in presenting 33rd Annual Report on the business and operations of the Company alongwith the audited Balance Sheet and Statement of Profit & Loss for the year ended on 31st March 2019.
|FINANCIAL RESULTS:||(र in Lacs)|
|Particulars||Year Ended 31st March, 2019||Year Ended 31st March, 2018|
|Revenue from Operations|
|- Sale of Products||25,797||20,469|
|- Other Operating revenues||1,128||363|
|Total Revenue from Operations||26,925||20,832|
|Profit before Interest, Depreciation & Tax||2,540||2,137|
|Profit Before Tax and After Exceptional Items||1,129||1,306|
|Less: Previous Year adjustments||19||4|
|Provision for current year income-tax||290||350|
|Provision for Deferred Tax||100||56|
|Net Profit after tax||720||896|
|Net profit after tax and adjustments||720||896|
|Other Comprehensive Income|
|- Items that will not be classified to profit or loss||11||12|
|- Items that will classified to profit or loss||NIL||NIL|
REVIEW OF OPERATIONS:
The Company has achieved net revenue from operations of र 26,925 Lakhs in this financial year ended on 31st March, 2019 at a growth of around 29.25% as against र 20,832 Lakhs for the previous financial year. The net profit after tax for this year is र 720 Lakhs as compared to र 896 Lakhs for the previous financial year.
Reserves & Surplus as on 31st March, 2019 stand at र 5,245 Lakhs as against the paid-up capital of र 508 Lakhs.
Your Directors recommend a dividend of र 1.5/- per share (15%) for the financial year 2018-19. This dividend payout, if approved in the forthcoming Annual General Meeting, will result in outflow of र 76 Lacs excluding Dividend Distribution Tax.
The register of Members and Share Transfer Books will remain closed on Monday, 23rd September, 2019 for the purpose of payment of final dividend for the financial year ended March 31, 2019 and the AGM. The AGM is scheduled to be held on Monday, 30th September, 2019
TRANSFER TO GENERAL RESERVE:
Your Directors do not propose transfer to the general reserves and it is proposed to be retained in the profit and loss account.
There is no change in Authorised, Subscribed, Issued and paid up capital of the Company during the year under review.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid and unclaimed dividends are required to be transferred by the Company to IEPF established by the Government of India, after completion of seven years. Further, according to the Rules , the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to demat account of the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends of र 1,15,545/-pertaining to unclaimed and unpaid dividend for the financial year 2010-11. Further, 34,207 corresponding shares were transferred as per the requirements of IEPF Rules. The details are provided on our website www.talbrosaxles.com.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 "OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT"
No matters of actual or alleged fraud has been reported by the auditors under sub-section 12 of Section 143 of Companies Act, 2013.
The annual listing fees for the year under review have been paid to BSE Limited where your Companys shares are listed.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has a proper Internal Control System commensurate with the size, scale and complexity of its operations. The Company has appointed M/s Harshit Bansal & Associates, Chartered Accountants as Internal Auditors of the Company for financial year 2018-19. To maintain the objectivity and independence, the Internal Audit team reports to the Chairman of the Audit Committee of the Board and to the President/COO.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control system in the company, accounting procedures and policies. Based on the internal audit report, the Company undertake corrective action in their respective areas and thereby strengthen the control.
MARKETING AND EXPORT:
The export sales have registered a growth to र 5,207 Lakhs in financial year 2018-19 as against र 4,212 Lakhs in previous year. Thus, showing an increase of 23.62% as compared to previous fiscal year.
Your Company has been assigned a rating of A- (Stable) for Long Term Bank Facilities (Term Loans) of र 19.61 Crores and rating of A2+ for Short Term Bank Facilities (Fund Based Limits) availed from DBS Bank Limited, Yes Bank Limited, HDFC Bank Limited, The Hongkong and Shanghai Banking Corp. Ltd. The rating is assigned by CARE Ratings Limited.
The Company is not having any subsidiary company.
The Board of Directors consists of executive and non-executive directors including independent directors who have wide and varied experience in different disciplines of corporate functioning.
During the year, Mr. Sanjay Sharma has been appointed as an Additional Executive Director w.e.f. 01st November, 2018 pursuant to the provisions of section 161 of the Companies Act, 2013, who shall hold the office of Director upto the Ensuing General Meeting. However, the Nomination and Remuneration Committee has recommended for confirmation of his appointment in ensuing General Meeting. Mr. Vijay Kumar Sharma, Executive Director is liable to retire by rotation and being eligible offers himself for re-appointment. Your Directors recommend for his re-appointment.
Pursuant to section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company during the year are Mr. Vijay Kumar Sharma, Executive Director, Mr. Sanjay Sharma, Executive Director, Mr. Kanwar Pal Pawar, Chief Financial Officer and Mr. Ankush Jindal, Company Secretary.
