BOARD'S REPORT To: The Members of EIMCO ELECON (INDIA) LTD. The Directors take pleasure in presenting the 42nd Annual Report together with the audited financial statements for the year ended 31st March, 2016. The Management Discussion and Analysis has also been incorporated in this report. 1. HIGHLIGHTS OF PERFORMANCE Total revenue for the year decreased to Rs. 143.44 crores as compared to Rs. 201.84 crores in the previous year. During the year, Coal India Ltd. focused more on Open Cast Mines than underground mines, where our products are supplied, and also few of the tenders were delayed by some of the subsidiaries of Coal India Ltd., hence the company's sales were affected. Profit before tax for the year was Rs. 22.46 crores as compared to Rs. 30.08 crores in the previous year. Profit after tax for the year was Rs. 16.63 crores as compared to Rs. 21.51 crores in the previous year 3. DIVIDEND Your directors recommend for your consideration a dividend of Rs. 5/- (previous year Rs. 5/- ) per share of Rs. 10/- each for the year ended 31st March, 2016. 4. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES The Company has no subsidiary and Joint venture companies. Associated Companies : Eimco Elecon Electricals Limited The Company holds 47.62% of the Equity Shares of Eimco Elecon Electricals Ltd. The profit after Tax for the year ended 31st March, 2016 was Rs. 83.84 Lacs as against Rs. 205.50 Lacs for the year ended 31st March, 2015. Wizard Fincap Limited The Company holds 24.95% of the Equity Shares of Wizard Fincap Ltd. The profit after Tax for the year ended 31st March, 2016 was Rs. 11.96 Lacs as against profit of Rs. 5.79 Lacs for the year ended 31st March, 2015. 5. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2016 was Rs. 5.76 crores. During the year under review, the Company has not issued shares with differential voting nor granted stock options nor sweat equity. 6. FINANCE Your Company continues to be debt free. The Company continues to focus on judicious management of its working capital. Receivables, Inventories and other working capital parameters were kept under strict check through continuous monitoring. The whole of the properties of the Company have been suitably insured. 7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the financial statements provided in this Annual Report. 8. FIXED DEPOSITS The Company has not accepted deposit from public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 9. DIRECTORS Mr. P. C. Amin retires by rotation and, being eligible, offers himself for reappointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. None of the Director of your Company is disqualified as per the provisions of section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement. 10.1 Audit Committee: The Board has constituted an Audit Committee pursuant to the provisions of Section 177(1) of the Companies Act, 2013. The Composition of Audit Committee is as under: Mr. Nalin Shah (Chairman) Mr. H. S. Parikh (Member) Mr. Nirmal Bhogilal (Member) Mr. P. M. Patel (Member) The recommendations of the Audit Committee were accepted by the Board of Directors of the Company from time to time. 10.2 Board Evaluation Pursuant to the provisions of the Companies Act, 2013 (The Companies (Accounts) Rules, 2014 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 10.3 Remuneration policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 10.4 Meetings During the year four Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 11. DIRECTORS' RESPONSIBILITY STATEMENT Based on the frame work of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companies' internal financial controls were adequate and effective during the year ended 31st March, 2016. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, based on the above and the representations received from the Operating Management, the Board of Directors, to the best of their knowledge and ability confirm that : 1. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures therefrom. 2. They have in the selection of the accounting policies consulted the statutory auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date. 3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. They have prepared the the annual accounts on a going concern basis. 5. They have laid internal financial controls in to be followed by the Company and that such Internal financial controls are adequate and were operating effectively during the year ended 31st March, 2016. 6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended 31st March, 2016. 12. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of the Company's business. All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature and in the ordinary course of the Company's business. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. 13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken project in the area of Education. This project is in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith as Annexure "A". 14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant or material orders passed by the Regulators/courts which would impact the going concern status of the Company and its future operations. 15. MANAGEMENT'S DISCUSSION AND ANALYSIS A detailed review of the operations, performance and future outlook of the Company is given in the Management's Discussion and Analysis appearing as Annexure "G" to this Report. 16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an internal control system, commensurate with the size, scale and complexity of its operations. 17. VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has established Vigil Mechanism system and framed Whistle Blower Policy. The Whistle Blower Policy is disclosed on the website of the Company. 18. CORPORATE GOVERNANCE Your Company has always striven to incorporate appropriate standards for good Corporate Governance. It has taken adequate steps to ensure that the provisions of Corporate Governance as prescribed under the Listing Agreements with the Stock Exchanges, are complied with. A detailed report on Corporate Governance is appearing as Annexure 'B' to this Report along with the Auditors' Certificate on its compliance by the Company. 19. PERSONNEL Industrial relations in the Company were cordial throughout the year under review. The Board of Directors of the Company wishes to place on record its sincere appreciation for the continued support and good work of all employees. As required by the provisions of The Companies (Appointment and Remuneration of of Managerial Personnel) Rules, 2014, the names and other particulars of the employees are set out in the Annexure 'C' to the Directors' Report. 20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO The particulars required to be disclosed in this report pursuant to the provision of The Companies (Accounts) Rules, 2014 are given in Annexure 'D' forming part of this report. 21. AUDITORS M/s Talati & Talati, Chartered Accountants, Statutory Auditors were appointed for a period of two years at the last Annual General Meeting, subject to ratification of their appointment every year. You are requested to ratify their appointment pursuant to the provisions of Section 139 of the Companies Act, 2013. 22. COST AUDITORS Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its activity are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s Y. S. Thakar & Co. to audit the cost accounts of the Company for the financial year ending 31st March 2017 on a remuneration of Rs. 32,000/- Plus Taxes as applicable and out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration payable to Messrs Y. S. Thakar & Co., the Cost Auditors, is included at Item No. 6 of the Notice convening the Annual General Meeting. 23. SECRETARIAL AUDITORS 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 has appointed Messrs D. G. Bhimani & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure 'E". 24. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 are annexed herewith as "Annexure 'F". 25. INSURANCE The Company takes a very pragmatic approach towards insurance. Adequate insurance cover has been taken for all movable and immovable assets for various types of risks. 26. REPORTING OF FRAUDS There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under section 143(12) of the Act and Rules framed thereunder. 27. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in overseeing and approving the Company's enterprise wide risk management framework. The Company monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. 28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirement of The Sexual Harassment of Women at the Workplace (Prevention & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainee) are covered under the policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16 : No. of complaints received : Nil No. of complaints disposed off : N.A. 29. ACKNOWLEDGEMENT The Board records its thanks to the Company's Bankers, Financial Institutions, Government, Collaborators and other agencies for their support extended to the Company and look forward to their continued support. For and on behalf of the Board of Directors P. C. Amin Director M. G. Rao Wholetime Director Place : Vallabh Vidyanagar Date : 27th April, 2016 |