Your Directors have pleasure in presenting the 27th Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the FinancialYear ended March 312016.
The financial performance of your Company for the Financial Year ended March 312016 issummarized below:
|Particulars || |
| ||Financial Year ended 31.03.2016 ||Financial Year ended 31.03.2015 ||Financial Year ended 31.03.2016 ||Financial Year ended 31.03.2015 |
|Sales & Other Income ||182.43 ||136.78 ||182.43 ||136.78 |
|Operating Profit / (Loss) (EBITDA) ||6.88 ||(10.67) ||6.88 ||(10.68) |
|Finance Costs ||9.19 ||7.40 ||9.19 ||7.40 |
|Depreciation and Amortisation Expense ||2.14 ||2.12 ||2.14 ||2.12 |
|Profit/(Loss) before Exceptional items and Tax ||(4.45) ||(20.19) ||(4.45) ||(20.20) |
|Exceptional Items ||0.30 ||1.23 ||0.30 ||1.23 |
|Profit/(Loss) before Tax ||(4.15) ||(18.96) ||(4.15) ||(18.97) |
|Less: Tax Expense ||(0.13) ||1.47 ||(0.13) ||1.47 |
|Profit /(Loss) after Tax ||(4.02) ||(20.43) ||(4.02) ||(20.44) |
|Profit/(Loss) for the year ||(4.02) ||(20.43) ||(4.02) ||(20.44) |
|Add: Balance brought forward from previous year ||(31.94) ||(11.44) ||(32.94) ||(12.43) |
|Less: Adjustment related to Fixed Assets ||- ||(0.07) ||- ||(0.07) |
|Balance carried over to Balance sheet ||(35.96) ||(31.94) ||(36.96) ||(32.94) |
|Earnings per Share |
(Face Value of Rs.5/- per Equity Share)
|(2.50) ||(12.73) ||(2.50) ||(12.73) |
FINANCIAL HIGHLIGHTS (On Standalone basis)
There has been a significant improvement in the Turnover and Profitability of theCompany during the financial year ended March 312016.
During the financial year under review your Company has achieved Sales and OtherIncome of Rs.182.43 crores as against Rs.136.78 crores in the previous financial year2014-15 thereby recording a growth of 33.36% over the previous financial year 2014-15.The Loss before Tax for the financial year ended March 31 2016 stood reduced to Rs.4.15crores as against Rs.18.96 crores in the previous financial year ended March 312015.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the financial year 2015-16have been prepared in compliance with the applicable provisions of the Companies Act2013 Accounting Standards and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
DIVIDEND AND RESERVES
Constrained by planned financial investments for faster growth your Directors do notrecommend any Dividend for the year under review.
The Company has not transferred any amount to General Reserve during the financial year2015-16.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments
During the period under review Dr. Rashmi Vij was appointed as an Additional Directorin the category of Independent Director by the Board of Directors through resolutionpassed by circulation on April 24 2015. Subsequently the Shareholders of the Companyhad in their 26th Annual General Meeting held on September 29 2015 approved theappointment of Dr. Rashmi Vij as Independent Director of the Company to hold office for aterm of five consecutive years commencing from April 24 2015 to April 23 2020 and whoseoffice shall not be liable to retirement by rotation.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Vivek Mahendru Whole-timeDirector is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends his re-appointment.
The details of Director being recommended for re-appointment as required underSecretarial Standard 2 and Regulation 36 (3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are given in the Notice convening the ensuingAnnual General Meeting of the Company. Appropriate Resolution seeking your approval to there-appointment of Director is also included in the Notice.
Key Managerial Personnel
Mr. Ved Prakash Mahendru Chairman & Managing Director Mr. Vivek Mahendru and Mr.Vinay Mahendru Whole-time Directors Mr. K B Satija Chief Financial Officer and Mr.Vinay Aggarwal Company Secretary & Compliance Officer are the Key ManagerialPersonnel of your Company in accordance with the provisions of Section 2(51) and 203 ofthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
Resignations & Appointments
During the period under review Mr. Kumar Indramani resigned as Sr. Manager (Legal)& Company Secretary w.e.f. October 19 2015. Mr. Vinay Aggarwal has been appointed asCompany Secretary & Compliance Officer of the Company w.e.f. May 23 2016.
The Companies Act 2013 mandates formal annual evaluation by the Board of its ownperformance and that of Committees and individual Directors. Schedule IV to the CompaniesAct 2013 provides that the performance evaluation of Independent Directors shall be doneby the entire Board of Directors excluding the Directors being evaluated.
