Elcid Investments Limited
Your Directors have pleasure in presenting the Fortieth Annual Report together with theaudited Statement of Accounts for the year ended 31st March 2021.
| ||2020-21 (Rs. In Lakhs) ||2019-20 (Rs. In Lakhs) |
|Revenue from operations ||7297.52 ||5480.16 |
|Add/(Less): Total Expenses ||(95.59) ||(96.93) |
|Profit / (loss) before exceptional items and tax ||7201.93 ||5383.23 |
|Exceptional items ||0.00 ||0.00 |
|Profit/(loss) before tax ||7201.93 ||5383.23 |
|Add/(Less): Provision for Tax-Current ||700 ||9.00 |
|Deferred Tax ||1013.27 ||(84.89) |
|Adjustment for previous years || ||- |
|Profit/(loss) for the year from continuing operations ||5488.66 ||5459.12 |
|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 ||5488.66 ||5459.12 |
|Other Comprehensive Income ||218356.94 ||122837.66 |
|Total Comprehensive Income for the year ||223845.59 ||128296.79 |
|Opening balance in Retained Earnings* ||23763.89 ||19440.94 |
|Profit Available for Appropriation ||29252.55 ||24900.06 |
|Less: Transfer to Statutory Reserve (u/s 45-IC of The Reserve Bank of India Act 1934) ||1098 ||1100.00 |
|Less: Dividend paid for FY 2019-20 ||30.00 ||30.00 |
|Less: Corporate Dividend Tax ||- ||6.17 |
|Balance carried to balance Sheet ||28124.55 ||23763.89 |
* Retained Earnings do not include Debt and Equity instruments classified at Fair Valuethrough Other Comprehensive Income
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:
The total net profit before tax of the Company is Rs. 7201.93 lakhs in current yearcompared to Rs. 5383.23 lakhs in 2020. The Net profit after tax stood at Rs. 5488.66lakhs as compared to Rs. 5459.12 lakhs in 2020.
With the growing markets your Company is also expected to grow and the future prospectsare expected to be better with the booming economy of the Country.
Your Directors have pleasure to recommend payment of Final Dividend for the year ended31st March 2021 on 200000 Equity Shares of Rs. 15/- each and will be paid tothose members whose names appear on the Register of Members as on 22ndSeptember 2021 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 2013 read with InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") all unclaimed dividends are required to be transferred by theCompany to the IEPF after completion of seven (7) years. Further according to IEPFRules the shares on which dividend has not been claimed by the shareholders for seven (7)consecutive years or more shall be transferred to the demat account of the IEPF Authority.
Company proposes to transfer a sum of Rs. 109800000/- to Special reserve createdunder the provisions of section 45-IC of Reserve Bank of India (Amendment) Act 1997.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATEAND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relate onthe date of this report. There has been no change in the nature of business of thecompany.
The Annual Return of the Company as on 31st March 2021 in Form MGT - 7 inaccordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 is available on the website of the Company atwww.elcidinvestments.com
The Company has two subsidiary companies viz. Murahar Investments & Trading CompanyLimited & Suptaswar Investments & Trading Company Limited. However the Companydoes not have any joint venture or associate company.
A separate statement containing the salient features of the financial statements of allsubsidiaries of your company forms part of consolidated financial statements in compliancewith section 129 and any other applicable sections if any of Companies Act 2013 as"Annexure 2"
Further to note that the above-mentioned subsidiary companies have become the materialsubsidiaries of the company with respect to amended regulations of SEBI (ListingObligations Disclosure Requirements) Regulations 2015 and the compliance with the same isundertaken. The amended policy on material subsidiaries has been placed on the website ofthe company.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements of your Company for the financial year 2020-21are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standards and as per provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The consolidated financial statements have been preparedbased on the audited financial statements of your company and its material subsidiaries asapproved by the respective Board of Directors.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
There was no change in the directorship of the company. Mr. Varun Amar Vakil (Din:01880759) is retiring by rotation and the resolution for his reappointment is proposed asnon-executive director liable to retire by rotation of the company.
BOARD OF DIRECTORS:
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
During the Financial Year 2020-21 5 Board Meetings were held. The details of themeetings of the Board of Directors and its Committees convened during the Financial Year2020-21 are given in the Corporate Governance Report which forms part of this report.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 aredecided by the Nomination & Remuneration Committee constituted by the Company. Thedetails of the said Committee are given in the Corporate Governance Report which formspart of this report.
