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Electrotherm (India) Ltd.

BSE: 526608 Sector: Metals & Mining
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OPEN 73.30
52-Week high 170.00
52-Week low 69.00
Mkt Cap.(Rs cr) 93
Buy Price 73.05
Buy Qty 97.00
Sell Price 73.60
Sell Qty 8.00
OPEN 73.30
CLOSE 73.75
52-Week high 170.00
52-Week low 69.00
Mkt Cap.(Rs cr) 93
Buy Price 73.05
Buy Qty 97.00
Sell Price 73.60
Sell Qty 8.00

Electrotherm (India) Ltd. (ELECTHERM) - Director Report

Company director report


The Members

Electrotherm (India) Limited

Your Directors have pleasure in presenting the 36th Annual Report on thebusiness and operations of the Company and Audited Financial Statements for the year endedon 31st March 2022.


The standalone financial performance of the Company for the year ended on 31stMarch 2022 is summarized below:

(Rs. In Crores)
Particulars 2021-2022 2020-2021
Total Income 2834.04 2530.59
Total Expenses 2866.03 2467.29
Profit/(Loss) before Exceptional Items and Tax (31.99) 63.30
Less : Exceptional Items (22.33) -
Profit/(Loss) before Tax (54.32) 63.30
Less: Tax Expenses - -
Profit/(Loss) for the Year (54.32) 63.30
Other Comprehensive Income 0.39 1.34
Total Comprehensive Income (53.93) 64.64
Earning Per Equity Shares (42.64) 49.69


The Company is engaged in the business of manufacturing induction furnaces TMT BarsDuctile Iron Pipes (DI Pipes) Electric Vehicles Transformers Transmission Line Towersetc.

During the year ended on 31st March 2022 the total income of the Companywas Rs. 2834.04 Crores compared to Rs. 2530.59 Crores of previous financial year. The netLoss for the current financial year was Rs. 54.32 Crores as compared to profit Rs. 63.30Crores of previous financial year. A detailed analysis of performance for the year isincluded in the Management Discussion and Analysis which forms part of this AnnualReport.


During the financial year there was no change in the nature of business carried out bythe Company.


During the financial year under review no amount has been transferred to the GeneralReserve.


In view of losses incurred during the current financial year and accumulated losses ofthe previous financial years the Board of Directors of the Company do not recommend anydividend on Equity Shares and on Preference Shares for the year ended on 31st March2022.


There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report. The operations and financialposition of the Company have been impacted due to Covid-19 pandemic and the Companycontinues to monitor any material changes to the future economic conditions.


The Consolidated financial statements of the Company for the financial year 2021-2022are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards ("Ind AS") and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") which form part of thisAnnual Report.


The Company has the following subsidiaries/joint venture companies as on 31stMarch 2022:

1. Hans Ispat Limited

2. Electrotherm Services Limited

3. Shree Ram Electro Cast Limited

4. ET Elec-Trans Limited

5. Jinhua Indus Enterprises Limited

6. Jinhua Jahari Enterprises Limited (Step-down Subsidiary Company)

7. Bhaskarpara Coal Company Limited (Joint Venture Company)

Pursuant to section 129(3) of the Companies Act 2013 a statement containing thesalient features of the financial statement including the highlights of the performance ofthe subsidiary/joint venture companies in Form AOC-1 is attached as "Annexure -A" to this Report.

Pursuant to section 136 of the Companies Act 2013 the financial statements of thecompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries/joint venture companies are available on thewebsite of the company

During the financial year 2021-2022 none of the companies have become or ceased to besubsidiaries joint ventures or associate companies.


During the financial year 2021-2022 four (4) Board Meetings were held. Details of thecomposition of the Board and its Committees and of the meetings held attendance of theDirectors at such meetings and other relevant details are provided in the CorporateGovernance Report.


• Retirement by Rotation

Pursuant to the provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and Articles ofAssociation of the Company Mr. Suraj Bhandari (DIN: 07296523) retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.

