Tarapur Transformers Ltd Directors Report.

Dear Members,

The Directors of your Company have pleasure in presenting 31st Annual Report together with the Audited Accounts and Auditors Report for the year ended 31st March, 2019.

1. Financial summary or highlights/ Performance of the Company (Standalone): The financial performance of the Company for the Year ended 31st March, 2019 is as summarized below:

(Rs. In Lakhs)
Particulars 2018-19 2017-18
Gross Turnover & Other Income 1581.04 1478.76
Profit /(Loss) before Interest, Depreciation & Taxation 254.83 (761.08)
Less Interest 3.79 23.58
Profit /(Loss) before Depreciation & Taxation 251.04 (784.66)
Less Depreciation 177.55 315.52
Profit / (Loss) before Exceptional Items & tax 73.49 (1100.18)
Less: Exceptional Item - -
Net Profit / (Loss) before Tax 73.49 (1100.18)
Less Income tax of earlier years - 15.15
Net Profit / (Loss) for the year 73.49 (1115.33)
Add/(less) Surplus/ (deficit) brought forward from previous Year (4443.83) (3328.50)
Add/(less) Retain Value Assets - -
Profit available for Appropriations/(Loss) (4370.34) (4443.83)
Appropriations: - -
Balance Carried to Balance Sheet (4370.34) (4443.83)

2. Performance Review:

The Net Turnover of the Company is Rs. 1581.04 Lakh and the Company has incurred net Profit of Rs. 73.49 Lakh for the f. y. 2018-19 compared to net loss of Rs. 1115.33 Lakh in the previous year.

3. Extract of Annual Return: Extract of Annual Return as provided under sub-section (3) of section 92 in Form No. MGT 9, Annexure 1.

4. Number of meetings of the Board of Directors: During the year 2018-19, 10 meetings of the Board of Directors are held.

5. Directors Responsibility Statement: The Directors Responsibility Statement referred to in clause (c) of sub- section (3) of Section 134 of the Companies Act, 2013, shall state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a airs of the company at the end of the financial year and of the Profit and loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating the effectively.

6. Auditors Report:

As regards Auditors remarks in the Audit report, comments of the Board of Directors are as under:-

a) Auditors Remark:

The Company has sent letters to customers in respect of trade receivables for confirming balances as at March 31, 2019, but in most of the cases the customers have not sent written confirmation confirming the balance outstanding as at March 31, 2019. In the absence of confirmation, any provision to be made for adverse variation in the carrying amounts of trade receivable is not quantified.

Boards Comments on the same:

The Board considers all outstanding balance of customers as on 31st March, 2019are subject to provision.

b) Auditors Remark:

The Company has sent balance confirmation letters to parties who are not covered in the register maintained under section 189 of the Companies Act, 2013, but in most of the cases the company have not received written confirmation confirming the balance outstanding as at March 31, 2019. Further in respect of loans granted, repayment of the principal amount was not as stipulated and payment of interest has also not been regular.

Boards Comments on the same:

The Company has received balance confirmation from some of the companies and is vigorously following up with the rest of the borrowers. The company expects to receive balance confirmation from all the companies to whomsoever advances have been given. The efforts are made to regularize arrears and recovery against overdue principal and interest.

c) Auditors Remark:

The company has not provided for Interest payable to Canara Bank amounting to Rs.1049.46 Lakhs for the year ended 31st March, 2019. The Company has also not made any provision for penal interest claimed by the bank. As a result the Profit for the year ended 31st March, 2019 is overstated by Rs. 1049.46 Lakhs & current liabilities as at 31st March, 2019 are also understated by Rs.1049.46 Lakhs and reserves are overstated by Rs. 1049.46 Lakhs.

Boards Comments on the same:

Based on the Legal advice received by the company, it has been decided not to provide any interest on liability of Canara Bank.

d) Auditors Remark:

The company has not provided for Interest payable to Dhanlaxmi Bank amounting to Rs.41.27 Lacs for the year ended 31st March, 2019. As a result the Profit for the year ended 31st March, 2019 is overstated by Rs.41.27 Lacs & current liabilities as at 31st March, 2019 are also understated by Rs.41.27Lacs and reserves are overstated by Rs.41.27 Lacs.

