Elcid Investments Limited
Y our Directors have pleasure in presenting the Thirty-Ninth AnnualReport together with the audited Statement of Accounts for the year ended 31stMarch 2020.
| ||2019-20 ||2018-19 |
| ||(Rs. In Lakhs) ||(Rs. In Lakhs) |
|Revenue from operations ||5480.16 ||4254.13 |
|Add/(Less): Total Expenses ||(96.93) ||(173.61) |
|Profit / (loss) before exceptional items and tax ||5383.23 ||4080.52 |
|Exceptional items ||0.00 ||0.00 |
|Profit/(loss) before tax ||5383.23 ||4080.52 |
|Add/(Less): Provision for Tax-Current ||9.00 ||6.50 |
|Deferred Tax ||(84.89) ||319.34 |
|Adjustment for previous years ||- ||- |
|Profit/(loss) for the year from continuing operations ||5459.12 ||3754.68 |
|Profit/(loss) from discontinued operations ||0.00 ||0.00 |
|Tax Expense of discontinued operations ||0.00 ||0.00 |
|Profit/(loss) from discontinued operations (After tax) ||0.00 ||0.00 |
|Profit/(loss) for the year ||5459.12 ||3754.68 |
|Other Comprehensive Income ||122837.66 ||82697.35 |
|Total Comprehensive Income for the year ||128296.79 ||86452.04 |
|Opening balance in Retained Earnings* ||19440.94 ||16242.36 |
|Profit Available for Appropriation ||24900.06 ||19997.04 |
|Less: Transfer to Statutory Reserve (u/s 45-IC of The Reserve Bank of India Act 1934) ||1100.00 ||520.00 |
|Less: Dividend paid for FY 2018-19 ||30.00 ||30.00 |
|Less: Corporate Dividend Tax ||6.17 ||6.11 |
|Balance carried to balance Sheet ||23763.89 ||19440.94 |
* Retained Earnings do not include Debt and Equity instrumentsclassified at Fair Value through Other Comprehensive Income
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:
The total net profit before tax of the Company is Rs. 5383.23 lakhs incurrent year compared to Rs. 4080.52 lakhs in 2019. The Net profit after tax stood at Rs.5459.12 lakhs as compared to Rs. 3754.68 lakhs in 2019.
With the growing markets your Company is also expected to grow and thefuture prospects are expected to be better with the booming economy of the Country.
IMPACT OF COVID-19:
The country witnessed lockdown being implemented in India in the secondfortnight of March 2020. There were also restrictions of varying extent across larger partof the world due to the COVID-19 pandemic. This impacted the business operations of theCompany in certain way however by staying true to its purpose and its values thetop-most priority for the Company was to ensure the safety of its employees. The Companyhas taken several measures to ensure their well-being including leveraging the power oftechnology to enable them to work from home. And continued to carry on its businessactivities. The national lockdown announced on March 23 2020 owing to the COVID-19pandemic affected activities of organizations across the economic ecosystem impactingearning prospects and valuations of companies and creating volatility in the capitalmarkets. The resultant impact on the fair value of the investments held by the Company wasreflected in the Total Comprehensive Income and Total Equity of the Company for thequarter and year ended 31st March 2020 in line with the Accounting Policyconsistently followed by the Company.
The future income from investments and the valuations of investeecompanies would depend on the global economic developments in the coming months and theresumption of activity on gradual relaxation of Lockdowns. Based on the current assessmentof the potential impact of the COVID-19 on the Company management is of the view that thebalance sheet of the Company has adequate liquidity to service its obligations and sustainits operations. The Management and Directors are actively engaged and will continue toclosely monitor the future developments during the lockdown period.
Your Directors have pleasure to recommend payment of Final Dividend forthe year ended 31st March 2020 on 200000 Equity Shares of Rs. 15/- each andwill be paid to those members whose names appear on the Register of Members as on 22ndSeptember 2020 after the approval of the members of the Company in the ensuing AnnualGeneral Meeting of the Company.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
In accordance with the applicable provisions of Companies Act 2013read with Investor Education and Protection Fund (Accounting Audit Transfer and Refund)Rules 2016 (IEPF Rules) all unclaimed dividends are required to betransferred by the Company to the IEPF after completion of seven (7) years. Furtheraccording to IEPF Rules the shares on which dividend has not been claimed by theshareholders for seven (7) consecutive years or more shall be transferred to the demataccount of the IEPF Authority.