• Appointment/Cessation of Directors:

Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047) who wereappointed as Independent Directors of the Company holds office up to 4th September 2022("first term" in terms of Sections 149(10) of the Companies Act 2013). A briefprofile of Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047) aregiven in the notice convening the 36th AGM for the reference of the Shareholders. TheBoard taking into account the recommendation of the Nomination and Remuneration Committeeand on the basis of performance evaluation of Independent Directors has recommended there-appointment of Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047)as Independent Directors of the Company for the second term of 5 (five) years from 5thSeptember 2022 upto 4th September 2027 subject to approval of members in generalmeeting.

The Board of Directors based on the recommendation of the Nomination and RemunerationCommittee re-appointed Mr. Suraj Bhandari (DIN: 07296523) as a Whole-time Director for aperiod of three years commencing from 13th November 2022 and concluding on 12thNovember 2025 subject to approval of members in general meeting.

Mr. Aditya Jain (DIN: 01568183) Non-Executive Director has resigned with effect from10th December 2021. The Board places on record its appreciations for the servicesrendered by him as a Non-Executive Director of the Company during his tenure.

• Key Managerial Personnel:

Mr. Shailesh Bhandari (DIN:00058866) is the Managing Director and Mr. Suraj Bhandari(DIN : 07296523) is the Wholetime Director of the Company.

During the financial year 2021-2022 Mr. Fageshkumar R. Soni resigned from the post ofCompany Secretary & Compliance Officer of the Company with effect from 31stJuly 2021. The Board places on record its appreciations for the services rendered by himas a Company Secretary & Compliance Officer of the Company during his tenure.

Except above there was no change in the Key Managerial Personnel during the year underreview.

• Declaration of Independence

The Company has received declaration of Independence as stipulated under section 149(7)of the Companies Act 2013 and Regulation 16(1)(b) of the Listing Regulations from allIndependent Directors confirming that they meet the criteria of independence and notdisqualified from appointment/continuing as an Independent Director and they have compliedwith the code of conduct for Independent Directors prescribed in Schedule IV of theCompanies Act 2013. Further pursuant to Companies (Creation and Maintenance of databankof Independent Directors) Rules 2019 Independent Directors registered their name in theIndependent Director's Databank.

• Annual Evaluation of Board's Performance

In terms of the provisions of Section 134(3)(p) of the Companies Act 2013 read withRule 8(4) of the Companies (Accounts) Rules 2014 and Listing Regulations the Nominationand Remuneration Committee has carried out the annual evaluation of performance of theBoard and its Committees and the Board of Directors has carried out the annual evaluationof the performance of individual directors. The manner in which the evaluation was carriedout is provided in the Corporate Governance Report which is part of this Annual Report.

• Nomination and Remuneration Policy

The Board of Directors of the Company has on the recommendation of Nomination andRemuneration Committee framed and adopted a policy for selection and appointment ofDirectors Key Managerial Personnel Senior Management and their remuneration. The salientaspects of the Nomination and Remuneration Policy covering the policy on appointment andremuneration of Directors and other matters have been outlined in the Corporate GovernanceReport which forms part of this Annual Report. The said policy is available on the websiteof the Company at www.


Particulars of investment made loan and guarantee given as covered under the Section186 of the Companies Act 2013 has been provided in Note No. 5 6 and 30 of the notes tothe financial statement which form part of this Annual Report.


Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company hasconstituted a CSR Committee. The Board of Directors on the recommendation of CorporateSocial Responsibility (CSR) Committee had approved the Corporate Social ResponsibilityPolicy. With a view to enlarge the scope of CSR activities the Company has revised theCSR Policy and same is available on the website of the company at composition and terms of reference of the CSR Committee are detailed in the enclosedCorporate Governance Report.

The Annual Report on CSR Activities during the financial year 20212022 forming part ofthis Board's Report is annexed herewith as "Annexure -B" to this report.