RATIO OF DIRECTOR'S REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER DICLOSURES:
The information required pursuant to Section 197 of the Companies Act 2013 read withThe Companies (Appointment and Remuneration) Rules 2014 are as follows:
i) Ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the Financial Year are as follows:
|Sr. No. 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. Dipika Vakil ||Non-Executive Director ||25000 ||0.03 |
|3. Amrita Vakil ||Non-Executive Director ||25000 ||0.03 |
|4. Mahesh Dalal ||Independent Director ||45000 ||0.05 |
|5. Ketan Kapadia ||Independent Director ||45000 ||0.05 |
|6. Bharat Talati ||Independent Director ||45000 ||0.05 |
Directors are paid remuneration only in the form of sitting fees.
The median remuneration calculated for the Financial Year 2020-21 was Rs. 808331/-.
ii) Percentage increase in the median remuneration of each Director CFO CEO CompanySecretary or Manager if any in the financial year:
There is no increase in the remuneration of CFO of the Company. The Directors are onlypaid sitting fees for attending the meetings. Percentage increase for the remunerationpaid to the Company Secretary was 17% during the financial year 2020-21.
iii) Percentage increase in the median remuneration of employees in the financial year:
Percentage increase/decrease is not reported in the median remuneration as theemployees were not on the roll for the complete year.
iv) Number of permanent employees on the rolls of the Company at the end of the yearother than Managing Director: 2
v) Average percentile increase in the salaries of employees other than the managerialpersonnel in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration;
The comparative percentile increase in the salary of such employees could not bereported as the employees were not on the roll for the complete year.
vi) Affirmation that the remuneration is as per the remuneration policy of the company:
The Company is in Compliance with the Remuneration Policy.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules. All the Independent Directors have gotthemselves registered with the Independent Directors Databank.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Committees.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Company is primarily an investment Company and its business income is the incomearriving out of investments held by the Company. The company is functioning under singlesegment of investment activities. The growing trend in the India's economy is a motivatingfactor for the Company to look forward to increase the profitability. The predominant riskpertains to investments including volatile capital market risks. The company regularlyappoints and seeks advise from reputed portfolio managers to mitigate the risks andaccordingly carry out its investments within the risk management framework. Internalcontrol system is commensurate with the size of the Company.
Ratios for the year 2020-21 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) ||31.60 ||31.61 |
*The company is an investment company hence the ratios relating to sales inventoryare not applicable to the company.
** The company is not having any debt therefore the ratio relating to debt andinterest comes to 0.
The Audit Committee comprises of namely Mr. Bharat Talati (Chairman) and Mr. MaheshDalal and Mr. Ketan Kapadia Directors as other members. All members of the AuditCommittee 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 THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES:
The Company has constituted a Corporate Social Responsibility (CSR) Committee incompliance with Section 135 of the Companies Act 2013. On the recommendation of the CSRcommittee the Board has approved the CSR policy of the Company which is published on theCompany's website at www.elcidinvestments.com.
CSR activities of the Company are carried directly and through Non-GovernmentOrganizations who have track record of minimum of 3 years in carrying out the activitiesand other criteria as prescribed under Section 135 of the Companies Act 2013 read withSchedule VII and Companies (Corporate Social Responsibility Policy) Rules as amended fromtime to time.
The Annual Report on CSR activities undertaken by the Company during the financial year2020-21 is annexed as Annexure 1' and forms part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Considering nature of business activities carried out by the Company your Board hasnothing to report disclosures about Conservation of Energy and Technology Absorption asrequired under Section 134(m) of the Companies Act 2013. There was no foreign exchangeInflow or Outflow during the financial year under review.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Company is an investment company and therefore the predominant risk pertains toinvestments including capital market risks. The company regularly appoints and seeksadvise from reputed portfolio managers to mitigate the risks and accordingly carry out itsinvestments within the risk management framework.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
Your Company is a Non-Banking Finance Company (NBFC) registered with the Reserve Bankof India. Investments are made by the Company are in ordinary course of business. Section186 of the Companies Act 2013 hence is not applicable on the Company.
There were no loans and guarantees made by the Company under Section 186 of theCompanies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts/arrangements/transactions entered into by the Company during the yearunder review with Related Parties were in the ordinary course of business and on arm'slength basis in terms of provisions of the Act. All transactions with related parties werereviewed and approved by the Audit Committee and are in accordance with the Policy ondealing with and materiality of Related Party Transactions and the Related PartyFramework formulated and adopted by the Company.
Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 is set out in the "Annexure 3" to this report.
