Eon Electric Ltd.
|BSE: 532658||Sector: Engineering|
|NSE: EON||ISIN Code: INE076H01025|
|BSE 00:00 | 26 Oct||Eon Electric Ltd|
|NSE 05:30 | 01 Jan||Eon Electric Ltd|
|BSE: 532658||Sector: Engineering|
|NSE: EON||ISIN Code: INE076H01025|
|BSE 00:00 | 26 Oct||Eon Electric Ltd|
|NSE 05:30 | 01 Jan||Eon Electric Ltd|
Your Directors have pleasure in presenting the 30th Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the FinancialYear ended March 31 2019.
The financial performance of your Company for the Financial Year ended March 31 2019is summarized below
During the financial year under review your Company has achieved Sales and OtherIncome of Rs.83.98 Crores as against Rs.163.82 Crores in the previous financial year2017-18 The Loss before Interest Taxes and Depreciation for the year ended March 31 2019stood at Rs. 13.08 Crores as against an EBITDA of Rs. 14.31 Crores during the previousyear.
The Loss before Tax for the financial year ended March 31 2019 stood at Rs. 25.38Crore as against a profit of Rs.0.88 Crores earned during the previous financial yearended March 31 2018. The Loss after Tax for the current year stood at Rs. 23.99 Croreagainst a Profit after Tax Rs. 0.44 Crores earned during the previous year ended 31stMarch 2018. The decline in the operations of the Company during the year under review hasbeen due to the liquidity crunch being experienced by your Company during the past oneyear or so on account of delay in realization of receivables from one of its majorcustomers for whom the Company has executed orders during the previous year. As thepayments from the customers was considerably delayed beyond the expected realizationperiod this resulted in an acute pressure on the Company's cash flows which affected theoperations of the Company resulting in shortfall in turnover and operating loss during2018-19.
Your Directors are fully seized of the Company's performance related issues and havealso initiated proactive measures by initiating steps in the following directions:-
(a) Consolidation of operations and implementation of cost control measures to reducefixed costs and thereby curtail losses
(b) Disposal of Investments in Mutual Funds and Bonds and thereby repaying loans raisedagainst these investments from Standard Chartered Bank and RBL Bank Limited leading toreduction in interest and thereby improving the profitability and cash flows of theCompany.
(c) Strengthening Relationship Management with all stake holders including potentialcustomers.
Efforts are also afoot to further strengthen the Company's internal Management in areasof Marketing Sales and Recoveries.
Consolidated financial statements
The Consolidated Financial Statements of your Company for the financial year 2018-19have been prepared in compliance with the applicable provisions of the Companies Act2013 Indian Accounting Standards and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
Dividend and reserves
In light of the loss incurred by the Company during the year your Directors do notrecommend any Dividend for the year under review.
The Company has not transferred any amount to General Reserve during the financial year2018-19.
Directors and key managerial personnel
Appointments / resignations
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Vinay Mahendru Joint ManagingDirector is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Appropriate resolution seeking your approvalto his re-appointment as Director is included in the Notice. The Board recommends hisre-appointment.
Mr. Ashish Bansal was appointed as an additional Non-Executive Independent Director on1st April 2019 and is proposed to be appointed as Non-Executive Independent Director ofthe Company at the ensuing Annual General Meeting (AGM). His details as required under theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are contained inthe accompanying Notice convening the ensuing AGM of your Company. Appropriate resolutionseeking your approval to his appointment as Independent Director is included in theNotice.
Mr. Ashok Kumar Gupta was appointed as an additional Non-Executive Independent Directoron 1st April 2019 and is proposed to be appointed as Non-Executive Independent Directorof the Company at the ensuing Annual General Meeting (AGM). His details as required underthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are containedin the accompanying Notice convening the ensuing AGM of your Company. Appropriateresolution seeking your approval to his appointment as Independent Director is included inthe Notice.
During the year Mr. Ajoy Kumar Ghosh Independent Director resigned from the Board andall committees w.e.f. January 25 2019 due to his ill health. Mr. Ramesh Chander Bansalamd Mr. Ranjan Sarkar on having attained the age of 75 years resigned from the Board w.e.f1st April 2019. Dr (Mrs.) Rashmi Vij resigned from the Company w.e.f 30th May 2019 dueto her preoccupation. There was no material reason for resignation of the Directors otherthan the one mentioned in their Resignation letters.
Key Managerial Personnel
Mr. Ved Prakash Mahendru Chairman & Managing Director Mr. Vivek Mahendru and Mr.Vinay Mahendru Joint Managing Directors Mr. K B Satija Chief Financial Officer and Mr.Shiv Kumar Jha Company Secretary & Compliance Officer are the Key ManagerialPersonnel of your Company in accordance with the provisions of Section 2(51) and 203 ofthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
The Companies Act 2013 mandates formal annual evaluation of the performance of theBoard its Committees and individual Directors. Schedule IV to the Companies Act 2013provides that the performance evaluation of Independent Directors shall be done by theentire Board of Directors excluding the Directors being evaluated.