The Company has pursuant to the approval of the shareholders through specialresolution under Section 188 of the Companies Act 2013 entered into related partytransactions on arm's length basis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the Policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and on dealing with relatedparty transactions as approved by the Board may be accessed on the Company's website

There are no materially significant related party transactions that may have potentialconflict with interest of the Company at large. The details of transaction with relatedparties for the financial year ended on 31st March 2022 is given in Note No.42 of the financial statements which is part of this Annual Report of the Company.


During the financial year 2021-2022 the Company has not accepted any deposit withinthe meaning of Section 73 to 76 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014. Further there are no outstanding deposits as on 31stMarch 2022.


Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors state that :

a) in the preparation of the annual accounts for the financial year ended on 31stMarch 2022 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;

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 financial year and of theloss 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 the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting frauds and otherirregularities;

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 provisions ofall applicable laws and that such systems were adequate and operating effectively.



Pursuant to the provisions of Section 139 142 and other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 M/s. HiteshPrakash Shah & Co. Chartered Accountants (Firm Registration No.127614W) Ahmedabadwere appointed as Statutory Auditors of the Company at the 31st Annual GeneralMeeting held on 5th September 2017 for a term of five (5) years beginning from theconclusion of the 31st Annual General Meeting till the conclusion of the 36thAnnual General Meeting.

The first term of M/s. Hitesh Prakash Shah & Co. Chartered Accountants asstatutory auditors of the Company expire at the conclusion of the 36th AGM of the Company.In terms of the provisions of the Companies Act 2013 and rules made thereunder an auditfirm acting as the statutory auditor of a company is eligible to be appointed as statutoryauditors for two terms of five years each. Considering their performance as auditors ofthe Company during their present tenure the Audit Committee of the Company after duedeliberation and discussion recommended the re-appointment of M/s. Hitesh Prakash Shah& Co. Chartered Accountants as statutory auditors of the Company for a second term offive years to hold office from the conclusion of the 36th AGM to be held in 2022 till theconclusion of the 41st AGM of the Company to be held in the year 2027 atremuneration as may be mutually agreed between the Board of Directors and StatutoryAuditors.

The above proposal forms part of the Notice of the AGM for your approval.

Auditors' Report:

In the Independent Auditors' Report for the year ended on 31st March 2022there are certain matters of emphasis related to (a) Note No 36 in respect of treatment inthe books of account of the assignment/settlements of debts of various bank and thefinancial institution (b) Note No 15(c) in respect of non-payment of Installments due tolender of the loan for the period from December 31 2019 to March 31 2022 and

Interest due for the period from September 30 2020 till March 31 2022 and requestedall lenders to allow this moratorium period for the said payments and the lenders are yetto confirm the revised repayment schedule (c) Note No 38(c) in respect ofconfi'rmation/reconciliation of few accounts of "Trade Receivables" "TradePayable" "Bank and Loan accounts" "Advance from Customers"Advances Recoverable in Cash or Kind" and "Advance to suppliers and otherparties" (d) Note No 36(a)(i)(f) in respect of Petition filed by Central Bank ofIndia a financial creditor under Section 7 of the Insolvency and Bankruptcy Code 2016before the National Company Law Tribunal (NCLT) Ahmedabad (e) Note No 32(a)(ix) and 40 inrespect of pending litigations/cases and recovery proceedings against the company and theDirectors of the Company (f) Note No 8(d) in respect of pending appeal filed against orderof DRT Mumbai for sale of property of the Wholly owned subsidiary Hans Ispat Limitednon-impairment of the investment value of the subsidiary company and provision of expectedcredit losses on the balances outstanding of the said subsidiary.

The relevant Notes to accounts related to these matters of emphasis areself-explanatory.

