To The Members
Electrotherm (India) Limited
Your Directors have pleasure in presenting the 34th Annual Report on thebusiness and operations of the Company and Audited Financial Statements for the year endedon 31st March 2020.
FINANCIAL SUMMARY OR HIGHLIGHTS:
The standalone financial performance of the Company for the year ended on 31stMarch 2020 is summarized below:
(Rs. In Crores)
|Particulars ||2019-2020 ||2018-2019 |
|Total Income ||2850.12 ||3481.27 |
|Total Expenses ||2840.68 ||3340.48 |
|Profit / (Loss) before Exceptional Itemsand Tax ||9.44 ||140.79 |
|Less : Exceptional Items ||35.54 ||- |
|Profit / (Loss) before Tax ||44.98 ||140.79 |
|Less: Tax Expenses ||- ||- |
|Profit / (Loss) for the Year ||44.98 ||140.79 |
|Other Comprehensive Income ||(2.70) ||(1.35) |
|Total Comprehensive Income ||42.28 ||139.44 |
|Earning Per Equity Shares ||35.31 ||110.50 |
to the classification of the current period. Previousyearfigures has beenregrouped
STATE OF THE COMPANY'S AFFAIRS AND OPERATIONS: statements relate and The Company isengaged in the business of manufacturing induction furnaces TMT Bars Ductile Iron Pipes(DI Pipes) Electric Vehicles Transformers Transmission Line Towers etc.
During the year ended on 31st March 2020 the total income of the Companywas Rs. 2850.12 Crores compared to Rs. 3481.27 Crores of previous financial year. The netprofit for the current financial year was Rs. 44.98 Crores as compared to profit Rs.140.79 Crores of previous financial year. A detailed analysis of performance for the yearis included in the Management Discussion and Analysis which forms part of this AnnualReport.
CHANGE IN NATURE OF BUSINESS:
During the financial year there was no change in the nature business carried out bythe Company.
TRANSFER TO RESERVES:
During the financial year under review no amount has been transferred to the GeneralReserve.
In view of accumulated losses during the previous financial years and fundrequirements the Board of Directors of the Company do not recommend any dividend onEquity Shares and on Preference Shares for the year ended on 31st March 2020.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANICAL POSITION AFTER THE END OFFINANCIAL YEAR:
There are no material changes and commitments except the impact of Covid-19 pandemicaffecting the financial Company which have occurred between the end of the financial yearof the Company to which the financial the date of the report.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated financial statements of the Company for the financial year 2019-2020are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards ("Ind AS") and SEBI (Listing Obligations and DisclosureRequirements) Regulations2015 ("Listing Regulations") Annual Report.
SUBSIDIARY / JOINT VENTURE COMPANIES:
The Company has the following subsidiaries / joint venture companies as on 31stMarch 2020:
1. Hans Ispat Limited
2. Electrotherm Services Limited (erstwhile known as Shree Hans Papers 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 the salient features of the financialthe highlights of the performance of the subsidiary / joint venture companies in FormAOC-1 is attached as "Annexure A" to this Report.
Pursuant to the Section 136 of the Companies Act 2013 statements of the companyconsolidated financial statements along with relevant documents and separate auditedaccounts in respect of subsidiaries / joint venture companies are available on thewebsite of the company www.electrotherm.com.
During the financial year 2019-2020 none of the companies have become or ceased to besubsidiaries joint ventures or associate companies.
NUMBER OF BOARD MEETINGS:
During the financial year 2019-2020 Five held and the intervening gap between themeetings was within the year 2019 period prescribed under the Companies Act 2013. Detailsof the composition of the Board and its Committees held attendance of the Directors atsuch meetings and other relevant details are provided in the Corporate Governance Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):? 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. Shailesh Bhandari (DIN: 00058866) retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for re-appointment.financial year 2019-2020 Mr. Pawan Gaur Company with effect??Appointment/Re-appointmentof Directors:
During the financial year 2019-2020 pursuant to the provisions of Section 161 of theCompanies Act 2013 and the Rules farmed thereunder on the recommendation Nomination andRemuneration Committee (NRC) the Board of Directors had appointed Mr. Suraj Bhandari(DIN: 07296523) as Additional Director and Whole-time of three years subject to approvalof the Member in General Meeting with effect from 13 th November 2019 andconcluding on 12th November 2022 and he will hold office upto the date ofensuing Annual General Meeting. The Company has received a notice in writing from a memberproposing the candidature of Mr. Suraj Bhandari (DIN: 07296523) for appointment as aDirector of the Company. Your Directors recommends his appointment as a Director of theCompany.
