Taparia Tools Ltd Management Discussions

FORWARD LOOKING STATEMENTS :

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations and predictions may be "forward-looking statements" within the meaning of applicable securities law and regulations. Actual results could differ materially from those expressed or implied, important factors that could make difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the Government regulations, tax regimes, economic developments within India and countries in which the Company conducts business and other incidental factors.

The Financial Statements have been prepared on a historical cost basis and on the accrual basis and are prepared in accordance with the accounting standards notified under the Companies (Accounting Standard) Rules, 2006 and other relevant provisions of the Companies Act, 2013.

GLOBAL ECONOMY OVERVIEW

The latest World Economic Situation and Prospects report for 2024, paints a sobering picture of the global economic landscape. The world economy continues to face multiple crises, jeopardizing progress towards the Sustainable Development Goals (SDGs).Although global economic growth outperformed expectations in 2023 with several large economies showing remarkable resilience, simmering geopolitical tensions and the growing intensity and frequency of extreme weather events have increased underlying risks and vulnerabilities. Furthermore, tight financial conditions also pose increasing risks to global trade and industrial production.

GLOBAL GDP GROWTH

The global GDP growth, from an estimated 2.7% in 2023 to 2.4% in 2024, signaling a continuation of sluggish growth trends. Developing economies, in particular, are struggling to recover from pandemic- induced losses, with many facing high debt and investment shortfalls.

The United States, the worlds largest economy, is expected to see a drop in GDP growth from 2.5% in 2023 to 1.4% in 2024. Consumer spending, a key driver of its economy, is likely to weaken due to various factors, including high interest rates and a softening labor market.

INDIAN ECONOMY OVERVIEW

With strong macro-economic fundamentals, robust domestic demand, fiscal discipline, high saving rates and demographic trends, India is now the fifth-largest economy in the world. Today, Indias leading economic contributors are traditional and modern agriculture, technology services, the handicraft industry and business outsourcing. With an estimated GDP of more than 4.1 trillion dollars generated by a population of over 1 billion, India is among the highest population-based economies in the world.

The Indian economy is projected to grow at 7.5 per cent in 2024, the World Bank has said, revising its earlier projections for the same period by 1.2 per cent. Overall, growth in South Asia is expected to be strong at 6.0 per cent in 2024.Financial conditions in India have remained accommodative. Domestic credit issuance to the commercial sector (including public and private borrowers) grew by 14 per cent (year-on-year) in December 2023, the fastest pace since 2013. Financial soundness indicators continued to improve.

HAND TOOLS MARKET

Major growth drivers for the Indian hand tools market include the increasing infrastructure projects, rising automobile demand, an expansion of infrastructure and construction projects, the growth of the heavy engineering sector, and an upward trend in consumer disposable income. E-commerce platforms offer wider access to products, influencing market dynamics. The markets future hinges on innovation, ergonomic design, and durability, aligning with users evolving preferences. As Indias industries expand and consumer demands shift, the hand tools market showcases adaptability and potential for sustained growth. Major factors driving the growth of the India Hand Tools Market include the growing infrastructure sector and increasing number of manufacturing plants.

The market is projected to grow at a CAGR of 5.4% between 2024and 2032 and estimated to witness a healthy growth in the forecast period of 2024-2032 to reach about USD 39.39 billion by 2032.The development of advanced and innovative hand tools, the surging trend of DIY activities, and the manufacturing of hand tools using cutting-edge technology are the key trends aiding the market report.

BUSINESS REVIEW AND PERFORMANCE

The current market conditions are improving in a balanced manner and there are hopes of steady recovery form the past effects of pandemic situation. The Company will continue to pursue the long lasting and stable growth based on its philosophy of generating profits through creation of the "Greatest Value" for its Customers and Stakeholders.

The Company has paid Interim Dividend to its Shareholders @200% ( Rs. 20/-per share) for the Financial Year 2023-2024 and also declared Final Dividend.

SWOT ANALYSIS

Strengths

1. Superior Quality of product.

2. Brand Name of the Company in Hand Tools Market.

3. Powerful dealer and service Network.

4. Strong leadership of Top Level Management.

5. Skilful and qualified employees.

6. Emerging and Challenging new markets.

7. Readiness to cope up with the advancements emerging in the Market.

Weakness

1. Increasing production and Operation Cost.

2. Increasing demand.

Opportunities

1. Global Market Demand.

2. Technology improvement.

3. Digitalisation of business processes.

4. Informative Programme for advancements in Hand Tools.

Threats

1. Rising cost of raw material.

2. Competition from domestic and international imports.

3. Uncertainties due to global crisis.

OPERATIONAL AND FINANCIAL PERFORMANCE :

The Companys working during the year is very satisfactory. The Companys total Revenue was Rs. 83,766.86 Lakh that represents an increase of 8.95% over Rs. 76,887.55 Lakh in the previous year. The total comprehensive income after tax is Rs. 10,034.33 Lakh in the current year represents an increase of 39.20% against Rs. 7,208.70 Lakh in the previous year.

