Elcid Investments Ltd Directors Report.

To,

The Members

Elcid Investments Limited

Y our Directors have pleasure in presenting the Thirty-Ninth Annual Report together with the audited Statement of Accounts for the year ended 31st March, 2020.

FINANCIAL RESULTS:

2019-20 2018-19
(Rs. In Lakhs) (Rs. In Lakhs)
Revenue from operations 5,480.16 4,254.13
Add/(Less): Total Expenses (96.93) (173.61)
Profit / (loss) before exceptional items and tax 5,383.23 4,080.52
Exceptional items 0.00 0.00
Profit/(loss) before tax 5,383.23 4,080.52
Add/(Less): Provision for Tax-Current 9.00 6.50
Deferred Tax (84.89) 319.34
Adjustment for previous years - -
Profit/(loss) for the year from continuing operations 5,459.12 3,754.68
Profit/(loss) from discontinued operations 0.00 0.00
Tax Expense of discontinued operations 0.00 0.00
Profit/(loss) from discontinued operations (After tax) 0.00 0.00
Profit/(loss) for the year 5,459.12 3,754.68
Other Comprehensive Income 1,22,837.66 82,697.35
Total Comprehensive Income for the year 1,28,296.79 86,452.04
Opening balance in Retained Earnings* 19,440.94 16,242.36
Profit Available for Appropriation 24,900.06 19,997.04
Less: Transfer to Statutory Reserve (u/s 45-IC of The Reserve Bank of India Act, 1934) 1,100.00 520.00
Less: Dividend paid for FY 2018-19 30.00 30.00
Less: Corporate Dividend Tax 6.17 6.11
Balance carried to balance Sheet 23,763.89 19,440.94

* Retained Earnings do not include Debt and Equity instruments classified at Fair Value through Other Comprehensive Income

REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

The total net profit before tax of the Company is Rs. 5,383.23 lakhs in current year compared to Rs. 4,080.52 lakhs in 2019. The Net profit after tax stood at Rs. 5,459.12 lakhs as compared to Rs. 3,754.68 lakhs in 2019.

With the growing markets your Company is also expected to grow and the future prospects are expected to be better with the booming economy of the Country.

IMPACT OF COVID-19:

The country witnessed lockdown being implemented in India in the second fortnight of March 2020. There were also restrictions of varying extent across larger part of the world, due to the COVID-19 pandemic. This impacted the business operations of the Company in certain way, however, by staying true to its purpose and its values, the top-most priority for the Company was to ensure the safety of its employees. The Company has taken several measures to ensure their well-being including leveraging the power of technology to enable them to work from home. And continued to carry on its business activities. The national lockdown announced on March 23, 2020 owing to the COVID-19 pandemic affected activities of organizations across the economic ecosystem, impacting earning prospects and valuations of companies and creating volatility in the capital markets. The resultant impact on the fair value of the investments held by the Company was reflected in the Total Comprehensive Income and Total Equity of the Company for the quarter and year ended 31st March, 2020, in line with the Accounting Policy consistently followed by the Company.

The future income from investments and the valuations of investee companies would depend on the global economic developments in the coming months and the resumption of activity on gradual relaxation of Lockdowns. Based on the current assessment of the potential impact of the COVID-19 on the Company, management is of the view that the balance sheet of the Company has adequate liquidity to service its obligations and sustain its operations. The Management and Directors are actively engaged and will continue to closely monitor the future developments during the lockdown period.

DIVIDEND:

Your Directors have pleasure to recommend payment of Final Dividend for the year ended 31st March 2020 on 2,00,000 Equity Shares of Rs. 15/- each and will be paid to those members whose names appear on the Register of Members as on 22nd September, 2020 after the approval of the members of the Company in the ensuing Annual General Meeting of the Company.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

In accordance with the applicable provisions of Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority.

RESERVES:

Company proposes to transfer a sum of Rs. 11,00,00,000/- to Special reserve created under the provisions of section 45-IC of Reserve Bank of India (Amendment) Act 1997.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate on the date of this report. There has been no change in the nature of business of the company.

EXTRACTS OF ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in “Annexure 1” and is attached to this Report.

SUBSIDIARY COMPANIES:

The Company has two subsidiary companies viz. Murahar Investments & Trading Company Limited & Suptaswar Investments & Trading Company Limited. However, the Company does not have any joint venture or associate company.

A separate statement containing the salient features of the financial statements of all subsidiaries of your company forms part of consolidated financial statements in compliance with section 129 and any other applicable sections, if any, of Companies Act 2013 as “Annexure 2”

Further, to note that the above-mentioned subsidiary companies have become the material subsidiaries of the company with respect to amended regulations of SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 and the compliance with the same is undertaken. The amended policy on material subsidiaries has been placed on the website of the company.

CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements of your Company for the financial year 2019-20, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and as per provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The consolidated financial statements have been prepared based on the audited financial statements of your company and its material subsidiaries as approved by the respective Board of Directors.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Amar Arvind Vakil (Din:), Director of the company has resigned w.e.f. 22nd August 2019. Miss Amrita Amar Vakil (Din: 00170725) has been appointed as non-executive director, liable to retire by rotation of the company by the members in the previous Annual General Meeting of the Company held on 22nd August 2019.

BOARD OF DIRECTORS:

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

During the Financial Year 2019-20, 7 Board Meetings were held. The details of the meetings of the Board of Directors and its Committees, convened during the Financial Year 2019-20 are given in the Corporate Governance Report which forms part of this report.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 are decided by the Nomination & Remuneration Committee constituted by the Company. The details of the said Committee are given in the Corporate Governance Report which forms part of this report.

RATIO OF DIRECTORS REMUNERATION TO MEDIAN EMPLOYEES REMUNERATION AND OTHER DICLOSURES:

The information required pursuant to Section 197 of the Companies Act 2013 read with The Companies (Appointment and Remuneration) Rules, 2014 are as follows:

i) Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year are as follows:

Name of the Director Designation Remuneration Per Annum (INR) Ratio (Remuneration of Director to Median Remuneration)
1. Varun Vakil Non-Executive Chairman Nil NA
2. Amar Vakil* Non-Executive Director 15,000 0.02
3. Dipika Vakil Non-Executive Director 35,000 0.05
4. Amrita Vakil** Non-Executive Director 20,000 0.03
5. Mahesh Dalal Independent Director 55,000 0.08
6. Ketan Kapadia Independent Director 55,000 0.08
7. Bharat Talati Independent Director 55,000 0.08

Directors are paid remuneration only in the form of sitting fees.

The median remuneration calculated for the Financial Year 2019-20 was Rs. 6,87,500/-.

*Mr. Amar Vakil resigned w.e.f. 22nd August 2020.

**Ms. Amrita Vakil appointed w.e.f. 22nd August 2020.

ii) Percentage increase in the median remuneration of each Director, CFO, CEO, Company Secretary or Manager if any in the financial year:

There is no increase in the remuneration of CFO of the Company. The Directors are only paid sitting fees for attending the meetings. Percentage increase/decrease is not reported for the remuneration paid to the Company Secretary as she was appointed with effect from 25th September, 2018 i.e. for a part of the financial year 2018-19.

iii) Percentage increase in the median remuneration of employees in the financial year:

Percentage increase/decrease is not reported in the median remuneration of employees as she was appointed with effect from 28th May, 2019 i.e. for the part of the financial year 2019-20. There are only three employees in the Company.

iv) Number of permanent employees on the rolls of the Company at the end of the year other than Managing Director: 3

v) Average percentile increase in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The comparative percentile increase in the salary of such employees could not be reported as the employees were not on the roll for the complete year.

vi) Affirmation that the remuneration is as per the remuneration policy of the company:

The Company is in Compliance with the Remuneration Policy.

DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. All the Independent Directors have got themselves registered with the Independent Directors Databank.

FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, 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.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Company is primarily an investment Company and its business income is the income arriving out of investments held by the Company. The company is functioning under single segment of investment activities. The growing trend in the Indias economy is a motivating factor for the Company to look forward to increase the profitability. The predominant risk pertains to investments including volatile capital market risks. The company regularly appoints and seeks advise from reputed portfolio managers to mitigate the risks and accordingly carry out its investments within the risk management framework. Internal control system is commensurate with the size of the Company.

Ratios for the year 2019-20 are as follows:

Ratios Standalone Consolidated
Debtors Turnover Ratio NA NA
Inventory Turnover Ratio NA NA
Interest Coverage Ratio NA NA
Current Ratio NA NA
Debt Equity Ratio 0 0
Operating Margin Ratio NA NA
Net Profit Margin NA NA
Return on Net Worth (RONW) 26.47 26.16

*The company is an investment company hence, the ratios relating to sales, inventory are not applicable to the company.

** The company is not having any debt, therefore the ratio relating to debt and interest comes to 0.

With effect from 1st April 2019 the provisions of Indian Accounting Standards have become applicable on the Company and your company is complying with the applicable accounting standards and their provisions.

