undefined share price Directors report


To:

The Members of

Eimco Elecon (India) Limited,

The Directors take pleasure in presenting the 49th Annual Report together with the Audited Financial Statements for the Financial Year ended on 31st March, 2023.

1. HIGHLIGHTS OF PERFORMANCE

Total Revenue for the year increased to Rs 17,269.70 Lakh as compared to Rs 8,444.37 Lakh in the previous year. Profit Before Tax for the year was Rs 2,648.62 Lakh as compared to Rs 987.69 Lakh in the previous year. Profit After Tax for the year was Rs 2,086.75 Lakh as compared to Rs 851.94 Lakh in the previous year.

2. FINANCIAL RESULTS

(Rs in Lakhs)

Particulars Standalone Consolidated
31-03-2023 31-03-2022 31-03-2023 31-03-2022
Revenue from Operations 17,269.70 8,444.37 17,269.70 8,444.37
Other Income 1,048.61 918.21 905.81 918.21
Total Income from Operations 18,318.31 9,362.58 18,175.51 9,362.58
Profit Before Tax 2,648.62 987.70 2514.36 1,003.54
Tax Expenses 561.87 135.75 561.87 135.75
Share in Profit of Associates - - 8.54 15.84
Profit for the Year 2,086.75 851.95 1,952.49 867.79
Other Comprehensive Income (19.19) (26.49) (19.19) (26.49)
Total Comprehensive Income for the year 2,067.56 825.46 1,933.30 841.30
Equity Reserves 34,309.89 32,386.53 34,496.28 32,707.19

3. DIVIDEND

Your directors recommend for your consideration a dividend of 50% i.e. Rs5/- per share on 57,68,385 equity shares of Rs10/- each for the year ended on 31st March, 2023 (Previous Year Rs2.5/- per share on 57,68,385 equity shares of Rs10/- each). Dividend is subject to approval of members at the ensuing Annual General Meeting (AGM) and shall be subject to deduction of income tax at source.

The Dividend Distribution Policy is available on the Companys website www.eimcoelecon.in.

During the year, the unclaimed dividend pertaining to the Financial Year 2014-15 has been transferred to the Investor Education & Protection Fund.

4. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profit for the Financial Year 2022-23 in the Statement of Profit & Loss.

5. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has neither subsidiary nor Joint Venture Company.

Associate Company :

Eimco Elecon Electricals Limited Your Company holds 47.62% of the Equity Shares of Eimco Elecon Electricals Limited. The profit of the Associate for the Financial Year ended on 31st March, 2023 was Rs 8.54 Lakh as against profit of Rs15.84 Lakh for the previous year.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Indian Accounting Standards as per the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Accounting Standards) Rules, 2016, notified under Section 133 of the Companies Act, 2013 and form an integral part of this Report. Pursuant to Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/ Associate Companies/ Joint Ventures is given in Form AOC-1 which forms an integral part of this Report.

6. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2023 was Rs576.84 Lakh. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

7. FINANCE

The Company continues to focus on judicious management of its working capital. Receivables, Inventories and other working capital parameters were kept under strict check through continuous monitoring. The whole of the properties of the Company have been suitably insured.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the financial statements provided in this Annual Report.

9. FIXED DEPOSITS

The Company has not accepted any deposit from public falling within the ambit of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. There are no unpaid / unclaimed deposits as on 31st March, 2023.

10. DIRECTORS

Resignation by Independent Directors

Shri Nalin M. Shah, Independent Director, ceased to be a director of the Company w.e.f. 25th January, 2023. The Board placed on record their appreciation for the assistance and guidance provided by Shri Nalin M. Shah during his tenure as Non-Executive Independent Director of the Company.

Director Retiring by Rotation

Shri Prayasvin B. Patel 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.

Appointment of Independent Directors

Shri Venkatraman Srinivasan (DIN: 00246012) was appointed as an Additional Non-Executive Independent Director of the Company for a period of 5 years with effect from 24th April, 2023, subject to approval of the members at the 49th Annual General Meeting of the Company. He holds a Bachelors Degree in Commerce from the University of Bombay and is a Fellow Member of the Institute of Chartered Accountants of India since 1981. He has more than 36 years of rich experience in Finance, Accounts, Governance and Corporate Laws.

