To,
The Members
Electrotherm (India) Limited
Your Directors have pleasure in presenting the 36th Annual Report on the
business and operations of the Company and Audited Financial Statements for the year ended
on 31st March, 2022.
FINANCIAL SUMMARY OR HIGHLIGHTS:
The standalone financial performance of the Company for the year ended on 31st
March, 2022 is summarized below:
|
|
(Rs. In Crores) |
| Particulars |
2021-2022 |
2020-2021 |
| Total Income |
2834.04 |
2530.59 |
| Total Expenses |
2866.03 |
2467.29 |
| Profit/(Loss) before Exceptional Items and Tax |
(31.99) |
63.30 |
| Less : Exceptional Items |
(22.33) |
- |
| Profit/(Loss) before Tax |
(54.32) |
63.30 |
| Less: Tax Expenses |
- |
- |
| Profit/(Loss) for the Year |
(54.32) |
63.30 |
| Other Comprehensive Income |
0.39 |
1.34 |
| Total Comprehensive Income |
(53.93) |
64.64 |
| Earning Per Equity Shares |
(42.64) |
49.69 |
STATE OF THE COMPANYS AFFAIRS AND OPERATIONS:
The Company is engaged in the business of manufacturing induction furnaces, TMT Bars,
Ductile Iron Pipes (DI Pipes), Electric Vehicles, Transformers, Transmission Line Towers
etc.
During the year ended on 31st March, 2022, the total income of the Company
was Rs. 2834.04 Crores compared to Rs. 2530.59 Crores of previous financial year. The net
Loss for the current financial year was Rs. 54.32 Crores as compared to profit Rs. 63.30
Crores of previous financial year. A detailed analysis of performance for the year is
included in the Management Discussion and Analysis, which forms part of this Annual
Report.
CHANGE IN NATURE OF BUSINESS:
During the financial year, there was no change in the nature of business carried out by
the Company.
TRANSFER TO RESERVES:
During the financial year under review, no amount has been transferred to the General
Reserve.
DIVIDEND:
In view of losses incurred during the current financial year and accumulated losses of
the previous financial years, the Board of Directors of the Company do not recommend any
dividend on Equity Shares and on Preference Shares for the year ended on 31st March,
2022.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANICAL POSITION AFTER THE END OF
FINANCIAL YEAR:
There are no material changes and commitments, affecting the financial position of the
Company which have occurred between the end of the financial year of the Company to which
the financial statements relate and the date of the report. The operations and financial
position of the Company have been impacted due to Covid-19 pandemic and the Company
continues to monitor any material changes to the future economic conditions.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated financial statements of the Company for the financial year 2021-2022
are prepared in compliance with applicable provisions of the Companies Act, 2013, Indian
Accounting Standards ("Ind AS") and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("Listing Regulations"), which form part of this
Annual Report.
SUBSIDIARY/JOINT VENTURE COMPANIES:
The Company has the following subsidiaries/joint venture companies as on 31st
March, 2022:
1. Hans Ispat Limited
2. Electrotherm Services Limited
3. Shree Ram Electro Cast Limited
4. ET Elec-Trans Limited
5. Jinhua Indus Enterprises Limited
6. Jinhua Jahari Enterprises Limited (Step-down Subsidiary Company)
7. Bhaskarpara Coal Company Limited (Joint Venture Company)
Pursuant to section 129(3) of the Companies Act, 2013, a statement containing the
salient features of the financial statement including the highlights of the performance of
the subsidiary/joint venture companies in Form AOC-1 is attached as "Annexure -
A" to this Report.
Pursuant to section 136 of the Companies Act, 2013, the financial statements of the
company, consolidated financial statements along with relevant documents and separate
audited accounts in respect of subsidiaries/joint venture companies, are available on the
website of the company www.electrotherm.com.
During the financial year 2021-2022, none of the companies have become or ceased to be
subsidiaries, joint ventures or associate companies.
