Your Directors have pleasure in presenting this 60th Annual Report togetherwith the Audited Financial Statements for the financial year ended on March 31 2020.
You being our valued partners in the Company we share our vision of growth with you.Our guiding principles are a blend of realism and optimism which has been and will be theguiding force of all our future endeavors.
Performance of the Company
Standalone Financial Performance
For the year ended on March 31 2020 the Company has achieved a Turnover of Rs83573.82 Lakhs as against Rs 95546.12 Lakhs in the previous year.
For the year ended on March 31 2020 the Company has achieved Earnings Before Interest(Finance Cost) Depreciation & Amortization and Tax (EBIDTA) of Rs 11460.37 Lakhs asagainst the EBIDTA of Rs 13551.56Lakhs during the previous year.
The Net Profit of the Company for the financial year 2019-20 was Rs 7241.89 Lakhscompared to ' 1207.29 Lakhs during the previous year.
The Company holds total unexecuted orders about Rs 103456.82 Lakhs (Rs 52226.96Lakhs for Gear Division and Rs 51229.86 Lakhs of MHE Division) as on March 31 2020. Thiswill help us to continue to have sustainable growth in coming years.
The Audited Consolidated Financial Statements of your Company as on March 31 2020which forms part of the Annual Report have been prepared pursuant to the provisions ofSEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 and also as perthe applicable Indian Accounting Standards (Ind AS) on Consolidated Financial Statements(Ind AS-110) as notified by the Ministry of Corporate Affairs.
Your Company's total consolidated turnover for the year ended on March 31 2020 was Rs108846.49 Lakhs as against Rs 122484.43 Lakhs for previous year.
For the year ended on March 31 2020 the Company has achieved Earnings Before Interest(Finance Cost) Depreciation & Amortization and Tax (EBIDTA) of Rs 14822.68 Lakhs asagainst the EBIDTA of Rs 20526.29 Lakhs during the previous year.
( ' in Lakhs)
|Particulars || |
| ||31/03/20 ||31/03/19 ||31/03/20 ||31/03/19 |
|Turnover ||83573.82 ||95546.12 ||108846.49 ||122484.43 |
|Profit Before Tax Finance cost Depreciation & Amortization and Adjustment for previous year (EBIDTA) ||10529.79 ||11348.82 ||14037.73 ||13969.89 |
|Add: Other Income ||930.58 ||2202.74 ||784.95 ||6556.39 |
|EBIDTA (Including other income) ||11460.37 ||13551.56 ||14822.68 ||20526.28 |
|Less : Finance Cost ||6963.25 ||6408.15 ||7703.52 ||7297.10 |
|Depreciation & Amortization ||4369.33 ||4357.75 ||5325.81 ||4789.25 |
|Profit Before Tax ||127.79 ||2785.66 ||1793.35 ||8439.93 |
|Less: Provision for Tax ||118.13 ||- ||216.73 ||300.82 |
|Deferred Tax ||(7232.23) ||1232.97 ||(7235.84) ||1169.10 |
|Short/(Excess) Prov. of earlier years ||-- ||345.40 ||-- ||344.98 |
|Profit After Tax ||7241.89 ||1207.29 ||8812.46 ||6625.03 |
|Add: || || || || |
|Others Comprehensive Income ||(19.21) ||(9.27) ||(86.67) ||(821.15) |
|Share of Profit of Associates ||-- ||-- ||157.69 ||385.89 |
|Previous Year Balance Brought Forward ||17988.04 ||19560.55 ||24613.22 ||21193.97 |
|PROFIT AVAILABLE FOR APPROPRIATION ||25210.72 ||20758.57 ||33496.70 ||27383.75 |
|APPROPRIATIONS: || || || || |
|Dividend paid ||224.40 ||224.40 ||224.40 ||224.40 |
|Income Tax on Dividend ||46.13 ||46.13 ||46.13 ||46.13 |
|Transfer to Dividend Redemption Reserve ||-- ||2500.00 ||-- ||2500.00 |
|Transfer to General Reserve ||-- ||-- ||-- ||-- |
|Transfer to Reserve (merger) ||3411.02 ||-- ||-- ||-- |
|Balance Carried Forward ||21529.17 ||17988.04 ||33226.17 ||24613.22 |
The Consolidated Net Profit of the Company for the financial year 2019-20 after othercomprehensive income and share of profit/loss of associates was Rs 8970.15 Lakhs comparedto Rs 7010.92 Lakhs during the previous year.