As per provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 the Members of the Company in their 35th Annual GeneralMeeting held on 26th August 2016 appointed M/s Ravi A Shah & AssociatesChartered Accountants Mumbai (Firm Registration No. 125079W) as the Statutory Auditorsof the Company for a term of consecutive 5 years i.e. from the conclusion of 35thAnnual General Meeting till the conclusion of 40th Annual General Meeting ofthe Company to be held for the financial year ending 31st March 2021 subjectto the ratification by members of the Company every year. As the term of M/s Ravi Shah& Associates is expiring on the conclusion of ensuing Annual General Meeting of thecompany; the Board of Directors of the Company at their meeting held on 30thJune 2021 on the recommendation of the Audit Committee and subject to the approval of theshareholders of the Company at the ensuing AGM have approved the appointment of M/s. Vora& Associates Chartered Accountants (Firm Registration No. 111612W) as the Statutory
Auditors for a period of 3 (Three) years i.e. from the conclusion of the 40thAGM till the conclusion of 43rd AGM of the Company.
The Company has received written consent and certificate of eligibility in accordancewith Sections 139 141 and other applicable provisions of the Act and Rules issuedthereunder from M/s. Vora & Associates. They have confirmed to hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia (ICAI) as required under the Listing Regulations.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Ruchi Kotak & Associates Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Auditor is annexedherewith as "Annexure 4".
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no qualifications reservations or adverse remarks made by the StatutoryAuditors of the Company. However the secretarial auditor has made observation withrespect to filing of returns by the company as applicable being a Non-banking financialcompany under Reserve Bank of India guidelines. The observation made by the auditor towhich management has reply is mentioned below:
|Particulars of Observation ||Reply to the Observation |
|Delay in filing RBI returns as applicable to the company. ||The company wish to submit their submission that the Company has become the Systematically Important non-deposit accepting NBFC since 1st April 2020 due to the applicability of Indian Accounting Standards. As such the Company tried to reach out to our lawyers and also to Reserve Bank to understand the applicability of said regulations on the company. Due to present situation of COVID the company was unable to get the required support. The company has taken necessary steps towards it and the requisite returns are in the process of being submitted under RBI guidelines. We are a company with a focus on full compliance to the applicable laws on the Company. |
During the financial year under review no fraud against the Company or by the Companywas found by the Auditors the Company.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Board has adopted policies and procedures for ensuringthe orderly and efficient conduct of its business the safeguarding of its assetsprevention & 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 of internal control systemin the Company its compliance with operating systems accounting procedures and policiesin the Company. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. The policyprovides for a framework and process whereby concerns can be raised by its employeesagainst any kind of discrimination harassment victimization or any other unfair practicebeing adopted against them.
The Company has neither accepted nor renewed any deposits during the year under review.
There is no change in the Share Capital of the Company. As on 31st March2021 the issued subscribed and the paid-up share capital of the Company stood at Rs.2000000/- comprising of Rs. 200000 Equity Shares of Rs. 10/- each.
The cost audit pursuant to the provisions of Section 148 of the Companies Act 2013 isnot applicable to the company.
As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement)Regulations 2015 a separate section on corporate governance practices followed by theCompany together with a certificate from the Company's Auditors confirming complianceforms an integral part of this Report as "Annexure 5".
LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 toBSE Ltd. where the Company's Shares are listed.
PARTICULARS OF EMPLOYEES:
There is no employee in the Company drawing monthly remuneration of Rs.850000/- permonth or Rs. 10200000/- per annum. The company has 2 employees. Hence the Company isnot required to disclose any information as per Rule 5(2) of The Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
The Company has in place a policy on Prevention of Sexual Harassment at Workplace.Pursuant to applicable provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 read with Rule 14 the internalcommittee constituted under the said act has confirmed that no complaint/case has beenfiled/pending with the Company during the year.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.The company had received show cause notice from Compliance and Monitoring Division - IICorporation Finance Department (CFD) of Securities and Exchange Board of India howeverthe same does not affect the going concern status of your Company and its operations infuture.
a. The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India on meetings of the Board of Directors and General Meetings.
b. The CFO and CEO of the Company has not received any remuneration or commission fromany of Company Subsidiary.
c. The Company has not issued any equity shares with differential rights to dividendvoting or otherwise.
d. There was no revision of financial statements and Board's Report of the Companyduring the year under review.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgegratefully the shareholders for their support and confidence reposed on your Company.
| ||By Order of the Board For Elcid Investments Limited |
| ||Varun Vakil |
| ||Chairman |
|Mumbai: June 30 2021 || |