Pursuant to the provisions of the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried out annual evaluation of performance of Directors individuallyCommittees of the Board and the Board as a Whole.
The manner in which the evaluation has been carried out is explained in the CorporateGovernance Report.
Meetings of the board and committees
Four meetings of the Board of Directors were held during the Financial Year 2018-19.The details of number of Meetings of the Board and various Committees of your Company areset out in the Corporate Governance Report. Besides in term of requirements of Schedule IVto the Companies Act 2013 and Regulation 25 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate meeting ofthe Independent Directors was heldon March 02 2019 for the Financial Year 2018-19.
Declaration BY independent directors
All 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 provision ofCompanies Act 2013 and the relevant regulations.
In accordance with the provisions of Section 178 of the Companies Act 2013 read withrules made there under and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company's Policy on Nomination andRemuneration of Directors kmps and Senior Management of your Company is uploaded on thewebsite of the Company: http://www.eonelectric.com/investor10.php
As at 31st March 2019 the Audit Committee of the Board of Directors of the Companycomprised of 3 members namely Shri Ramesh Chander Bansal Independent Director ShriRanjan Sarkar Independent Director and Shri Vivek Mahendru Joint Managing Director. ShriRamesh Chander Bansal is Chairman of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
Auditors and auditors' report statutory auditors
On recommendation of the Audit Committee the Board in its meeting held on August 312017 and approval of the shareholders in the Annual General Meeting held on 27th September2017 M/s Bansal and Co LLP. Chartered Accountants (Firm Registration Number001113N/N500079) have been appointed as the Statutory Auditors of the Company for a termof five consecutive years i.e. From conclusion of the 28th AGM till the conclusion of 33rdAGM to be convened in the year 2022.
Statutory auditors' report
The Board has duly examined the Statutory Auditors' Report on the Standalone andConsolidated Financial Statements of the Company for the financial year ended March 312019 by M/s Bansal and Co. LLP Chartered Accountants. The Company has already initiatedsteps to deposit the undisputed statutory dues as mentioned in the Auditors' Report withthe respective authorities.
Further no fraud has been reported by the Statutory Auditors in terms of Section143(12) of the Companies Act 2013 during the year.
Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act2013 and Rules made there under Mr. Krishan Singh Berk Cost Accountant (FRN: 102044& Membership No. 2724) 365 Sector 15 Faridabad 121 007 Haryana was appointed asthe Cost Auditor of the Company for the financial year ended March 31 2019. Your Companyis required to maintain cost records as specified under Section 148(1) of the CompaniesAct 2013 and accordingly such accounts and records are made and maintained in theprescribed manner.
Mr. Krishan Singh Berk Cost Accountant (FRN: 102044 & Membership No. 2724)carried out the cost audit during the year. The Board of Directors have appointed Mr.Krishan Singh Berk Cost Accountants as Cost Auditors for the financial year 2019-20. Theremuneration proposed to be paid to the cost auditors for 2019-20 is subject toratification by members at the ensuing Annual General Meeting.
Secretarial auditors & their report
The Company had appointed M/s Navneet K Arora & Co LLP Company Secretaries NewDelhi to conduct its Secretarial Audit for the financial year ended March 31 2019. TheSecretarial Auditor has submitted its Report confirming compliance by the Company of allthe provisions of applicable corporate laws except delay in deposit of monthly statutorydues under Employee Provident Fund and Miscellaneous Provisions Act 1952 and EmployeesState Insurance Act 1948 and applicable rule made thereunder which have since beendeposited by the Company. The Secretarial Audit Report for FY 2018-19 is annexed as Annexure- A to this report.
A Secretarial Compliance Report for the financial year ended 31st March 2019 oncompliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunderwas obtained from M/s Navneet Arora & Co. LLP Secretarial Auditors and submitted toboth the stock exchanges.
The Board has re-appointed M/s Navneet K Arora & Co. LLP Company Secretaries NewDelhi as Secretarial Auditors of the Company for Financial Year 2019-20.
Extract of the annual return
The extract of the Annual Return in Form MGT 9 as stipulated under Section 92(3) of theCompanies Act 2013 read with the Companies (Management and Administration) Rules 2014is annexed herewith as Annexure-B' to this Report and is posted on the website ofthe Company at www.eonelectric.com
Related PARTY transactions
In terms of Section 134(3)(h) there is no information to be provided regarding theparticulars of contracts or arrangements with related parties referred to in sub-section(1) of Section 188 of the Companies Act 2013 except the transactions as stated in NoteNo. 43 of the Financial Statements. Accordingly no transactions are being reported inForm No. AOC-2 in terms of Section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014.
All related party transactions that were entered into during the year under review werein the ordinary course of business and on an arm's length basis and were in compliancewith the applicable provisions of the Companies Act 2013.
Material changes and commitments IF any affecting the financial position of thecompany WHICH have occured between the end of the financial year of the company To WHICHthe financial statements relate and the date of the report
There are no material changes and commitments affecting the financial position of theCompany that have occurred between the end of financial year on March 31 2019 to whichthese Financial Statements relate and the date of this Report.