With regard to the qualification in the Independent Auditors' Report in reference toNote No. 37(b) of non-provision of interest on NPA accounts of banks on approximate basisof Rs. 213.81 Crores for the year under consideration and total amount of such unprovidedinterest till date is Rs. 1435.54 Crores the Board of Directors submits that the loanaccounts of the Company have been classified as Non-Performing Assets (NPA) by the Bankersand some of the Bankers has not charged interest on the said accounts and thereforeprovision for interest has not been made in the books of accounts. The quantification hasbeen done only for the loans which have not been settled.

• Cost Auditor:

Pursuant to the consent and certificate received from M/s V.H. Savaliya &Associates Cost Accountants Ahmedabad and as per Section 148 and other applicableprovisions if any of the Companies Act 2013 read with Companies (Audit and Auditors)Rules 2014 the Board of Directors of the Company has on the recommendation of the AuditCommittee appointed him as Cost Auditor to conduct the cost audit of the Company for thefinancial year ending on 31st March 2023 at a remuneration as mentioned inthe notice convening the Annual General Meeting subject to ratification of theremuneration by the Members of the Company.

Maintenance of cost records as specified by the Central Government under sub-section(1) of Section 148 of the Companies Act 2013 is applicable to the Company andaccordingly such accounts and records are made and maintained by the Company.

• Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andRegulation 24A of the SEBI (LODR) Regulations 2015 the Company has appointed M/s. BharatPrajapati & Co. Company Secretary in Practice to conduct the Secretarial Audit of theCompany. The Secretarial Audit Report in Form No. MR-3 is annexed herewith as "Annexure- C" to this report.

With regard to qualifications of the Secretarial Auditor the Board of Directorssubmits as under:

(a) With regard to appointment of Company Secretary and Chief Financial Officer theCompany in process to identify the suitable candidate for the said posts.

(b) With regard to delay in submission of audited/unaudited financial results for thequarter ended on 31st March 2021 and quarter ended on 30th June 2021 and 30thSeptember 2021 and gap of more than 120 days between two board meetings & auditcommittee meetings and delay in filing/approval of cost audit report there was stay onBoard Meeting by Hon'ble National Company Law Appellate Tribunal (NCLAT) and thereforethe Company could not hold the Board Meeting for approval of audited/unaudited financialresults and approval of cost audit report. However after the approval of Hon'ble NCLATand disposal of appeals pending before the Hon'ble NCLAT the Company has submitted thesaid audited/unaudited financial results to the stock exchanges and requested for waiverof fines imposed on the Company in view of judicial order of stay on the Board Meeting.

(c) With regard to non-submission of disclosures of defaults on payment of interest/repayment of principal amount on loans from banks/financial institutions for the periodfrom 1st April 2021 till 31st March 2022 the Company will ensureto submit disclosures within the time line.


The information required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8(3) the Companies (Accounts) Rules 2014 with respect toconservation of energy technology absorptions and foreign exchange earnings and outgo isgiven in "Annexure - D" which forms part of this Annual Report.


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 the employees are given in "Annexure- E" to this AnnualReport.


The composition terms of the reference and number of meetings & attendance at theAudit Committee held during the financial year is covered in the enclosed CorporateGovernance Report.

As on 31st March 2022 the Audit Committee consists of  (i) Mr. PratapMohan Independent Director as Chairman (ii) Mr. Dinesh Mukati Independent Director asMember and (iii) Ms. Nivedita Sarda Independent Director as Member.


The Risk Management Policy adopted by the Board of Directors of the Company covers thevarious criteria for identification of key risk action plans to mitigate those risksreview and reporting of identified risks on periodical basis etc.

In the opinion of the Board of the Directors of the Company there are elements ofrisks in the nature of various legal cases including for recovery of dues attachment ofcertain properties which may threaten the existence of the Company.


Presently there are certain significant and material orders passed by theregulator/court/tribunal which may impact the Company and its operations in future asmentioned in Note No. 36 & 40 of the standalone financial statements which is part ofthis Annual Report.