-Mr. Shailesh Bhandari was previously d's Performance re-appointed as ManagingDirector for the period from 1st February 2017 to 31st January2020. Pursuant to the provisions of the Companies Act 2013 and the Rules farmedthereunder Regulations on the recommendation Committee the Board of Directors hasre-appointed Mr. Shailesh Bhandari (DIN: 00058866) as a Managing Director for a period ofthree years with effect from 1st February 2020 and concluding on 31stJanuary 2023 subject to approval of Members in General Meeting and subject toInterlocutory Application (IA) filed Section 241 & 242 of the Companies Act 2013.
??Cessation of Directors:
Mr. Siddharth Bhandari (DIN: 01404674) Whole-time Director retired by rotationat the33 rd Annual General Meeting was not the financial re-appointed and as such heceased to be a Director as well as Whole-time Director of the Company with effect from 30thSeptember 2019.
Mr. Arun Kumar Jain (DIN: 07564704) Non-Executive ect from 17 eff Independent Directorhas resigned with th August 2019. The Board places on record its appreciationsfor the services rendered by him as an Independent Director and as a Chairman/Member ofvarious Committees during his tenure.
(5) Board Meetings were? Key Managerial Personnel:
-2020 the term of Mr. Mukesh Duringthe financial
Bhandari (DIN: 00014511) as a Chairman and Mr. Shailesh and ofthemeetings Bhandari(DIN: 00058866) as a Managing Director was concluded on 31st January 2020. TheBoard of Directors of the Company in their meeting held on 28th January 2020on recommendationofNominationand Remuneration Committee re-appointed Mr. Shailesh Bhandari(DIN: 00058866) as a Managing Director for a period three years and the Board had notapproved the re-appointment of Mr. Mukesh Bhandari (DIN: 00014511) as a Chairman of theCompany. As such Mr. Mukesh Bhandari ceased to be a Chairman Chairman) of the Companywith effect from 1st February 2020 and continued as a Non-Executive Director.
Duringthe asaChiefFinancial from 28th January 2020.
Except above there was no change in the Key Managerial of Personnel during the yearunder review.
? Declaration of Independence for the period
The Company has received declaration of Independence as stipulated under Section 149(7)of the Companies Act 2013 and Regulation16(b) of the Listing Regulations from allIndependent Directors confirmingthat they meet the criteria of independence and notdisqualified from appointment / continuingas an Independent Director and they havecomplied with the code of conduct for Independent Directors prescribed in Schedule IV ofthe Companies Act 2013.
??Annual Evaluation of
In terms of the provisions of Section 134(3)(p) of the Companies Act 2013 read withRule 8(4) of the Companies the Nomination (Accounts)Rules 2014 and Listing andRemuneration Committee of Nomination has carried out the annual and Remunerationevaluation of performance of the Board and its Committees and the Board of Directors hascarried out the annual evaluation of the performance of individual directors. The mannerin which the evaluation was carried out is provided in the Corporate Governance Reportwhich is part of this Annual Report. of the
? 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 salient aspects of the Nomination andRemuneration Policy covering the policy on appointment and remuneration of Directors andother matters have been outlined in the Corporate Governance Report which forms part ofthis Annual Report. The said policy is available on the website of the Company atwww.electrotherm.com.
PARTICULARS OF INVESTMENT LOAN AND GUARANTEE:
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 31 of the notes tothe financial statement which form part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
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 The Board of Directors on the recommendation of Corporate SocialResponsibility (CSR) Committee had approved the Corporate Social Responsibility Policy.With a view to enlarge the scope of same CSR activities is available on the website ofthe company at www.electrotherm. com. The composition and terms of reference of theCommittee are detailed in the enclosed Corporate Governance Report.
activities the financial Details related to expenditure on CSR year 2019-2020 areforming part of this Annual Report in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as "Annexure B" to thisreport.