Company proposes to transfer a sum of Rs. 110000000/- to Specialreserve created under the provisions of section 45-IC of Reserve Bank of India (Amendment)Act 1997.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITIONOFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENT RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year to which this financialstatement relate on the date of this report. There has been no change in the nature ofbusiness of the company.
EXTRACTS OF ANNUAL RETURN:
The extracts of Annual Return pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and administration) Rules 2014 isfurnished in Annexure 1 and is attached to this Report.
The Company has two subsidiary companies viz. Murahar Investments &Trading Company Limited & Suptaswar Investments & Trading Company Limited.However the Company does not have any joint venture or associate company.
A separate statement containing the salient features of the financialstatements of all subsidiaries of your company forms part of consolidated financialstatements in compliance with section 129 and any other applicable sections if any ofCompanies Act 2013 as Annexure 2
Further to note that the above-mentioned subsidiary companies havebecome the material subsidiaries of the company with respect to amended regulations ofSEBI (Listing Obligations Disclosure Requirements) Regulations 2015 and the compliancewith the same is undertaken. The amended policy on material subsidiaries has been placedon the website of the company.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements of your Company for the financialyear 2019-20 are prepared in compliance with applicable provisions of the Companies Act2013 Accounting Standards and as per provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The consolidated financial statements havebeen prepared based on the audited financial statements of your company and its materialsubsidiaries as approved by the respective Board of Directors.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Amar Arvind Vakil (Din:) Director of the company has resignedw.e.f. 22nd August 2019. Miss Amrita Amar Vakil (Din: 00170725) has beenappointed as non-executive director liable to retire by rotation of the company by themembers in the previous Annual General Meeting of the Company held on 22ndAugust 2019.
BOARD OF DIRECTORS:
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
During the Financial Year 2019-20 7 Board Meetings were held. Thedetails of the meetings of the Board of Directors and its Committees convened during theFinancial Year 2019-20 are given in the Corporate Governance Report which forms part ofthis report.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OFREMUNERATION AND DISCHARGE OF THEIR DUTIES:
The Company's Policy relating to appointment of Directors paymentof Managerial remuneration Directors' qualifications positive attributesindependence of Directors and other related matters as provided under Section 178(3) ofthe Companies Act 2013 are decided by the Nomination & Remuneration Committeeconstituted by the Company. The details of the said Committee are given in the CorporateGovernance Report which forms part of this report.
RATIO OF DIRECTOR'S REMUNERATION TO MEDIAN EMPLOYEES REMUNERATIONAND OTHER DICLOSURES:
The information required pursuant to Section 197 of the Companies Act2013 read with The Companies (Appointment and Remuneration) Rules 2014 are as follows:
i) Ratio of the remuneration of each director tothe median remuneration of the employees of the Company for the Financial Year are asfollows:
|Name of the Director ||Designation ||Remuneration Per Annum (INR) ||Ratio (Remuneration of Director to Median Remuneration) |
|1. Varun Vakil ||Non-Executive Chairman ||Nil ||NA |
|2. Amar Vakil* ||Non-Executive Director ||15000 ||0.02 |
|3. Dipika Vakil ||Non-Executive Director ||35000 ||0.05 |
|4. Amrita Vakil** ||Non-Executive Director ||20000 ||0.03 |
|5. Mahesh Dalal ||Independent Director ||55000 ||0.08 |
|6. Ketan Kapadia ||Independent Director ||55000 ||0.08 |
|7. Bharat Talati ||Independent Director ||55000 ||0.08 |
Directors are paid remuneration only in the form of sitting fees.
The median remuneration calculated for the Financial Year 2019-20 wasRs. 687500/-.
*Mr. Amar Vakil resigned w.e.f. 22nd August 2020.