NUMBER OF BOARD MEETINGS:
During the financial year 2021-2022, four (4) Board Meetings were held. Details of the
composition of the Board and its Committees and of the meetings held, attendance of the
Directors at such meetings and other relevant details are provided in the Corporate
Governance Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
• Retirement by Rotation
Pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the
Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of
Association of the Company, Mr. Suraj Bhandari (DIN: 07296523), retires by rotation at the
ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
• Appointment/Cessation of Directors:
Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047), who were
appointed as Independent Directors of the Company, holds office up to 4th September, 2022
("first term" in terms of Sections 149(10) of the Companies Act, 2013). A brief
profile of Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047) are
given in the notice convening the 36th AGM, for the reference of the Shareholders. The
Board taking into account the recommendation of the Nomination and Remuneration Committee
and on the basis of performance evaluation of Independent Directors, has recommended the
re-appointment of Mr. Dinesh Mukati (DIN: 07909551) and Mr. Pratap Mohan (DIN: 03536047)
as Independent Directors of the Company, for the second term of 5 (five) years from 5th
September, 2022 upto 4th September, 2027, subject to approval of members in general
meeting.
The Board of Directors based on the recommendation of the Nomination and Remuneration
Committee, re-appointed Mr. Suraj Bhandari (DIN: 07296523) as a Whole-time Director for a
period of three years, commencing from 13th November, 2022 and concluding on 12th
November, 2025, subject to approval of members in general meeting.
Mr. Aditya Jain (DIN: 01568183), Non-Executive Director has resigned with effect from
10th December, 2021. The Board places on record its appreciations for the services
rendered by him as a Non-Executive Director of the Company during his tenure.
• Key Managerial Personnel:
Mr. Shailesh Bhandari (DIN:00058866) is the Managing Director and Mr. Suraj Bhandari
(DIN : 07296523) is the Wholetime Director of the Company.
During the financial year 2021-2022, Mr. Fageshkumar R. Soni resigned from the post of
Company Secretary & Compliance Officer of the Company with effect from 31st
July, 2021. The Board places on record its appreciations for the services rendered by him
as a Company Secretary & Compliance Officer of the Company during his tenure.
Except above, there was no change in the Key Managerial Personnel during the year under
review.
• Declaration of Independence
The Company has received declaration of Independence as stipulated under section 149(7)
of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations from all
Independent Directors confirming that they meet the criteria of independence and not
disqualified from appointment/continuing as an Independent Director and they have complied
with the code of conduct for Independent Directors prescribed in Schedule IV of the
Companies Act, 2013. Further, pursuant to Companies (Creation and Maintenance of databank
of Independent Directors) Rules 2019, Independent Directors registered their name in the
Independent Directors Databank.
• Annual Evaluation of Boards Performance
In terms of the provisions of Section 134(3)(p) of the Companies Act, 2013 read with
Rule 8(4) of the Companies (Accounts) Rules, 2014 and Listing Regulations, the Nomination
and Remuneration Committee has carried out the annual evaluation of performance of the
Board and its Committees and the Board of Directors has carried out the annual evaluation
of the performance of individual directors. The manner in which the evaluation was carried
out is provided in the Corporate Governance Report, which is part of this Annual Report.
• Nomination and Remuneration Policy
The Board of Directors of the Company has, on the recommendation of Nomination and
Remuneration Committee, framed and adopted a policy for selection and appointment of
Directors, Key Managerial Personnel, Senior Management and their remuneration. The salient
aspects of the Nomination and Remuneration Policy, covering the policy on appointment and
remuneration of Directors and other matters have been outlined in the Corporate Governance
Report which forms part of this Annual Report. The said policy is available on the website
of the Company at www. electrotherm.com.
PARTICULARS OF INVESTMENT, LOAN AND GUARANTEE:
Particulars of investment made, loan and guarantee given as covered under the Section
186 of the Companies Act, 2013, has been provided in Note No. 5, 6 and 30 of the notes to
the financial statement which form part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has
constituted a CSR Committee. The Board of Directors on the recommendation of Corporate
Social Responsibility (CSR) Committee had approved the Corporate Social Responsibility
Policy. With a view to enlarge the scope of CSR activities, the Company has revised the
CSR Policy and same is available on the website of the company at www.electrotherm.com.
The composition and terms of reference of the CSR Committee are detailed in the enclosed
Corporate Governance Report.
The Annual Report on CSR Activities during the financial year 20212022 forming part of
this Boards Report is annexed herewith as "Annexure -B" to this report.
