Mar 31, 2023
Your Directors have pleasure in presenting this 63rd Annual Report together with the Audited Financial Statements for the financial year ended on 31st March, 2023.
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 31st March, 2023, the Company has achieved a Turnover of ''1,19,699.24 Lakhs as against ''89,281.67 Lakhs in the previous year.
For the year ended on 31st March, 2023, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of ''28,069.02 Lakhs as against the EBIDTA of ''18,422.51 Lakhs during the previous year.
The Net Profit after tax of the Company for the financial year 2022-23 was ''18,814.88 Lakhs compared to ''9,551.78 Lakhs during the previous year.
The Company holds total unexecuted orders about ''63,443 Lakhs (''48,913 Lakhs for Gear Division and ''14,530 Lakhs of MHE Division) as on 31st March, 2023. This will help us to continue to have sustainable growth in coming years.
Consolidated Operations
Your Company''s total consolidated turnover for the year ended on 31st March, 2023 was ''1,52,968.21 Lakhs as against ''1,21,194.58 Lakhs for previous year.
For the year ended on 31st March, 2023, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of ''33,887.54 Lakhs as against the EBIDTA of ''24,643.98 Lakhs during the previous year.
The Consolidated Net Profit after tax of the Company for the financial year 2022-23 was
( '' in Lakhs) |
|||||
Particulars |
Standalone |
Consolidated |
|||
31.03.2023 |
31.03.2022 |
31.03.2023 |
31.03.2022 |
||
Turnover |
1,19,699.24 |
89,281.67 |
1,52,968.21 |
1,21,194.58 |
|
Profit Before Tax, Finance Cost, Depreciation & Amortization and Adjustments for previous year (EBIDTA) |
28,069.02 |
18,422.51 |
33,887.54 |
24,643.98 |
|
Add: Other Income |
1,634.92 |
955.67 |
2,005.91 |
856.19 |
|
EBIDTA (Including other income) |
29,703.94 |
19,378.18 |
35,893.45 |
25,500.17 |
|
Less : Finance Cost |
1,129.73 |
3,191.74 |
1,331.22 |
3,734.12 |
|
Depreciation & Amortization |
3,928.36 |
3,825.19 |
4,903.93 |
4,857.64 |
|
Profit before share of equity accounted investee and tax |
24,645.85 |
12,361.25 |
29,658.29 |
16,908.41 |
|
Share of Profit of Associates |
324.50 |
144.23 |
|||
Profit Before Tax |
24,645.85 |
12,361.25 |
29,982.79 |
17,052.64 |
|
Less: Provision for Tax |
6,298.94 |
2,850.00 |
6,691.82 |
3,057.15 |
|
Deferred Tax |
(119.02) |
(163.90) |
(115.77) |
(177.13) |
|
Short/(Excess) Prov. of earlier years |
(348.95) |
123.37 |
(342.61) |
123.37 |
|
Profit After Tax |
18,814.88 |
9,551.78 |
23,749.35 |
14,049.25 |
|
Add: |
|||||
Other comprehensive income |
(62.85) |
(284.79) |
708.61 |
(501.51) |
|
Previous Year Balance Brought Forward |
36,557.97 |
25,239.78 |
55,330.56 |
39,731.62 |
|
PROFIT AVAILABLE FOR APPROPRIATION |
55,310.00 |
34,506.77 |
79,788.53 |
53,279.36 |
|
APPROPRIATIONS: |
|||||
Dividend Paid |
1,570.80 |
448.80 |
1,570.80 |
448.80 |
|
Transfer to Retained Earning |
(2,500.00) |
(2,500.00) |
|||
Transfer to General Reserve |
|||||
Transfer to Reserve (Merger) |
|||||
Balance Carried Forward |
53,739.20 |
36,557.97 |
78,217.73 |
55,330.56 |
''23,749.35 Lakhs compared to ''14,049.26 Lakhs during the previous year.
During the year under review, your Company''s consolidated net worth is ''1,26,156.14 Lakhs as against ''1,03,492.47 Lakhs for previous year.
The Company holds total unexecuted orders about ''71,395 Lakhs (''56,865 Lakhs for Gear Division and ''14,530 Lakhs of MHE Division) as on 31st March, 2023. This will help us to continue to have sustainable growth in coming years.
Dividend
Your Directors have recommended Final Dividend of ''2.00/- (i.e. 100%) per Equity Share of '' 2.00/- each for the financial year ended on 31st March, 2023 (previous year ''1.40 per share). The said dividend, if approved by the shareholders, would involve a cash outflow of ''2,244.00 Lakhs, against ''1,570.80 lakhs dividend in the previous year.
The dividend recommended is in accordance with the Company''s Dividend Distribution
Policy. As required under the Regulation 43A of the Listing Regulations, the Company has a Policy on Dividend Distribution. The Dividend Distribution Policy of the Company can be accessed at https://www.elecon.com/views/ templates/admin-uploads/Investors/Policies/ Dividend-Distribution-Policy.pdf
During the year under review, the unclaimed dividend pertaining to the financial year 2014-15 has been transferred to the Investor Education & Protection Fund.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profit for financial year 2022-23 in the statement of profit and loss
Share Capital
The paid up Equity Share Capital as on 31st March, 2023 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.
Borrowings
Working Capital Borrowings:
Continuous monitoring and review of the receivables, inventories and other working capital parameters helped the Company reducing working capital borrowings to NIL as at 31st March, 2023 from ''7,425.46 lakhs as at 31st March, 2022. Further, the Company is working on effective Supply Chain Management to optimize overall working capital flow in the Company.
Cash and Cash Equivalent as at 31st March, 2023 was ''2,446.65 Lakhs.
There is no instance of one time settlement and valuation while taking loan from banks/financial Institutions.
Fixed Deposits
The Company has not accepted any fixed deposits and there is no unpaid/unclaimed deposits as on 31st March, 2023.
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 Companies Act, 2013 are given in the notes to the Financial Statements.
Directors & Key Managerial Personnel (KMPs)
Re-appointment of Director
The term of appointment of Shri Prayasvin B. Patel, Chairman & Managing Director of the Company will be completed on 30th June, 2023. The Board of Directors at their Meeting convened on 25th April, 2023 approves his reappointment and remuneration for the term of three years with effect from 1st July, 2023 subject to the approval of the shareholders at the ensuing General Meeting.
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 63rd Annual General Meeting of the Company and being eligible, offers himself for re-appointment.
The Board recommends his appointment for your approval.
New Appointment
Shri Aayush Shah (DIN: 07140517), was appointed as an Additional Director (Non-Executive and Non-Independent) of the Company effective from 25th April, 2023 subject to the approval of the shareholders at the ensuing 63rd Annual General Meeting of the Company. He is Mechanical Engineer from Georgia Institute of Technology, USA. He is having more than 2 years of experience in the domain of Managing Business Unit, Operations Management, Strategic Planning & Budgeting, Process Improvement, Project Management and Business Turn around. Presently, he is actively performing his duties as an Executive Director of Power Build Private Limited.
In the opinion of the Board, he has strong operational, personal and social networking, good understanding of multicultural business challenges, detailing, analytical and common sense approach. He is a strong believer in technology and continuous improvements, customer engagement and innovations which will be beneficial to the Company. The Board recommends his appointment to the shareholders. The notice convening the 63rd Annual General Meeting forming part to this annual report sets out the details.
In terms of Section 152 and other applicable provisions of the Companies Act, 2013, Shri Aayush Shah (DIN: 07140517) shall be appointed as an Additional Director (Non-Executive and Non-Independent) from the date of 25th April, 2023 subject to approval of the shareholders at the ensuing 63rd Annual General Meeting of the Company and shall be liable to retire by rotation.
Members'' approval for his appointment as a Non-Executive and Non-Independent Director, under Sections 152 of the Companies Act, 2013 and under Listing Regulations has been sought in the Notice convening the 63rd 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 Listing Regulations, 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 was carried out has been explained in the Corporate Governance Report which forms part of this report.
Meetings
During the year under review, five Board Meetings, five Audit Committee Meetings, one Stakeholders Relationship Committee Meetings, one Nomination and Remuneration Committee Meeting, one Corporate Social Responsibility Committee Meeting, two Risk Management Committee Meetings and one Separate Meeting of Independent Directors were held. During the year, some of the resolutions were also passed by way of Circular Resolutions. 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 Listing Regulations and their meetings are given in the Corporate Governance Report which forms part of this report.
Independent Directors
The Independent Directors met on 27th January, 2023 without 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 Listing Regulations, 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 Listing Regulations.
Familiarization Programme for Independent Directors
In compliance with the requirements of Listing Regulations, 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-a-vis the Company, the industry in which the company operates, business model etc., alongwith updating on various amendments in the Listing Regulations 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
Nomination and Remuneration Policy
The Board has framed a policy for selection and appointment of Directors, Key Managerial Personnel (KMP) and Senior Management and their remuneration.
As and when need arises to appoint Director, KMP and Senior Management Personnel, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements. NRC, while recommending candidature to the Board, takes into consideration the qualification, attributes, experience and independence of the candidate. Director(s), KMP(s) and Senior Management Personnel appointment and remuneration will be as per NRC Policy of the Company.
The salient features of the Nomination and Remuneration Policy of the Company has been disclosed in the Corporate Governance Report, which is a part of this report. The said Policy is available on the Company''s website on https:// www.elecon.com/views/templates/admin-uploads/Investors/Policies/Nomination%20 &%20Remuenration%20Policy%20-25.04.2023. pdf
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.
Directorsâ 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 along with 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 properand 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 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/RPT-Policy-2022-FINAL.pdf
None of the Directors or any Key Managerial Personnel has any material pecuniary relationships or transactions vis-a-vis the Company.
Auditors
Statutory Auditors
M/s. C N K & Associates, LLP, Chartered Accountants, appointed as a Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of 61st Annual General Meeting for the Financial Year 2020-21.
The Board has taken note and 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 as Statutory Auditors of the Company. As required under Listing Regulations, the Auditors 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 have, on the recommendation of the Audit Committee, appointed M/s. Ketki D. Visariya & Co., Cost Accountants as a Cost Auditors to audit the cost accounts of the Company for the financial year ended on 31st March, 2024 on a remuneration of ''1,70,000/-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. Ketki D. Visariya & Co., Cost Auditors is included in the Notice convening the 63rd Annual General Meeting.
The Cost Audit Report provided by the previous cost auditors of the Company i.e. M/s. Y. S. Thakar & Co., for the year 2021-22 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 2022-23. The Report on the Secretarial Audit carried out by the Secretarial Auditor i.e. CS Ashwin Shah, Practicing Company Secretary during the Financial Year 2022-23 is annexed herewith as âAnnexure Aâ. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Further, your Directors have on the recommendation of the Audit Committee appointed M/s. Samdani Shah & Kabra, 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.
Annual Secretarial Compliance Report
The Company has undertaken an audit for the Financial Year 2022-23 for all applicable compliances as per Listing Regulations and Circulars/Guidelines issued by SEBI from time to time. 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 31st March, 2023, 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 there under and Listing Regulations, 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 forms part of the Annual Report.
The Annual Report of the Company containing standalone and consolidated financial statements has been placed on the website of the Company. Further, annual accounts of the Subsidiary Companies have also been 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 (consolidated)
Total Income of the Benzlers Radicon Group has increased by 10% to GBP 33.62 Million in current year compared to GBP 30.61 Million in previous year. EBITDA excluding other income decreased to GBP 4.74 Million in current year compared to GBP 4.95 Million in previous year. The Company has made a Profit before Tax for GBP 3.78 Million in Current Year compared to Profit before Tax of GBP 3.56 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change in strategy of optimization.
Benzlers Group (Consolidated)
It has witnessed an increase in Sales Revenue by 1% to GBP 14.1 Million in current year compared to GBP 13.9 Million in previous year. The Company''s EBITDA Margin is GBP 2.37 Million in current year compared to GBP 2.06 Million in previous year. Profit before tax and exceptional income has increased to GBP 2.32 Million compared to GBP 1.67 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change instrategy of optimization.
Radicon Transmission UK Limited
The Sales Revenue for the year has increased by 13% to GBP 11.47 Million compared to GBP 10.15 Million in previous year. EBITDA Margin has increased to GBP 1.68 Million compared to GBP 1.43 Million in previous year. Profit before Tax is GBP 1.13 Million in current year compared to GBP 0.67 Million in previous year.
Radicon Drive Systems, Inc
It has witnessed an increase in Sales Revenue by 23% to GBP 9.14 Million in current year compared to GBP 7.40 Million in previous year. EBITDA increased with current year at GBP 1.86 Million, compared with previous year of GBP 1.51 Million. Generating a Profit before Tax of GBP 1.43 Million in current year compared to GBP 0.97 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change in strategy of optimization.
Elecon Singapore Pte. Limited
During the year under consideration revenue of Elecon Singapore Pte. Ltd., has increased by 22% from USD 2.34 million FY 2021-22 to USD 2.85 million FY 2022-23. EBITDA has increased by 63% from 0.11 million FY 2021-22 to USD 0.18 million FY 2022-23.
Elecon Middle East FZCO, Dubai
During the year, total revenue of Elecon Middle East FZCO has increased by 5.42 %, from AED 26.96 million FY 2021-22 to AED 28.42 million FY 2022-23. Increase in EBITDA by 22% from AED 4.68 million FY 2021-22 to AED 5.73 million FY 2022-23.
Financial Performance - Associate
Eimco Elecon (India) Limited (EEIL)
During the year, EEIL has achieved a Turnover of ''17,269.70 Lakhs for year ended on March 31st, 2023 as against ''8,444.37 Lakhs in the previous year. For the year ended on March 31st, 2023, EEIL has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) including other income of 3,310.46 Lakhs as against the EBIDTA of ''1,839.85 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/admin-uploads/ Investors/whistle-blower-policy/Elecon-Whistle-Blower-Policy-2022-new.pdf
Corporate Governance
Pursuant to Regulation 34(3) read with Schedule V of the Listing Regulations, 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
In accordance with the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, your Company has already amended it''s policy on the recommendation of the Members of the CSR Committee and with the approval of the Board. The CSR policy may be accessed on the Company''s Website at the https://www.elecon.com/views/ templates/admin-uploads/Investors/Policies/ Index-CSR%20Policy-05.05.2021-30.08.2021. pdf
The Compo-sition 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 âAnnexure Bâ, 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/Index-Elecon-Board-Diversitv-Policv-30.08.2022.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. During the financial period under review, no application is made or pending under the Insolvency and Bankruptcy Code, 2016 (âIBC 2016â) against the Company.