RELATED PARTY TRANSACTIONS:
The Company has pursuant to the approval of the shareholders through special resolutionunder 2013 entered into related party transactions on arm's length basis During the yearthe Company had not entered into any contract / arrangement / transaction with relatedparties considered material in accordance with the Policy of the Companyonmaterialityofrelatedpartytransactions
The Policy on materiality of related party transactions with related party transactionsas approved by the Board may be accessed on the Company's website at www.electrotherm.com.
There are no materially significant related party transactions that may have potentialconflict with interest of the Company at large. year The details of transaction withrelated parties for the financial ended on 31st March 2020 is given in NoteNo. 38 of the financial statements which is part of this Annual Report of the Company.
FIXED DEPOSIT: resolution During the financial Companies anydeposit within themeaning of Section Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.Further there are no outstanding deposits as on 31st March 2020.
DIRECTORS' RESPONSIBILITY STATEMENT:
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 2020 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 theprofit 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 other
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.
AUDITORS AND AUDITORS' REPORT:? Statutory Auditor:
Pursuant to the provisions of Section 139 142 and other 188 of the Companies Actapplicable provisions of the Companies Act 2013 read with . the Companies (Audit andAuditors) Rules 2014 M/s. Hitesh Prakash Shah & Co. Chartered AccountantsAhmedabad (Firm Registration No. 127614W) were appointed as Statutory Auditors of theCompany at the 31st Annual General Meeting held on 5th September2017 for a term of five (5) years beginning from the conclusion of the 31stAnnual General Meeting till the conclusion of the 36 th Annual General Meetingsubject to ratification of the appointment by the Members every subsequent Annual GeneralMeeting. However as per the notification of the Ministry of Corporate Affairs("MCA") dated 7th May 2018 Section 139 of the Companies Act 2013was amended by the Companies (Amendment) Act 2017 and as per the amendment of Companies(Audit and Auditors) Second Amendment Rules 2018 the requirement of annual ratificationof appointment of the Statutory Auditors has been to ratification omitted. Accordinglythe of the appointment of M/s. Hitesh Prakash Shah & Co. Chartered AccountantsAhmedabad (Firm Registration No. 127614W) is not required to be placed before the membersat the 34th Annual General Meeting.
In the Independent Auditors' Report for the year ended on 31st March 2020there are certain matters of emphasis related to assignment of debts non-payment ofinstalments Petition under the provisions of Insolvency and Bankruptcy Code 2016balance confirmations etc. The relevant Notes to accounts related to these matters ofemphasis are self-explanatory.
With regard to the qualification in the Independent Auditors' Report for non-provisionof interest on Bank loan as account declared as Non-Performing Assets (NPA) amounting toRs. 160.67 Crores (Net of Reversal) for the year under consideration and total amount ofRs. 1037.01 Crores the Board of Directors submits that the loan accounts of the Companyhave been classified as Non-Performing Assets 197 of the Companies (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: terms of the reference and number of meetings Pursuant to theconsent and certificate received from M/s V. H. Savaliya & Associates CostAccountants Ahmedabad and as per Section 148 and other applicable provisions if any ofthe Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014 the Board ofDirectors of the Company has on the Committ him as recommendation oftheAudit Cost Auditorto conduct the cost audit of the Company for the financialyear ending on 31 stMarch 2021 at a remuneration General asmentioned (AGM) of the Shareholders of theCompany Meeting subject to ratification of the remuneration by the Members of theCompany.
Maintenance of cost records as specified by the Central of the Government undersub-section Companies Act 2013 is applicable to the Company and accordingly suchaccounts and records are made and maintained by the Company.
? Secretarial Auditor:
Pursuant to the provisions of Section204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Bharat Prajapati & Co. of Company Secretary in Practice to conductthe Secretarial Audit of the Company. The Secretarial Audit Report in Form ris ks onperiodical basis etc. No. MR-3 is annexed herewith as "Annexure C" tothis report.
With regard to Board of Directors submits as under:
(a) With regard to delay in submission of unaudited financial results for the quarterendedon30 significant and material orders passed th June2019within the timelimits as prescribed under Regulation 33(3)(a) & (b) of the SEBI (LODR) Regulations2015 there was delay in submission of results because of non-calling of the Board Meetingwithin such time limit.