RELATED PARTY TRANSACTIONS:
The Company has, pursuant to the approval of the shareholders through special
resolution under Section 188 of the Companies Act, 2013, entered into related party
transactions on arms length basis. During the year, the Company had not entered into any
contract/arrangement/transaction with related parties which could be considered material
in accordance with the Policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and on dealing with related
party transactions as approved by the Board may be accessed on the Companys website at
www.electrotherm.com.
There are no materially significant related party transactions that may have potential
conflict with interest of the Company at large. The details of transaction with related
parties for the financial year ended on 31st March, 2022 is given in Note No.
42 of the financial statements which is part of this Annual Report of the Company.
FIXED DEPOSIT:
During the financial year 2021-2022, the Company has not accepted any deposit within
the meaning of Section 73 to 76 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014. Further there are no outstanding deposits as on 31st
March, 2022.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that :
a) in the preparation of the annual accounts for the financial year ended on 31st
March, 2022, the applicable accounting standards had been followed along with proper
explanation relating to material departures, if any;
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 financial year and of the
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 the Companies Act, 2013 for
safeguarding the assets of the company and for preventing and detecting frauds 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.
AUDITORS AND AUDITORS REPORT:
• STATUTORY AUDITOR:
Pursuant to the provisions of Section 139, 142 and other applicable provisions of the
Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Hitesh
Prakash Shah & Co., Chartered Accountants (Firm Registration No.127614W), Ahmedabad,
were appointed as Statutory Auditors of the Company at the 31st Annual General
Meeting held on 5th September, 2017 for a term of five (5) years beginning from the
conclusion of the 31st Annual General Meeting till the conclusion of the 36th
Annual General Meeting.
The first term of M/s. Hitesh Prakash Shah & Co., Chartered Accountants as
statutory auditors of the Company expire at the conclusion of the 36th AGM of the Company.
In terms of the provisions of the Companies Act, 2013 and rules made thereunder, an audit
firm acting as the statutory auditor of a company is eligible to be appointed as statutory
auditors for two terms of five years each. Considering their performance as auditors of
the Company during their present tenure, the Audit Committee of the Company, after due
deliberation and discussion, recommended the re-appointment of M/s. Hitesh Prakash Shah
& Co., Chartered Accountants as statutory auditors of the Company for a second term of
five years to hold office from the conclusion of the 36th AGM to be held in 2022 till the
conclusion of the 41st AGM of the Company to be held in the year 2027, at
remuneration as may be mutually agreed between the Board of Directors and Statutory
Auditors.
The above proposal forms part of the Notice of the AGM for your approval.
Auditors Report:
In the Independent Auditors Report for the year ended on 31st March, 2022,
there are certain matters of emphasis related to (a) Note No 36 in respect of treatment in
the books of account of the assignment/settlements of debts of various bank and the
financial institution (b) Note No 15(c) in respect of non-payment of Installments due to
lender of the loan for the period from December 31, 2019 to March 31, 2022 and
Interest due for the period from September 30, 2020 till March 31, 2022 and requested
all lenders to allow this moratorium period for the said payments and the lenders are yet
to confirm the revised repayment schedule (c) Note No 38(c) in respect of
confirmation/reconciliation of few accounts of "Trade Receivables", "Trade
Payable", "Bank and Loan accounts", "Advance from Customers",
Advances Recoverable in Cash or Kind", and "Advance to suppliers and other
parties" (d) Note No 36(a)(i)(f) in respect of Petition filed by Central Bank of
India, a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016
before the National Company Law Tribunal (NCLT), Ahmedabad (e) Note No 32(a)(ix) and 40 in
respect of pending litigations/cases and recovery proceedings against the company and the
Directors of the Company (f) Note No 8(d) in respect of pending appeal filed against order
of DRT Mumbai for sale of property of the Wholly owned subsidiary Hans Ispat Limited,
non-impairment of the investment value of the subsidiary company and provision of expected
credit losses on the balances outstanding of the said subsidiary.
The relevant Notes to accounts related to these matters of emphasis are
self-explanatory.