Material Changes and Commitments
There are no material changes and commitments, affecting the financial performance of the Company that occurred during the Financial Year of the Company to which the Financial Statements relate and the date of this Report.
Reporting of Frauds
There was no instance of fraud during the year under review, which required the Statutory Auditors or Secretarial 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
Being one of the top 1000 Listed Company, the Company has implemented Risk Management
System. The Board of the Company has constituted 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 âAnnexure C â.
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 âAnnexure Dâ.
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 write to the Company and will be furnished with said information on receipt in writing by the Company.
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/Sexual%20Harassment%20 Policy-2023.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 is available on our website at https://www.elecon.com/views/templates/ adminuploads/Investors/Policies/Elecon-Policy-on-Determining-Material-Subsidiary-2020.pdf
The Company does not have material subsidiary company.
Annual Return
The annual return of the Company as on 31st March, 2023 in the prescribed format is available on the Company''s website. The web-link is as under: https://www.elecon.com/views/ templates/admin-uploads/Investors/Corporate-Information/Draft%20Form_MGT_7-31.03.2023-Website.pdf
Business Responsibility and Sustainability Report
SEBI, vide its circular dated 10th May, 2021, made Business Responsibility and Sustainability Report (BRSR) mandatory for the top 1,000 listed companies (by market capitalization) from financial year 2023.
Your Company being covered under top 1000 companies, BRSR is applicable to it. The BRSR is forming part of the Annual Report and annexed as âAnnexure Eâ.
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. 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 wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees 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 : 25th April, 2023
Mar 31, 2022
Your Directors have pleasure in presenting this 62nd Annual Report together with the Audited Financial Statements for the financial year ended on 31st March, 2022.
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.
The summary of financial highlight is given below:
Performance of the Company
For the year ended on 31st March, 2022, the Company has achieved a Turnover of ''88,442.47 Lakhs as against ''79,609.68 Lakhs in the previous year.
For the year ended on 31st March, 2022, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of ''19,378.18 Lakhs as against the EBIDTA of ''15,486.40 Lakhs during the previous year.
The Net Profit after tax of the Company for the financial year 2021-22 was '' 9,551.78 Lakhs compared
to '' 3,626.49 Lakhs during the previous year.
The Company holds total unexecuted orders about ''53,714 Lakhs (''41,001 Lakhs for Gear Division and '' 12,713 Lakhs of MHE Division) as on 31st March, 2022. This will help us to continue to have sustainable growth in coming years.
Consolidated Operations
Your Companyâs total consolidated turnover for the year ended on 31st March, 2022 was ''1,20,355.38 Lakhs as against '' 1,04,443.96 Lakhs for previous year.
For the year ended on 31st March, 2022, the Company has achieved EBIDTA of ''25,500.17 Lakhs as against the EBIDTA of ''19,133.63 Lakhs during the previous year.
The Consolidated Net Profit after tax of the Company for the financial year 2021-22 was ''13,905.02 Lakhs compared to ''5,575.71 Lakhs during the previous year.
During the year under review, your Companyâs consolidated net worth is '' 1,05,023.78 Lakhs as against ''91,924.83 Lakhs for previous year.
( '' in Lakhs) |
||||
Particulars |
Standalone |
Consolidated |
||
31/03/22 |
31/03/21 |
31/03/22 |
31/03/21 |
|
Turnover |
88,442.47 |
79,609.68 |
120,355.38 |
1,04,443.96 |
Profit Before Tax, Finance Cost, Depreciation & Amortization and Adjustment for previous year (EBIDTA) |
18,422.51 |
14,380.65 |
24,643.98 |
18,534.21 |
Add: Other Income |
955.67 |
1105.75 |
856.19 |
599.42 |
EBIDTA (Including other income) |
19,378.18 |
15,486.40 |
25,500.17 |
19,133.63 |
Less : Finance Cost |
3,191.74 |
5,426.89 |
3,734.12 |
5,980.63 |
Depreciation & Amortization |
3,825.19 |
4,231.33 |
4,857.64 |
5,211.23 |
Profit Before Tax |
12,361.25 |
5,828.18 |
16,908.41 |
7,941.77 |
Less: Provision for Tax |
2,850.00 |
- |
3,057.15 |
134.28 |
Deferred Tax |
(163.90) |
2,201.69 |
(177.13) |
2,201.69 |
Short/(Excess) Prov. of earlier years |
123.37 |
- |
123.37 |
30.09 |
Profit After Tax |
9,551.78 |
3,626.49 |
13,905.02 |
5,575.71 |
Add: |
||||
Others Comprehensive Income |
(284.79) |
84.12 |
(501.51) |
742.35 |
Share of Profit of Associates |
- |
144.23 |
187.39 |
|
Previous Year Balance Brought Forward |
25,239.78 |
21,529.17 |
39,731.62 |
33,226.17 |
PROFIT AVAILABLE FOR APPROPRIATION |
34,506.77 |
25,239.78 |
53,279.36 |
39,731.62 |
APPROPRIATIONS: |
||||
Dividend paid |
448.80 |
- |
448.80 |
- |
Income Tax on Dividend |
- |
- |
- |
|
Transfer to Retained Earnings |
(2,500.00) |
-- |
(2,500.00) |
-- |
Transfer to General Reserve |
-- |
- |
-- |
|
Transfer to Reserve (merger) |
- |
- |
-- |
|
Balance Carried Forward |
36,557.97 |
25,239.78 |
55,330.56 |
39,731.62 |
Your Directors have recommended Final Dividend of ''1.00/- (i.e. 50%) and additionally Special Dividend of '' 0.40/- (i.e. 20%), to mark 70 years of Elecon Brand, which aggregates to ''1.40/- (i.e. 70%) per Equity Share of ''2/- each for the financial year ended on 31st March, 2022 (previous year '' 0.40 per share). The said dividend, if approved by the shareholders, would involve a cash outflow of ''1,570.80 Lakhs against ''448.80 lakhs dividend in the previous year.
The dividend recommended is in accordance with the Companyâs Dividend Distribution Policy. As required under the Regulation 43A of the Listing Regulations, the Company has a Policy on Dividend
Distribution. The Dividend Distribution Policy of the Company can be accessed at https://www.elecon. com/views/templates/admin-uploads/Investors/ Policies/Dividend-Distribution-Policy.pdf
During the year under review, the unclaimed dividend pertaining to the financial year 2013-14 has been transferred to the Investor Education & Protection Fund.
The Board of Directors has decided to retain the entire amount of profit for financial year 2021-22 in
the statement of profit and loss.
Share Capital
The paid up Equity Share Capital as on 31st March, 2022 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.
During the year under review, the Company had made Voluntary Redemption of 12.25% Senior, Secured, Rated, Redeemable Non-convertible Debentures (NCDs) issued on private placement basis and prepaid ''9,285.71 towards principal amount. The said NCDs were also delisted from BSE Limited (the designated exchange where NCDs were listed). Accordingly, all the said NCDs stand extinguished.
Working Capital Borrowings
Continuous monitoring and review of the receivables, inventories and other working capital parameters helped the Company reducing working capital borrowings to ''7,425.46 lakhs as at 31st March, 2022 from ''8,964.80 lakhs as at 31st March, 2021. Further, the Company is working on effective Supply Chain
Management to optimize overall working capital flow in the Company.
Cash and Cash Equivalent as at 31st March, 2022 was ''1,413.14 Lakhs.
There is no instance of one time settlement and valuation while taking loan from banks/financial institutions.
Fixed Deposits
The Company has not accepted fixed deposits and there is no unpaid/unclaimed deposits as on 31st March, 2022.
The details of Loans given, Guarantees and Securities provided and Investments made by the Company in compliance with the Companies Act, 2013 are given in the notes to the Financial Statements.
Directors & Key Managerial Personnel (KMPs)
Cessation of Tenure of Independent Director
During the year under review, Shri Jal R. Patel (DIN: 00065021), an Independent & Non-Executive Director of the Company had completed the second and final term of his tenure from close of business hours on 31st March, 2022 and consequently he also ceased to be a Director of the Company with effect from 1st April, 2022.
The Board placed on record their appreciation for the assistance and guidance provided by Shri Jal R. Patel 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 Prashant C. Amin, 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.
New Appointment
Shri Ashutosh Pednekar (DIN:00026049), was appointed as a Non-Executive Independent Director of the Company effective from 1st July, 2022 for a period of five years subject to the approval of shareholders at the ensuing 62nd Annual General Meeting of the Company. He is a Practising Chartered Accountant and is a Partner of M. P. Chitale & Co., Chartered Accountants since 1992. M. P. Chitale & Co. is a member of DFK International - a top ten association of accounting firms and business advisors. He was the Chairman of DFK Internationalâs
Accounting & Assurance Services Committee. He was also involved by ICAI, RBI and IRDAI in various research projects. He is experienced Chartered Accountant with a demonstrated history of working in the financial services and infrastructure industries. His graduation is from Information Systems Audit & Control Association (USA).
In the opinion of the Board, he is well versed in the fields of accountancy, finance, risk management, insurance contracts etc., who brings a wealth of experience and financial acumen to the Eleconâs 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 62nd 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 Ashutosh Pednekar (DIN:00026049) shall be appointed as an Independent Director to hold office for a term of five consecutive years from the date of 1st July, 2022 subject to approval of the shareholders at the ensuing 62nd Annual General Meeting of the Company and shall not be liable to retire by rotation.
Membersâ 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 62nd 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 Listing Regulations, 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 was carried out has been explained in the Corporate Governance Report which forms part of this report.
Meetings
During the year, five Board Meetings, four Audit Committee Meetings, two Stakeholders Relationship Committee Meetings, one Nomination and
Remuneration Committee Meeting, one Corporate Social Responsibility Committee Meeting, two Risk Management Committee Meetings and one Separate Meeting of Independent Directors were held. During the year, some of the resolutions were also passed by way of Circular Resolutions, 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 Listing Regulations and their meetings are given in the Corporate Governance Report which forms part of this report.
Independent Directors
The Independent Directors met on 24th February, 2022 without 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 Listing Regulations, 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 Listing Regulations.
In compliance with the requirements of Listing Regulations, 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-a-vis the Company, the industry in which the company operates, business model etc. alongwith updating on various amendments in the Listing Regulations 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 Companyâs website https://www.elecon.com/ investors/corporate-information
Nomination and Remuneration Policy
The Board has framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The remuneration policy is stated in the Corporate Governance Report forming part of this Annual Report.
As and when need arises to appoint Director, KMP and Senior Management Personnel, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements. NRC, while recommending candidature to the Board, takes into consideration the qualification, attributes, experience and independence of the candidate. Director(s), KMP(s) and Senior Management Personnel appointment and remuneration will be as per NRC Policy of the Company.
The salient features of the Nomination and Remuneration Policy of the Company has been disclosed in the Corporate Governance Report, which is a part of this report. The said Policy is available on the Companyâs website on https:// www.elecon.com/views/templates/admin-uploads/ Investors/Policies/Elecon-The-Nomination-and-Remuenration-Policy-2019.pdf
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.
Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, with respect to the Directorsâ Responsibility
Statement, the Board of Directors, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with 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 armâs length basis and in the ordinary course of the Companyâs business. All such contracts or arrangements were entered into 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 Companyâs website athttps://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-a-vis the Company.
Statutory Auditors
M/s. C N K & Associates, LLP, Chartered Accountants, appointed as a Statutory Auditors of the Company for a period of 5 (five) years i.e. from the conclusion of 61st Annual General Meeting for the Financial Year 2020-21.
The Board has taken note and 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 as Statutory Auditors of the Company. As required under Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
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 financial year ended on 31st March, 2023 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 Memberâs ratification for the remuneration payable to M/s. Y. S. Thakar & Co., Cost Auditors is included in the Notice convening the 62nd Annual General Meeting. The Cost Audit Report for the year 2020-21 was filed with the Ministry of Corporate Affairs before the due date of filing.
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 2021-22. The Report on the Secretarial Audit carried out by him during the Financial Year 2021-22 is annexed herewith as âAnnexure Aâ. 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 2021-22 for all applicable compliances as per Listing 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 31st March, 2022, 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 there under and Listing Regulations, 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 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 physical copy of Audited Financial Statements of the Subsidiary Companies may obtain the same by writing to the Company.
Financial Performance - Subsidiary Companies
Radicon Transmission UK Limited (consolidated)
Total Income of the Benzlers Radicon Group has increased by 20% to GBP 30.61 Million in current year compared to 25.60 Million in previous year. EBITDA excluding other income increased to GBP 4.95 Million in current year compared to GBP 2.93 Million in previous year. The Company has made a Profit before Tax for GBP 3.56 Million in Current Year compared to Profit before Tax of GBP 1.38 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change in strategy of optimization.
Benzlers Group (Consolidated)
It has witnessed an increase in Sales Revenue by 10% to GBP 13.9 Million in current year compared to GBP
12.6 Million in previous year. The Companyâs EBITDA Margin is GBP 2.17 Million in current year compared to GBP 1.07 Million in previous year. Profit before tax and exceptional income has increased by 160.9% to GBP 1.67 Million compared to 0.64 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change in strategy of optimization.
The Sales Revenue for the year has increased by 14% to GBP 10.15 Million compared to GBP 8.88 Million in previous year. EBITDA Margin has increased to GBP 1.43 Million compared to GBP 1.13 Million in previous year. Profit before Tax is GBP 0.67 Million in current year compared to 0.46 Million in previous year.
Radicon Drive Systems, Inc
It has witnessed an increase in Sales Revenue by 46% to GBP 7.40 Million in current year compared to GBP
5.06 Million in previous year. EBITDA increased with current year at GBP 1.51m, compared with previous year of GBP 0.74m. Generating a Profit before Tax of GBP 0.97 Million in current year compared to GBP 0.28 Million in previous year. The Company has achieved the profitability by cost rationalization coupled with change in strategy of optimization.
Elecon Singapore Pte. Limited
During the year under consideration revenue of Elecon Singapore Pte. Ltd., has decreased from USD 2.85 million FY 2020-21 to USD 2.34 million FY 2021-22. EBITDA has decreased from 0.26 million FY
2020-21 to USD 0.11 million FY 2021-22.
During the year, total revenue of Elecon Middle East FZCO has increased by 20.6 %, from AED 22.35 million FY 2020-21 to AED 26.96 million FY 2021-22. Decrease in EBITDA by 0.4% from AED 5.11 million FY 2020-21 to AED 5.09 million FY 2021-22.
