Elecon Engineering Company Ltd Directors Report.

Specially designed test stand for Vertical Roller Mill Gearbox

Dear Members,

Your Directors have pleasure in presenting this 61st Annual Report together with the Audited Financial Statements for the financial year ended on March 31, 2021.

You being our valued partners in the Company, we share our vision of growth with you. Our guiding principles are a blend of realism and optimism which has been and will be the guiding force of all our future endeavors.

Performance of the Company

Standalone Financial Performance

For the year ended on March 31, 2021, the Company has achieved a Turnover of 79,636.37 Lakhs as against 83,573.82 Lakhs in the previous year. For the year ended on March 31, 2021, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of 15,486.40 Lakhs as against the EBIDTA of 11,460.37 Lakhs during the previous year.

The Net Profit of the Company for the financial year 2020-21 was 3,626.49 Lakhs compared to 7,241.89 Lakhs during the previous year.

The Company holds total unexecuted orders about 48,000.00 Lakhs (38,000.00 Lakhs for Gear Division and 10,000.00 Lakhs of MHE Division) as on March 31, 2021. This will help us to continue to have sustainable growth in coming years.

Consolidated Operations

The Audited Consolidated Financial Statements of your Company as on March 31, 2021, which forms part of the Annual Report, have been prepared pursuant to the provisions of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 and also as per the applicable Indian Accounting Standards (Ind AS) on Consolidated Financial Statements (Ind AS-110) as notified by the Ministry of Corporate Affairs.

Your Company’s total consolidated turnover for the year ended on March 31, 2021 was 1,04,470.65 Lakhs as against 1,08,846.49 Lakhs for previous year.

For the year ended on March 31, 2020, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA)

Standalone Consolidated
Particulars 31/03/21 31/03/20 31/03/21 31/03/20
Turnover 79,636.37 83,573.82 1,04,470.65 1,08,846.49
Profit Before Tax, Finance Cost, Depreciation & Amortization and Adjustment for previous year (EBIDTA) 14,407.34 10,529.79 18,560.90 14,037.73
Add: Other Income 1079.06 930.58 572.73 784.95
EBIDTA (Including other income) 15,486.40 11,460.37 19,133.63 14,822.68
Less : Finance Cost 5,426.89 6,963.25 5,980.63 7,703.52
Depreciation & Amortization 4,231.33 4,369.33 5,211.23 5,325.81
Profit Before Tax 5,828.18 127.79 7,941.77 1,793.35
Less: Provision for Tax - 118.13 134.28 216.73
Deferred Tax 2,201.69 (7,232.23) 2,201.69 (7,235.84)
Short/(Excess) Prov. of earlier years - -- 30.09 --
Profit After Tax 3,626.49 7,241.89 5,575.71 8,812.46
Add:
Others Comprehensive Income 84.12 (19.21) 742.35 (86.67)
Share of Profit of Associates - -- 187.39 157.69
Previous Year Balance Brought Forward 21,529.17 17,988.04 33,226.17 24,613.22
PROFIT AVAILABLE FOR APPROPRIATION 25,239.78 25,210.72 39,731.62 33,496.70
APPROPRIATIONS:
Dividend paid - 224.40 - 224.40
Income Tax on Dividend - 46.13 - 46.13
Transfer to Debenture Redemption Reserve -- -- -- --
Transfer to General Reserve -- -- -- --
Transfer to Reserve (merger) - 3411.02 -- --
Balance Carried Forward 25,239.78 21,529.17 39,731.62 33,226.17

of 19,133.63 Lakhs as against the EBIDTA of 14,822.68 Lakhs during the previous year.

The Consolidated Net Profit of the Company for the financial year 2020-21 after other comprehensive income and share of profit/loss of associates was 5,763.10 Lakhs compared to 8,970.15 Lakhs during the previous year.

During the year under review, your Company’s consolidated net worth is 91,924.83 Lakhs as against 85,419.38 Lakhs for previous year.

Dividend

Your Directors have recommended dividend of 20 % i.e. 0.40/- per share on 11,21,99,965 equity shares of 2/- each for the financial year ended on March 31, 2021 (previous year NIL per share). The said dividend, if approved by the shareholders, would involve a cash outflow of 270.53 Lakhs, including deduction of income tax at source against NIL dividend in the previous year.