**Ms. Amrita Vakil appointed w.e.f. 22nd August 2020.
ii) Percentage increase in the median remuneration of each DirectorCFO CEO Company Secretary or Manager if any in the financial year:
There is no increase in the remuneration of CFO of the Company. TheDirectors are only paid sitting fees for attending the meetings. Percentageincrease/decrease is not reported for the remuneration paid to the Company Secretary asshe was appointed with effect from 25th September 2018 i.e. for a part of thefinancial year 2018-19.
iii) Percentage increase in the median remuneration of employees in thefinancial year:
Percentage increase/decrease is not reported in the median remunerationof employees as she was appointed with effect from 28th May 2019 i.e. for thepart of the financial year 2019-20. There are only three employees in the Company.
iv) Number of permanent employees on the rolls of the Company at theend of the year other than Managing Director: 3
v) Average percentile increase in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The comparative percentile increase in the salary of such employeescould not be reported as the employees were not on the roll for the complete year.
vi) Affirmation that the remuneration is as per the remuneration policyof the company:
The Company is in Compliance with the Remuneration Policy.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules. All the IndependentDirectors have got themselves registered with the Independent Directors Databank.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Committees.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Company is primarily an investment Company and its business incomeis the income arriving out of investments held by the Company. The company is functioningunder single segment of investment activities. The growing trend in the India'seconomy is a motivating factor for the Company to look forward to increase theprofitability. The predominant risk pertains to investments including volatile capitalmarket risks. The company regularly appoints and seeks advise from reputed portfoliomanagers to mitigate the risks and accordingly carry out its investments within the riskmanagement framework. Internal control system is commensurate with the size of theCompany.
Ratios for the year 2019-20 are as follows:
|Ratios ||Standalone ||Consolidated |
|Debtors Turnover Ratio ||NA ||NA |
|Inventory Turnover Ratio ||NA ||NA |
|Interest Coverage Ratio ||NA ||NA |
|Current Ratio ||NA ||NA |
|Debt Equity Ratio ||0 ||0 |
|Operating Margin Ratio ||NA ||NA |
|Net Profit Margin ||NA ||NA |
|Return on Net Worth (RONW) ||26.47 ||26.16 |
*The company is an investment company hence the ratios relating tosales inventory are not applicable to the company.
** The company is not having any debt therefore the ratio relating todebt and interest comes to 0.
With effect from 1st April 2019 the provisions of IndianAccounting Standards have become applicable on the Company and your company is complyingwith the applicable accounting standards and their provisions.
The Audit Committee comprises of namely Mr. Bharat Talati (Chairman)and Mr. Mahesh Dalal and Mr. Ketan Kapadia Directors as other members. All members of theAudit Committee are financially literate and have experience in financial management. Therecommendations of the Audit Committee are always welcomed and accepted by the Board andall the major steps impacting the financials of the Company are undertaken only after theconsultation of the Audit Committee.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THECOMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Company has constituted a Corporate Social Responsibility Committeewhich has reviewed and considered that Company's income is mainly from the dividendincome which is excluded from the computation of net profits as provided in Rule 2(f)(ii)the Companies (Corporate Social Responsibility Policy) Rules. 20I4. As such the Companytill the financial year 2018-19 has not developed and implemented any Corporate SocialResponsibility initiatives as the said provisions were not applicable after deduction ofdividend income. Company has however constituted a committee on Corporate SocialResponsibility to analyse the applicability of the same on the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTIONFOREIGN EXCHANGE EARNINGS AND OUTGO:
Considering nature of business activities carried out by the Companyyour Board has nothing to report disclosures about Conservation of Energy and TechnologyAbsorption as required under Section 134(m) of the Companies Act 2013. There was noforeign exchange Inflow or Outflow during the financial year under review.
STATEMENT CONCERNING DEVELOPMENT ANDIMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:
The Company is an investment company and therefore the predominant riskpertains to investments including capital market risks. The company regularly appoints andseeks advise from reputed portfolio managers to mitigate the risks and accordingly carryout its investments within the risk management framework.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTSMADE UNDER SECTION 186 OF THE COMPANIES ACT 2013:
Your Company is a Non-Banking Finance Company (NBFC) registered withthe Reserve Bank of India. Investments are made by the Company are in ordinary course ofbusiness. Section 186 of the Companies Act 2013 hence is not applicable on the Company.
There were no loans and guarantees made by the Company under Section186 of the Companies Act 2013 during the year under review and hence the said provisionis not applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITHRELATED PARTIES:
There were no contracts or arrangements made with any related partiesduring the year under review. However the company is giving salary to its employees.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIRREPORTS
There were no qualifications reservations or adverse remarks made bythe Auditors and secretarial auditors of the Company.