In the opinion of the Board, he is well versed in the fields of accountancy, finance, risk management, insurance, governance and corporate laws etc., who brings a wealth of experience and financial acumen to the Eimcos Board and his vast experience in the realm of various fields will be beneficial to the Company. Further, he possesses 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 49th AGM forming part to this annual report sets out the details.

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 Listing Regulations, an Independent Director shall hold office for a term of five consecutive years and not be liable to retire by rotation. Accordingly, Shri Venkatraman Srinivasan (DIN: 00246012) shall be appointed as an Independent Director to hold office for a term of five consecutive years from the date of 24th April, 2024 subject to approval of the members at the ensuing 49th 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 and 152 of the Companies Act, 2013 and under Listing Regulations has been sought in the Notice convening the 49th Annual General Meeting of the Company.

Independent Directors

The Independent Directors met on 2nd March, 2023 without the attendance of Non-Independent Directors and members of the management. The Independent Directors reviewed the performance of NonIndependent 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.

Statutory Declarations/Disclosures by Directors

All Independent Directors of the Company have given declarations to the Company under Section 149 (7) of the Companies Act, 2013 that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

None of the Director of your Company is disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

11. DIRECTORS RESPONSIBILITY STATEMENT

Based on the frame work of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the year ended on 31st March, 2023. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, based on the above and the representations received from the Operating Management, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures therefrom;

(ii) They have, in the selection of the accounting policies, consulted the statutory auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the profit of the Company for the year ended on that date;

(iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis;

(v) They have laid internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year ended on 31st March, 2023; and

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the year ended on 31st March, 2023.

12. KEY MANAGERIAL PERSONNEL (KMP)

As on 31st March, 2023, Shri Mukulnarayan Dwivedi, Executive Director; Shri Vishal C. Begwani, Chief Financial Officer and Shri Rikenkumar Dalwadi, Company Secretary are designated as KMP of the Company.

13. COMMITTEES OF THE BOARD

The Board of Directors have the following Committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Corporate Social Responsibility Committee.

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

14. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and notifications/ circulars of SEBI, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

15. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The weblink of the policy is https:// eimcoelecon.in/wp-content/uploads/2020/06/THE- NOMINATION-AND-REMUNERATION-POLICY.pdf.

16. NUMBER OF MEETINGS OF THE BOARD

During the year under review, the Board met 4 times. The meeting details are provided in the Corporate Governance Report that forms part of this Annual Report. The maximum intervals between any two meetings are as prescribed under the Companies Act, 2013.

17. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of the Companys business.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prior approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature and in the ordinary course of the Companys business. Transactions with related parties are disclosed in the notes to accounts to the financial statements.

The Form No. AOC-2 envisages disclosure of material contracts or arrangement or transaction at arms length basis is annexed with as Annexure ‘1.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website. The weblink of the policy is https://eimcoelecon.in/wp-content/ uploads/2022/08/7 g EIMCO-ELECON RPT- Policv 31012022.pdf.

18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As part of its initiatives under the Corporate Social Responsibility (CSR), the Company has undertaken projects in the area of education and health care. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companys CSR policy. The Annual Report on CSR activities is annexed herewith as Annexure ‘A.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

20. MANAGEMENTS DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and future outlook of the Company is given in the Managements Discussion and Analysis appearing as Annexure ‘B to this Report.

21. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk-mitigation systems, which are constantly assessed and strengthened with new/revised standard operating procedures. The Companys internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to Messrs C.F. Patel & Co., Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, the Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions are taken by the Management. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the Management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

22. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established Vigil Mechanism system and framed Whistle Blower Policy. Whistle Blower Policy is disclosed on the website of the Company at followingweb-link- https://eimcoelecon. in/wp-content/uploads/2023/01/The-Whistle-Blower- Policy 30012023.pdf.

23. CORPORATE GOVERNANCE

Your Company has always striven to incorporate appropriate standards for good Corporate Governance. It has taken adequate steps to ensure that the provisions of Corporate Governance as prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 are complied with.

A detailed report on Corporate Governance is appearing as Annexure ‘C to this Report along with the Auditors Certificate on its compliance by the Company.

24. 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 employees of the Company are set out in the Annexure ‘D to the Boards Report.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO

The information on conservation of energy, technology of absorption and foreign exchange earning and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure ‘E forming part of this report.