Pursuant to the provisions of the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried out annual evaluation of performance of Directors individuallyCommittees of the Board and the Board as a Whole.
The manner in which the evaluation has been carried out is explained in the CorporateGovernance Report.
MEETINGS OF THE BOARD AND COMMITTEES
Six meetings of the Board of Directors were held during the year. The details of numberof Meetings of the Board and various Committees of your Company are set out in theCorporate Governance Report which forms part of this report.
The intervening gap between the meetings was within the period prescribed under theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated under Section 149(6) of the Companies Act 2013read with Schedule IV and the Rules made thereunder as well as under the provisions ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
SEPARATE MEETING oF INDEPENDENT DIRCToRS
In term of requirements of Schedule IV to the Companies Act 2013 and Regulation 25 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate meeting of the Independent Directors was heldon March 23 2016 for the Financial Year 2015-16.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company taking into account the views ofExecutive Directors and NonExecutive Directors; and
c. Assess the quality quantity and timeliness of flow of information between theCompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
All the Independent Directors attended the meeting under the Chairmanship of Mr. RameshChander Bansal.
In accordance with the provisions of Section 178 of the Companies Act 2013 read withrules made there under and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company's Policy on Nomination andRemuneration of Directors KMPs and Senior Management of your Company is uploaded on thewebsite of the Company: http://www.eonelectric.com/investors/corporate-policys.html.
M/s. J. C. Bhalla & Co. Chartered Accountants (FRN: 001111N) B 5 Sector 6 NOIDA- 201301 UP Statutory Auditors of the Company hold office till the conclusion of theensuing Annual General Meeting. The Company has received their written consent and acertificate that they satisfy the criteria provided under Section 141 of the CompaniesAct 2013 and that the re-appointment if made shall be in accordance with the applicableprovisions of the Act and rules framed there under.
The Audit Committee and the Board of Directors recommend the re-appointment of M/s.J.C. Bhalla & Co. Chartered Accountants (FRN: 001111N) as the Statutory Auditors ofthe Company in relation to the financial year 2016-17 till the conclusion of the nextAnnual General Meeting.
STATUTORY AUDITORS REPORT
The observations of Statutory Auditors in their reports on Standalone and ConsolidatedFinancials are self-explanatory and therefore do not call for any further comments.
Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act2013 and Rules made there under Mr. Krishan Singh Berk Cost Accountant (FRN: 102044& Membership No. 2724) 365 Sector - 15 Faridabad - 121 007 Haryana was appointedas the Cost Auditor of the Company for the financial year ended March 312016.
Your Board on the recommendation of the Audit Committee has re-appointed Mr. KrishanSingh Berk Cost Accountant for auditing the cost records of the Company for thefinancial year 2016-17. In terms of Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 appropriate resolution seeking yourratification of the remuneration of Mr. Krishan Singh Berk Cost Accountant is includedin the Notice convening the 27th AGM of the Company.
Your Board had appointed Mr. Manish Ranjan (FCS: 5074) of M/s Manish Ranjan &Associates Company Secretaries 503 5th Floor Nipun Tower Plot No. 15 CommunityCentre Karkardooma Delhi - 110092 to conduct the Secretarial Audit of your Company forthe financial year ending March 312016. The Secretarial Audit Report is annexed herewithas Annexure - A' to this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
Your Board of Directors has appointed M/s Navneet K Arora & Co. CompanySecretaries having Office at E8/1 Near Geeta Bhawan Mandir Shivalik Road MalviyaNagar New Delhi - 110017 as the Secretarial Auditors of the Company to conduct theSecretarial Audit of the Company for the financial year ending March 312017.
EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form MGT - 9 as stipulated under Section 92(3) ofthe Companies Act 2013 read with the Companies (Management and Administration) Rules2014 is annexed herewith as Annexure-B' to this Report.
RELATED PARTY TRANSACTIONS
In terms of Section 134(3)(h) there is no information to be provided regarding theparticulars of contracts or arrangements with related parties referred to in sub-section(1) of Section 188 of the Companies Act 2013 except the transactions as stated in NoteNo. 38 of the Financial Statements. Accordingly no transactions are being reported inForm No. AOC -2 in terms of Section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014.
All related party transactions that were entered into during the year under review werein the ordinary course of business and on an arm's length basis and were in compliancewith the applicable provisions of the Companies Act 2013.
Moreover on the recommendations of the Audit Committee the Board had adopted thePolicy on Related Party Transactions in accordance with the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 and as perthe provisions of the Companies Act 2013.