Eimco Elecon (India) Limited (EEIL)
During the year, EEIL has achieved a Turnover of ''8,444.37 Lakhs as against ''12,613.10 Lakhs in the previous year. For the year ended on 31st March, 2022, EEIL has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) including other income of ''1,839.85 Lakhs as against the EBIDTA of ''2,219.54 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 Companyâs 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 Companyâs website at https://www. elecon.com/views/templates/admin-uploads/ Investors/whistle-blower-policy/Elecon-Whistle-Blower-Policy-2019.pdf
Corporate Governance
Pursuant to Regulation 34(3) read with Schedule V of the Listing Regulations, 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. In accordance with the provisions of Section 135 of the Companies Act, 2013 and the said Rules, your Company has amended itâs 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 Companyâs Website at the
https://www.elecon.com/views/templates/admin-uploads/Investors/Policies/Elecon-Corporate-Social-Responsibilitv-Policv-mav-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 âAnnexure Bâ, 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
There are no material changes and commitments, affecting the financial performance of the Company that occurred during the Financial Year of the Company to which the Financial Statements relate and the date of this Report.
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
Being one of the top 1000 Listed Company, the Company has implemented Risk Management System. The Board of the Company has constituted 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 âAnnexure Câ.
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 âAnnexure Dâ.
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. [email protected].
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 Companyâs website at https://www. elecon.com/views/templates/admin-uploads/ Investors/Policies/Elecon-Sexual-Harassment-Policy.pdf
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 is available on our website at https://www.elecon.com/views/templates/ admin-uploads/Investors/Policies/Elecon-Policy-on-Determining-Material-Subsidiary-2020.pdf
The company does not have material subsidiary company.
The annual return of the Company as on 31st March, 2022 in the prescribed format is available on the Companyâs website. The web-link is as under:
https://www.elecon.com/views/templates/ admin-uploads/Investors/Corporate-Announcements/2021-2022/1-DRAFT-Form MGT 7. pdf
Business Responsibility Report
Being one of the top 1000 Listed Company, we have integrated the Business Responsibility Report (BRR) disclosures into our Annual Report as âAnnexure Eâ 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.
A fire incidence took place at one of the machines situated at one of the factory sheds of the Company located at its Registered Office & Works situated at Anand-Sojitra Road, Vallabh Vidyanagar, Gujarat - 388 001 on 14th April, 2022. Fire was controlled within time and fortunately, there were no casualty and injury to life. The estimated loss of ''3.00 Crores against this fire incidence, is subject to claim settlement under the Insurance Policy.
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.
Your Directors are highly grateful for the unstinted guidance, support and assistance received from the Government and Financial Institutions. 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 wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees to ensure that the Company continues to grow and excel.
For and on behalf of Board of Directors,
Chairman & Managing Director
DIN:00037394
Place: Vallabh Vidyanagar
Date : 3rd May, 2022
Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting this 58th Annual Report together with the Audited Financial Statements for the year ended on March 31, 2018.
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, 2018, the Company has achieved a Turnover of Rs.91,953.72 Lakhs as against Rs.99,648.05 Lakhs in the previous year.
For the year ended on March 31, 2018, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of Rs.10,058.39 Lakhs as against the EBIDTA of Rs.15,579.96 Lakhs during the previous year.
The Net Profit of the Company for the year 201718 was Rs.808.37 Lakhs compared to Rs.2,106.22 Lakhs during the previous year.
The Company holds total unexecuted orders about Rs.1,23,676 Lakhs (Rs.767.19 Lakhs for Gear Division and Rs.469.57 Lakhs of MHE Division) as on March 31, 2018. This will help us to continue to have sustainable growth in coming years.
The Company posted subdued financial performance in the fiscal as it witnessed challenges on multiple counts. At the macro level, the economic activity in the country remained low and it resulted in the slow pick up of orders and poor execution of the operation at the client level. The Companyâs customers also got affected by rolling out of GST which led to some disruption of activity. With all the major headwinds behind, the Company has reformulated its strategy and plans to pursue product-based business going forward with a focus on expanding the bottom line. The Company is seeing sustained revival in economy and increased manufacturing activity and anticipates a strong recovery in its business in the near-term future.
Consolidated Operations
The Audited Consolidated Financial Statements of your Company as on March 31, 2018, which forms part of the Annual Report, have been prepared pursuant to the provisions of SEBI (LODR) Regulations, 2015 and also as per the applicable Indian Accounting Standard (IndAS) on Consolidated Financial Statements (IndAS-110) as notified by the Ministry of Corporate Affairs.
(Rs. in Lakhs)
Particulars |
Standalone |
Consolidated |
||
31/03/18 |
31/03/17 |
31/03/18 |
31/03/17 |
|
Turnover |
91,953.72 |
99,648.05 |
118,850.06 |
127,465.54 |
Profit Before Tax, Finance cost, Depreciation & Amortization and Adjustment for previous year (EBIDTA) |
10,058.39 |
15,579.96 |
11,592.29 |
16,402.42 |
Add: Other Income |
1,055.72 |
785.34 |
547.38 |
856.26 |
EBIDTA (Including other income) |
11,114.11 |
16,365.30 |
12,139.67 |
17,258.68 |
Less : Finance Cost |
5,798.24 |
6,304.87 |
6,555.81 |
7,957.32 |
Depreciation & Amortization |
4,807.20 |
4,813.76 |
5,292.32 |
5,323.82 |
Profit Before Tax |
508.67 |
5,246.67 |
291.54 |
3,977.54 |
Less/(Add) : Exceptional Items |
-- |
-- |
-- |
-- |
Less: Provision for Tax |
604.69 |
2,079.08 |
650.34 |
2,246.03 |
Deferred Tax |
(372.11) |
1,026.81 |
(304.60) |
1,030.32 |
Mat Credit Entitlement |
-- |
-- |
-- |
-- |
Short/(Excess) Prov. of earlier years |
(532.28) |
34.56 |
(532.28) |
34.56 |
Profit After Tax |
808.37 |
2,106.22 |
478.08 |
666.63 |
Add: |
||||
Others Comprehensive Income |
11.41 |
(75.04) |
(171.08) |
923.84 |
Share of Profit of Associates |
-- |
-- |
270.42 |
408.39 |
Previous Year Balance Brought Forward |
19,415.97 |
18,827.02 |
21,291.76 |
20,735.14 |
PROFIT AVAILABLE FOR APPROPRIATION |
20,235.75 |
20,858.20 |
21,869.18 |
22,734.00 |
APPROPRIATIONS: |
||||
Dividend paid |
561.00 |
1,198.29 |
561.00 |
1,198.29 |
Income Tax on Dividend paid |
114.20 |
243.94 |
114.20 |
243.95 |
Transfer to General Reserve |
-- |
-- |
-- |
-- |
Balance Carried Forward |
19,560.55 |
19,415.97 |
21,193.98 |
21,291.76 |
Your Companyâs total consolidated turnover for the year ended on March 31, 2018 was Rs.118,850.06 Lakhs as against Rs.127,465.54 Lakhs for previous year.
For the year ended on March 31, 2018, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of Rs.11,592.29 Lakhs as against the EBIDTA of Rs.16,402.42 Lakhs during the previous year.
The Consolidated Net Profit of the Company for the year 2017-18 after other comprehensive income and share of profit/loss of associates was Rs.199.28 Lakhs compared to Rs.1,998.86 Lakhs during the previous year.
During the year under review, your Companyâs consolidated net worth is Rs.70,887.19 Lakhs as against Rs.70,984.97 Lakhs for previous year.
Dividend
Your Directors have recommended dividend of 10% i.e Rs.0.20/- per share on 11,21,99,965 equity shares of Rs.2/- each for the year ended on March 31, 2018 (previous year Rs.0.50/- per share on 11,21,99,965 equity shares of Rs.2/- each).
The said dividend, if approved by the shareholders, would involve a cash outflow of Rs.270.53 Lakhs, including dividend distribution tax of Rs.46.13 Lakhs against Rs.675.21 Lakhs including dividend distribution tax of Rs.114.21 Lakhs in the previous year.
During the year, the unclaimed dividend pertaining to the financial year 2009-10 has been transferred to the Investor Education & Protection Fund.
Transfer to Reserves
The Company proposes to retain the entire amount of Rs.19,560.56 Lakhs in the profit and loss account.
Share Capital
The paid up Equity Share Capital as on March 31, 2018 was Rs.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.
Directorsâ shareholding in the Company, as on March 31, 2018, is given in extract of Annual Return.
Finance
Cash and cash equivalent as at March 31, 2018 was Rs.831.70 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. There are no unpaid/unclaimed deposits as on March 31, 2018.
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)
Director Retire by rotation IIn accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Prashant C. Amin, 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.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (LODR) 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. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
Meetings
During the year four Board Meetings, four Audit Committee Meetings, four Stakeholders Relationship Committee Meetings, two Nomination and Remuneration Committee Meetings, one Corporate Social Responsibility Committee Meeting, one Management Committee Meeting and one Separate Meeting of Independent Directors were held.
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 May 19, 2017 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, 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-a-vis the Company, the industry in which the Company operates, business model etc. 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 Companyâs website https://www.elecon.com/ investors/corporate-information.
Remuneration Policy
TThe policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel is set out in âAnnexure Aâ which forms part of the Board 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.
Change in KMP
During the year under review, Shri Parthiv Parikh resigned as Company Secretary, KMP & Compliance Officer of the Company w.e.f. August 4, 2017. Shri Devang Trivedi has been appointed as Company Secretary, KMP & Compliance Officer of the Company w.e.f. August 5, 2017 and he resigned as Company Secretary, KMP & Compliance Officer of the Company w.e.f. January 13, 2018.
Shri Rajat Jain resigned as Chief Financial Officer & KMP of the Company w.e.f. close of business hours of December 31, 2017. Shri Kamlesh Shah has been appointed as Chief Financial Officer & KMP of the Company w.e.f. May 4, 2018.
Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, the Board of Directors, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with 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 armâs length basis and in the ordinary course of the Companyâs business. All such contracts or arrangements were entered into only with prior approval of Audit Committee. No material contract or arrangements with related parties were 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 Companyâs website at https://www.elecon.com/views/templates/admin-uploads/Investors/Policies/Elecon-Related-Party-Transactions-Policy-2017.pdf. None of the Directors or any Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.
Auditors
Statutory Auditors
M/s. B S R & Co. LLP, Chartered Accountants appointed as a 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 2015-16 until the conclusion of Annual General Meeting for the financial year 2020-21. As per the provisions of Section 139 of the Companies Act, 2013 the Company has placed the matter relating to ratification of their appointment by members at the Annual General Meeting.
M/s. B S R & Co. LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Statutory Auditors of the Company. As required under SEBI (LODR) Regulations, 2015, the Auditor 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, 2019 on a remuneration of â 75,000/- 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 Memberâs ratification for the remuneration payable to M/s. Y.S. Thakar & Co., Cost Auditors is included in the notice convening the 58th Annual General Meeting. The Cost Audit Report for the year 2016-17 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. The Report on the Secretarial Audit carried out by him during the year 2017-18 is annexed herewith as âAnnexure Bâ.
Subsidiary, Joint Venture & Associate Companies
As on March 31, 2018, the Company has 12 Direct & Indirect Subsidiary Companies.
During the year under review, no new Company has been incorporated / acquired as Subsidiary, Joint Ventures or Associates Companies.
Pursuant to the provisions of Sections 129, 134 and 136 of the Companies Act, 2013 read with rules framed there under 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
Elecon Transmission International Limited (Mauritius - consolidation)
During the financial year under review, turnover of Benzlers Radicon Group increased sales by 2.9 % from GBP 31.6 million FY 2016-17 to GBP 32.5 million FY 2017-18. There was also an increase in EBITDA from 0.2% FY 2016-17 to 2.4% FY 2017-18. Finance Cost has increased by 1.4% and SG&A Cost has increased by 6.8 % which resulted in a loss of GBP 1.22 million FY 2017-18 compared to a loss of GBP 1.71 million in FY 2016-17.
Benzlers group (Nordic and Europe)
Benzlers Group had a good year in terms of sales. All entities in both Nordic and European countries increased their sales compared to previous year except Denmark. The sales dropped in Denmark during the first 6 months due to slow order intake, however the orders have picked up again in the last 6 months. The sales increased by 4.7% with highest sales growth coming from European customers (14.6%).
EBITDA grew from GBP 1.08 million ( 7.1%) to GBP 1.71 million ( 10.7%) due to better sales and efficient cost control processes. This together with the increased sales has given the group a PAT of GBP 1.18 million an increase of almost 3 times compared to previous year of GBP 0.45 million.
Benzlers Group sales performance in the FY 2017-18 - despite very strong competition - is in line with business strategy of changing from a product oriented company to a sales and service company. We expanded our service and repair business in the Nordic countries during FY 2017-18 and the focus will be to increase the profit in this area further. We will also put more focus on sales and development of Screwjacks range during the year which was started in 2017 with good results. We are in the process of placing more marketing activities and digital communications in the market place which will give us positive results in coming year.
The marketing of Elecon products into the European Union is continuously being well received and the sales of these products are increasing yearly.
Radicon Transmission UK Limited
The UK domestic market continues to be cautious, due to Brexit. This is affecting capital investment decisions within a lot of industries. Which has subsequently affected a number of larger project based orders available in the market.
Distribution and the replacement market have stayed consistent, but with the lack of larger investment projects this has increased competition to substitute for the lack of the investment/project orders. We still believe that Radicon is well placed to service this market. As we have the advanced manufacturing capabilities of Elecon Engineering Company Limited, along with local facilities to provide not only sales, but also engineering and technical support direct to our customers. This enables Radicon to provide customised service levels to high volume distributors and manufacturers wanting standard products, to more bespoke customers requiring higher technical support and assistance. We believe it is this attention to customer service level that will distinguish Radicon in a competitive market. And we continue to focus on providing outstanding customer support and service.
We also have an established and experienced service and repair division which has seen some challenges in the steel industry, due to reorganization of the British Steel industry. We are now seeing new opportunities within this sector. This coupled with having managed to secure some important contracts with key new customers, we are looking for continued growth in our service and repair division in the coming year.
Growth potential outside of Radiconâs domestic and traditional markets continues to be explored. Orders within the African region increased by 3.3% on prior year and are expected to continue to grow with increased local representation. Eleconâs enhanced product ranges, are also giving Radiconâs customerâs greater choice and options, whilst increasing capabilities, with engineering support.