26. STATUTORY AUDITORS

Messrs K. C. Mehta & Co LLP, Chartered Accountants, Vadodara were appointed as the Statutory Auditors of the Company for a period of 5 (five) consecutive years at the 48th Annual General Meeting of the Company.

There is no audit qualification, reservation or adverse remark in the Auditors Report for the year under review.

27. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its activity are required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed Messrs Diwanji & Co., Cost Accountants, to audit the cost accounts of the Company for the financial year ending 31st March, 2024 on a remuneration of 55,000/- plus taxes as applicable and out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to Messrs Diwanji & Co., Cost Accountants, the Cost Auditors is included at Item No. 6 of the Notice convening the Annual General Meeting.

28. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs D. G. Bhimani & Associates a firm of Company Secretary in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2022-23. The Report on the Secretarial Audit carried out by the Secretarial Auditor during the Financial Year 2022-23 is annexed herewith as Annexure ‘F. There is no secretarial audit qualification for the year under review.

Further, your Directors have on the recommendation of the Audit Committee appointed M/s. J. J. Gandhi & Co., Vadodara, Practicing Company Secretary, as a Secretarial Auditors of the Company to undertake the Secretarial Audit of the Company and provide Annual Secretarial Compliance Report for the Financial Year 2023-24

29. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31st March, 2023 is available on the Companys website https://eimcoelecon.in/ annual-return-as-provided-under-section-92-of-the- companies-act-2013/.

30. INSURANCE

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

31. REPORTING OF FRAUDS

No fraud has been reported by the Auditors to the Audit Committee or the Board.

32. RISK MANAGEMENT

The Company operates in a competitive environment and is generally exposed to various risks at different times such as technological risks, business risks, operational risks, financial risks etc. The Company has a system based approach to business risk management backed by strong internal control systems. A range of responsibilities from strategy to the operations is specified. A strong independent internal audit function at the corporate level carries out risk focused audits across all businesses enabling identification of areas where risk managements processes may need to be improved. The Management prepares the Risk Register which is reviewed by the Audit Committee and the Board of the Company.

The Board reviews internal audit findings and provides strategic guidance on internal control, monitors internal control environment within the Company and ensures that Internal Audit recommendations are effectively implemented. The combination of policies and procedures adequately addresses the various risks associated with your companys businesses.

33. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainee) are covered under the policy.

The following is a summary of sexual harassment complaints received and disposed-off during the year 2022-23:

No. of complaints received : Nil
No. of complaints disposed off : N.A.
No. of complaints pending : Nil

The policy on Sexual Harassment at workplace is placed on the Companys website at https:// eimcoelecon.in/wp-content/uploads/2019/04/Sexual- Harassment-Policy.pdf.

34. 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.

35. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. During the first Board Meeting attended, each newly appointed Independent Director is taken through a formal induction program, including the presentation from the Whole-time Director on the Companys manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Director about his/her legal and regulatory responsibilities as a Director. The Familiarization Programme for Independent Directors includes a detailed presentation by Business and Functional Heads, visit to the manufacturing site, etc. Weblink for the Policy for the Familiarisation Programme for Independent Directors https://eimcoelecon.in/ details-of-familiarization-programmes-imparted-to- independent-directors/.

36. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year and date of this report.

37. APPLICATION MADE OR PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the financial period under review, no application was made under the Insolvency and Bankruptcy Code, 2016 ("IBC 2016") by the

Company. No proceedings are pending under IBC 2016 against the Company.

38. PARTICULARS OF VALUATION DONE AT THE TIME OF ONE-TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS

During the financial period under review, there were no instances of any one-time settlement against loans taken from Banks or Financial Institutions.

39. CHANGE IN THE NATURE OF BUSINESS There is no change in the nature of business during the year under review.

40. COMPLIANCE OF SECRETARIAL STANDARDS

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

41. ACKNOWLEDGEMENT

Your Directors are highly grateful for the unstinted guidance, support and assistance received from the Government, Bankers and Financial Institutions. Your Directors are thankful to all valuable Stakeholders of the Company viz. shareholders, customers, dealers, vendors, suppliers, collaborators, business associates and other agencies for their faith, trust and confidence reposed in the Company.

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 the Board of Directors,
Mukulnarayan Dwivedi Prayasvin B. Patel
Executive Director Executive Director
DIN : 08442155 DIN : 00037394
Place : Vallabh Vidyanagar
Date: 24th April, 2023