During the year under review your Company's consolidated net worth is Rs 85419.38Lakhs as against ' 76806.44 Lakhs for previous year.
The Board of Directors has not recommended any dividend for the financial year endedMarch 31 2020.
During the year under review the unclaimed dividend pertaining to the financial year2011-12 has been transferred to the Investor Education & Protection Fund.
Transfer to Reserves
Pursuant to the Amendment in the Companies (Share Capital and Debentures) AmendmentRules 2019 dated August 16 2019; for Listed Company it is not required to createDebenture Redemption Reserve for Non-Convertible Debentures issued on private placementbasis. Hence there is no requirement to create Debenture Redemption Reserve for the issueof 12.25% Senior Secured Rated Listed Redeemable Non- Convertible Debentures (NCDs')for Financial Year ended on March 31 2020. Hence Debenture Redemption Reserve is notcreated for the financial year ended on March 31 2020. (During previous year the Companyhas transferred Rs 2500.00 lakhs to the Debenture Redemption Reserve).
The paid up Equity Share Capital as on March 31 2020 was Rs 2244.00 Lakhs. During theyear under review the Company has not issued any shares with differential voting rightsnor granted stock options nor sweat equity.
Directors' shareholding in the Company as on March 31 2020 is given in extract ofAnnual Return in this Annual Report.
Cash and Cash Equivalent as at March 31 2020 was Rs 521.80 Lakhs. The Companycontinues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
The Company has not accepted any fixed deposits from the public falling within theambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014. Hence there is no unpaid/unclaimed deposits as on March 31 2020.
Particulars of Loans Guarantees or Investments
The details of Loans given Guarantees and Securities provided and Investments made bythe Company in compliance with the provisions of Section 186 of the Companies Act 2013are given in the notes to the Financial Statements.
Directors & Key Managerial Personnel (KMPs)
Change in Designation
The contractual term with Shri Prashant Amin as an Executive Director and KeyManagerial Personnel (KMP) of the Company was completed on May 31 2020. Shri PrashantAmin ceased to be an Executive Director and KMP of the Company with effect from closing ofbusiness hours of May 31 2020. However he will continue as a Non-Executive Director ofthe Company with effect from June 1 2020.
Re-appointment of Director
The term of appointment of Shri Prayasvin B. Patel Chairman & Managing Director ofthe Company will be completed on June 30 2020. The Board Meeting dated June 26 2020approves his appointment and remuneration for the term of three years with effect fromJuly 1 2020 subject to the approval of the shareholders at the ensuing General Meeting.
Director Retire by rotation
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Shri P. C. Amin Director retires by rotation at theforthcoming Annual General Meeting of the Company and being eligible offers himself forreappointment.
The Board recommends his appointment for your approval.
Evaluation of Board and Senior Management
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Committees. Further theNomination & Remuneration Committee has carried out the performance evaluation ofSenior Management including the Company Secretary and Chief Financial
Officer of the Company. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
During the year five Board Meetings five Audit Committee Meetings four StakeholdersRelationship Committee Meetings three Nomination and Remuneration Committee Meetings oneCorporate Social Responsibility Committee Meeting and one Separate Meeting of IndependentDirectors were held. The intervening gaps between the Board Meetings were within theperiod prescribed under the Companies Act 2013.
Composition of Various Committees
Details of various committees constituted by the Board as per the provisions ofCompanies Act 2013 and SEBI (LODR) Regulations 2015 and their meetings are given in theCorporate Governance Report which forms part of this report.
The Independent Directors met on July 26 2019 without the attendance ofNon-Independent Directors and Members of the Management. The Independent Directorsreviewed the performance of Non-Independent Directors and Board as a whole and assessedthe quality quantity and timeliness of flow of information between the Company Managementand the Board that is necessary for the Board to effectively and reasonably perform theirduties.
The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(LODR) Regulations 2015.
In 59th Annual General Meeting held on September 17 2019; Dr. Sonal Ambani(DIN 02404841) was reappointed as an Independent Woman Director for second term of fiveyears commencing from August 14 2020 on the Board of the Company.