The efforts by the Management have led to very stable and healthy work environment in the Company and paves way for the future growth. The Management always takes efforts for its employees for better growth of an organization at all levels. The Board acknowledges strong commitment and on the ground efforts of all employees towards the growth of the Organization.

Established in 1965 in India with collaboration with Swedish Company, Taparia Tools Limited is one stop and most reliable solution to hand tools requirements. The Company is committed to providing quality products to increase customer satisfaction. The Company is continuously expanding its product line with new innovative products to address the needs of market along with offering ease of use maintaining the aesthetic look.

RATIOS	2023-2024	2022-2023	% CHANGE
Current Ratio (Times)	4.27	4.27	No change
Return on Equity Ratio (%)	31.51	26.75	17.79
Inventory Turnover Ratio (Times)	4.48	3.30	35.76
Trade Receivable Turnover Ratio (Times)	11.46	11.75	(2.47)
Trade Payable Turnover Ratio (Times)	9.06	11.98	(24.37)
Net Capital Turnover Ratio (Times)	2.85	3.17	(10.09)
Net Profit Ratio (%)	8.44	9.46	(10.78)
Return on Capital Employed (%)	32.70	35.77	(8.58)
Return on Investment (%)	4.01	3.25	23.38

RESEARCH AND DEVELOPMENT

Taparia Tools Limited has a dedicated Research and development team of Professionals continuously looking for ways to increase their products effectiveness, conduct study of market trends and advancement and come up with new ideas that will shape the market.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has established proper and effective internal control system to provide reasonable assurance for safeguarding the Companys assets, promoting operational efficiency and reliability and ensuing compliance with various legal and regulatory provisions. The internal control systems are designed to ensure that the financial and other records re reliable for preparing financial statements and for maintaining accountability of assets and other records in a systematized manner.

The company has created an effective internal control system, by establishing the following:

1. Policies and procedures including, organizational structure, job descriptions, authorization matrix;

2. Segregation of duties and responsibilities;

3. Authorization and approval process;

4. Performance monitoring and control procedures;

5. Safeguarding assets, completeness and accuracy;

6. Manpower management;

7. Independent internal audit function;

8. Regulatory compliance and risk management;

Company has documented Standard Operating Procedures (SOPs) for procurement, human resources, sales and marketing, logistics, finance and treasury, financial reporting, compliances and other areas of its operations.

The compliance to these controls and systems including SOPs is periodically reviewed by the Internal Audit function and exceptions are reported. All material audit observations and follow up actions thereon are reported to the Audit Committee. The Committee holds regular discussions with the auditors to ensure adequacy, efficiency and effectiveness of the internal control systems and monitors implementation of audit recommendations from time to time.

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY :

A Healthy work culture can drive better economic development and a feeling of well-being. Taparia Tools Limited recognizes the importance of health and wellness of its employees as well as at the Factory and Offices. The Safety, Occupational Health & Environmental Policy (SH&E Policy),inter alia, covers and ensures safety of public, employees, plant and equipment, ensures compliance on a monthly basis by developing compliance systems and imparts training on Safety, Sustainability & Prevention of Sexual Harassment to all its employees. Due to Companys commitment to improve the well-being of its employees and contract workmen, it organizes physical fitness activities like Occupational Health Examination Camps, medical checkups, consultation and counseling.

HUMAN RESOURCES:

Human Resource is a key pillar to the success of manufacturing industries. To ensure your business can overcome the challenges threatening the industry, you need to make sure you have a skilled and dedicated work force. HR can also help to ensure that staff is retained and create value and performance-based reward systems. Another important role that HR plays in manufacturing businesses is that they are able to create better and effective recruitment processes based on the experience and caliber of the Candidate, on-boarding training which can help to eliminate the skills shortage gap altogether.

The Company has strongly embedded core values and all employees are trained and encouraged to use these values in their daily operations and the bases for making decisions. Taparia Tools Limited has a favorable work environment that encourages innovation and meritocracy. The Company continued the welfare activities for the employees, which include Medical Care, Group Insurance, Canteen facility, etc. To enrich the skills of employees and enrich their experience, the Company arranges Practical Training Courses by Internal and External Faculty.

STATUTORY COMPLIANCE

All declarations and compliances with respect to the applicable statutes, enactments and guidelines are submitted at every meeting of the Board of Directors of the Company. The Company Secretary who is also the Compliance Officer gives a declaration of compliance to the Board with respect to the applicable provisions of Companies Act, 2013 and Securities and Exchange Board of India (SEBI) Regulations, 2015.

CONCLUSION

The Company has posted better results in the financial year 2023-2024. The Company is concentrating to achieve higher position in the Hand Tools Market in near future and multiply its turnover through effective and qualified manpower.