During the financial year under review no fraud against the Company orby the Company was found by the Auditors the Company.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 the Board hereby submit its responsibility Statement:
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) the directors had prepared the annual accounts on a going concernbasis;
(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and
(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The Board has adopted policies and procedures forensuring the orderly and efficient conduct of its business the safeguarding of itsassets prevention & detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of financial disclosures. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board.
The Company monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies in the Company. Significant audit observations and correctiveactions thereon are presented to the Audit Committee of the Board.
Your Company is committed to highest standards of ethical moral andlegal business conduct. Accordingly the Board of Directors have formulated a WhistleBlower Policy which is in compliance with the provisions of Section 177 (10) of theCompanies Act 2013 and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. The policy provides for a framework and process whereby concerns can beraised by its employees against any kind of discrimination harassment victimization orany other unfair practice being adopted against them.
The Company has neither accepted nor renewed any deposits during theyear under review.
There is no change in the Share Capital of the Company. As on 31stMarch 2020 the issued subscribed and the paid-up share capital of the Company stood atRs. 2000000/- comprising of Rs. 200000 Equity Shares of Rs. 10/- each.
As per provisions of Section 139 of the Act read with the Companies(Audit and Auditors) Rules 2014 the Members of the Company in their 35thAnnual General Meeting held on 26th August 2016 appointed M/s Ravi A Shah& Associates Chartered Accountants Mumbai (Firm Registration No. 125079W) as theStatutory Auditors of the Company for a term of consecutive 5 years i.e. from theconclusion of 35 th Annual General Meeting till the conclusion of 40thAnnual General Meeting of the Company to be held for the financial year ending 31stMarch 2021 subject to the ratification by members of the Company every year.
However the aforesaid Section 139 is amended by the Companies(Amendment) Act 2017 w.e.f. 7th May 2018 and as per amended section theappointment of auditors is no more required to be ratified every year in Annual GeneralMeeting. Accordingly the ratification of appointment of M/s Ravi A Shah & AssociatesChartered Accountants as Statutory Auditors of the Company is no more required and theywill hold office upto the conclusion of 40thAnnual General Meeting of theCompany to be held for the financial year ending on 31st March 2021.
M/s Ravi A Shah & Associates has furnished written confirmation tothe effect that they are not disqualified from acting as the Statutory Auditors of theCompany in terms of the provisions of Section 139 and 141 of the Companies Act 2013 andRules framed thereunder.
Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s. Ruchi Kotak & Associates Company Secretaries to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexedherewith as Annexure 3.
The cost audit pursuant to the provisions of Section 148 of theCompanies Act 2013 is not applicable to the company.
As per Regulation 34 of the SEBI (Listing Obligations & DisclosureRequirement) Regulations 2015 a separate section on corporate governance practicesfollowed by the Company together with a certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report as Annexure 4.
LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for theyear 2019-2020 to BSE Ltd. where the Company's Shares are listed.
PARTICULARS OF EMPLOYEES:
There is no employee in the Company drawing monthly remuneration ofRs.850000/- per month or Rs. 10200000/- per annum. The company has 2 employees. Hencethe Company is not required to disclose any information as per Rule 5(2) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a policy on Prevention of Sexual Harassment atWorkplace. Pursuant to applicable provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 read with Rule 14 theinternal committee constituted under the said act has confirmed that no complaint/case hasbeen filed/pending with the Company during the year.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THEREGULATORS:
There are no significant/material orders passed by the Regulators orCourts or Tribunals impacting the going concern status of your Company and its operationsin future.
a. The Company has complied with the Secretarial Standards issued bythe Institute of Company Secretaries of India on meetings of the Board of Directors andGeneral Meetings.
b. The CFO and CEO of the Company has not received any remuneration orcommission from any of Company Subsidiary.
c. The Company has not issued any equity shares with differentialrights to dividend voting or otherwise.
Your Directors place on record their sincere thanks to bankersbusiness associates consultants and various Government Authorities for their continuedsupport extended to your Companies activities during the year under review. Your Directorsalso acknowledge gratefully the shareholders for their support and confidence reposed onyour Company.
| ||By Order of the Board |
| ||For Elcid Investments Limited |
| ||Varun Vakil |
| ||Chairman |
|Mumbai: June 30 2020 || |