Familiarization Programme for Independent Directors
In compliance with the requirements of SEBI (LODR) Regulations 2015 the Company hasput in place a Familiarization Programme for Independent Directors to familiarize themwith the working of the Company their roles rights and responsibilities vis-a-vis theCompany the industry in which the company operates business model etc. alongwithupdating on various amendments in the SEBI (LODR) Regulations 2015 and the Companies Act2013. The
policy on Familiarization Programme is uploaded on the website of the Company and canbe accessed through web link https://www.elecon.com/views/templates/admin-uploads/Investors/Policies/Details-of-Familiarization-Programmes-for-IDs.pdf.
The Company has conducted the familiarization programme for Independent Directors ofthe Company details for the same have been disclosed on the Company's websitehttps://www.elecon. com/investors/corporate-information.
The Board has framed a policy for selection and appointment of Directors KeyManagerial Personnel and Senior Management and their remuneration. During the year underreview the Company has revised the Remuneration Policy in line with the variousamendments in SEBI (LODR) 2015 and the Companies Act 2013. The remuneration policy isstated in the Corporate Governance Report forming part of this Annual Report. TheNomination & Remuneration Policy is appended as "Annexure A" to thisBoard's Report.
Disclosures by Directors
None of the Directors of your Company is disqualified as per provisions of Section164(2) of the Companies Act 2013. Your Directors have made necessary disclosures to thiseffect as required under Companies Act 2013.
Change in Key Managerial Personnel
During the year under review Shri Kamlesh Shah has resigned as Chief Financial Officerand Key Managerial Personnel of the Company due to his personal reasons w.e.f. closinghours of March 7 2020. Shri Narasimhan Raghunathan was appointed as a Chief FinancialOfficer and Key Managerial Personnel of the Company w.e.f. March 8 2020.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 with respect to the Directors'Responsibility Statement the Board of Directors hereby confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the Directors have 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 of the Company for the period;
(c) the Directors have 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 have prepared the annual accounts on a going concern basis; and
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Related Party Transactions
All contracts or arrangements with related parties entered during the financial yearwere at arm's length basis and in the ordinary course of the Company's business. All suchcontracts or arrangements were entered into only with prior approval of Audit Committee.No material contract or arrangement with related parties was entered into during the yearunder review. Therefore there is no requirement to report any transaction in Form No.AOC-2 in terms of Section 134 of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at https://www.elecon.com/views/templates/
admin-uploads/Investors/Policies/Elecon-Related- Party-Transactions-Policy-2020.pdf.None of the Directors or any Key Managerial Personnel has any pecuniary relationships ortransactions vis-a-vis the Company.
M/s. B S R & Co. LLP Chartered Accountants appointed as a Statutory Auditors ofthe Company for a period of 5 (five) years i.e. from the conclusion of 56thAnnual General Meeting for the financial year 2016-17 until the conclusion of AnnualGeneral Meeting for the financial year 2020-21. Referring to the amendments in theprovisions of Section 139 of the Companies Act 2013 the requirement relating toratification of their appointment by members at the Annual General Meeting has been doneaway.
However the Board has taken note and M/s. B S R & Co. LLP Chartered Accountantshave confirmed their eligibility under Section 141 of the Companies Act 2013 and theRules framed thereunder for
appointment as Statutory Auditors of the Company. As required under SEBI (LODR)Regulations 2015 the Auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the Cost Audit records maintained by the Company inrespect of its manufacturing activity are required to be audited. Your Directors had onthe recommendation of the Audit Committee appointed M/s. Y.S. Thakar & Co. CostAuditors to audit the cost accounts of the Company for the year ended on March 31 2021 ona remuneration of ' 75000/- p.a. As required under the Companies Act 2013 theremuneration payable to the Cost Auditors is required to be placed before the Members in aGeneral Meeting for their ratification. Accordingly a Resolution seeking Member'sratification for the remuneration payable to M/s. Y.S. Thakar & Co. Cost Auditors isincluded in the Notice convening the 60th Annual General Meeting. The CostAudit Report for the year 2018-19 was filed with the Ministry of Corporate Affairs beforethe due date of filing.
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 CS Ashwin Shah a Company Secretary in Practice to undertake the SecretarialAudit of the Company. The Report on the Secretarial Audit carried out by him during thefinancial year 2019-20 is annexed herewith as "Annexure B".