Further Central Bank of India a financial creditor has filed a petition under Section7 of the Insolvency and Bankruptcy Code 2016 (IBC) before Hon'ble National Company LawTribunal (NCLT) Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP)against the Company. The Company has on 29th June 2022 accepted the Compromise/One TimeSettlement (OTS) letter of Central Bank of India dated 28th June 2022 for theiroutstanding loan/credit facilities. As per the settlement terms and conditions all theproceedings in various legal forums will be kept in abeyance till receipt of final paymentunder the OTS.


In compliance with the provisions of Listing Regulations a separate report onCorporate Governance along with a certificate from a Practicing Company Secretaryregarding the status of compliance of conditions of corporate governance forms a part ofthis Annual Report.


The Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated Whistle Blower Policy/VigilMechanism in compliance with the provision of Section 177(10) of the Companies Act 2013and Regulation 22 of the Listing Regulations. The policy provides for a framework andprocess whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimization or any other unfair practice being adoptedagainst them. More details of the Whistle Blower Policy/Vigil Mechanism are explained inthe Corporate Governance Report. The Whistle Blower Policy/Vigil Mechanism is available onthe website of the Company at


Pursuant to Regulation 34(2)(e) read with Part B of Schedule V of the ListingRegulations Management Discussion and Analysis Report is annexed after the Boards' Reportand form a part of this Annual Report.


Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act 2013 the AnnualRerun as on 31st March 2022 is available on the website of the Company


The Company has put in place adequate internal financial controls with reference to thefinancial statements. During the financial year such internal financial controls wereoperating effectively and it is commensurate with the size scale and complexity of theCompany and the nature of business of the Company.


During the year under review the Company has complied with the applicable SecretarialStandards issued by The Institute of Company Secretaries of India (ICSI).


The Company is committed to provide a work environment that ensures every employee istreated with dignity respect and afforded equal treatment. The Company has complied withthe provisions relating to the constitution of Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and during the financial year the Company has not received any complaints under the saidAct.


a) During the financial year 2021-2022 there was no change in authorized sharecapital subscribed and paid-up share capital of the Company. Also there was noreclassification/sub- division in authorized share capital of the Company.

b) There was no reduction of share capital or buy back of shares or change in capitaltraction resulting from restructuring.

c) The Company has not issued equity shares with differential rights as to dividendvoting or otherwise.

d) The Company has not issued sweat equity shares to its directors or employees.

e) The Company does not have any Employees Stock Option Scheme for itsEmployees/Directors.

f) During the financial year 2021-2022 the Company has not made allotment of anysecurities and as such the requirement for obtaining credit rating was not applicable tothe company.

g) There is no money lying to unpaid/unclaimed dividend account pertaining to any ofthe previous years with the Company. As such the Company is not required to transfer suchamount to the Investor Education and Protection Fund established by the CentralGovernment.

h) The Auditors has not reported any frauds under sub-section (12) of Section 143 ofthe Companies Act 2013.

i) The details of difference between amount of valuation done at the time of one timesettlement and the valuation done while taking loan from the Banks or financialinstitutions along with the reasons thereof is not applicable as during the financialyear there was no one time settlement or valuation done by the Company.

j) There are certain pending petitions before the Hon'ble National Company Law Tribunal(NCLT) Ahmedabad and inspection/investigation by Ministry of Corporate Affairs asmentioned in Note No. 40 of the standalone financial statements which is part of thisAnnual Report.


Your Directors wish to place on record their appreciation for the valuable co-operationand support received from the customers and suppliers various financial institutionsbanks government authorities auditors and shareholders during the year under review.Your Directors also wish to place on record their deep sense of appreciation for thedevoted services of the Executives Staff and Workers of the Company.

For and on behalf of the Board of Directors
Electrotherm (India) Limited
Shailesh Bhandari Suraj Bhandari
Place : Ahmedabad Managing Director Whole-time Director
Date : 2nd August 2022 (DIN : 00058866) (DIN: 07296523)