Boards Comments on the same:

Based on the Legal advice received by the Company, it has been decided not to provide any interest on liability of Dhanlaxmi Bank.

e) Auditors Remark:

The company has not conducted periodic physical verification of inventory at reasonable intervals. In respect of traded stock at Mumbai Head Of ice, the details of finished goods stock storage location is not available for our verification.

Board Comments on the same:

Management had properly observed the inventory at regular intervals.

f) As regard Auditors remarks in the Annexure to their report under Item No. (vii) (a) and (b) With respect to non-payment of central Sales Tax, Sales Tax, and Income Tax the same is self explanatory.

Board Comments on the same:

The Company had paid the statutory dues though the some of the dues has been delayed because of financial position.

g) As regard Auditors remarks in the Annexure to their report under Item No. (viii), With respect to non-payment of dues to banks the same is self explanatory

7. Loan and Investment by Company: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, are given in the notes to the Financial Statements.

8. Particulars of contracts or arrangements with related parties: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is given in Form No. AOC-2, Annexure 2.

9. Reserves: In the financial year 2018-19 reserve maintained with the Company is Rs. (4370.74)Lakhwhile in year 2017-18, reserve was Rs. (4443.83) Lakh.

10. Dividend: Your Directors has not recommended any dividend for this financial year.

11. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report: No such Material changes occurred subsequent to closure of the financial year of the Company to which the balance sheet relates and the date of the report.

12. Conservation of energy, technology absorption and foreign exchange earnings and outgo: The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A. Conservation of energy:

I. the steps taken or impact on conservation of energy: NIL;

II. the steps taken by the company for utilizing alternate sources of energy: NIL;

III. the capital investment on energy conservation equipments: NIL.

B. Technology absorption:

I. the efforts made towards technology absorption: NIL;

II. the benefits derived like product improvement, cost reduction, product development or import substitution: NIL;

III. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

a) the details of technology imported: NIL;

b) the year of import: NIL;

c) whether the technology been fully absorbed: NIL;

d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: NIL; and

e) The expenditure incurred on Research and Development: NIL.

C. Foreign exchange earnings and Outgo: The Foreign Exchange earned in terms of actual in lows during the year and the Foreign Exchange outgo during the year in terms of actual outflows: In low: Nil and Out low: Rs. 0.61 Lakhs.

13. Risk management policy: The Company has been addressing various risks impacting the Company, reviewing the risk management plan and ensuring its the effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis report.

14. Change in the nature of business, if any: No

15. Directors and Key Managerial Personnel:

A) Changes in Directors and Key Managerial Personnel:

During the Financial year 2018-19, there is no changes in composition of the Board of Directors. But the changes has been made in Key Managerial Personnel, in 22.06.2018 Mr. Prakash Sogam resigned as a Company Secretary & Compliance Officer of the Company and appointed Ms. Rachana Baria for the same position with the effect from 01.07.2018.

B) Declaration by an Independent Director(s) and re- appointment, if any:

In accordance with Regulation 25(8) of SEBI (LODR) Regulations, 2015, a declaration has submitted by Independent Directors that they meet the criteria of independence as provided in Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and sub-section (6) of Section 149 of the Companies Act, 2013 to the Company.

A separate meeting of Independent Directors was conducted as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 on 20th March, 2019. All the independent directors were present for the meeting.

C) Formal Annual Evaluation:

The Board has formulated a code of conduct policy for formal annual evaluation purpose which has been made by the Board of its own performance and that of its committees and individual directors.