Subsidiary Joint Venture & Associate Companies
As on March 31 2020 the Company has 11 Direct & Indirect Subsidiary Companies.
Pursuant to the provisions of Sections 129 134 and 136 of the Companies Act 2013 readwith rules framed thereunder and SEBI (LODR) Regulations 2015 your Company had preparedConsolidated Financial Statements of the Company and its Subsidiaries and a separatestatement containing salient features of financial statement of Subsidiaries/Associatesforms part of the Annual Report.
The Annual Financial Statements and related information of the Subsidiary Companiesshall be made available for inspection by the shareholders of the Holding and SubsidiaryCompanies on all working days during business hours for a period of 21 days before thedate of the Annual General Meeting
and the same will also be placed on the website of your Company. Any member who isinterested in obtaining the Audited Financial Statements of the Subsidiary Companies mayobtain the same by writing to the Company.
During the year under review Elecon Transmission International Limited Mauritius(ETIL Mauritius) a wholly owned subsidiary of the company was merged with the Companywith an appointed date of April 1 2019 vide the scheme of amalgamation approved by theNational Company Law Tribunal Ahmedabad Bench on May 1 2019. The same has also beenapproved by the Regulatory Authority in Mauritius.
Consequently Radicon Transmission UK Limited UK becomes the Wholly Owned SubsidiaryCompany of the Company.
Financial Performance - Subsidiary Companies
Radicon Transmission UK Limited (consolidation)
Total Income of the Benzlers Radicon Group has decreased by 12% to GBP 27.99 Million incurrent year compared to 31.87 Million in previous year. However EBITDA excluding otherincome increased to GBP 3.47 Million in current year compared to GBP 2.89 Million inprevious year. The Company has made a Profit before Tax for GBP 1.58 Million in CurrentYear compared to Profit before Tax of GBP 3.06 Million in previous year. This included anexceptional income of GBP 1.4 Million during the previous year. The Company has achievedthe profitability by cost rationalization coupled with change in strategy of optimization.
Benzlers Group (Nordic and Europe)
Benzlers Group has witnessed a decrease in Sales Revenue by 6% to GBP 13.5 Million incurrent year compared to GBP 14.31 Million in previous year. However the Company's EBITDAMargin is GBP 1.88 Million in current year compared to GBP 1.77 Million in previous year.Profit before tax and exceptional income has decreased by 3.5% to GBP 1.38 Millioncompared to 1.43 Million in previous year. The Company has achieved the profitability bycost rationalization coupled with change in strategy of optimization.
Radicon Transmission UK Limited
Radicon UK has seen challenges due to Brexit uncertainty in UK. The Sales Revenue hasdecreased by 18% to GBP 10.24 Million in current year compared to GBP 12.44 Million inprevious year. EBITDA Margin has decreased to GBP 1.21 Million compared to GBP 1.52Million in previous year. Profit before Tax is GBP 0.21 Million in current year comparedto 1.05 Million in previous year. Domestic Market in
UK is facing general uncertainty due to unknown Brexit negotiations and future tradingterms with EU effective from January 2021 hence market is subdued. However we remainoptimistic that reasonable trading terms will be negotiated before 31st December 2020 inthe interest of the UK and EU and look to the future with confidence.
Radicon Drive Systems Inc (Radicon USA)
Radicon-USA has witnessed an increase in Sales Revenue by 3% to GBP 5.37 Million incurrent year compared to GBP 5.21 Million in previous year. EBITDA increased substantiallywith current year at GBP 0.29m profit compared with a loss in previous year of GBP 0.98m.Loss before taxation was also reduced substantially reducing to GBP 0.10 Million incurrent year compared to loss of GBP 1.32 Million in previous year. The Company hasachieved the profitability by cost rationalization coupled with change in strategy ofoptimization.
Elecon Singapore Pte. Limited
Elecon Singapore Pte. Ltd. Singapore is a Wholly- Owned Subsidiary of the Company. Itis a marketing arm of your Company and engages in the business of selling and supply ofyour Company's products in Singapore Indonesia Malaysia Laos Vietnam PhilippinesTaiwan South Korea North Korea Cambodia Russia China Japan Myanmar ThailandMongolia and other Far East countries.