The dividend recommended is in accordance with the Company’s Dividend Distribution Policy. The Dividend Distribution Policy of the Company is annexed herewith and marked as "Annexure A" to this Report and the same is available on the Company’s website and can be accessed at https:// www.elecon.com/investors/policies During the year under review, the unclaimed dividend pertaining to the financial year 2012-13 has been transferred to the Investor Education & Protection Fund.

Transfer to Reserves

Pursuant to the Amendment in the Companies (Share Capital and Debentures) Amendment Rules, 2019 dated August 16, 2019; for Listed Company, it is not required to create Debenture Redemption Reserve for Non-Convertible Debentures issued on private placement basis. Hence, Debenture Redemption Reserve is not created for the financial year ended on March 31, 2021.

Share Capital

The paid up Equity Share Capital as on March 31, 2021 was 2,244.00 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

Finance

Cash and Cash Equivalent as at March 31, 2021 was 1,594.15 Lakhs. 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.

Fixed Deposits

The Company has not accepted any fixed deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Hence, there is no unpaid/unclaimed deposits as on March 31, 2021.

Particulars of Loans, Guarantees or Investments

The details of Loans given, Guarantees and Securities provided and Investments made by the Company in compliance with the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Directors & Key Managerial Personnel (KMPs)

Resignation by Director

During the year under review, Shri Chirayu R. Amin, Independent Director resigned with effect from August 10, 2020 before completion of his tenure. He informed the Board of the Company that he resigned due to his business and travel schedules as well as other pre-occupations. He further confirmed that there was no reason other than stated as above. The Board placed on record their appreciation for the assistance and guidance provided by Shri Chirayu R. Amin during his tenure as Non-Executive Independent Director of the Company.

Director Retire by rotation

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Pradip M. Patel, Director retires by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for re-appointment.

The Board recommends his appointment for your approval. Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Board in its meeting held on May 27, 2021 had approved the continuation of Shri Pradip M. Patel (DIN : 00012138) as a Non-Executive Non-Independent Director on the Board of the Company subject to the approval of the Shareholders at the ensuing 61st Annual General Meeting of the Company, who is liable to retire by rotation, notwithstanding his attaining the age of Seventy-five (75) years on November 5, 2022.

New Appointment

As per Section 161 of the Companies Act, 2013, Shri Pranav C. Amin, was appointed as an Independent Director (Additional Director) of the Company effective from May 27, 2021 for a period of five years subject to the approval of shareholders at the ensuing 61st Annual General Meeting of the Company. In the opinion of the Board, he is a well-respected business leader who brings a wealth of experience and financial acumen to the Elecon’s Board. His vast experience in the realm of corporate governance will greatly benefit the Company. Further, he possesses integrity and relevant proficiency which will bring tremendous value to the Board and to the Company. The Board recommends his appointment to the shareholders. The notice convening the 61st AGM forming part to this annual report sets out the details. The Board welcomes Shri Pranav C. Amin. In terms of Section 149 and other applicable provisions of the Companies Act, 2013 and Regulation 16(1) (b) and other applicable regulations of the SEBI (LODR) Regulations, 2015, an Independent Director shall hold office for a term of five consecutive years and not be liable to retire by rotation. Accordingly, Shri Pranav C. Amin shall be appointed as an Independent Director to hold office for a term of five consecutive years from the date of May 27, 2021 at the ensuing Annual General Meeting of the Company and shall not be liable to retire by rotation.

Members’ approval for his appointment as an Independent Director, under Sections 149 & 152 of the Companies Act, 2013 and under SEBI (LODR) Regulations has been sought in the Notice convening the Annual General Meeting of the Company.

Evaluation of Board and Senior Management

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosures 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. Further, the Nomination & Remuneration Committee has carried out the performance evaluation of Senior Management including the Company Secretary and Chief Financial Officer of the Company. The manner in which the evaluation has been carried out was explained in the Corporate Governance Report.

