elango industries ltd Management discussions

COMPANY OVERVIEW

Elango Industries Limited initially established a steel plant to produce steel ingots in Karaikal and Pondicherry in 1994. After about 10 years in the steel industry, it was sold and the promoters commissioned a 7 MW Gas based power plant in 2005 in Mayiladuthurai. Later, seeing good prospects and opportunities in power generation business, another 63Mw captive power plant using coal was set up in 2012. Since then, the Company has majorly been a power generation and distribution company. Elango Industries Limited has been lately providing operation and maintenance services to power plants, which constitutes its major revenue. Further, the company has also started to market and sell the power produced by the power plants of its clients, to increase its revenue.

OPPORTUNITIES AND THREATS

The Company is steadily trying to increase its operations and its planning on investing in assets like spare parts which are required in due course in conducting the services of operations and maintenance of power plants of the clients. The company is trying to create more opportunities for itself in order to increase its sales and revenue. The Board of Directors have been working relentlessly to add value to the company also so that, it reflects on the share price as quoted on the BSE, where the Companys shares are listed. However, the blip caused by Covid-19 pandemic has disrupted the business as well as logistics, negatively impacting overall power industry

Power is among the most critical components of infrastructure, crucial for the economic growth and welfare of nations. The existence and development of adequate power infrastructure is essential for sustained growth of the Indian economy. The fundamental principle of Indias power industry has been to provide universal access to affordable power in a sustainable way. The Ministry of Power has made significant efforts over the past few years to turn the country from one with a power shortage to one with a surplus by establishing a single national grid, fortifying the distribution network, and achieving universal household electrification.16.59

India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 416.59 GW as of April 30, 2023. Growing population along with increasing electrification and per-capita usage will provide further impetus. Power consumption in India in FY23 logged a 9.5% growth to 1,503.65 billion units (BU).

Schemes such as Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) are expected to augment electrification across the country.

The Members may note that your Company is exploring to purchase the asset which is available for sale from the promoters of Group Company about 6.5 MW gas based power plant located within the state of Tamilnadu. The plant has capacity and has proven record to generate 2.4 crore units of electricity per year. The plant will provide the revenue of Rs. 12-15 crore per year.

As you are aware the company has undertaken the Operations & Maintenance activities for the power plant, marketing and selling of power generated by power plant run by KGPL and the Promoters are well versed in the operation and maintenance of the power plants.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. Company ensures adherence to all statutes. The Internal Financial Control systems are adequate considering the present state of business. The company has established Internal Financial Control framework including internal control over financial reporting operating controls and fraud framework. The framework is revised regularly by the management and tested by the internal audit team. Based on the periodical testing, the frame work is strengthened from time to time to ensure adequacy and effectiveness of Internal Financial Controls. The Report of the Statutory Auditors containing the Internal Financial Controls is given in the Statutory Auditors Report for the year ended March 31, 2023

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Comparing the performance of the current financial year, i.e., 2022-23 with the previous financial year, i.e., 2021-22; the financial performance of the company has marginally decreased due to various reasons. Considering the demand in electricity consumption, the promoters of the Company are exploring to purchase the assets which is available for sale from the promoters of Group Company about 6.5 MW gas based power plant located within the state of Tamilnadu which will add the revenue to the Company of Rs. 12-15 crore per year

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

HUMAN RESOURCES

The Company strives to maintain a cordial relationship and healthy atmosphere with its employees at all times. Continuous commitment to upgrading skills is an integral part of the human resource development policy of the Company. The Company is an equal opportunity employer and promotes diversity in its workforce. Equal opportunities are given to optimize their potential and improve their standard of living. The Company lays great emphasis on retention of its human talents. Employees welfare is a paramount consideration of the Company.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report contains forwarding looking statements based upon the data available with the Company, assumptions with regard to global economic conditions, the Government policies etc. The Company cannot guarantee the accuracy of assumptions and perceived performance of the Company in future. Therefore, it is cautioned that the actual results may materially differ from those expressed or implied in the report.

	For and on behalf of the Board of Directors
	Elango Industries Limited
Place: Chennai	S. Elangovan	S. A. Premkumar
Date: 10.08.2023	Managing Director	Director
	(DIN: 01725838)	(DIN: 00342952)