COMPOSITION OF COMMITTEES
The Composition of all Committees formed by the Board is provided in Corporate Governance Report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company as required under Schedule IV of the Companies Act, 2013 and Listing Regulations has made arrangements to facilitate the Independent Directors to familiarize with the operations of the Company, their roles, rights, responsibilities as Directors of the Company considering the nature of the Industry in which the Company operates, business model of the Company, etc. The above aspect can be accessed on website www.talbrosaxles.com. During the year 2018-19, Mr. Sunil Kumar and Ms. Priyanka Khattar have been re-appointed as an Independent Non-Executive Directors of the Company for a consecutive term of 5 (Five) years effective from 1st April, 2019.
DIRECTORS RESPONSIBILITY STATEMENT:
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis. The Ind AS are prescribed under section 133 of Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 effective from April, 2016, the Company has adopted all the Ind AS standards and the adoption was carried out in accordance with applicable transition guidance.
The directors confirm that:
(i) In preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;
(ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and of the profit of the company for that period;
(iii) They have taken proper and sufficient care for the maintenance of adequate accounting records 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;
(v) They have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
(vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS:
The Independent directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of section 149(6) of the Companies Act, 2013 and under regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
NUMBER OF MEETINGS OF THE BOARD:
The Board met 6 (Six) times during the financial year under review, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013.
Pursuant to the provisions of Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015, and as per Guidance Notice issued by SEBI, the Board has carried out annual performance evaluation for Financial Year 2018-19.
Independent Directors at their meeting without the participation of the Non-Independent Directors and Management, considered / evaluated the Boards performance, assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The Board subsequently evaluated its own performance, the working of its committees (Audit, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee) and Independent Directors (without participation of the relevant Director).
The criteria for performance evaluation have been detailed in the Corporate Governance Report attached to this report.
The Registered Office address of the Company is Plot No. 74-75-76, Sector 6, Faridabad, Haryana 121 006.
POLICY OF DIRECTORS APPOINTMENT AND REMUNERATION:
The Companys policy on directors appointment and remuneration and other matters pursuant to section 178(3) of the Companies Act, 2013 has been disclosed in Corporate Governance Report, which forms part of this report.
CODE OF CONDUCT:
The Board of Directors has approved a code of conduct applicable to the members of the Board, principal executive officers, principal financial officers, principal accounting officers or controllers and all senior management of the Company. The code has been titled as "Code of Ethics for Designated Persons". The same has been posted on the website of the Company www.talbrosaxles.com.
The code lays down as standard procedure for efficient working of designated employees and to build a transparency between the management and stakeholders of the Company, compliance with governmental laws, rules and regulations.
The Designated employees have confirmed the compliance with the code of conduct.
The Audit Committee consists of 3 (Three) Directors with Independent Director as chairman. During the year 4 (Four) meetings of the committee were held. The responsibility and duties of Audit Committee have been detailed in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration committee consists of 3 (three) Non Executive Directors. During the year 2 (Two) meetings have been held. The key areas of Committee have been detailed in Corporate Governance Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
The Company has not given any loan or guarantees covered under the provisions of section 186 of Companies Act, 2013. The detail of investments made by the Company is given in the notes to the financial statements.
CHANGE IN THE NATURE OF BUSINESS:
During the year under review, there has been no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There has been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
There are no significant or material orders passed by the Regulators / Courts which would impact the future operations / going concern status of the Company.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Information on transaction with related parties pursuant to section 134(3)(h) of Companies Act, 2013 read with rule 8(2) of Companies (Accounts) Rules, 2014 are given in form AOC-2 and the same forms part of this report. Policy on dealing with related party transactions is available on the Companys website at www.talbrosaxles.com.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The policy on Vigil Mechanism/Whistle Blower is hosted on the website of the Company.
The policy inter alia provided direct access to the Vice Chairman and CFO of the Company. The Vice Chairman and CFO can approach and discuss the matter with Chairman or Audit Committee as they deem fit.
Your Company affirms that no complaints have been received during the year under review.
M/s DSRV and Co. LLP, Chartered Accountants (Firm registration number 006993N) was appointed as Statutory Auditors of the Company to hold the office from the conclusion of 31st Annual General Meeting held on 28th September, 2017, till the conclusion of 36th Annual General Meeting to be held in year 2022, subject to the ratification by shareholders at every Annual General Meeting or as may be necessitated by the Act from time to time. The Ministry of Corporate Affairs vide their notification dated 7th May, 2018 has dispensed the requirement of ratification of Statutory Auditors and each Annual General Meeting.
The Statutory Auditors Report for Financial Year 2018-19 on the financial statement of the Company forms part of this Annual Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their audit report on the financial statements for the year ended on 31st March, 2019. The observations of the Statutory Auditors are self-explanatory and therefore Directors dont have any further comments on the same.
