Your Directors have pleasure in presenting the 28th Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the FinancialYear ended March 312017.
The financial performance of your Company for the Financial Year ended March 312017 issummarized below:
|Particulars || |
| ||Financial Year ended 31.03.2017 ||Financial Year ended 31.03.2016 ||Financial Year ended 31.03.2017 ||Financial Year ended 31.03.2016 |
|Sales & other Income ||196.45 ||182.43 ||196.45 ||182.43 |
|Operating Profit (EBITDA) ||15.23 ||6.88 ||15.23 ||6.88 |
|Finance Costs ||9.29 ||9.19 ||9.29 ||9.19 |
|Depreciation and Amortisation Expense ||2.11 ||2.14 ||2.11 ||2.14 |
|Profit/(Loss) before Exceptional items and Tax ||3.83 ||(4.45) ||3.83 ||(4.45) |
|Exceptional Items ||- ||0.30 ||- ||0.30 |
|Profit/(Loss) before Tax ||3.83 ||(4.15) ||3.83 ||(4.15) |
|Less: Tax Expense ||(0.17) ||(0.13) ||(0.17) ||(0.13) |
|Profit /(Loss) after Tax ||4.00 ||(4.02) ||4.00 ||(4.02) |
|Profit/(Loss) for the year ||4.00 ||(4.02) ||4.00 ||(4.02) |
|Add: Balance brought forward from previous year ||(35.96) ||(31.94) ||(36.96) ||(32.94) |
|Balance carried over to Balance sheet ||(31.96) ||(35.96) ||(32.96) ||(36.96) |
|Earnings per Share (Face Value of Rs.5/- per Equity Share) ||2.49 ||(2.50) ||2.49 ||(2.50) |
There has been a significant improvement in the operating results of the Company duringthe financial year ended March 312017.
During the financial year under review your Company has achieved Sales and OtherIncome of Rs.196.45 crores as against Rs.182.43 crores in the previous financial year2015-16 thereby recording a growth of 7.69% over the previous financial year 2015-16.
While there has been a marginal growth in the turnover there has been substantialimprovement in the operating results of the Company as is evidenced by an impressivegrowth in EBITDA PBT and PAT.
The EBITDA for the year ended March 312017 increased to Rs. 15.23 Crore therebyrecording a growth of around 121% over the previous year's EBITDA of Rs. 6.88 Crore.
The Profit before Tax for the financial year ended March 312017 stood at Rs.3.83crores as against a loss of Rs.4.15 crores incurred during the previous financial yearended March 312016. The Profit after Tax for the current year stood at Rs. 4.00 croreagainst a Loss after Tax Rs. 4.02 crore incurred during the previous year ended 31stMarch 2016.
Given the state of the economy the results are indicative of the more powerful andunderlying progress your Company has made since the last year the overall performanceduring the year has been quite impressive and the management endeavours to continuouslyenhance the cash generating ability of the Company which will play the catalytic role inthe Company's growth.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the financial year 2016-17have 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 and conservation of internal accruals forfaster growth of the Company your Directors do not recommend any Dividend for the yearunder review.
The Company has not transferred any amount to General Reserve during the financial year2016-17.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Vinay 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 Board also recommends the re-appointment of Shri Ved Prakash Mahendru as Chairmanand Managing Director Shri Vivek Mahendru as Whole Time Director and re-designate him asJoint Managing Director and Shri Vinay Mahendru as Whole Time Director and re-designatehim as Joint Managing Director for a period of 3 (Three) years w.e.f. 1st October 2017since their current tenure shall end on 30th September 2017 and in terms of provision ofSection 196 of the Companies Act 2013 re-appointment of Managing Director/Whole TimeDirectors can be made one year before the expiry of current tenure.
The details of Directors 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 resolutions seeking your approval tothe re-appointment of Directors are 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. ShivKumar Jha Company Secretary & Compliance Officer are the Key Managerial Personnel ofyour Company in accordance with the provisions of Section 2(51) and 203 of the CompaniesAct 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
Appointments & Resignation
During the period under review Mr. Vinay Aggarwal was appointed as Company Secretaryand Compliance Officer on May 23 2016. He resigned from the services of the Companyw.e.f. January 13 2017. Mr. Shiv Kumar Jha has been appointed as Company Secretary w.e.fMay 15 2017 and designated as Company Secretary & Compliance Officer of the Companyw.e.f. May 24 2017.