Sales revenue increased 1% to GBP 11.2 million in FY 2018, from GBP 11.1 million in FY 2017.
EBITDA was GBP 0.772 million compared with GBP 0.956 million in FY 2017. This was affected by new material cost saving initiatives being delayed, whilst market conditions keeping resale prices competitive with increased transport costs during the year.
Despite challenging European markets, starting the new financial year with an established sales team, along with Eleconâs product ranges, development of new sectors, industries, and territories, Radicon UK are forecasting growth in FY 2018-19.
Radicon Drive Systems, Inc, (Radicon USA) - a Radicon UK subsidiary
During the last financial year Radicon Drive Systems has continued with the expansion of its sales and marketing team, and an increased representation geographically. This has been backed by an extensive marketing campaign to communicate the Radicon brand, and also publicise the additional Elecon product ranges and capabilities which can now be offered. Growth of national distribution partners is also continuing, to increase national market penetration.
Radicon Drive Systems moved its facilities to a new much larger premises during the year. We are confident that the company now has the facility and capabilities to give the expanded customers base, the great Radicon service levels.
Subsequently, Radicon Drive Systems is now serving a larger and more geographically diverse customers base. However, converting all of these into sales revenue, is now expected to be mainly realised in the 2018-19 financial year.
As such the sales revenue for the past year increased by 4% from USD 9.6million to USD 10 million.
EBITDA loss increased from USD 1.3 million FY 2017-18 to a loss of USD 2.1 million FY 2018-19. As a consequence of the increase in selling and expansion costs plus additional one time transport costs and competitive pricing to establish new customers was also a factor.
The management is confident that Radicon Drive Systems will grow sales and profitability in FY 2018-19 and beyond.
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 Companyâs products in Singapore, Indonesia, Malaysia, Laos, Vietnam, Philippines, Taiwan, South Korea, North Korea, Cambodia, Russia, China, Japan, Myanmar, Thailand, Mongolia and other Far East countries.
During the year under consideration revenue of Elecon Singapore Pte. Ltd., has dropped from USD 2.08 million FY 2016-17 to USD 1.72 million FY 2017-18. Accordingly EBITDA has decreased from 0.027 million FY 2016-17 to USD (0.18) million FY 2017-18.
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 Companyâs products in U.A.E. (Abu Dhabi, Dubai, Sharjah, Ajman, Umma Al Quwain, Ras Al Khaimah), Saudi Arabia, Oman, Yemen, Jordan, Kuwait, Iran, Iraq, Syria, Turkey, Bahrin, Qatar, Afghanistan, Palestine, Algeria, Comoros, Djibouti, Lebanon and other Middle East Countries.
During the year, total revenue of Elecon Middle East FZE has dropped by 17.70 %, from AED 8.51 million FY 2016-17 to AED 7.01 million FY 2017-18. However, EBITDA has increased by 176.80 % from AED 0.56 million FY 2016-17 to AED 1.55 million FY 2017-18.
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 Rs.14,216.55 Lakhs as against Rs.18,540.52 Lakhs in the previous year. For the year ended on March 31, 2018, EEIL has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) including other income of â 2,496.76 Lakhs as against the EBIDTA of Rs.3,535.15 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 Companyâs 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 Companyâs website at https://www.elecon.com/ views/templates/admin-uploads/Investors/whistle-blower-policyZElecon-Whistle-Blower-Policy-2017.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
In accordance with the provisions of Section 135 of the Companies Act, 2013 and Rules framed thereunder your Company has adopted a policy for CSR and the Board has constituted a Committee for implementing the CSR activities. Composition of the Committee and other details are provided in Corporate Governance Report.
The Company has implemented various CSR projects directly and / or through implementing agency and the projects 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, is given in âAnnexure Câ, forming part of this report.
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.
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 the date of this report.
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
Although it is not mandatory for the Company, the Board of the Company has constituted 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.
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 âAnnexure Dâ.
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 is annexed herewith as âAnnexure Eâ, forming part of this Report.
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 Companyâs website at https://www. elecon.com/views/templates/admin-uploads/Investors/ Policies/Elecon-Sexual-Harassment-Policy.pdf.
Copy of Annual Return
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as âAnnexure Fâ.
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 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 4, 2018
Mar 31, 2017
Dear Members,
The Directors have pleasure in presenting this 57th Annual Report together with the Audited Financial Statements for the year ended on March 31, 2017.
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
Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards ("IndASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. Financial statements for the year ended and as at March 31, 2016 have been restated to conform to IndAS Note 43 to the standalone & consolidated financial statement provides further explanation on the transition to Ind AS.
Standalone Financial Performance
For the year ended on March 31, 2017, the Company has achieved a Turnover of Rs.99,648.05 Lakhs as against Rs.106,473.41 Lakhs in the previous year.
For the year ended on March 31, 2017, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of Rs.15,579.96 Lakhs as against the EBIDTA of Rs.14,236.49 Lakhs during the previous year, representing a marginal increase in EBIDTA by 9.43%.
The Net Profit of the Company for the year 2016-17 was Rs.2,106.22 Lakhs compared to Rs.3,651.10 Lakhs during the previous year.
The Company holds total unexecuted orders about Rs.115,780 Lakhs (Rs. 67,959 Lakhs for Gear Division and Rs.47,821 Lakhs of MHE Division) as on March 31, 2017. This will help us to continue to have sustainable growth in coming years.
The financial performance of the Company in the fiscal remained soft as it witnessed challenges on multiple counts. At the macro level, the economic activity in the country remained low and it resulted in the slow pick up of orders and poor execution of the operation at the client level. The Company''s customers also got affected by Demonetization, event which led to some disruption of activity. At the micro level, the integration process of merger of Elecon EPC Projects Limited, which is a significant step forward for the Company''s growth, also added momentary interruption to the normalcy. With the major events already executed, the Company now aims to consolidate its business and expand its operations on the core strengths. It expects the activity at the macro level to smoothen soon and thus anticipates a strong recovery in its business in the near term future.
Consolidated Operations
The Audited Consolidated Financial Statements of your Company as on March 31, 2017, which forms part of the Annual Report, have been prepared pursuant to the provisions of SEBI (LODR) Regulations, 2015 and also as per the applicable Indian Accounting Standard (IndAS) on Consolidated Financial Statements (IndAS-110) as notified by the Ministry of Corporate Affairs.
Particulars |
Standalone |
Consolidated |
||
31/03/17 |
31/03/16 |
31/03/17 |
31/03/16 |
|
Turnover |
99648.05 |
106473.41 |
127465.54 |
136554.80 |
Profit Before Tax, Finance cost, Depreciation & Amortization and Adjustment for previous year (EBIDTA) |
15579.96 |
14236.49 |
16402.42 |
16380.24 |
Add: Other Income |
785.34 |
3125.10 |
856.26 |
2967.50 |
EBIDTA (Including other income) |
16365.30 |
17361.59 |
17258.68 |
19347.73 |
Less : Finance Cost |
6304.87 |
6243.73 |
7957.32 |
7471.96 |
Depreciation & Amortization |
4813.76 |
5567.22 |
5323.82 |
6212.26 |
Profit Before Tax |
5246.67 |
5550.64 |
3977.54 |
5663.52 |
Less: Provision for Tax |
2079.08 |
1419.53 |
2246.03 |
1663.35 |
Deferred Tax |
1026.81 |
489.62 |
1030.32 |
570.19 |
Short/(Excess) Prov. of earlier years |
34.56 |
(9.61) |
34.56 |
(9.61) |
Profit After Tax |
2106.22 |
3651.10 |
666.63 |
3439.59 |
Add: |
|
|
|
|
Others Comprehensive Income |
(75.04) |
(29.02) |
923.84 |
157.04 |
Share of Profit of Associates |
-- |
-- |
408.39 |
297.33 |
Previous Year Balance Brought Forward |
18827.02 |
18153.99 |
16476.71 |
15531.81 |
PROFIT AVAILABLE FOR APPROPRIATION |
20858.20 |
21776.07 |
18475.57 |
19425.76 |
APPROPRIATIONS: |
|
|
|
|
Dividend paid |
1198.29 |
1198.29 |
1198.29 |
1198.29 |
Income Tax on Dividend paid |
243.94 |
250.76 |
243.94 |
250.76 |
Transfer to General Reserve |
-- |
1500.00 |
-- |
1500.00 |
Balance Carried Forward |
19415.97 |
18827.02 |
17033.34 |
16476.71 |
Your Company''s total consolidated turnover for the year ended on March 31, 2017 was Rs.127,465.54 Lakhs as against Rs.136,554.80 Lakhs for previous year.
For the year ended on March 31, 2017, the Company has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) of Rs.16,402.42 Lakhs as against the EBIDTA of Rs.16,380.24 Lakhs during the previous year.
The Consolidated Net Profit of the Company for the year 2016-17 after minority interest and share of profit/loss of associates was ''1,998.86 Lakhs compared to Rs.3,893.96 Lakhs during the previous year.
During the year under review, your Company''s consolidated net worth is Rs.70,984.97 Lakhs as against Rs.70,428.35 Lakhs for previous year.
Dividend
Your Directors have recommended dividend of 25% i.e Rs.0.50/- per share on 11,21,99,965 equity shares of Rs.2/-each for the year ended on March 31, 2017 (previous year Rs.1.10/- per share on 10,89,35,843 equity shares of Rs.2/-each).
The said dividend, if approved by the shareholders, would involve a cash outflow of Rs. 675.21 Lakhs, including dividend distribution tax of Rs.114.21 Lakhs against Rs.1,442.23 Lakhs including dividend distribution tax of Rs.243.94 Lakhs in the previous year.
During the year, the unclaimed dividend pertaining to the financial year 2008-09 has been transferred to the Investor Education & Protection Fund.
Transfer to Reserves
The Company proposes to retain the entire amount of Rs.19,415.97 Lakhs in the profit and loss account.
Amalgamation of Elecon EPC Projects Limited with Elecon Engineering Company Limited
During the year under review, the Hon''ble High Court of Gujarat, vide its Orders dated October 7, 2016 approved the Scheme of Arrangement of Elecon EPC Projects Limited (Transferor Company) with the Company and their respective Shareholders and Creditors. The appointed date of the Scheme was March 30, 2015. The Scheme became effective upon filing of the certified copy of order with Registrar of Companies, Gujarat on October 24, 2016.
The Scheme of Amalgamation inter alia, envisages following benefits:
i. Enable Company to use the resources of Transferor Company and generate significant synergy in operations;
ii. The consolidated entity would be able to utilize its full potential and leverage on the combined financial strength as well as optimize the use of resources for the purpose of future growth;
iii. Reduction of overheads and other expenses, facilitate administrative convenience and ensure optimum utilization of available services and resources.
Share Capital
The paid up Equity Share Capital as on March 31, 2017 was Rs.2,244.00 Lakhs. Pursuant to the Scheme of Amalgamation duly approved by the Hon''ble High Court of Gujarat vide its order dated October 7, 2016, the Company has issued 32,64,122 Equity Shares to the shareholders of Elecon EPC Projects Limited (Transferor Company) on November 10, 2016.
During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.
Directors'' shareholding in the Company, as on March 31, 2017, is given in extract of Annual Return.
Finance
Cash and cash equivalent as at March 31, 2017 was Rs.470.84 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. There are no unpaid/unclaimed deposits as on March 31, 2017.
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
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.
Your Directors expressed their profound grief on the sad demise of Shri Hasmukhlal S. Parikh, an Independent Director of the Company on May 8, 2016. The Board expressed its heartfelt condolence to his family members to bear the irreparable loss. The Board paid glowing tribute to him and put on record highest appreciation of his association with the Company as a highly respected Director.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (LODR) 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. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
Meetings
During the year four Board Meetings, four Audit Committee Meetings, one Corporate Social Responsibility Committee Meeting, three Nomination and Remuneration Committee Meetings, three Stakeholders Relationship Committee Meeting and one Separate Meeting of Independent Directors were held. 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 April 27, 2016 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, 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
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 policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel is set out in "Annexure A" which forms part of the Board 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 along with 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 arrangements with related parties were 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/Inves-tors/Policies/Elecon-Related-Party-Transactions-Policy.pdf.
None of the Directors or any Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.
Auditors
Statutory Auditors
M/s. Thacker Butala Desai, Chartered Accountants, Statutory Auditor of the Company had been appointed as Statutory Auditors for two (2) years at the 55th Annual General Meeting of the Company. Their tenure will expire at the ensuing 57th Annual General Meeting of the Company for the financial year 2016-17.
The Board places on record the highest sense of appreciation for the valuable services rendered by them as Auditors of the Company during their long association with the Company.
M/s. B S R & Co. LLP, Chartered Accountants appointed as a Joint 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 2015-16 until the conclusion of Annual General Meeting for the financial year 2020-21. As per the provisions of Section 139 of the Companies Act, 2013 the Company has placed the matter relating to ratification of their appointment by members at the Annual General Meeting. Consequent upon the expiry of term of M/s. Thacker Butala Desai, M/s. B S R & Co. LLP shall be the Statutory Auditors of the Company.
M/s. B S R & Co. LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Statutory Auditors of the Company. As required under SEBI (LODR) Regulations, 2015, the Auditor 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, 2018 on a remuneration of ''75,000/- 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 57th Annual General Meeting. The Cost Audit Report for the year 2015-16 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. The Report on the Secretarial Audit carried out by him during the year 2016-17 is annexed herewith as "Annexure B".
Internal Auditors
Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Company has appointed M/s. K. C. Mehta & Co., Chartered Accountants (Firm Reg. No. 106237W), as Internal Auditors of the Company to carry out the Internal Audit as per the scope of work approved by the Board.
Subsidiary, Joint Venture & Associate Companies
As on March 31, 2017, the Company has 14 Direct & Indirect Subsidiary Companies.
During the year under review, no new Company has been incorporated / acquired as Subsidiary, Joint Ventures or Associate Companies. Pursuant to the Scheme of Amalgamation as approved by the Hon''ble High Court of Gujarat vide its Order dated October 7, 2016 Elecon EPC Projects Limited ceased to be a Subsidiary Company of the Company.
Pursuant to the provisions of Sections 129,134 and 136 of the Companies Act, 2013 read with rules framed there under 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 Secretary of the Company.
Financial Performance - Subsidiary Companies
Elecon Transmission International Limited (Mauritius -consolidation)
During the financial year under review, turnover of Benzlers Radicon Group has increased by 3.22 % from GBP 30.6 million FY 2015-16 to 31.6 million FY 2016-17. However there is a drop in EBITDA from 7.20% FY 2015-16 to 2.98 % FY 2016-17. Finance Cost and SG&A Cost has increased by 45.53 % and 15.34% respectively which resulted in loss of GBP 1.53 million FY 2016-17 from Profit Before Tax of GBP 0.11 million FY 2015-16.