SECRETARIAL AUDIT REPORT AND THE APPOINTMENT OF THE SECRETARIAL AUDITOR:
The Company has appointed M/s Anuj Gupta & Associates, Company Secretaries to hold the office of Secretarial Auditors and to conduct the Secretarial Audit pursuant to section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report for the financial year ended on 31st March, 2019 is being attached with the Directors Report as Annexure B which is self explanatory and needs no comments.
Pursuant to recent amendments in Listing Regulations read with SEBI circular NO. LIST/COMP/14/2018 dated June 20, 2018, a certificate from M/s Anuj Gupta & Associates, Company Secretary in Practice that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of Companies by the SEBI/Ministry of Corporate Affairs or any such statutory authority is annexed to Corporate Governance Report.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company complied with all applicable Secretarial Standards.
COST AUDITORS AND THEIR REPORT:
Cost Audit is not applicable on the product being manufactured by the Company.
INSURANCE AND RISK MANAGEMENT:
The assets of the Company are adequately insured against the loss of fire, burglary and other risks which are considered necessary by the management and suggested by the bankers of the Company.
PREVENTION OF INSIDER TRADING:
The Company has formulated and adopted code for prevention of insider trading. The same has also been published on the website of the Company.
The code inter alia contains the formalities / pre clearance required for dealing in companys shares and prohibits the sale or purchase by the Directors and designated employees while in possession of the unpublished price sensitive information and during the closure of trading window. The Board is responsible for implementation of the code.
All the directors and designated employees have confirmed compliance with the code.
The Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.
Your Company is committed to good Corporate Governance Practices and following to the guidelines prescribed by the SEBI and Stock Exchanges from time to time. The Company has implemented all of its major stipulations as applicable to the Company. The Statutory Auditors Certificate dated 5th August, 2019 in accordance with SEBI (Listing Regulations), 2015 and report on Corporate Governance is annexed to and forming part of the Directors Report.
Mr. Tarun Talwar, Chief Operating Officer and Mr. Kanwar Pal Pawar, Chief Financial Officer, have given a certificate to the Board as contemplated in Regulation 17(8) and Schedule V of SEBI (Listing Regulations), 2015.
CORPORATE SOCIAL RESPONSIBILITY:
The Company is committed to discharging its social responsibility as a good corporate citizen. As part of its social responsibility, the Company has contributed to various NGOs for promoting good education, contribution for softwares and hardwares required for providing good knowledge and education to the childrens.
Further, the Company has also contributed to certain NGOs namely Savera Association engaged in promotion of health in rural areas where people lack the right guidance for regular health check-ups & proper treatment. The company has contributed towards medicines in their clinics and running costs of their mobile health clinics and Lily Foundation engaged in prevention of human trafficking in India.
The Company has also contributed to NGO namely People for animals trust to provide better care to the animals and providing shelter to them and HMP Gramya Vikas and Kalyan Foundation who are indulged in providing regular health check up camps in slum and rural areas. Further, the company has paid school fees and amount for books for under privileged students and contributed water coolers to schools for providing safe drinking water to students.
The Board provided a brief outline of the Companys CSR Policy including the statement of intent reflecting the ethos of the Company, broad areas of CSR interest and an overview of activities proposed to be undertaken. The CSR policy has been hosted on the website of the Company.
The present Composition of the CSR committee is:
1. Mr. Vijay Kumar Sharma, Executive Director
2. Mr. Kuldeep Singh Bhalla, Independent Director
3. Mr. Sunil Kumar, Independent Director
The average net profit of the company for last three (3) financial years is र 9.47 Crores (approx). The threshold limit (2%) and total proposed spending on CSR for the financial year 2018-19 is र 22.30 Lacs (approx) (inclusive of unspent amount for year 2017-18).
The total amount spent by the Company in year 2018-19 is र 22.35 Lakhs (Approx.).
The details of CSR activities / projects undertaken during the financial year under review are as follows:
|S. No.||CSR Project/activity identified||Sector in which the project is covered||Projects/ Programs Local area/others||Amount outlay (budget) project or programs wise (र in Lakhs)||Amount spent on the project/ Program (र In Lakhs)||Cumulative expenditure upto the date of reporting period (र in Lakhs)||Amount Spent: Direct or through implementing agency (र in Lakhs)|
|2||Eradicating Hunger||Eradicating Hunger||Uttarakhand||2.00||2.00||2.00||2.00|
|3||Promoting Education||Education &||New Delhi||5.00||5.00||5.00||5.00|
|and Health Care||Healthcare||Haryana||1.16||1.16||1.16||1.16|
|4||Orphange/ Old Age||Orphange/ Old||Haryana||1.00||1.00||1.00||1.00|
|5||Promoting Health Care||Health Care||Gujarat||3.00||3.00||3.00||3.00|
|6||Animal Welfare||Animal Welfare||Faridabad||2.75||2.73||2.73||2.73|
* Details of Implementing Agency: RBTH Singh Memorial Charitable Hospital Society, Savera Association, Lily Foundation, Gene Campaign, Sh. Gobind Ram Arya Sen. Sec. School, Fuel A Dream, Shri Madhav Jan Sewa Nayas, Gow Raksha Sadan, Chetna Welfare Society, Chhatravas Chandra Arya Vidya Mandir, People or Animals Trust, Saint Hardayal Education and Orphans Welfare Society and HMP Gramya Vikas and Kalyan Foundation.