AUDIT COMMITTEE:

The Audit Committee comprises of namely Mr. Bharat Talati (Chairman) and Mr. Mahesh Dalal and Mr. Ketan Kapadia, Directors as other members. All members of the Audit Committee are financially literate and have experience in financial management. The recommendations of the Audit Committee are always welcomed and accepted by the Board and all the major steps impacting the financials of the Company are undertaken only after the consultation of the Audit Committee.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The Company has constituted a Corporate Social Responsibility Committee which has reviewed and considered that Companys income is mainly from the dividend income which is excluded from the computation of net profits as provided in Rule 2(f)(ii) the Companies (Corporate Social Responsibility Policy) Rules. 20I4. As such the Company till the financial year 2018-19 has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions were not applicable after deduction of dividend income. Company has however constituted a committee on Corporate Social Responsibility to analyse the applicability of the same on the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Considering nature of business activities carried out by the Company, your Board has nothing to report disclosures about Conservation of Energy and Technology Absorption as required under Section 134(m) of the Companies Act, 2013. There was no foreign exchange Inflow or Outflow during the financial year under review.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

The Company is an investment company and therefore the predominant risk pertains to investments including capital market risks. The company regularly appoints and seeks advise from reputed portfolio managers to mitigate the risks and accordingly carry out its investments within the risk management framework.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Your Company is a Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India. Investments are made by the Company are in ordinary course of business. Section 186 of the Companies Act 2013, hence is not applicable on the Company.

There were no loans and guarantees made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

There were no contracts or arrangements made with any related parties during the year under review. However, the company is giving salary to its employees.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications, reservations or adverse remarks made by the Auditors and secretarial auditors of the Company.

During the financial year under review, no fraud against the Company or by the Company was found by the Auditors the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement: —

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(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 the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, prevention & detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of financial disclosures. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies in the Company. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

VIGIL MECHANISM:

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them.

DEPOSITS:

The Company has neither accepted nor renewed any deposits during the year under review.

SHARES:

There is no change in the Share Capital of the Company. As on 31st March, 2020, the issued, subscribed and the paid-up share capital of the Company stood at Rs. 20,00,000/- comprising of Rs. 2,00,000 Equity Shares of Rs. 10/- each.

STATUTORY AUDITORS:

As per provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in their 35th Annual General Meeting held on 26th August, 2016 appointed M/s Ravi A Shah & Associates, Chartered Accountants, Mumbai, (Firm Registration No. 125079W), as the Statutory Auditors of the Company for a term of consecutive 5 years i.e. from the conclusion of 35 th Annual General Meeting till the conclusion of 40th Annual General Meeting of the Company to be held for the financial year ending 31st March, 2021, subject to the ratification by members of the Company every year.

However, the aforesaid Section 139 is amended by the Companies (Amendment) Act, 2017 w.e.f. 7th May, 2018 and as per amended section, the appointment of auditors is no more required to be ratified every year in Annual General Meeting. Accordingly, the ratification of appointment of M/s Ravi A Shah & Associates, Chartered Accountants, as Statutory Auditors of the Company is no more required and they will hold office upto the conclusion of 40thAnnual General Meeting of the Company to be held for the financial year ending on 31st March, 2021.

M/s Ravi A Shah & Associates, has furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Section 139 and 141 of the Companies Act, 2013 and Rules framed thereunder.

SECRETARIAL AUDIT:

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 M/s. Ruchi Kotak & Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as “Annexure 3”.

COST AUDIT:

The cost audit pursuant to the provisions of Section 148 of the Companies Act, 2013 is not applicable to the company.

CORPORATE GOVERNANCE:

As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Companys Auditors confirming compliance forms an integral part of this Report as “Annexure 4”.

LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2019-2020 to BSE Ltd. where the Companys Shares are listed.

PARTICULARS OF EMPLOYEES:

There is no employee in the Company drawing monthly remuneration of Rs.8,50,000/- per month or Rs. 1,02,00,000/- per annum. The company has 2 employees. Hence the Company is not required to disclose any information as per Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a policy on Prevention of Sexual Harassment at Workplace. Pursuant to applicable provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14, the internal committee constituted under the said act has confirmed that no complaint/case has been filed/pending with the Company during the year.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

OTHER DISCLOSURES:

a. The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on meetings of the Board of Directors and General Meetings.

b. The CFO and CEO of the Company has not received any remuneration or commission from any of Company Subsidiary.

c. The Company has not issued any equity shares with differential rights to dividend, voting or otherwise.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledge gratefully the shareholders for their support and confidence reposed on your Company.

By Order of the Board
For Elcid Investments Limited
Varun Vakil
Chairman
Mumbai: June 30, 2020