Benzlers group (Nordic and Europe)
Benzlers Group had a good year in terms of sales. All entities in both Nordic and European countries increased their sales compared to previous year. The sales increased by 18% with highest sales growth coming from Nordic customers.
EBITDA grew from GBP 0.89 million ( 6.9%) to GBP 1.08 million ( 7.1%) due to better sales and efficient cost control processes put in place during FY 2015-16. This together with the increased sales has given the group a PAT of GBP 0.45 million almost double than previous year of GBP 0.24 million.
Benzler Groups sales performance in the FY 2016-17 -despite very strong competition - is in line with business strategy of changing from a product oriented company to a sales and service company. We are expanding our service and repair business in the Nordic countries during FY 2017-18. We are in the process of placing more marketing activities and digital communications in the market which will give us positive result in coming year.
The marketing of Elecon products into the European Union is continuously being well received and the sales of these products are increasing yearly.
Radicon Transmission UK Ltd.
The UK domestic market continues to be subdued, due to Brexit. This is affecting capital investment decisions within a lot of industries. This has affected number of larger project based orders available in the market.
Distribution and the replacement market have stayed consistent but with the lack of larger investment projects, this has increased competition to substitute for the lack of the investment/project orders. We still believe that Radicon is well placed to service this market. As we have the advanced manufacturing capabilities of Elecon Engineering Company Limited along with local facilities to provide not only sales, but also engineering and technical support direct to our customers. This enables Radicon to provide customized service levels to high volume distributors and manufacturers, wanting standard products to more bespoke customers, requiring higher technical support and assistance. We believe it is this attention to customer service level that will distinguish Radicon in a competitive market. And we continue to focus on providing outstanding customer support and service.
We also have an established and experienced service and repair division which has seen some challenges in the steel industry during the past year. However, we have managed to secure some important contracts with key new customers and we are looking for growth in our service and repair division in the coming year.
Growth potential outside of Radicon''s domestic and traditional markets continues to be explored. Orders within the African region increased by 10% on prior year and are expected to continue to grow with increased local representation. Elecon''s enhanced product ranges, are also giving Radicon''s customer''s greater choice and options, whilst increasing capabilities, with engineering support.
We are also looking for further opportunities in the export markets, which may be strengthened more with competitive pricing resulting from GBP currency depreciation. However the currency depreciation during the past financial year has impacted on Radicon UK''s profit, as GBP lost ground on all major currencies after the EU referendum.
Sales revenue dropped 20.7% to GBP 11.1 million in FY 2017, from GBP 14.0 million in FY 2016. However, due to cost control initiatives and adaptability, EBITDA was maintained at GBP 1 million compared with GBP 1.3million in FY 2016. And would have been similar to prior year, if not for foreign currency fluctuations.
Despite challenging European markets, starting the year with an established sales team, along with Elecon''s product ranges, development of new sectors, industries, and territories Radicon UK are forecasting growth in FY 2018.
Radicon Drive Systems, Inc, (Radicon USA)
(Formerly known as Elecon USA Transmission Ltd.) - a Radicon UK subsidiary
During the last financial year Radicon Drive Systems has continued with the expansion of its sales and marketing team, and an increased representation geographically. This has been backed by an extensive marketing campaign to communicate the Radicon brand, and also publicize the additional Elecon product ranges and capabilities which can now be offered. Growth of national distribution partners is also continuing, to also increase national market penetration.
Radicon Drive Systems also expanded their facilities and moved to new larger premises during the year. Coupled with further capital investment, to make sure that the company has the capabilities to give the expanded customer base, the great Radicon service levels.
Subsequently Radicon Drive Systems is now quoting a larger and more geographically diverse customer base. However converting all of these into sales revenue, is now expected to be mainly realised in the forthcoming financial year.
As such the sales revenue for the past year increased by 1% from USD 9.5million to USD 9.6 million.
EBITDA reduced from USD 0.3 million to a loss of USD 1.3 million as a consequence of the increase in selling and expansion costs. The management believes that this investment will help grow sales and profitability in the new financial year and beyond.
Elecon Singapore Pte. Ltd.
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 and other Far East countries.
Elecon Singapore Pte. Ltd., has achieved a total revenue growth of 32.77 %, from USD 1.56 million FY 2015-16 to USD 2.08 million FY 2016-17. However, EBITDA has decreased by 62.76% from USD 0.072 million FY 2015-16 to USD 0.027 million FY 2016-17.
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 U.A.E. (Abu Dhabi, Dubai, Sharjah, Ajman, Umma Al Quwain, Ras Al Khaimah), Saudi Arabia, Oman, Yemen, Jordan, Kuwait, Iran, Iraq, Syria, Turkey, Bahrin, Qatar, Afghanistan, Palestine, Algeria, Comoros, Djibouti, Lebanon and other Middle East Countries.
During the year, total revenue of Elecon Middle East FZE has dropped by 36.18 %, from AED 13.33 million FY 2015-16 to AED 8.51 million FY 2016-17 and an EBITDA has dropped by 75.40% from AED 2.21 million FY 2015-16 to AED 0.54 million FY 2016-17.
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 Rs.18,540.52 Lakhs as against Rs.14,953.26 Lakhs in the previous year, representing an increase of 24 %.
For the year ended on March 31, 2017, EEIL has achieved Earnings Before Interest (Finance Cost), Depreciation & Amortization and Tax (EBIDTA) including other income of Rs.3,535.15 Lakhs as against the EBIDTA of Rs.3,022.19 Lakhs during the previous year, representing an increase of 16.97 %.
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/admin-uploads/Investors/whistle-blower-policy/Elecon-Whistle-Blower-Policy.pdf.
Report on Management Discussion & Analysis and Corporate Governance
As per Chapter IV of SEBI (LODR) Regulations, 2015, separate reports on Management Discussion & Analysis, Corporate Governance and a certificate from the Company''s Auditors 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
In accordance with the provisions of Section 135 of the panies Act, 2013 and Rules framed there under your Company has adopted a policy for CSR and the Board has constituted a Committee for implementing the CSR activities. Composition of the Committee and other details are provided in Corporate Governance Report.
The Company has implemented various CSR projects directly and / or through implementing agency and the projects 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, is given in "Annexure C", forming part of this report.
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.
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 the date of this report.
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 there under.
Risk Management
Although it is not mandatory for the Company, the Board of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Board at its meeting held on July 26, 2016 & November 10, 2016 reconstituted Risk Management Committee, particulars of which are mentioned in the Corporate Governance Report. 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.
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 D"
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, is annexed to this Report as "Annexure E", forming part of this Report.
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.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure F".
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 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 19, 2017
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting this 54th Annual Report
together with the Audited Statements of Accounts for the year ended on
March 31, 2014.
In the environment of global slowdown, your Directors strive hard to
retain/restate the confidence of various stakeholders including the
shareholders. We have continued with our custom of providing high
quality content and services. The custom in no way hinders our capacity
for innovations.
As you are our valued partner 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
endeavours.
The summary of operating results for the year and appropriation of
divisible profits is given below:
Review of Operations
Standalone financial performance
For the year ended on 31st March, 2014, the Company has achieved a
Turnover of Rs. 50,123.19 Lacs as against Rs.59,520.70 Lacs in the previous
year, representing decrease in Turnover by 15.79%. The decline in
turnover is because of slow down in Indian economy.
For the year ended on 31st March, 2014, the Company has achieved
Earnings Before Interest (Finance Cost), Depreciation & Amortization
and Tax (EBIDTA) of Rs.11,762.34 Lacs as against the EBIDTA of Rs.11,381.85
Lacs during the previous year, representing increase in EBIDTA by
3.34%.
The Company holds total unexecuted orders worth Rs. 266.49 Crs. as on
March 31, 2014. This will help us to continue to have sustainable
growth in coming years.
( Rs. in Lacs)
Year Ended March 31, Standalone Consolidated
2013-14 2012 -13 2013-14 2012-13
Profit Before Tax,
Finance cost, 11,762.34 11,381.85 16,504.25 21,560.59
Depreciation &
Amortization and
Adjustment for previous
year
Less : Finance Cost 3,324.78 3,008.16 7,403.70 8,168.32
Depreciation &
Amortization 4,542.22 4,198.88 6,162.36 5,708.99
Profit Before Tax 3,895.34 4,174.81 2,938.19 7,683.28
Less/(Add) : Exceptional
Items - 2,668.29 - 2,668.29
Less: Provision for Tax 1,402.67 1,044.37 1,667.80 2,268.90
Deferred Tax (250.31) (306.49) (84.21) (111.58)
Mat Credit Entitlement - - (73.35) -
Short/(Excess) Prov. of
earlier years - (83.86) 1.22 (81.82)
Profit After Tax 2,742.98 852.50 1,426.73 2,939.49
Add:
Minority Interest - - (68.87) (1,150.99)
Profit on disposal of
Interest in Associate - - 15.42 4.72
Previous Year Balance
Brought Forward 1,924.09 2,446.09 1,259.25 1,241.98
PROFIT AVAILABLE FOR
APPROPRIATION
APPROPRIATIONS: 4,667.07 3,298.59 2,632.53 3,035.20
Proposed Dividend 1,089.36 1,089.36 1,121.33 1,089.36
Income Tax on Dividend 97.91 185.14 104.41 278.90
Transfer to General
Reserve 500.00 100.00 799.07 407.69
Balance Carried Forward 2,979.80 1,924.09 607.72 1,259.25
Consolidated operations
In compliance with the applicable Clauses of the Listing Agreements
with the Stock Exchanges, the Company has prepared Consolidated
Financial Statements as per the Accounting Standard on Consolidated
Financial Statements (AS 21, AS 23 & AS 27) issued by the Institute of
Chartered Accountants of India. The Audited Consolidated Financial
Statements along with the Auditors'' Report have been annexed to this
Annual Report.
Your Company''s total consolidated turnover for the year 2013-14 was
Rs.1,29,291.79 Lacs as against Rs.1,52,684.66 Lacs for previous year,
representing an decrease of 15.32 %.
For the year ended on 31st March, 2014, the Company has achieved
Earnings Before Interest (Finance Cost), Depreciation & Amortization
and Tax (EBIDTA) of Rs.16,504.25 Lacs as against the EBIDTA of Rs.21,560.59
Lacs during the previous year, representing decrease in EBIDTA by
23.45%. During the year under review, your Company''s consolidated net
worth is Rs.53,209.37 Lacs as against Rs.53,779.16 Lacs for previous year.
Dividend
Your Directors are pleased to recommend dividend of Rs.1/- per share
(previous year^1 per share on 10,89,35,843 equity shares of Rs. 2/- each)
on 10,89,35,843 equity shares of Rs. 2/- each for the year ended on 31st
March, 2014.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to the Directors'' Responsibility Statement, it is hereby confirmed
that:
-in the preparation of the annual accounts of the Company for the year
ended on March 31, 2014, the applicable accounting standards have been
followed;
-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 year ended on that date;
-the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and the accounts have been prepared on a "going
concern" basis.
Directors
Retire by rotation
In accordance with the provisions of the Companies Act, 1956 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.
Appointment Under Section 149 of the Companies Act, 2013
In our Company, all Independent Directors were appointed as directors
liable to retire by rotation as per Section 256 of the Companies Act,
1956.
In terms of Section 149 and any other applicable provisions of the
Companies Act, 2013 and Clause 49 of the Listing Agreement, an
Independent Director appointed by the Company and holding office as an
Independent Director as on the date of commencement of the Companies
Act, 2013 i.e. 01.04.2014 shall hold office for a term of five
consecutive years and not be liable to retire by rotation.
Accordingly, all Independent Directors of the Company i.e. Shri H.S.
Parikh, Shri Chirayu Amin, Shri Jal R. Patel and Shri Jai S. Diwanji
shall be appointed as Independent Directors to hold office for a term
of five consecutive years from 01.04.2014 upto 31.03.2019 and shall not
liable to retire by rotation.
All our Independent Directors fulfil the conditions specified in the
Companies Act, 2013 and rules made there under for their appointment as
Independent Directors of the Company and are independent of the
management.
Members'' approval for their appointment as Independent Directors has
been sought in the Notice convening the Annual General Meeting of the
Company.
Auditors
Section 139 read with Rules the Companies (Audit and Auditors) Rules,
2014, an Audit firm can be appointed as Statutory Auditors of the
Company for maximum two terms of five consecutive years. If the Audit
firm has already been appointed as Statutory Auditors of the Company
for more than 10 years as on the date of the commencement of the Act,
i.e. 01.04.2014, such Audit firm can be appointed as Statutory Auditors
for maximum period of 3 years from the date of commencement of the Act,
2013 and their appointment shall be ratified at each Annual General
Meeting till the completion of the term.
Since, the Company''s Auditors M/s. Thacker Butala Desai, Chartered
Accountants, Navsari has been appointed as Statutory Auditors of the
Company for more than 10 years, they can be appointed as Statutory
Auditors of the Company to hold the office for maximum period of 3
years from the ensuing Annual General Meeting of the Company. However,
your Directors have decided to appoint them on annual basis and they
will hold office for one year from the conclusion of the ensuing Annual
General Meeting till the conclusion of the next Annual General Meeting
after the commencement of the Act i.e. 01.04.2014.
Subsidiary Companies
Elecon EPC Projects Limited. (EPL)
Financial Performance: During the year under review, turnover of EPL
was Rs. 50,203.45 Lacs against Rs. 66,442.23 Lacs during previous year.
( Rs. In Lacs)
PARTICULARS 31.03.2014 31.03.2013
Profit before Depreciation, Interest & 4,409.51 8,830.02
provision for Taxation
Less: Finance Cost 3,125.13 3,780.57
Depreciation & Amortisation 934.42 850.68
Profit Before Tax 349.96 4,198.77
Add/Less: Provision for Taxation 73.35 1,061.29
Deferred Tax 180.42 223.45
MAT Credit entitlement (73.35) -
Profit After Tax 169.54 2,914.03
APPROPRIATION :
Transfer to General Reserve 150 300.00
Proposed Dividend - Equity Shares - 848.56
Tax on distributed dividend - 144.21
Balance brought forward to balance sheet ,621.18 (0.08)
Balance carried forward to balance sheet 1,640.72 1,621.18
Foreign Subsidiaries
Benzlers-Radicon Group
The Benzlers Radicon group saw tremendous amount of activity by way of
site shifting in Benzlers and record order booking growth in Radicon UK
(24%) and Radicon USA (18%)
Benzlers shifted its focus from being a manufacturer to that of being a
Sales and Engineering focused company. A major portion of
manufacturing has been shifted to Elecon in India. The movement saw a
great amount of hard work and teamwork by the employees which
culminated into an Open day event and inauguration of the facility by
our Group Chairman. Along with the open day event, Benzlers also
celebrated its 70th anniversary which covered meetings with our key
customers and distributors. The new mantra for the B-R group is growth
through volumes.