Meetings

During the year, four Board Meetings, four Audit Committee Meetings, four Stake holders Relationship Committee Meetings, one Nomination and Remuneration Committee Meeting, one Corporate Social Responsibility Committee Meeting and one Separate Meeting of Independent Directors were held. During the year, some of the resolutions were also passed by way of Circular Resolution. The details of which are given in the Corporate Governance Report. The intervening gaps between the Board Meetings were within the period prescribed under the Companies Act, 2013.

Composition of Various Committees

Details of various committees constituted by the Board as per the provisions of Companies Act, 2013 and SEBI (LODR) Regulations, 2015 and their meetings are given in the Corporate Governance Report which forms part of this report.

Independent Directors

The Independent Directors met on February 26, 2021 without the attendance of Non-Independent Directors and Members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Company has received necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013 and under Regulation 16 (1) (b) of SEBI (LODR) Regulations, 2015 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015.

Familiarization Programme for Independent Directors

In compliance with the requirements of SEBI (LODR) Regulations, 2015, the Company has put in place a Familiarization Programme for Independent Directors to familiarize them with the working of the Company, their roles, rights and responsibilities vis--vis the Company, the industry in which the company operates, business model etc. alongwith updating on various amendments in the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. The policy on Familiarization Programme is uploaded on the website of the Company and can be accessed through web link https://www.elecon.com/views/ templates/admin-uploads/Investors/Policies/ Details-of-Familiarization-Programmes-for-IDs.pdf

The Company has conducted the familiarization programme for Independent Directors of the Company, details for the same have been disclosed on the Company’s website https://www.elecon. com/investors/corporate-information

Remuneration Policy

The Board has framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. During the year under review, the Company has revised the Remuneration Policy in line with the various amendments in SEBI (LODR), 2015 and the Companies Act, 2013. The remuneration policy is stated in the Corporate Governance Report forming part of this Annual Report. The Nomination & Remuneration Policy is appended as, "Annexure B" to this Board’s Report.

Disclosures by Directors

None of the Directors of your Company is disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures to this effect as required under Companies Act, 2013.

Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement, the Board of Directors, hereby confirm that:

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

(b) the Directors have 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 of the Company for the period;

(c) the Directors have 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 have prepared the annual accounts on a going concern basis; and

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

Related Party Transactions

All contracts or arrangements with related parties, entered during the financial year were at arm’s length basis and in the ordinary course of the Company’s business. All such contracts or arrangements were entered into only with prior approval of Audit Committee. No material contract or arrangement with related parties was entered into during the year under review. Therefore, there is no requirement to report any transaction in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at https://www.elecon.com/views/templates/ admin-uploads/Investors/Policies/Elecon-Related-Party-Transactions-Policy-2020.pdf None of the Directors or any Key Managerial Personnel has any pecuniary relationships or transactions vis--vis the Company.

Auditors

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants was appointed as Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of 56th Annual General Meeting for the financial year 2016-17 until the conclusion of 61st Annual General Meeting for the financial year 2020-21. Their tenure will expire at the conclusion of ensuing 61st Annual General Meeting of the Company for the financial year 2020-21. The Board places on record the highest sense of appreciation for the valuable services rendered by them as Auditors of the Company during their association with the Company. Your Directors have recommended the appointment of M/s. C N K & Associates, LLP (Firm Registration No. 101961W/W-100036), Chartered Accountants, as Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of ensuing 61st Annual General Meeting for the financial year 2020-21 until the conclusion of 66th Annual General Meeting to be held in the year 2026 for the Financial Year 2025-26 subject to the approval of the Members at the ensuing 61st Annual General Meeting of the Company. As per the provisions of Section 139 of the Companies Act, 2013 the Company has placed the matter relating to their appointment by members at the Annual General Meeting. Consequent upon the expiry of term of M/s. B S R & Co. LLP, M/s. C N K & Associates LLP shall be the Statutory Auditors of the Company.