The CSR Committee of the Company confirms that the implementation and monitoring of CSR policy is in compliance with CSR objectives and policy of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS:
A Management discussion and Analysis as required under Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is annexed and forming part of the Directors Report.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
The particulars prescribed under section 134(3)(m) of
Companies Act, 2013 read with rule 8 of Companies (Accounts) Rules, 2014, are enclosed as Annexure A to the Boards Report.
INFORMATION PURSUANT TO SECTION 197(12) READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
Pursuant to the provisions of Section 197(12) of Companies Act, 2013 and rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures and details as required to be annexed to the Boards Report are provided hereunder:
(a) Ratio of remuneration of each director to the median remuneration of employees of the Company
|(Amount in र Lacs)|
|Name of the Director||Designation||Remuneration paid||Ratio to median remuneration|
|Mr. Sanjay Sharma||Executive Director (From 01.11.2018)||4.86||2.98|
|Mr. Vijay Kumar Sharma||Executive Director||11.60||7.10|
|Mr. Kuldeep Singh Bhalla||Independent Director||0.05||Only Sitting fees paid|
|Mr. Sunil Kumar||Independent Director||0.05||Only sitting fees paid|
|Ms. Priyanka Khattar||Independent Director||0.05||Only sitting fees paid|
(b) Percentage increase in remuneration of Directors and KMPs
|(Amount in र Lacs)|
|Name of the Director/KMP||Designation||Remuneration for the year ended 2018-19||Remuneration for the year ended 2017-18||% change during the year|
|Mr. Sanjay Sharma*||Executive Director||4.86||6.40||NA|
|Mr. Vijay Kumar Sharma||Executive Director||11.60||10.54||10.06|
|Mr. Sunil Kumar||Independent Director||0.05||0.05||0.00|
|Ms. Priyanka Khattar||Independent Director||0.05||0.05||0.00|
|Mr. Kuldeep Singh Bhalla||Independent Director||0.05||0.05||0.00|
|Mr. Ankush Jindal||Company Secretary||7.07||6.56||7.77|
|Mr. Kanwar Pal Pawar||CFO||3.92||3.81||2.89|
* Mr. Sanjay Sharma has resigned from the post of Executive Director w.e.f. 14th November, 2017. Further, he has re-joined the Company w.e.f. 01st November, 2018.
(c) The median remuneration of the employees has increased by 6.66% in 2018-19 as compared to 2017-18.
(d) Number of permanent employees on the rolls of the Company.
|Financial Year||No. of Employees|
(e) We affirm that the remuneration paid to Directors, Key Managerial Personnels and employees is as per the remuneration policy of the Company.
(f) The details pursuant to the provisions of Section 197(12) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Remuneration) Rules, 2014, as amended from time to time pertaining to top ten employees in terms of remuneration drawn and employees drawing remuneration of more than One Crore and Two Lakhs Rupees during the year will be available for inspection at the Registered Office of the Company during the working hours as and when requested by any shareholder in terms of section 136 of Companies Act, 2013.
CORPORATE GOVERNANCE CERTIFICATE:
The Compliance Certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in SEBI (Listing Regulations), 2015 has been annexed to this report.
EXTRACTS OF THE ANNUAL RETURN:
The Extracts of the Annual Return for the year 2018-19 being attached with the Directors Report as AnnexureC
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
In order to prevent sexual harassment of women at work place a new act, The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy and constituted a committee for prevention of Sexual Harassment of Women at workplace. During the year Company has not received any complaint of harassment.
Your Directors wish to place on record their appreciation for the overwhelming co-operating and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thank the employees at all levels, who, through their dedication, co-operation, support and smart work, have enabled the Company to achieve rapid growth.
|For and on behalf of the Board|
|Vijay Kumar Sharma||Sanjay Sharma|
|Executive Director||Executive Director|
|DIN: 06394784||DIN: 06394774|
|R/o H.No. 309, Sector 3,||R/o H.No. 1002, Sector 8|
|Faridabad, Haryana||Faridabad, Haryana|
|Date: 5th August, 2019|