Radicon UK booked 2 prestigious orders from Glaxo Smith Kline (value
GBP 1 million) and MVB ( Value GBP 1.2 million), this is the highest
single value order in history of Radicon. The current year will see an
expansion of sales network having our own sales personnel in France;
Africa; Poland; Spain & Portugal. Along with the geographic expansion
we will also expand the product portfolio and introduce the EOS series
and planetary series in UK/Europe.
Radicon USA on the strength of its distribution business and geographic
expansion grew the order booking by 18%. In the current year there will
be aggressive expansion of geographic reach, product portfolio and
manpower to reach a target of USD 20million.
Financial Performance
Against a challenging global economic environment, Benzlers Radicon
group managed to grow sales by 9% from Rs.294 Crores (GBP 34.25 mn.) to
Rs.320Crores (GBP 33.29 mn.). Benzlers group had a negative growth of
17%. The budget for 2014-15 for the group has been set at GBP 49
million targeting a growth of 48%. The major growth is forecasted in
Radicon USA (125%), Radicon UK (28%) and Benzlers Group (30%)
Radicon Transmission UK Ltd.
The sale at Radicon Transmission UK Ltd. is Rs.132 Cr. (GBP 13.70 Mn.) in
FY 13-14 compared to Rs.112 Cr. (GBP 13.06 Mn.) in FY 12-13 resulting
into growth of 17% in FY 13- 14.
Elecon USA Transmission Ltd., (Radicon USA) Â a Radicon UK subsidiary
The sale at Radicon Transmission USA Ltd. is Rs.62 Cr. (USD 10.23 Mn.)
in FY 13-14 compared to Rs. 47 Cr. (USD 8.59 Mn.) in FY 12-13 resulting
into growth of 32% in FY 13-14.
AB Benzlers, Sweden
The sales at AB Benzlers, Sweden is Rs.117 Cr. (SEK 126.55 Mn.) in FY
13-14 compared to Rs.137 Cr. (SEK 168.77 Mn.) in FY 12-13 resulting into
negative growth of (14%) in FY 13-14.
Operations: (Opening new assembly centers across the world)
We have opened our assembly center in UAE and we now have our own sales
personnel in Spain & Portugal. The target is to have our own local
entity with stocks and assembly center once the sales cross GBP 1.5
million in that territory.
In 2013-14 we also appointed new distributors in South Africa; Spain,
Poland, Germany and Finland who carry our stocks in kit form and
locally assemble.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No. 2/2011 dated 8th February, 2011, exempt Companies from
attaching to its Balance Sheet, the individual Annual Reports of its
Subsidiary Companies. As per the Circular, the Consolidated Financial
Statements of the Company and all its Subsidiaries duly audited by its
statutory auditors are included in the Annual Report.
Shareholders interested in obtaining the statement of Company''s
interest in the Subsidiaries or Standalone Financial Statements of the
Subsidiary Companies may obtain the same by writing to the Company
Secretary of the Company.
The annual accounts of Subsidiary Companies are available for
inspection by any investor at the registered office of the Company.
Corporate Governance
As per Clause 49 of the Listing Agreement, a report on Corporate
Governance, together with Management Discussion and Analysis and a
certificate from the Company''s Auditors form part of this Report.
Your Company, acknowledging its corporate responsibility, has obtained
a "Secretarial Compliance Report" from Mr. Ashwin Shah, Company
Secretary in practice, which is annexed to this Report.
Your Company is committed to maintain the highest standards of
Corporate Governance, reinforcing the valuable relationship between the
Company and its Stakeholders.
Fixed Deposits
During the year under review, your Company has not accepted any fixed
deposits under the provisions of Section 58A of the Companies Act, 1956
read with Companies (Acceptance of Public Deposits) Rules, 1975. There
are no unclaimed deposits as on 31st March, 2014.
Particulars of Employees
Statement as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (particulars of employees) Rules, 1975 as amended is
annexed to this Report as Annexure A, forming part of this Report.
Foreign Exchange Earnings and Outgo
The particulars required to be furnished under Section 217(1)(e) read
with the Companies (Disclosures of particulars in the report of Board
of Directors) Rules, 1988 are given in Annexure B, forming part of this
Report.
Statutory Disclosures
None of the Directors of your Company is disqualified as per provisions
of Section 274(1)(g) of the Companies Act, 1956. Your Directors have
made necessary disclosures, as required under various provisions of the
Act and Clause 49 of the Listing Agreement.
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
As trustees of the Company, the Directors acknowledge the unstinted
support received from Vendors, Traders, Customers, Banks, Financial
Institutions, Shareholders and the Society at large.
The Directors also acknowledge the support of the Auditors, Bankers,
State and Central Governments'' Officials, Business Partners,
Solicitors, Advisors and Employees. The growth of the Company would not
have been possible without their unfailing support.
Your Directors look forward to having a long and fruitful relationship
with all of them.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
Place: Vallabh Vidyanagar
Date : May 23, 2014
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting this 53rd Annual Report
together with the Audited Statements of Accounts for the year ended on
March 31, 2013.
In the environment of global slowdown, your Directors strive hard to
retain/restate the confidence of various stakeholders including the
shareholde'' We have continued with our custom of providing high
quality content and services. The custom in no way hinders our capacity
for innovations.
As you are our valued partner 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
endeavo''
The summary of operating results for the year and appropriation of
divisible profits is given below:
Review of Operations
Standalone financial performance
For the year ended on 31st March, 2013, the Company has achieved a
Turnover of Rs. 60,631.53 Lacs as against Rs. 1,33,909.98 Lacs in the
previous year. The decline in turnover is only because of slump sale of
MHE Business of the Company, which was used to contribute more than 50%
of total turnover. Therefore, the F.Y. 2012-13 financial figures are
not comparable with previous year''s figures.
For the year ended on 31st March, 2013, the Company has achieved
Earnings Before Interest (Finance Cost), Depreciation & Amortization
and Tax (EBIDTA) of Rs. 10,271.02 Lacs (excluding exceptional item of Rs.
2,668.29 Lacs pertains to loss on sale of MHE undertaking pursuant to
the Scheme of Arrangement).
(Rs.in Lacs)
Year Ended March 31, Standalone Consolidated
2012-13 2011 -12 2012-13 2011-12
Proft Before Tax,
Finance cost, 11381.85 21017.41 21560.59 21667.28
Depreciation &
Amortization and
Adjustment for
previous year
Less : Finance Cost 3008.16 5795.81 8168.32 6634.71
Depreciation &
Amortization 4198.88 4238.08 5708.97 4864.71
Proft Before Tax 174.81 10983.52 7683.30 10167.86
Less/(Add) : Exceptional
Items 2668.29 2668.29 (149.34)
Less: Provision for Tax 1044.37 3495.08 2268.90 3746.11
Deferred Tax (306.49) 360.82 (111.58) 350.68
Short/(Excess)
Prov. of earlier years (83.86) 167.70 (81.82) 166.87
Proft After Tax 852.50 6959.92 2939.99 6053.54
Add: Adjustment of P.
Y. / Share of Proft (1150.99)
of Associate 4.72 30.87
Proft on disposal of
Interest in Associate 25.61
Previous Year Balance
Brought Forward 2446.09 2428.84 1241.98 2409.95
PROFIT AVAILABLE FOR
APPROPRIATION 3298.59 9388.76 3035.20 8519.97
APPROPRIATIONS:
Proposed Dividend 1089.36 1671.51 1089.36 1709.84
Income Tax on Dividend 185.14 271.16 278.90 277.38
Transfer to General Reserve 100.00 5000.00 407.69 5290.77
Balance Carried Forward 1924.09 2446.09 1259.25 1241.98
The Company holds total unexecuted orders worth Rs. 20,612.00 Lacs as on
March 31, 2013. This will help us to continue to have sustainable
growth in coming yea''
Consolidated operations
In compliance with the applicable Clauses of the Listing Agreements
with the Stock Exchanges, the Company has prepared Consolidated
Financial Statements as per the Accounting Standard on Consolidated
Financial Statements (AS 21, AS 23 & AS 27) issued by the Institute of
Chartered Accountants of India. The Audited Consolidated Financial
Statements along with the Auditors'' Report have been annexed to this
Annual Report.
Your Company''s total consolidated revenue for the year 2012-13 was Rs.
1,53,422.83 Lacs as against Rs. 1,62,119.77 Lacs for previous year,
representing an decrease of 5.36%.
During the year, EBIDTA was Rs. 20,822.42 Lacs (excluding exceptional
item of Rs. 2,668.29 Lacs pertains to loss on sale of MHE undertaking
pursuant to the Scheme of Arrangement) as against Rs. 21,018.54 Lacs for
the previous year, representing a decrease of 0.94%. During the year
under review, your Company''s consolidated net worth is Rs. 53,779.16 Lacs
as against Rs. 45,869.29 Lacs for previous year.
Dividend
Your Directors are pleased to recommend dividend of Rs. 1/- per share
(previous year Rs. 1.80 per share on 9,28,61,510 equity shares of Rs. 2/-
each) on 10,89,35,843 equity shares of Rs. 2/- each for the year ended on
31st March, 2013.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to the Directors'' Responsibility Statement, it is hereby confirmed
that:
- in the preparation of the annual accounts of the Company for the year
ended on March 31, 2013, the applicable accounting standards have been
followed;
- 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 year ended on that date;
- the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- the accounts have been prepared on a "going concern" basis.
Directors
Retire by rotation
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Pradip M. Patel and Shri
Chirayu Amin, Directors retire by rotation at the forthcoming Annual
General Meeting of the Company and being eligible, offer themselves for
reappointment.
New Appointment
Shri Jai S. Diwanji, was appointed as an Additional Director of the
Company from the 1st day of November 2012. His experience in the field
of domestic and international laws, drafting of various documents will
provide essential guidance for the Company in today''s legal
complexities. He holds office upto the date of the ensuing Annual
General Meeting of the Company.
The Board welcomes Shri Jai S. Diwanji and considers it an advantage to
the Company to avail the expertise of the new board member. Members''
approval for his appointment as a Director has been sought in the
Notice convening the Annual General Meeting of the Company.
Auditors
The Company''s Auditors M/s. Thacker Butala Desai, Chartered
Accountants, Navsari retire as Statutory Auditors at the ensuing Annual
General Meeting of the Company and being eligible offer themselves for
reappointment.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 2012-13:
Acquisition of Shares of Elecon EPC Projects Ltd.
During the year under review, the Company has invested in shareholding
of Elecon EPC Projects
Ltd. (formerly known as Aakaaish Projects Ltd.), a closely held
unlisted Group Company by purchasing its entire capital. By virtue of
the acquisition of shares, the Elecon EPC Projects Ltd. has become a
Wholly-Owned Subsidiary of the Company. As this Subsidiary is material
non listed Indian subsidiary Company, as per Clause 49 (III) of the
Listing Agreement, one of the Independent Directors of the Company has
been appointed on the Board of the Subsidiary.
Formation of a new Subsidiary Company
During the year, the Company has formed a private Company namely; Excel
EPC Projects Pvt. Ltd. on 30.05.2012 as its Wholly-Owned Subsidiary
Company. Later during the year, the Company has sold its entire
shareholding in Excel EPC Projects Pvt. Ltd. to two of the promoters of
the Company.
Scheme of Arrangement
During the year under review, the Hon''ble High Court of Gujarat, vide
its orders dated December 21, 2012 has sanctioned the Scheme of
Arrangement between Prayas Engineering Limited (''First Demerged
Company'' or ''PEL'') and EMTICI Engineering Limited (''Second Demerged
Company'' or ''EMTICI'') and Elecon Engineering Company Limited (''First
Resulting Company'' or ''EECL'') and Elecon EPC Projects Limited (''Second
Resulting Company or ''EPL'') and their respective Shareholders and
Credito'' The appointed date of the Scheme is April 1, 2012. The
Company has received certified copies of the orders dated 19th March,
2013. The Scheme has become effective on filing of certified copy of
order with Registrar of Companies, Gujarat on 1st April, 2013.
The Scheme of Arrangement inter alia, envisages:
- Transfer of MHE Undertaking of Elecon Engineering Company Limited to
Elecon EPC Projects Limited, a Subsidiary Company of the Company by way
of slump sale.
- Transfer of GEAR business of Prayas Engineering Limited and EMTICI
Engineering Limited to Elecon Engineering Company Limited by way of
demerger.
Slump Sale of MHE Business
By virtue of the Scheme of Arrangement, the Company has transferred its
MHE Div. by way of slump sale to its Subsidiary Company for a total
cash consideration of Rs.127.32 C''
By virtue of the aforesaid High Court order, all assets, liabilities,
facilities, workforce, contracts, rights, obligations, qualifications,
etc. (except land and buildings) of MHE business of Elecon Engineering
Company Limited stands transferred to Elecon EPC Projects Limited.
Merger of GEAR Business of two Group Companies into the Company
By virtue of the Scheme of Arrangement, GEAR businesses of two Group
Companies i.e. Prayas Engineering Ltd. and Emtici Engineering Ltd.,
have been merged into the Company. Against the payment of the
consideration for the merger, the Company has allotted new equity
shares to the Shareholders of these two Group Companies.
By virtue of the aforesaid High Court order, all assets, liabilities,
facilities, workforce, contracts, rights, obligations, qualifications,
etc. (except land and buildings) of GEAR business of Prayas Engineering
Ltd. and Emtici Engineering Ltd. stands transferred to Elecon
Engineering Company Limited.
Share Capital
Pursuant to the Scheme of Arrangement and for the consideration of
merger of GEAR businesses of two Group Companies i.e. Prayas
Engineering Ltd. and Emtici Engineering Ltd., the Company, on 12th
April, 2013, has allotted 1,60,74,333 equity shares to the Shareholders
of these two Group Companies thereby increasing its Paid Up Share
Capital to 10,89,35,843 equity shares of Rs. 2 each.