M/s. C N K & Associates LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for appointment as Statutory Auditors of the Company. As required under SEBI (LODR) Regulations, 2015, M/s. C N K & Associates LLP have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Cost Audit records maintained by the Company in respect of its manufacturing activity are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Y.S. Thakar & Co., Cost Auditors to audit the cost accounts of the Company for the year ended on March 31, 2022 on a remuneration of 85,000/- p.a. 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 Member’s ratification for the remuneration payable to M/s. Y.S. Thakar & Co., Cost Auditors is included in the Notice convening the 61st Annual General Meeting. The Cost Audit Report for the year 2019-20 was filed with the Ministry of Corporate Affairs before the due date of filing.

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 CS Ashwin Shah, a Company Secretary in Practice to undertake the Secretarial Audit of the Company for the financial year 2020-21. The Report on the Secretarial Audit carried out by him during the financial year 2020-21 is annexed herewith as "Annexure C". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the financial year 2020-21 for all applicable compliances as per SEBI Regulations and Circulars/ Guidelines issued thereunder. The Annual Secretarial Compliance Report for abovesaid financial year has been submitted to the stock exchanges within 60 days of the end of the said financial year.

Subsidiary, Joint Venture & Associate Companies

As on March 31, 2021 the Company has 11 Direct & Indirect Subsidiary Companies.

Pursuant to the provisions of Sections 129, 134 and 136 of the Companies Act, 2013 read with rules framed thereunder and SEBI (LODR) Regulations, 2015, your Company had prepared Consolidated Financial Statements of the Company and its Subsidiaries and a separate statement containing salient features of financial statement of Subsidiaries/Associates forms part of the Annual Report. The Annual Financial Statements and related information of the Subsidiary Companies shall be made available for inspection by the shareholders of the Holding and Subsidiary Companies on all working days during business hours for a period of 21 days before the date of the Annual General Meeting and the same will also be placed on the website of your Company. Any member who is interested in obtaining the Audited Financial Statements of the Subsidiary Companies may obtain the same by writing to the Company.

Financial Performance – Subsidiary Companies

Radicon Transmission UK Limited (consolidation)

Total Income of the Benzlers Radicon Group has decreased by 8% to GBP 25.60 Million in current year compared to 27.99 Million in previous year. This was impacted by the economic effects of the global pandemic. EBITDA excluding other income decreased to GBP 2.93 Million in current year compared to GBP 3.47 Million in previous year. The Company has made a Profit before Tax for GBP 1.38 Million in Current Year compared to Profit before Tax of GBP 1.58 Million in previous year.

Benzlers Group (Nordic and Europe)

Benzlers Group has witnessed a decrease in Sales Revenue by 6% to GBP 12.6 Million in current year compared to GBP 13.5 Million in previous year. The Company’s EBITDA Margin is GBP 1.07 Million in current year compared to GBP 1.88 Million in previous year. Profit before tax and exceptional income has decreased by 53.6% to GBP 0.64 Million compared to 1.38 Million in previous year.

Radicon Transmission UK Limited

Radicon, UK has seen some challenges due to Brexit, but is now seeing greater UK economic growth, with the Brexit now ratified. The Sales Revenue for the year has decreased by 13% to GBP 8.88 Million compared to GBP 10.24 Million in previous year. EBITDA Margin has decreased to GBP 1.13 Million compared to GBP 1.21 Million in previous year. Profit before Tax is GBP

0.46 Million in current year compared to 0.21 Million in previous year. With Brexit completed, and the UK well advanced with its vaccination program. We are optimistic of good recovery during coming year, especially as there were positive signs of this in Q4 of current year. We take comfort in The Bank of England governor forecasting the largest post war economic growth.

Radicon Drive Systems, Inc (Radicon USA)

Radicon-USA has witnessed a decrease in Sales Revenue by 6% to GBP 5.06 Million in current year compared to GBP 5.37 Million in previous year. EBITDA increased with current year at GBP 0.74m, compared with previous year of GBP 0.29m. Generating a Profit before Tax of GBP 0.28 Million in current year compared to loss of GBP 0.10 Million in previous year.

Elecon Singapore Pte. Limited

Elecon Singapore Pte. Ltd., Singapore is a Wholly-Owned Subsidiary of the Company. It is a marketing arm of your Company and engages in the business of selling and supply of your Company’s products in Singapore, Indonesia, Malaysia, Laos, Vietnam, Philippines, Taiwan, South Korea, North Korea, Cambodia, Russia, China, Japan, Myanmar, Thailand, Mongolia, Fiji, Australia, New Zealand and other Far East countries.