During the year under consideration revenue of Elecon Singapore Pte. Ltd. hasincreased from USD 2.20 million FY 2018-19 to USD 2.30 million FY 201920. AccordinglyEBITDA has increased from 0.08 million FY 2018-19 to USD 0.29 million FY 2019-20.
Elecon Middle East FZE Dubai
Elecon Middle East FZE Dubai is a Wholly-Owned Subsidiary of the Company. It is amarketing arm of your Company and engages in the business of selling and supply of yourCompany's products in U.A.E. (Abu Dhabi Dubai Sharjah Ajman Umma Al Quwain Ras AlKhaimah) Saudi Arabia Oman Yemen Jordan Kuwait Iran Iraq Syria Turkey BahrinQatar Afghanistan Palestine Algeria Comoros Djibouti Lebanon and other Middle EastCountries.
During the year total revenue of Elecon Middle East FZE has increased by 42.19 % fromAED 6.59 million FY 2018-19 to AED 9.37 million FY 2019-20. Increase in EBITDA by 787.5 %from AED 0.16 million FY 201819 to AED 1.42 million FY 2019-20.
Financial Performance - Associate
Eimco Elecon (India) Limited (EEIL)
Eimco Elecon (India) Ltd. (EEIL) a listed Company was promoted by Elecon EngineeringCompany Ltd.
and Envirotech Corporation USA in 1974. In 1989 Tamrock OY a Finnish Corporate Giantacquired stake held by Envirotech Corporation USA in EEIL. In 1997 Sandvik AB a Swedishcompany has acquired major shares of Tamrock OY thereby taken its controlling interest.At present Sandvik Group holds 25.10% shares in EEIL.
EEIL is engaged in the business of manufacturing of a wide range of underground miningmachinery viz. Air Powered Rocker Shovels Electro Hydraulic Side Dump Loaders andElectro-hydraulic and Air powered Load Haul Dumpers used as loading machines in both theunderground Coal mines and Metalliferous mines. EEIL is the market leader in theunderground mining machinery business.
During the year EEIL has achieved a Turnover of Rs 10791.06 Lakhs as against Rs18473.48 Lakhs in the previous year. For the year ended on March 31 2020 EEIL hasachieved Earnings Before Interest (Finance Cost) Depreciation & Amortization and Tax(EBIDTA) including other income of ' 1654.80 Lakhs as against the EBIDTA of Rs 3596.01Lakhs during the previous year.
Vigil Mechanism / Whistle Blower Policy
The Company has in place a Vigil Mechanism/Whistle Blower Policy for Directors andEmployees to report their concerns about unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct. The Mechanism provides for adequate safeguardsagainst victimization of Director(s) and Employee(s) who avail the mechanism.
The Vigil Mechanism/Whistle Blower Policy is available on Company's website at https://www.elecon.com/views/templates/admin- uploads/Investors/whistle-blower-policy/Elecon-WhistleBlower-Policy-2019.pdf.
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations 2015separate reports on Management Discussion & Analysis and Corporate Governance togetherwith a certificate from the Practicing Company Secretary form part of this Report.
Your Company is committed to maintain the highest standards of Corporate Governancereinforcing the valuable relationship between the Company and its Stakeholders.
Corporate Social Responsibility (CSR) Initiatives
In accordance with the provisions of Section 135 of the Companies Act 2013 and Rulesframed thereunder your Company has adopted a policy for CSR and the Board has constituteda Committee
for implementing the CSR activities. Composition of the Committee and other details areprovided in Corporate Governance Report.
The Company has implemented various CSR projects directly and / or through implementingagency and the projects undertaken by the Company are in accordance with Schedule VII ofthe Companies Act 2013. The report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 is given in "Annexure C"forming part of this report.
The Company recognizes and embraces the importance of a diverse board in its success.The Company believes that a truly diverse board will leverage differences in thoughtperspective knowledge skill regional and industry experience cultural and geographicalbackground age ethnicity race and gender which will help the Company to retain itscompetitive advantage. The Board has adopted the Board Diversity Policy which sets out theapproach to diversity of the Board of Directors. The policy is available on our website athttps:// www.elecon.com/views/templates/admin-uploads/Investors/Policies/Board-Diversity.pdf.
Significant and Material Orders passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts/ Tribunalswhich would impact the going concern status of the Company and its future operations.