Change In the nature of business
There was no change in the nature of business of the Company during the financial yearended March 31 2019.
Conservation of energy technology absorption and foreign exchange earnings and outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies(Accounts) Rules 2014 is annexed herewith as Annexure - C ' to this Report.
Pursuant to the provisions of Section 134(3)(n) of the Companies Act 2013 and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has adopted a Risk Management Policy and established a riskmanagement framework to identify mitigate and control the risks which may threaten theexistence of the Company.
In ternal financial controls
The Company has a comprehensive Internal Financial Controls system with reference toFinancial Statements. During the year such controls were tested and no reportablematerial weakness in the design or operations were observed.
The report on the Internal Financial Control issued by the M/s. Bansal & Co. LLPChartered Accountants (FRN: 001113N/N500079) the Statutory Auditors of the Companyforms part of the Annual Report. In the opinion of the Board the existing InternalFinancial Control framework is adequate and commensurate with the size and nature of thebusiness of the Company.
Whistle blower and VIGIL mechanism
The Company has adopted a Whistle Blower Policy to provide a formal vigil mechanism tothe Directors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairperson of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee.
PARTICULARS of employees and related disclosures
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended by the Companies (Appointmentand Remuneration of Managerial Personnel) amended Rules 2016 are provided in theAnnexure - D' to this Report
Subsidiaries associates and joint ventures
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the FinancialStatements of the Company's Joint Ventures / Associates (in form AOC-1) is attached tothis Report as Annexure - E'.
Significant and material orders passed BY the regulators or courts
There was no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and the company's operations in future.
PARTICULARS of loans guarantees or investments
During the Financial Year 2018-19 the provisions of Section 186 of the Companies Act2013 were not applicable on the Company
Corporate social responsibility (CSR)
The provisions of 135 of the Companies Act 2013 read with Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Companyduring the Financial year ended on 31st March 2019.
The Company has not accepted/received any deposits during the year under report fallingwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
Directors' responsibility statement
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed:
(a) that in the preparation of the annual accounts for the year ended March 31 2019the applicable accounting standards and Schedule III to the Companies Act 2013 have beenfollowed and there are no material departures from the same;
(b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2019 andof the loss of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls to be followed by the Company were laiddown and that such internal financial controls were adequate and operating effectively;and
(f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and such systems were adequate and operating effectively.
Other information Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed herewith as Annexure - F' to thisReport.
Certificate on Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by Securities and Exchange Boardof India. The report on Corporate Governance as stipulated under the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 forms an integral part of this Report and annexed herewith as Annexure - G' tothis Report. The requisite certificate from M/s. Bansal & Co. LLP CharteredAccountants (FRN: 001113N/N500079) Statutory Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is annexed herewith to this Report.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted Internal Committees at all its locations known as the Prevention of SexualHarassment (POSH) Committees to inquire into complaints of sexual harassment andrecommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2018-19.
Transfer to Investor education and Protection Fund
Pursuant to Section 124 and 125 and other applicable provisions if any of theCompanies Act 2013 read with the Investor Education and protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules') all unclaimedand/ unpaid dividend application money debentures interest and interest on deposits asapplicable remaining unclaimed / unpaid for a period of seven years from the date theybecame due for payment were required to be transferred to the IEPF. Accordingly allunclaimed and unpaid dividend for a period of seven years from the date they became duefor payment in relation to the Company have been transferred to the IEPF established bythe Central Government. No claim shall be entertained against the Company for the amountsso transferred.
As per Section 124(6) of the Act read with the IEPF Rules as amended all the shares inrespect of which dividend has remained unpaid/unclaimed for seven consecutive years ormore are required to be transferred to an IEPF Demat Account. The Company has sent noticeto all the Members whose dividends are lying unpaid / unclaimed against their name forseven consecutive years or more. Necessary steps will be initiated by the Company totransfer shares held by the members to IEPF as per applicable regulations. Please notethat no claim shall lie against the Company in respect of the shares so transferred toIEPF. In the event of transfer of shares and the unclaimed dividends to IEPF members areentitled to claim the same from IEPF by submitting an online application in the prescribedForm IEPF-5 available on the website www. Iepf.gov.in and sending a physical copy of thesame duly signed to the Company along with the requisite documents enumerated in the FormIEPF- 5. Members can file only one consolidated claim in a financial year as per the IEPFRules.
Listing of Shares
The Shares of the Company are listed on the BSE Limited (BSE) and National StockExchange of India Limited (NSE). The Company has paid annual Listing fee for the FinancialYear 2019-20 to the BSE Limited and the National Stock Exchange of India Limited.
Your Company's organizational culture upholds professionalism integrity and continuousimprovement across all functions as well as efficient utilization of the Company'sresources for sustainable and profitable growth. The Directors wish to place on recordtheir appreciation for the valuable co-operation and support received from the Governmentof India various State Governments the Banks and other stakeholders such asshareholders customers and suppliers among others. The Directors also commend thecontinuing commitment and dedication of the employees at all levels which has beencritical for the Company's success. The Directors look forward to their continued supportin future.