During the year under consideration revenue of Elecon Singapore Pte. Ltd., has increased from USD 2.30 million FY 2019-20 to USD 2.85 million FY 2020-21. EBITDA has decreased from 0.29 million FY 2019-20 to USD 0.26 million FY 2020-21.

Elecon Middle East FZE, Dubai

Elecon Middle East FZE, Dubai is a Wholly-Owned Subsidiary of the Company. It is a marketing arm of your Company and engages in the business of selling and supply of your Company’s products in Middle East and African countries.

During the year, total revenue of Elecon Middle East FZE has increased by 138.6 %, from AED 9.37 million FY 2019-20 to AED 22.35 million FY 2020-21. Increase in EBITDA by 259.9 % from AED 1.42 million FY 2019-20 to AED 5.11 million FY 2020-21.

Financial Performance - Associate

Eimco Elecon (India) Limited (EEIL)

Eimco Elecon (India) Ltd. (EEIL), a listed Company, was promoted by Elecon Engineering Company Ltd. and Envirotech Corporation, USA in 1974. In 1989, Tamrock OY, a Finnish Corporate Giant acquired stake held by Envirotech Corporation, USA in EEIL. In 1997, Sandvik AB, a Swedish company, has acquired major shares of Tamrock OY, thereby taken its controlling interest. At present, Sandvik Group holds 25.10% shares in EEIL.

EEIL is engaged in the business of manufacturing of a wide range of underground mining machinery viz. Air Powered Rocker Shovels, Electro Hydraulic Side Dump Loaders and Electro-hydraulic and Air powered Load Haul Dumpers used as loading machines in both the underground Coal mines and Metalliferous mines. EEIL is the market leader in the underground mining machinery business.

During the year, EEIL has achieved a Turnover of 12,584.02 Lakhs as against 10,791.06 Lakhs in the previous year. For the year ended on March 31, 2021, EEIL has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) including other income of 2,219.54 Lakhs as against the EBIDTA of 1,654.80 Lakhs during the previous year.

Vigil Mechanism / Whistle Blower Policy

The Company has in place a Vigil Mechanism/Whistle Blower Policy for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct. The Mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail the mechanism.

The Vigil Mechanism/Whistle Blower Policy is available on Company’s website at https://www. elecon.com/views/templates/adminuploads/ Investors/whistle-blower-policy/Elecon-Whistle-Blower-Policy-2019.pdf

Corporate Governance

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015, separate reports on Management Discussion & Analysis and Corporate Governance together with a certificate from the Practicing Company Secretary form part of this Report.

Your Company is committed to maintain the highest standards of Corporate Governance, reinforcing the valuable relationship between the Company and its Stakeholders.

Corporate Social Responsibility (CSR) Initiatives

The Ministry of Corporate Affairs has amended the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 which will be effective from the date of the notification dated January 22, 2021. In accordance with the provisions of Section 135 of the Companies Act, 2013 and the said Rules, your Company has amended it’s policy on the recommendation of the Members of the CSR Committee and with the approval of the Board. The amended CSR policy may be accessed on the Company’s Website at the https://www.elecon. com/views/templates/admin-uploads/Investors/ Policies/Elecon-Corporate-Social-Responsibility-Policy-may-2021.pdf The Composition of the Committee and other details are provided in Corporate Governance Report. The Company implements various CSR activities directly and / or through the implementing agencies and the activities undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments thereto, is given in "Annexure D", forming part of this report.

Board Diversity

The Company recognizes and embraces the importance of a diverse board in its success. The Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help the Company to retain its competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The policy is available on our website at https:// www.elecon.com/views/templates/admin-uploads/ Investors/Policies/Board-Diversity.pdf

Significant and Material Orders passed by the Regulators or Courts

There are no significant material orders passed by the Regulators / Courts/ Tribunals which would impact the going concern status of the Company and its future operations. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

Material Changes and Commitments

COVID-19 pandemic:-

The outbreak of the deadly COVID-19 virus and the ensuing lockdown imposed across the country affected business operations. The health of the employees and workers became a priority; stoppage of operations for an uncertain period resulted in a large financial burden on the one hand and workforce idling on the other. COVID-19 is an unprecedented challenge. The lockdown gave India time to make a concerted effort to flatten the outbreak curve. However, towards later part of the year consequent to significant opening of the economic activity across the nation, the demand picked up compared to that during the initial period of Covid-19. India is currently experiencing a massive second wave of Covid-19 infections. However, we expect no major changes in the economic activity as the nation is preparing to face the Pandemic with vaccines and preparedness.