Subsidiary Companies
Elecon EPC Projects Limited. (EPL) Financial Performance :
During the year under review, turnover of EPL was Rs. 66,813.80 Lacs
against Rs. 3.80 Lacs during previous year.
(Rs. In Lacs)
PARTICULARS 31.03.2013 31.03.2012
Proft before Depreciation &
provision for Taxation 5049.45 3.73
Less: Depreciation & Amortisation 850.68
Proft Before Tax 4198.77 3.73
Add/Less: Provision for Taxation 1061.29 1.20
Deferred Tax 223.45
Excess/Short Provision for tax of
earlier year 0.77
Proft After Tax 2914.03 1.76
APPROPRIATION :
Transfer to General Reserve 100.00
Proposed Dividend - Equity Shares 848.56
Tax on distributed dividend 144.21
Balance Carried forward to balance sheet 1821.18
Foreign Subsidiaries
Year 2012-13 was year of change in Benzlers- Radicon group. Change not
only in terms of leadership but also in terms of operating structure.
Capitalizing on the superior manufacturing setup of Elecon group,
Benzlers-Radicon group will evolve into a highly customer centric,
sales-marketing and assembly- service oriented organization. BR group
has been constantly working towards streamlining of focus towards the
sales and marketing aspects of the business across the BR group and we
believe that this exclusive concentration will enable us to get an edge
over our competitors in the international markets, while reducing our
overall costs.
Benzlers is on the verge of successfully implementing its restructuring
strategy, Project Viking. Through the Project Viking, Benzlers looks
forward to harnessing the world class infrastructure of Elecon and
become a completely lean organization. With the implementation of
Project Viking we will succeed in rationalizing our supply chain, bring
down our costs and effectively compete in the European market.
As a step towards becoming one of the biggest power transmission
players in the world, we are looking forward to implementing our sales
expansion strategy called the Swift Sixteen project. We are planning
to establish Swift Centers in sixteen different locations across the
globe, where the geared motors of the BR group would be assembled and
distributed to the market. Our high quality, distributor friendly,
modular products enable us to successfully setup, operate and expand
our reach in different geographies. In the past one year, we have
already setup a master swift center at Chicago, USA and we are
continuously working towards expanding our distributor network in the
North American market. Similarly, we have also entered into the
growing Russian market, by starting a Swift Center in collaboration
with a strong local entity. We are also establishing a footprint in the
MENA (Middle East and North Africa) region through our own master swift
location in the UAE. We are expecting similar establishments in
countries like South Africa and Australia very soon. We are also
expanding our operations in Europe through setting up new sales offices
and deputing new Key Account Managers at different strategic locations
which would help us increase our marketing network. Through these
activities, we are consistently expanding our reach and growing
aggressively across the world. We are becoming a truly global group
with operations in every continent.
Financial Performance
Against a challenging global economic environment, Benzlers Radicon
group managed to grow sales by 15% from Rs. 255 Crores (GBP 33.46 mn.) to
Rs. 294 Crores (GBP 34.25 mn.). Benzlers group had a negative growth of
6%. The budget for 2013-14 for the group has been set at GBP 40 million
targeting a growth of 17%. Apart from the competition from the
well-established global players one of the biggest challenges facing
the group in exchange risk. For the year end 2012-13, the group has had
to provide for GBP 674,000 as loss on exchange rate movement.
Operations: (Opening new assembly centers across the world)
Elecon group has initiated process to start assembly and sales offices
in various largest and fastest growing economies of the world. The
group plans to open similar locations in South Africa, Brazil,
Ukraine/Russia (CIS) and UAE in the next 2 year This helps the group
to drive sales in new markets.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No. 2/2011 dated 8th February, 2011, exempt Companies from
attaching to its Balance Sheet, the individual Annual Reports of its
Subsidiary Companies. As per the Circular, the Consolidated Financial
Statements of the Company and all its subsidiaries duly audited by its
statutory auditors are included in the Annual Report.
Shareholders interested in obtaining the statement of Company''s
interest in the subsidiaries or stand- alone financial statements of
the subsidiary Companies may obtain the same by writing to the Company
Secretary of the Company.
The annual accounts of subsidiary Companies are available for
inspection by any investor at the registered office of the Company.
Corporate Governance
As per Clause 49 of the Listing Agreement, a report on Corporate
Governance, together with Management Discussion and Analysis and a
certificate from the Company''s Auditors form part of this report.
Your Company, acknowledging its corporate responsibility, has
voluntarily obtained a "Secretarial Compliance Report" from Mr. Ashwin
Shah, Company Secretary in whole-time practice, which is annexed to
this Report.
Your Company is committed to maintain the highest standards of
Corporate Governance, reinforcing the valuable relationship between the
Company and its Stakeholde''
Fixed Deposits
During the year under review, your Company has not accepted any fixed
deposits under the provisions of Section 58A of the Companies Act, 1956
read with Companies (Acceptance of Public Deposits) Rules, 1975. There
are no unclaimed deposits as on 31st March, 2013.
Particulars of Employees
Statement as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (particulars of employees) Rules, 1975 as amended is
annexed to this Report as Annexure A, forming part of this Report.
Foreign Exchange Earnings and Outgo
The particulars required to be furnished under Section 217(1)(e) read
with the Companies (Disclosures of particulars in the report of Board
of Directors) Rules, 1988 are given in Annexure B, forming part of this
report.
Statutory Disclosures
None of the Directors of your Company is disqualified as per provisions
of Section 274(1)(g) of the Companies Act, 1956. Your Directors have
made necessary disclosures, as required under various provisions of the
Act and Clause 49 of the Listing Agreement.
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
As trustees of the Company, the Directors acknowledge the unstinted
support received from Vendors, Traders, Customers, Banks, Financial
Institutions, Shareholders and the Society at large.
The Directors also acknowledge the support of the Auditors, Bankers,
State and Central Governments'' Officials, Business Partners,
Solicitors, Advisors and Employees. The growth of the Company would not
have been possible without their unfailing support.
Your Directors look forward to having a long and fruitful relationship
with all of them.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
Vallabh Vidyanagar,
May 23, 2013
Mar 31, 2012
The Directors have pleasure in presenting this 52nd Annual Report
together with the Audited Statements of Accounts for the year ended on
March 31, 2012.
Your Directors believe in enhancement of wealth of the shareholders. We
have continued with our custom of providing high quality content and
services. The custom in no way hinders our capacity for innovations.
As you are our valued partner 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.
The summary of operating results for the year and appropriation of
divisible profits is given below:
Review of Operations
Standalone financial performance For the year ended on 31st March,
2012, the Company has achieved Turnover of Rs 13,316.72 Mn. as against
the Turnover of Rs 11,739.43 Mn. during the previous year, representing
increase in Turnover of 13.44%
For the year ended on 31st March, 2012, the Company has achieved
Earnings Before Interest, Depreciation & Amortization and Tax (EBIDTA)
of Rs 2,003.90 Mn. as against the EBIDTA of Rs 1,771.40 Mn. during the
previous year, representing increase in EBIDTA by 13.13%.
The Company holds total unexecuted orders worth Rs 1 2,1 20.90 Mn. Out
of which Rs 9,130.07 Mn. is for the MHE division and Rs 2,9908.30 Mn. is
for the Gear Division as on March 31, 2012. This will help us to
continue to have sustainable growth in coming years.
(Rs.in Mn)
Year Ended March 31, Standalone Consolidated
2011-12 2010 -11 2011-12 2010-11
Profit Before Tax,
Finance cost,
Depreciation &
Amortization and 210l.74 2098.39 2166.73 2171.41
Adjustment for
previous year
Less : Finance Cost 579.58 500.94 663.47 527.87
Depreciation &
Amortization 423.81 393.53 486.47 416.50
Profit Before Tax 1098.35 1203.92 1016.79 1227.04
Add : Exceptional Items -- -- 14.93 --
Less:
Provision for Tax 402.36 324.71 426.37 340.35
Deferred Tax -- -- -- --
Short/(Excess)
Prov. of earlier years -- -- -- --
Profit After Tax 695.99 879.21 605.35 886.69
Add:
Adjustment of P. Y. /
Share of Profit --- -- 5.65 12.89
of Associate
Previous Year Balance
Brought Forward 242.88 207.94 241.00 203.75
PROFIT AVAILABLE FOR
APPROPRIATION 938.87 1087.15 852.00 1103.33
APPROPRIATIONS:
Proposed Dividend 167.15 167.15 170.98 167.15
Income Tax on Dividend 27.12 27.12 27.74 27.74
Transfer to General
Reserve 500.00 650.00 529.08 667.45
Balance Carried Forward 244.60 242.88 124.20 240.99
Consolidated operations
In compliance with the applicable Clauses of the Listing Agreements
with the Stock Exchanges, the Company has prepared Consolidated
Financial Statements as per the Accounting Standard on Consolidated
Financial Statements (AS 21, AS 23 & AS 27) issued by the Institute of
Chartered Accountants of India. The Audited Consolidated Financial
Statements along with the Auditors Report have been annexed to this
Annual Report.
Your Company's total consolidated revenue for the year 2011-12 was Rs
16,132.17 Mn. as against Rs12,843.48 Mn. for previous year, representing
an increase of 25.61%.
During the year, EBIDTA was Rs 1998.94 Mn. as against Rs 1,843.02 Mn. for
the previous year, representing an increase of 8.46%. During the year
under review, your Company's consolidated net worth is Rs 4,586.93 Mn.
as against Rs 4,183.91 Mn. for previous year.
Dividend
Your Directors are pleased to recommend dividend of Rs 1.80 per share
(previous year Rs 1.80 per share on 9,28,61,510 equity shares of Rs 2/-
each) on 9,28,61,510 equity shares of Rs 2/- each for the year ended on
31st March, 2012.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to the Directors' Responsibility Statement, it is hereby confirmed
that:
- in the preparation of the annual accounts of the Company for the
year ended on March 31, 2012, the applicable accounting standards have
been followed;
- 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 year ended on that date;
- the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- the accounts have been prepared on a "going concern" basis.
Directors
Retire by rotation
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Hasmukhlal Parikh,
Director retires by rotation at the forthcoming Annual General Meeting
of the Company and being eligible, offers himself for reappointment.
Your Directors express their profound grief on the sad demise of Dr.
A.C. Shah, an Independent Director of the Company on 16th January,
2012. The Board expresses its heartfelt condolence to his family
members to bear the irreparable loss. The Board pays glowing tribute
to him and puts on record highest appreciation of his association with
the Company as a highly respected Director.
New Appointment
Shri Jal Patel, was appointed as an Independent Director of the Company
w.e.f. 12th of May 2012 to fill the casual vacancy caused due to sad
demise of Dr. A.C. Shah. His experience in the field of financial
management, accounting, planning and business development will be an
asset to the Company. He holds the office upto the date of the ensuing
Annual General Meeting of the Company.
The Board welcomes Shri Jal Patel and expects to avail his expertise in
varied areas. Members approval for his appointment as an Independent
Director has been sought in the Notice convening the Annual General
Meeting of the Company.
Auditors
The Company's Auditors M/s. Thacker Butala Desai, Chartered
Accountants, Navsari retire as Statutory Auditors at the ensuing Annual
General Meeting of the Company and being eligible offer themselves for
reappointment.
Subsidiary Companies
During the year under review, the Company has been continuously
investing in the B-R group to enhance the group's profitability as
well as to expand its reach with new offices. Elecon has established UK
as the headquarters for the B-R group with a mandate to drive global
expansion. Elecon has invested in moving to a new manufacturing area
and offices in the UK, while a subsidiary of the UK in USA has started
sales in 2011. There are plans to create more entities to expand the
reach of the B-R group into newer markets.
Some of the initiatives to expand the B-R operations are:
- Expanding the product portfolio of B-R group to include a range of
Special Worm Gear Boxes, Couplings; Planetary Gear Boxes and Vertical
Mill Drives
- Shifting the function of procurement, assembly and testing of G
series gear boxes from Sweden and UK
- Driving the expansion of operations in South Africa; Russia and
South America from UK
A few of these efforts have been given in detail in the following
section:
Benzlers Overview for 2011-12
- Despite the tough economic climate in Europe, a steady top-line
growth has been maintained
- Focus on expanding the Service Business:
A new Service Center has been started at Orebro (North Sweden) with a
special emphasis on the Mining and Paper industries
- Geographic Expansion:
-The Company has entered into the Italian market through its new
subsidiary - Benzlers Italia srl, established at Milan
-The Company has also expanded its presence in Germany with the
addition of a new sales Key Account Manager
- New Products:
-Benzlers has now started focused selling of Elecon Worm units.
-Other Elecon products are being introduced in a planned manner.
Radicon Transmission UK Ltd.
Radicon UK has shifted old offices in Huddersfield, to a new
independent facility for manufacturing; service and sales offices at
Elland (West Yorkshire). The total cost of this initiative was about
GBP 750,000 and helped established a modern facility measuring about
30,000 sq. ft. facility to enable focused growth in the UK market.
Elecon USA Transmission Ltd.- a Radicon UK subsidiary
Elecon USA has obtained assumed name of Radicon USA Transmission in
Michigan. Sales in the US market were done through Cone Drive (in
Traverse City, Michigan) on a commission basis in the pre-acquisition
and post- acquisition period. However, as Cone Drive had similar
products, there was lack of focus on pushing Radicon USA sales leading
to a stagnation of growth in the US market. To enable growth from a
strong central entity, efforts were initiated to create an independent
facility for Radicon USA which would enable it to sell to the US
customers directly while also operating from a central location like
Chicago. These efforts have already started to bear fruits as Radicon
USA is currently on track to cross 10 million USD of sales compared to
8 million USD on average during the Cone Drive era.
Operations:
(Opening new assembly centers across the world)
Elecon group has initiated process to start assembly and sales offices
in various largest and fastest growing economies of the world. The
group plans to open similar locations in South Africa, Brazil,
Ukraine/Russia (CIS) and UAE in the next 2 years. This helps the group
to drive sales in new markets.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No. 2/2011 dated 8th February, 2011, exempt Companies from
attaching to its Balance Sheet, the individual Annual Reports of its
subsidiary companies. As per the Circular, the consolidated financial
statements of the Company and all its subsidiaries duly audited by its
statutory auditors are included in the Annual Report.
Shareholders interested in obtaining the statement of Company's
interest in the subsidiaries or stand-alone financial statements of the
subsidiary Companies may obtain the same by writing to the Company
Secretary of the Company.