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
Seven meetings of the Board of Directors were held during the Financial Year 2016-17.The details of number of Meetings of the Board and various Committees of your Company areset out in the Corporate Governance Report. Besides in term of requirements of Schedule IVto the Companies Act 2013 and Regulation 25 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate meeting ofthe Independent Directors was held on March 20 2017 for the Financial Year 2016-17.
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.
AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS
Under Section 139 of the Companies Act 2013 and the rules made thereunder it ismandatory to rotate the Statutory Auditors on completion of the maximum term permittedunder the said section. M/s J.C. Bhalla & Co. Chartered Accountants shall becompleting their tenure as the Company's Statutory Auditors and shall hold office till theconclusion of ensuing 28th AGM.
On recommendation of the Audit Committee the Board in its meeting held on August312017 subject to the approval of the shareholders has recommended the appointment of M/sBansal and Co. Chartered Accountants (Firm Registration Number 001113N) as the StatutoryAuditors of the Company. M/s Bansal and Co. will hold office for a term of fiveconsecutive years i.e. from conclusion of ensuing 28th AGM till the conclusion of 33rd AGMto be convened in the year 2022 subject to ratification by the members at every AGM.Accordingly the appointment of M/s Bansal and Co. the Company's Statutory Auditors isplaced for approval of the members. The Company has received a certificate from M/s Bansaland Co. to the effect that their appointment if made shall be in accordance with theprovisions of Section 141 of the Companies Act 2013. The first year of audit will be ofthe financial statements for the year ending March 31 2018 which will include the auditof the quarterly financial statements for the year.
STATUTORY AUDITORS' REPORT
The Board has duly examined the Statutory Auditor's Report on the Standalone andConsolidated Financial Statements of the Company for the financial year ended March312017 by M/s J. C. Bhalla and Co. which is self explanatory. The report does notcontain any observations disclaimer qualification or adverse remarks.
Further no fraud has been reported by the Statutory Auditors' in terms of Section143(12) of the Companies Act 2013 during the year.
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 312017.
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 2017-18. 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 28th AGM of the Company.
SECRETARIAL AUDITORS & THEIR REPORT
The Company had appointed M/s Navneet K Arora & Co LLP Company Secretaries NewDelhi to conduct its Secretarial Audit for the financial year ended March 31 2017. TheSecretarial Auditor has submitted its Report confirming compliance by the Company of allthe provisions of applicable corporate laws. The Report does not contain anyqualification observation disclaimer or adverse remark. The Secretarial Audit Report forFY 2016-17 is annexed as Annexure A to this report.
The Board has re-appointed M/s Navneet K Arora & Co. LLP Company Secretaries NewDelhi as Secretarial Auditors of the Company for Financial Year 2017-18.
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. 39 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.
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 312017 to whichthese Financial Statements relate and the date of this Report.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company during the financial yearended March 312017.
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 partof the 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
The Company has adopted a Whistle Blower Policy to provide a formal vigil mechanism tothe Directors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairperson of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee.
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) amended 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) amended 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 was no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and the company's operations in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the Financial Year 2016-17 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 31 2017the 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 312017 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 Securities and Exchange Boardof 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 zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted Internal Committees at all its locations known as the Prevention of SexualHarassment (POSH) Committees to inquire into complaints of sexual harassment andrecommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2016-17.
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 has paid annual listing fee for the Financial Year 2017-18 to the BSELimited and National Stock Exchange of India Limited.
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 recordtheir appreciation for the valuable co-operation and support received from the Governmentof India various State Governments the Banks and other stakeholders such asshareholders customers and suppliers among others. The Directors also commend thecontinuing commitment and dedication of the employees at all levels which has beencritical for the Company's success. The Directors look forward to their continued supportin future.
| ||For and on behalf of the Board of Directors |
| ||Ved Prakash Mahendru |
|Place: New Delhi ||Chairman & Managing Director |
|Dated: August 312017 ||DIN: 00005338 |