Material changes and commitments have occurred due to the epidemic COVID 19 across the globe at the end of the financial year to which the financial statements relates and the date of this Report and their impact on financial position of the company is not determinable.

However, following are some of the impacts of COVID-19 which company continues to look ahead:-i. Disruption of supply-chain ii. Impacts the workforce and production facilities iii. Material contracts: ‘force majeure’ clauses may be triggered by a listed company or its counterparty to justify non-performance. iv. Financing constraints The causes for such material changes and commitment as stated above and remedial measures were taken by the company.

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, Board and/or Central Government under Section 143(12) of the Companies Act, 2013 and Rules framed thereunder.

Risk Management

During the year under review, it was not mandatory for the Company to constitute the Risk Management Committee. However, the Company has voluntarily constituted the same. Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, it is mandatory for top 1000 Listed Companies to constitute the Risk Management Committee consisting of minimum three members with majority of them being members of the Board of Directors, including at least one Independent Director. The Board of the Company has reconstituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The said committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the areas of financial risks and controls. The details pertaining to the composition of the Risk Management Committee are included in the Corporate Governance Report, which is a part of this report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure E".

Particulars of Employees

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as "Annexure F". In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report. The Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may send their email to investor.relations@elecon.com

Prevention of Sexual Harassment at Workplace

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. As required under law, an Internal Complaints Committee (ICC) has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassment at the work place. During the year under review, there were no complaints pertaining to sexual harassment. The policy on Sexual Harassment at Workplace is placed on the Company’s website at https://www. elecon.com/views/templates/admin-uploads/ Investors/Policies/Elecon-Sexual-Harassment-Policy.pdf

Material Subsidiaries

The Board of Directors of the Company has approved a Policy for determining material subsidiaries which is in line with the Listing Regulations as amended from time to time. The Policy was revised in line with the amendments made to the Listing Regulations.

The policy is available on our website at https:// www.elecon.com/views/templates/adminuploads/ Investors/Policies/Elecon-Policy-on-Determining-Material-Subsidiary-2020.pdf

Annual Return

In accordance with the Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the annual return of the Company as on March 31, 2021 in the prescribed format is available on the Company’s website. The web-link as required under the Act is as under: https://www.elecon.com/views/templates/ admin-uploads/Investors/Corporate-Announcements/2020-2021/elecon-draft-annual-return-F.Y.-2020-21.pdf

Business Responsibility Report

The Listing Regulations mandate the inclusion of the Business Responsibility Report as part of the Annual Report for the top 1,000 listed entities based on market capitalization as on March 31, 2021. In compliance with the Listing Regulations, we have integrated the Business Responsibility Report (BRR) disclosures into our Annual Report as "Annexure G" describing the initiatives taken by the Company from an environmental, social and governance perspective.

Compliance of Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Insurance

The Company takes a very pragmatic approach towards insurance. Adequate cover has been taken for all movable and immovable assets for various types of risks.

Industrial Relations/Personnel

Your Company is committed to upholding its excellent reputation in the field of Industrial relations. Through continuous efforts, the Company invests and improvises development programmes for its employees.

Acknowledgement

Your Directors are highly grateful for the unstinted guidance, support and assistance received from the Government, Financial Institutions and Banks. Your Directors are thankful to all valuable Stakeholders of the Company viz. shareholders, customers, dealers, vendors, suppliers and business associates for their faith, trust and confidence reposed in the Company. Your Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.

For and on behalf of Board of Directors,

Prayasvin B. Patel

Chairman & Managing Director

DIN: 00037394

Place: Vallabh Vidyanagar

Date : May 27, 2021