Material Changes and Commitments
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers globally.Management's early assessments indicates that possible delays in collections fromcustomers temporary reduction in demand and resulting into stressed liquidity position.However it is expected to the situation to normalize in the third/fourth quarter of thecurrent financial year. The Management has taken certain specific steps by way ofnegotiating better payment terms and cost rationalization.
Material changes and commitments have occurred due to the pandemic COVID 19 across theglobe at the end of the financial year to which the financial statements relates and thedate of this Report and their impact on financial position of the company is notdeterminable.
However following are some of the impacts of COVID-19 which company looks ahead:
i. Disruption of supply-chain
ii. Impacts the workforce and production facilities
iii. Material contracts: force majeure' clauses may be triggered by a listedcompany or its counterparty to justify non-performance.
iv. Financing constraints
The causes for such material changes and commitment as stated above and remedialmeasures taken by the company.
Deferred tax liability reversal on Land indexation:-
At the time of transition to Indian Accounting Standards (Ind AS) with effect fromApril 01 2015 the Company had recognized the fair value of its land parcels in the booksof account and had also recognized deferred tax liability aggregating to Rs 6958 lakhsconsidering the future tax obligation that would arise upon sale of land in the expectedmanner in future (sale of land parcels piecemeal delinked from the business).
During the year the Company has reassessed the expected manner of recovery of thecarrying value of all land parcels and has now determined that a number of such landparcels would not be delinked from the business as they form an integral part of thebusiness operations. Consequently the Company currently expects that in the event ofdisposal of most of the land parcels in future these would be disposed off along with thebusiness and in a slump sale arrangement thereby not resulting in a temporary differencebetween accounting position and tax position.
Basis the above deferred tax liability of Rs 6117.70 lakhs recognized on such landparcels in earlier years has been reversed during the year.
Reporting of Frauds
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee Board and/or Central Government underSection 143(12) of the Companies Act 2013 and Rules framed thereunder.
Although it is not mandatory for the Company the Board of the Company has constituteda Risk Management Committee to frame implement and monitor the risk management plan forthe Company. The said committee is responsible for reviewing the risk management plan andensuring its effectiveness. The Audit Committee has additional oversight in the areas offinancial risks and controls.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure D".
Particulars of Employees
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company is annexed to this Report as "AnnexureE" forming part of this Report.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. As requiredunder law an Internal Complaints Committee (ICC) has been constituted for reporting andconducting inquiry into the complaints made by the victim on the harassment at the workplace. During the year under review there were no complaints pertaining to sexualharassment.
The policy on Sexual Harassment at Workplace is placed on the Company's website athttps://www. elecon.com/views/templates/admin-uploads/Investors/Policies/Elecon-Sexual-Harassment- Policy.pdf.
The Board of Directors of the Company has approved a Policy for determining materialsubsidiaries which is in line with the Listing Regulations as amended from time to time.The Policy was revised in line with the amendments made to the Listing Regulations. Thepolicy is available on our website at https://www.elecon.com/views/templates/adminuploads/Investors/Policies/Elecon-Policy-on-Determining- Material-Subsidiary-2020.pdf
In accordance with the Companies Act 2013 an extract of the annual return in theprescribed format is appended as "Annexure F" which forms an integral part ofthis Report and is also available on the Company's website at www.elecon.com.
Business Responsibility Report
The Listing Regulations mandate the inclusion of the Business Responsibility Report aspart of the Annual Report for the top 1000 listed entities based on market capitalizationas on March 31 2020. In compliance with the Listing Regulations we have integrated BRRdisclosures into our Annual Report as "Annexure G"
Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
The Company takes a very pragmatic approach towards insurance. Adequate cover has beentaken for all movable and immovable assets for various types of risks.
Your Company is committed to upholding its excellent reputation in the field ofIndustrial relations. Through continuous efforts the Company invests and improvisesdevelopment programmes for its employees.
Your Directors are highly grateful for the unstinted guidance support and assistancereceived from the Government Financial Institutions and Banks. Your Directors arethankful to all valuable Stakeholders of the Company viz. shareholders customersdealers vendors suppliers and business associates for their faith trust and confidencereposed in the Company.
Your Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
Your Directors wish to place on record their sincere appreciation for the dedicatedefforts and consistent contribution made by the employees at all levels to ensure thatthe Company continues to grow and excel.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
|Place: Vallabh Vidyanagar |
|Date : June 26 2020 |