16. COMMITTEES OF THE BOARD

The Company has constituted an Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee as per the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its Committees are provided under the Corporate Governance Section in this Annual Report. The composition of the Committees, as per the applicable provisions of the Act and Rules, are as follows:

Name of the Committee Composition of the Committee
Audit Committee Mr. Lalit Laxiram Agarwal (Chairman)
Mrs. Kiren Shrivastava (Member)
Mr. Rajendrakumar Choudhary (Member)
Nomination and Remuneration Committee Mr. Lalit Laxiram Agarwal (Chairman)
Mrs. Kiren Shrivastava (Member)
Mr. Rajendrakumar Choudhary (Member)
Stakeholders Relationship Committee Mr. Lalit Laxiram Agarwal (Chairman)
Mrs. Kiren Shrivastava (Member)
Mr. Rajendrakumar Choudhary (Member)

17. Details of establishment of vigil mechanism for directors and employees:

The Whistle blower policy of the Company was formulated and policy is available in the companys website www.tarapurtransformers.com.

18. Disclosure under the sexual harassment of women: Your Company is committed to provide and promote safe and healthy environment to all its employees without any discrimination. During the year under review, there was no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

19. Managerial Remuneration:

a. There are no employees covered pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

b. There is no director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Boards Report.

c. There is no such events occurs which require disclosures in the Board of Directors report under the heading "Corporate Governance", relating to the financial statement:

i. all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors;

ii. details of fixed component and performance linked incentives along with the performance criteria;

iii. service contracts, notice period, severance fees;

iv. Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.

20. Details of Subsidiary/JV/Associate Companies: The Company has no Subsidiary/ JV/ Associate Companies during the year.

21. Deposits:

The Company has not accepted or invited any deposits during the financial year 2018-2019.

22. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future: NIL 23. Auditors:

M/s. Dalal & Kala Associates, Chartered Accountant (firm registration number 102017W), who has been appointed by the company for periods 5 years from the financial year 2017-18 to 2021-22 at such remuneration plus service tax, out-of-pocket, travelling and living expenses etc., as may be mutually agreed between the Board of Directors and the Auditors."

Vide notification dated May 7, 2018 issued by Ministry of Corporate A airs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in notice of the 31st AGM.

24. Disclosure, as to whether the maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.

Based on the Auditors Report the company has maintained cost records as specified under Section 148(1) of the Act.

25. Brief description of the Companys working during the year: The Company has 2 manufacturing units at Boiser and Pali (Wada). However there is no manufacturing activity carried out at Boiser units.

However, the unit located at Boiser has been auctioned by Canara Bankduring the year.

26. Details in respect of internal financial controls with reference to the Financial Statements: The Company has laid down internal financial control with reference to the financial statement. The details in the respect of internal financial control and their adequancy are included in Management Discussion and Analysis, which forms part of this report.

27. Share Capital

There was no change in the Authorized and Paid-up Share Capital of the Company during the year. The Authorized Share Capital of the Company is Rs. 25,00,00,000/- (Rupees Twenty Five Crore only) divided into 2,50,00,000 (Two Crore and Fifty Lakh) Equity Shares of Rs. 10/-(Rupee Ten) each.

The Paid-up Share Capital of the Company is Rs. 19, 50, 00,110/- (Rupees Nineteen Crore Fifty Lakh One Hundered and Ten only) divided into 1,95,00,011 (One Crore Ninety Five Lakh and Eleven) Equity Shares of Rs. 10/- (Rupee Ten) each.

28. Secretarial Audit Report: According to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Secretarial Auditor M/s. Bhuwnesh Bansal & Associates (M. No. 6526, CP No. 9089), Company Secretary in Practice is enclosed as a part of this report in Annexure 3.

29. Managements Discussion and Analysis Report:

A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Managements Discussion and Analysis Report i.e Annexure 4, which forms part of this Report.

30. Corporate Governance:

We adhere to the principle of Corporate Governance mandated by the Securities and Exchange Board of India (SEBI) and have implemented all the prescribed stipulations. As required by Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed report on Corporate Governance forms part of this Report. The Auditors Certificate on compliance with Corporate Governance requirements by the Company is enclosed in Annexure 5, which forms part of this report.

Acknowledgement:

Your Directors would like to express their sincere appreciation for the assistance and co operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.

On behalf of the Board of Directors,

For Tarapur Transformers Limited

Sd/-

Suresh More

(DIN: 06873425)

Chairman Mumbai, 13th May, 2019