With regard to the qualification in the Independent Auditors Report in reference to
Note No. 37(b) of non-provision of interest on NPA accounts of banks on approximate basis
of Rs. 213.81 Crores for the year under consideration and total amount of such unprovided
interest till date is Rs. 1435.54 Crores, the Board of Directors submits that the loan
accounts of the Company have been classified as Non-Performing Assets (NPA) by the Bankers
and some of the Bankers has not charged interest on the said accounts and therefore
provision for interest has not been made in the books of accounts. The quantification has
been done only for the loans which have not been settled.
• Cost Auditor:
Pursuant to the consent and certificate received from M/s V.H. Savaliya &
Associates, Cost Accountants, Ahmedabad and as per Section 148 and other applicable
provisions if any, of the Companies Act, 2013 read with Companies (Audit and Auditors)
Rules, 2014, the Board of Directors of the Company has on the recommendation of the Audit
Committee appointed him as Cost Auditor, to conduct the cost audit of the Company for the
financial year ending on 31st March, 2023, at a remuneration as mentioned in
the notice convening the Annual General Meeting, subject to ratification of the
remuneration by the Members of the Company.
Maintenance of cost records as specified by the Central Government under sub-section
(1) of Section 148 of the Companies Act, 2013, is applicable to the Company and
accordingly such accounts and records are made and maintained by the Company.
• Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Regulation 24A of the SEBI (LODR) Regulations 2015, the Company has appointed M/s. Bharat
Prajapati & Co., Company Secretary in Practice to conduct the Secretarial Audit of the
Company. The Secretarial Audit Report in Form No. MR-3 is annexed herewith as "Annexure
- C" to this report.
With regard to qualifications of the Secretarial Auditor, the Board of Directors
submits as under:
(a) With regard to appointment of Company Secretary and Chief Financial Officer, the
Company in process to identify the suitable candidate for the said posts.
(b) With regard to delay in submission of audited/unaudited financial results for the
quarter ended on 31st March, 2021 and quarter ended on 30th June, 2021 and 30th
September, 2021 and gap of more than 120 days between two board meetings & audit
committee meetings and delay in filing/approval of cost audit report, there was stay on
Board Meeting by Honble National Company Law Appellate Tribunal (NCLAT) and therefore,
the Company could not hold the Board Meeting for approval of audited/unaudited financial
results and approval of cost audit report. However, after the approval of Honble NCLAT
and disposal of appeals pending before the Honble NCLAT, the Company has submitted the
said audited/unaudited financial results to the stock exchanges and requested for waiver
of fines imposed on the Company in view of judicial order of stay on the Board Meeting.
(c) With regard to non-submission of disclosures of defaults on payment of interest/
repayment of principal amount on loans from banks/financial institutions for the period
from 1st April, 2021 till 31st March, 2022, the Company will ensure
to submit disclosures within the time line.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
The information required under the provisions of Section 134(3) (m) of the Companies
Act, 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014 with respect to
conservation of energy, technology absorptions and foreign exchange earnings and outgo is
given in "Annexure - D" which forms part of this Annual Report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of the Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
in respect of the employees are given in "Annexure- E" to this Annual
Report.
AUDIT COMMITTEE:
The composition, terms of the reference and number of meetings & attendance at the
Audit Committee held during the financial year is covered in the enclosed Corporate
Governance Report.
As on 31st March, 2022, the Audit Committee consists of (i) Mr. Pratap
Mohan, Independent Director as Chairman (ii) Mr. Dinesh Mukati, Independent Director as
Member and (iii) Ms. Nivedita Sarda, Independent Director as Member.
RISK MANAGEMENT POLICY:
The Risk Management Policy adopted by the Board of Directors of the Company covers the
various criteria for identification of key risk, action plans to mitigate those risks,
review and reporting of identified risks on periodical basis etc.
In the opinion of the Board of the Directors of the Company, there are elements of
risks in the nature of various legal cases including for recovery of dues, attachment of
certain properties which may threaten the existence of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:
Presently, there are certain significant and material orders passed by the
regulator/court/tribunal which may impact the Company and its operations in future as
mentioned in Note No. 36 & 40 of the standalone financial statements which is part of
this Annual Report.