(b) With regard to delay in circulation of draft minutes of the BoardMeetings/Committee Meeting within the prescribed time period the Company will ensure tocirculate draft minutes within the time line.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
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.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section
Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees are given in "Annexure- E"to this Annual Report.
The composition & attendance at the Audit Committeeheldduringthefinancialyear iscovered in the enclosed Corporate Governance Report.
At the beginning of the year the Audit Committee comprised of Mr. Pratap MohanIndependent Director (Chairman of Audit Committee) Mr. Dinesh Mukati IndependentDirector (Member) Ms. Nivedita R. Sarda Independent Director (Member) and Mr. SiddharthBhandari Whole-time Director (Member). At the 33rd Annual General Meeting heldon Monday 30th September 2019 the resolution for reappointment of Mr.Siddharth Bhandari (retired by rotation) passed with requisite majority. As such heceased to be a Director of the Company and consequently he also ceased to be a Member ofthe Audit Committee.
As on 31st March 2020 the Audit Committee consists of
(i) Mr. Pratap Mohan Independent Director (Chairman of Audit Committee)
(ii) Mr. Dinesh Mukati Independent Director (Member) and
(iii) Ms. Nivedita Sarda Independent Director (Member).
RISK MANAGEMENT POLICY:
The Risk Management Policy adopted by the Board of Directors of the Company covers thevarious criteria for identification risk action plans to mitigate those risks review andreporting of identified
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 and attachmentof certain propertieswhich may threaten the existence of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:
Presentlytherearecertain by the regulator / court / tribunal which may impact theCompany and its operations in future as mentioned in Note No. 33 & 37 of thestandalone financial statements which is part of this Annual Report.
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.
WHISTLE BLOWER POLICY/VIGIL MECHANISM:
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 for a framework and process wherebyconcerns can be raised by its employees against any kind of discrimination harassmentvictimization or any other unfair practice being them. More details of the Whistle BlowerPolicy/Vigil Mechanism are explained in the Corporate Governance Report. The WhistleBlower Policy/Vigil Mechanism is available on the website of the Company atwww.electrotherm.com.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Pursuant to Regulation 34(2)(e) read with Part B of Schedule V of the ListingRegulations Management Discussion and Analysis Report annexed after the Directors' Reportand form a part of this Annual Report.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 143(3)(a) and Section 92(3) of the Companies Act 2013 the extractof the Annual Return in Form No. MGT-9 is annexed herewith as "Annexure F" andforms part of this Annual Report and same is also available on the website of the Companyat www.electrotherm.com.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has put in place adequate internal financial controls with reference to thefinancialstatements. During the financial such internal financial controls werecommensurate with the size scale and complexity of the Company and the nature of businessof 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).
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
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 financialyear the Company has not received any complaints under the saidAct.
OTHER DISCLOSURES: a) During the financial year 2019-2020 there was no change inauthorized share capital subscribed and paid-up share capital of the Company. Also therewas no reclassification/subdivision in authorized share capital of the Company. policyprovides b) There was no reduction of share capital or buy back of shares or change incapital traction adopted against c) The Company has not issued equity shares withdifferential rights as to dividend voting or otherwise. d) The Company has not issuedsweat equity shares to its directors or employees. e) The Company does not have anyEmployees Stock Option Scheme for its Employees/Directors. isf) During the financial year2019-2020 the Company has not made allotment of any securities and as such therequirement for obtaining credit rating was not applicable g) There is no money lying tounpaid / unclaimed dividend account pertaining to any of the previous years with theCompany. As such the Company is not required to transfer such amount to the InvestorEducation and Protection Fund established by the Central Government. h) The Auditors hasnot reported any frauds under sub-section (12) of Section 143 of the Companies Act 2013.i) There are certain pending petitions Company Law Tribunal (NCLT) Ahmedabad inspection/ investigation effectively and it is proceedings before SEBI as mentioned in Note No. 37of the standalone financial statements Report.
Your Directors wish to place on record their appreciation valuable co-operation andsupport received from the customers and suppliers various financialinstitutions banksgovernment authorities auditors and shareholders during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the devotedservices of the Executives Staff and Workers of the Company.
For and on behalf of the Board of Directors
Electrotherm (India) Limited