The policy is uploaded at the below web link:
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of theCompany that have occurred between the end of financial year on March 312016 to whichthese Financial Statements relate and the date of this Report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended March 312016.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies(Accounts) Rules 2014 is annexed herewith as Annexure - C' to this Report.
Pursuant to the provisions of Section 134(3)(n) of the Companies Act 2013 and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has adopted a Risk Management Policy and established a riskmanagement framework to identify mitigate and control the risks which may threaten theexistence of the Company.
INTERNAL FINANCIAL CONTROLS
The Company has a comprehensive Internal Financial Controls system with reference toFinancial Statements. During the year such controls were tested and no reportablematerial weakness in the design or operations were observed.
The report on the Internal Financial Control issued by the M/s. J. C. Bhalla & Co.Chartered Accountants (FRN: 001111N) the Statutory Auditors of the Company forms part ofthe Annual Report. In the opinion of the Board the existing Internal Financial Controlframework is adequate and commensurate with the size and nature of the business of theCompany.
WHISTLE BLOWER AND VIGIL MECHANISM
Your Company has formulated a Vigil Mechanism in place namely Whistle Blower Policyin accordance with the provisions of Section 177(9) of the Companies Act 2013 andRegulation 4 (d)(iv) of the SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 to deal with instances of unethical behaviour actual or suspectedfraud or violation of Company's Code of Conduct. The details of policy is explained inCorporate Governance Report and also uploaded on Company's website under the web link:
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended by the Companies (Appointmentand Remuneration of Managerial Personnel) ammended Rules 2016 are provided in theAnnexure D' to this Report.
Pursuant to the provisions of Section 197(12) of Companies Act 2013 read with Rules5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended by the Companies (Appointment and Remuneration of ManagerialPersonnel) ammended Rules 2016 a statement showing the names and other particulars ofemployees drawing remuneration in excess of the limits set out in the said rules is alsogiven in Annexure D'.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the FinancialStatements of the Company's Joint Ventures / Associates (in form AOC-1) is attached tothis Report as Annexure E'.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations during the yearunder review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the Financial Year 2015-16 the provisions of Section 186 of the Companies Act2013 were not applicable on the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of 135 of the Companies Act 2013 read with Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Company.
The Company has not accepted/received any deposits during the year under report fallingwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed:
(a) that in the preparation of the annual accounts for the year ended March 312016the applicable accounting standards and Schedule III to the Companies Act 2013 have beenfollowed and there are no material departures from the same;
(b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 312016 andof the loss of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls to be followed by the Company were laiddown and that such internal financial controls were adequate and operating effectively;and
(f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and such systems were adequate and operating effectively.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed herewith as Annexure F' to this Report.
Certificate on Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India. The report on Corporate Governance as stipulated under the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 forms an integral part of this Report and annexed herewith as Annexure G' tothis Report.
The requisite certificate from M/s. J. C. Bhalla & Co. Chartered Accountants (FRN:001111N) Statutory Auditors of the Company confirming compliance with the conditions ofCorporate Governance is annexed herewith to this Report.
Prevention of Sexual Harassment at Workplace
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013 and the Rules made thereunder. Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this Policy. There was no complaintreceived from any employee of the Company during the financial year 2015-16.
Listing of Shares
The shares of the Company are listed on the BSE Limited (BSE) and the National StockExchange of India Limited (NSE).
The Company entered into Uniform Listing Agreement with the BSE Limited and theNational Stock Exchange of India Limited in the month of February in order to carry out anovation of the erstwhile Listing Agreement.
The Company has paid annual listing fee for the Financial Year 2016-17 to the BSELimited and the National Stock Exchange of India Limited.
Personnel relations with all employees and workers remained cordial and harmoniousthroughout the year. Your Directors wish to place on record their sincere appreciation forthe devoted services of all the employees and workers of the Company.
Your Company's organizational culture upholds professionalism integrity and continuousimprovement across all functions as well as efficient utilization of the Company'sresources for sustainable and profitable growth.
The Directors wish to place on record their appreciation for the valuable co-operationand support received from the Government of India various State Governments the Banksand other stakeholders such as shareholders customers and suppliers among others. TheDirectors also commend the continuing commitment and dedication of the employees at alllevels which has been critical for the Company's success. The Directors look forward totheir continued support in future.
| ||For and on behalf of the Board of Directors |
|Place: New Delhi ||Ved Prakash Mahendru |
|Dated: August 13 2016 ||Chairman & Managing Director |
| ||DIN: 00005338 |