Further, Central Bank of India, a financial creditor has filed a petition under Section
7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before Honble National Company Law
Tribunal (NCLT), Ahmedabad, for initiating Corporate Insolvency Resolution Process (CIRP)
against the Company. The Company has on 29th June, 2022 accepted the Compromise/One Time
Settlement (OTS) letter of Central Bank of India dated 28th June, 2022 for their
outstanding loan/credit facilities. As per the settlement terms and conditions, all the
proceedings in various legal forums will be kept in abeyance till receipt of final payment
under the OTS.
CORPORATE GOVERNANCE:
In compliance with the provisions of Listing Regulations, a separate report on
Corporate Governance along with a certificate from a Practicing Company Secretary
regarding the status of compliance of conditions of corporate governance forms a part of
this Annual Report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM:
The Company is committed to highest standards of ethical, moral and legal business
conduct. Accordingly the Board of Directors has formulated Whistle Blower Policy/Vigil
Mechanism in compliance with the provision of Section 177(10) of the Companies Act, 2013
and Regulation 22 of the Listing Regulations. 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. More details of the Whistle Blower Policy/Vigil Mechanism are explained in
the Corporate Governance Report. The Whistle Blower Policy/Vigil Mechanism is available on
the website of the Company at www.electrotherm.com.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Pursuant to Regulation 34(2)(e) read with Part B of Schedule V of the Listing
Regulations, Management Discussion and Analysis Report is annexed after the Boards Report
and form a part of this Annual Report.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the Annual
Rerun as on 31st March, 2022 is available on the website of the Company at
www.electrotherm.com.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE
FINANCIAL STATEMENTS:
The Company has put in place adequate internal financial controls with reference to the
financial statements. During the financial year, such internal financial controls were
operating effectively and it is commensurate with the size, scale and complexity of the
Company and the nature of business of the Company.
SECRETARIAL STANDARDS:
During the year under review, the Company has complied with the applicable Secretarial
Standards issued by The Institute of Company Secretaries of India (ICSI).
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Company is committed to provide a work environment that ensures every employee is
treated with dignity, respect and afforded equal treatment. The Company has complied with
the provisions relating to the constitution of Internal Complaints Committee under the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
and during the financial year, the Company has not received any complaints under the said
Act.
OTHER DISCLOSURES:
a) During the financial year 2021-2022, there was no change in authorized share
capital, subscribed and paid-up share capital of the Company. Also, there was no
reclassification/sub- division in authorized share capital of the Company.
b) There was no reduction of share capital or buy back of shares or change in capital
traction resulting from restructuring.
c) The Company has not issued equity shares with differential rights as to dividend,
voting or otherwise.
d) The Company has not issued sweat equity shares to its directors or employees.
e) The Company does not have any Employees Stock Option Scheme for its
Employees/Directors.
f) During the financial year 2021-2022, the Company has not made allotment of any
securities and as such, the requirement for obtaining credit rating was not applicable to
the company.
g) There is no money lying to unpaid/unclaimed dividend account pertaining to any of
the previous years with the Company. As such the Company is not required to transfer such
amount to the Investor Education and Protection Fund established by the Central
Government.
h) The Auditors has not reported any frauds under sub-section (12) of Section 143 of
the Companies Act, 2013.
i) The details of difference between amount of valuation done at the time of one time
settlement and the valuation done while taking loan from the Banks or financial
institutions along with the reasons thereof is not applicable, as during the financial
year, there was no one time settlement or valuation done by the Company.
j) There are certain pending petitions before the Honble National Company Law Tribunal
(NCLT), Ahmedabad and inspection/investigation by Ministry of Corporate Affairs as
mentioned in Note No. 40 of the standalone financial statements which is part of this
Annual Report.
APPRECIATION:
Your Directors wish to place on record their appreciation for the valuable co-operation
and support received from the customers and suppliers, various financial institutions,
banks, government authorities, auditors and shareholders during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for the
devoted services of the Executives, Staff and Workers of the Company.
|
For and on behalf of the Board of Directors |
|
Electrotherm (India) Limited |
|
Shailesh Bhandari |
Suraj Bhandari |
| Place : Ahmedabad |
Managing Director |
Whole-time Director |
| Date : 2nd August, 2022 |
(DIN : 00058866) |
(DIN: 07296523) |
+91-9892691696