The annual accounts of subsidiary Companies are available for
inspection by any investor at the registered office of the Company.
Corporate Governance
As per Clause 49 of the Listing Agreement, a report on Corporate
Governance, together with Management Discussion and Analysis and a
certificate from the Company's Auditors form part of this report.
Your Company, acknowledging its corporate responsibility, has
voluntarily obtained a "Secretarial Compliance Report" from Mr. Ashwin
Shah, Company Secretary in whole-time practice, which is annexed to
this Report.
Your Company is committed to maintain the highest standards of
Corporate Governance, reinforcing the valuable relationship between the
Company and its Stakeholders.
Fixed Deposits
During the year under review, your Company has not accepted any fixed
deposits under the provisions of Section 58A of the Companies Act, 1956
read with Companies (Acceptance of Public Deposits) Rules, 1975. There
are no unclaimed deposits as on 31st March, 2012.
Particulars of Employees
Statement as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (particulars of employees) Rules, 1975 as amended is
annexed to this Report as Annexure A, forming part of this Report.
Foreign Exchange Earnings and Outgo
The particulars required to be furnished under Section 217(1)(e) read
with the Companies (Disclosures of particulars in the report of Board
of Directors) Rules, 1988 are given in Annexure B, forming part of this
report.
Statutory Disclosures
None of the Directors of your Company is disqualified as per provisions
of Section 274(1)(g) of the Companies Act, 1956. Your Directors have
made necessary disclosures, as required under various provisions of the
Act and Clause 49 of the Listing Agreement.
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
As trustees of the Company, the Directors acknowledge the unstinted
support received from Vendors, Traders, Customers, Banks, Financial
Institutions, Shareholders and the Society at large.
The Directors also acknowledges the support of the Auditors, Bankers,
State and Central Government Officials, Business Partners, Solicitors,
Advisors and Employees of Elecon. The growth of the Company would not
have been possible without their unfailing support.
Your Directors look forward to having a long and fruitful relationship
with all of them.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
Vallabh Vidyanagar, May 12, 2012
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting this 51st Annual Report
together with the Audited Statements of Accounts for the year ended on
March 31, 2011.
Your Directors always try to maximize the value to the share holders.
We have maintained our tradition of coming forth with high quality
content and services. Our tradition in no way inhibits our capacity for
innovations.
As trustees of 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 endeavours.
The summary of operating results for the year and appropriation of
divisible profits is given below:
Standalone financial performance
For the year ended on 31st March, 2011, the
Company has achieved Turnover ofRs. 11,772.09 Mn. and Net Profit ofRs.
879.21 Mn. as against the Turnover of Rs. 10,463.70 Mn. and Net Profit of
Rs. 661.75 Mn. respectively during the previous year, representing
increase in Turnover of 12.50% and increase in Net Profit by 32.86%.
The Company holds total unexecuted orders worthRs. 13,840 Mn. Out of
whichRs. 10,590 Mn. is for the MHE division and Rs. 3,250 Mn. is for the
Gear Division as of March 31, 2011. This will help us to continue to
have sustainable growth in coming years. Your Company has ability to
attend substantial live enquiries with excellence.
Consolidated operations
In compliance with the applicable Clauses of the Listing Agreements
with the Stock Exchanges, the Company has prepared Consolidated
Financial Statements as per the Accounting Standard on Consolidated
Financial Statements (AS 21, AS 23 & AS 27) issued by the Institute of
Chartered Accountants of India. The Audited Consolidated Financial
Statements along with the Auditors' Report have been annexed to
(Rs. in Mn)
Year Ended March 31, Standalone Consolidated
2010-11 2009-10 2010-11
Profit Before Tax, Interest,
Depreciation & 2049.42 1743.26 2121.86
Adjustments for previous year
Less: Interest 458.26 508.89 485.46
Depreciation 384.26 331.20 406.38
Profit Before Tax 1206.90 903.17 1230.02
Less: Provision for Tax 319.63 166.64 337.02
Deferred Tax 8.06 74.78 6.31
FBT -
Profit After Tax 879.21 661.75 886.69
Add:
Share of Profits of Associates - - 12.89
Adjustment of Previous Years 7.74 -
Previous Year Balance Brought Forward 207.94 200.87 203.75
PROFIT AVAILABLE FOR APPROPRIATION 1087.15 870.36 1103.33
APPROPRIATIONS:
Proposed Dividend 167.15 139.29 167.15
Income Tax on Dividend 27.12 23.13 27.74
Transfer to General Reserve 650.00 500.00 667.45
Balance Carried Forward 242.88 207.94 240.99
this Annual Report.
This is the first year of consolidation. Your Company's total
consolidated revenue for the year 2010- 11 was t 12,876.14 Mn. The Net
Profit after provision for taxation for the year ended 31st March, 2011
was Rs. 899.58 Mn. The basic earnings per share for the year was Rs. 9.69.
Your Company's consolidated net worth is Rs. 4,147.58 Mn. as on 31 March,
2011.
Your Directors are pleased to recommend dividend ofRs. 1.80 per share
(previous year Rs. 1.50 per share on 9,28,61,510 equity shares ofRs. 2/-
each) on 9,28,61,510 equity shares of Rs. 21- each for the year ended on
31st March, 2011.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to the Directors' Responsibility Statement, it is hereby confirmed
that:
- in the preparation of the annual accounts of the Company for the year
ended on March 31, 2011, the applicable accounting standards have been
followed;
- 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 year ended on that date;
- the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- the accounts have been prepared on a "going concern" basis.
Retire by rotation
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Pradip M. Patel and Shri
Chirayu Amin, Directors retire by rotation at the forthcoming Annual
General Meeting of the Company and being eligible, offer themselves for
reappointment.
Re-appointment of Shri Prayasvin B. Patel as Chairman and Managing
Director
The tenure of Shri Prayasvin B. Patel, Chairman & Managing Director of
the Company will expire on 30th June, 2011. The Remuneration Committee
and the Board of Directors at their respective meetings held on 24th
May, 2011 recommended and approved the re- appointment of and payment
of remuneration to Shri Prayasvin B. Patel as Chairman & Managing
Director of the Company for a further period of three years w.e.f. 1st
July, 2011, subject to the approval of Shareholders. Terms and
conditions for his re-appointment are contained in the Explanatory
Statement forming part of the notice of the ensuing Annual General
Meeting.
Appointment of Shri Prashant C. Amin as an Executive Director
Shri Prashant C. Amin has been appointed as Director liable to retire
by rotation w.e.f. 29th July, 2008. The Remuneration Committee and the
Board of Directors at their respective meetings held on 24th May, 2011
recommended and approved the appointment of and payment of remuneration
to Shri Prashant C. Amin as Executive Director of the Company for a
period of three years w.e.f. 1st June, 2011, subject to the approval of
Shareholders. Terms and conditions for his re-appointment are contained
in the Explanatory Statement forming part of the notice of the ensuing
Annual General Meeting.
The Company's Auditors M/s. Thacker Butala Desai, Chartered
Accountants, Navsari retire as Statutory Auditors at the ensuing Annual
General Meeting of the Company and being eligible offer themselves for
reappointment.
Subsidiary Companies
During the year under review, the Company has incorporated a Wholly
Owned Subsidiary, (WOS) in Mauritius, namely, Elecon Transmission
International Ltd. to acquire the business of Benzlers-Radicon Group, a
Sub-Group of David Brown Gear Systems Group, UK. the said WOS has
executed Sale and Purchase Agreement (SPA) to acquire 100% stake in the
business of 1) David Brown Systems Sweden AB (Sweden), 2) Applied
Transmission Products Division of David Brown Geared Systems Limited
(U.K) and 3) Geared Motor Division of Cone Drive Operations Inc. (U.S)
(the "Business") of the David Brown Gear Systems Group. The WOS has
also paid the acquisition consideration to the Seller on 26.11.2010.
The following eleven subsidiaries were set up / acquired during the
year:
1. Elecon Transmission International Ltd., Mauritius.
2. Radicon Transmission UK Ltd.
3. Elecon USA Transmission Ltd.
4. David Brown Systems Sweden AB
5. AB Benzlers, Sweden
6. Benzler Technisch Buro Aandrijftechniek B.V. (The Netherlands)
7. Benzler Transmission A.S. (Denmark)
8. Benzler Andtriebstech nik GmbH (Germany)
9. Oy Benzler AB (Finland)
10. Benzlers Antriebstechnik Gesmbh, Austria
11. Benzlers Malaysia, Malaysia
Radicon Transmission UK Ltd.
Warehouse and offices currently located at DB site, Huddersfield, UK
Warehousing, service, assembly, sales office Engineering: design and
applications There are total 58 Employees at present Relocation to
alternative premises in November 2011
Elecon USA Transmission Ltd
Site located in Traverse City, Michigan Warehousing, Assembly, Testing
Growth opportunities through regional focus, product expansion, sales
team focus
AB Benzlers, Sweden
Plant located in Helsingborg, Sweden Property owned by AB Benzlers
Manufacturing , Assembly, Testing, Warehousing ; Engineering: Design
and Applications ; At present, there are total 99 Employees Satellite
service centre in Orebro (central Sweden) opens April 2011
Benzler Technisch Buro Aandrijftechniek B.V. (The Netherlands)
- Site located in Venlo, Netherlands Warehousing, service, assembly,
sales office Well positioned to serve Centra! Europe
Benzlers-Radicon Intellectual Property acquired: Brands :
Products & Range Designs
Series G Industrial Reducer Series H Industrial Reducer Series BD Screw
Jacks Series BS Worm Drive Series BTM Shaft Mount Reducer Series A Mid
Worm Drive Series J Shaft Mount Reducer Series X Couplings Roloid Gear
Pump Kibo Taper Release System
By virtue of this acquisition, your Company can expand its operations
in various Countries across the globe either directly or through its
Subsidiary Companies.
The Ministry of Corporate Affairs, Government of India, vide General
Circular No. 2/2011 dated 8th February, 2011, exempt Companies from
attaching to its Balance Sheet,
the individual Annual Reports of its subsidiary companies. As per the
Circular, the consolidated financial statements of the Company and all
its subsidiaries duly audited by its statutory auditors are included in
the Annual Report.
Shareholders interested in obtaining the statement of Company's
interest in the subsidiaries or stand-alone financial statements of the
subsidiary Companies may obtain the same by writing to the Company
Secretary of the Company.
The annual accounts of subsidiary Companies are available for
inspection by any investor at the registered office of the Company.
Ringspann GmbH, Germany, a joint venture partner in Ringspann Elecon
(India) Ltd., a Joint Venture Company ("JVC") has made divestment of
their entire shareholding by selling their stake to Elecon Group of
Companies. In view of the said divestment, the said JVC has applied for
the change of name. The JVC will continue to use the technology of the
outgoing German partner for its captive consumption.
As per Clause 49 of the Listing Agreement, a report on Corporate
Governance, together with Management Discussion and Analysis and a
certificate from the Company's Auditors form part of this report.
Your Company, acknowledging its corporate responsibility, has
voluntarily obtained a "Secretarial Compliance Report" from Mr. Ashwin
Shah, Company Secretary in whole-time practice, which is annexed to
this Report.
Your Company is committed to maintain the highest standards of
Corporate Governance, reinforcing the valuable relationship between the
Company and its Stakeholders.
During the year under review, your Company has not accepted any fixed
deposits under the provisions of Section 58A of the Companies Act, 1956
read with Companies (Acceptance of Public Deposits) Rules, 1975. There
are no unclaimed deposits as on 31st March, 2011.
Statement as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (particulars of employees) Rules, 1975 as amended is
annexed to this Report as Annexure A, forming part of this Report.
The particulars required to be furnished under Section 217(l)(e) read
with the Companies (Disclosure of particulars in the report of Board of
Directors) Rules, 1988 are given in Annexure B, forming part of this
report.
None of the Directors of your Company is disqualified as per provisions
of Section 274(1 )(g) of the Companies Act, 1956. Your Directors have
made necessary disclosures, as required under various provisions of the
Act and Clause 49 of the Listing Agreement.
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.
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.
As trustees of the Company, the Directors acknowledge the unstinted
support received from Vendors, Traders, Customers, Banks, Financial
Institutions, Shareholders and the society at large.
The Directors also acknowledges the support of the Bankers, Auditors,
Central and State Government Officials, Solicitors, Advisors, Business
Partners and Members of Elecon family. The growth of the Company would
not have been possible without their unfailing support.
Your Directors look forward to having a long and fruitful relationship
with all of them.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
Vallabh Vidyanagar, May 24, 2011
Mar 31, 2010
The Directors have pleasure in presenting this 50th Annual Report
together with the Audited Statements of Accounts for the year ended on
March 31, 2010.
Your Directors always try to give the maximum possible value to the
share holders. We have maintained our tradition of coming forth with
high quality content and services. Our tradition in no way inhibits our
capacity for innovations.
As stewards of 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 endeavours.
For the first time, your Company has crossed a Milestone of Rs. 1000
Crores Turnover.
The summary of operating results for the year and appropriation of
divisible profits is given below:
(Rs. in Lacs)
Year Ended March 31, 2009-2010 2008-2009
Profit Before Tax, Interest, Depreciation & 17432.63 15861.55
Adjustments for previous year
Less: Interest 5088.89 4836.80
Depreciation 3312.03 2214.72
Profit Before Tax 9031.70 8810.03
Less:
Provision for Tax 1666.35 1812.43
Deferred Tax 747.83 1197.48
FBT - 55.00
Profit After Tax 6617.53 5745.12
Add:
Adjustment of Previous Years 77.38 (248.09)
Previous Year Balance Brought Forward 2008.75 5641.37
PROFIT AVAILABLE FOR APPROPRIATION 8703.66 11138.40
APPROPRIATIONS:
Proposed Dividend 1392.92 1392.92
Income Tax on Dividend 231.35 236.73
Transfer to General Reserve 5000.00 7500.00
Balance Carried Forward 2079.39 2008.75
Review of Operations
For the year ended on 31st March, 2010, the Company has achieved
Turnover of Rs. 104637.05 Lacs and Net Profit of Rs. 6617.53 lacs as
against the Turnover of Rs. 95506.48 Lacs and Net Profit of Rs. 5745.12
Lacs respectively during the previous year, representing increase in
Turnover of 9.56% and increase in Net Profit by 15.19%.
The Company holds unexecuted orders worth Rs. 124301.25 Lacs. Rs.
99653.25 Lacs is for the MHE division and Rs. 24648 Lacs is for the
Gear Division as of March 31, 2010. This will help us to steer the
Company in the profitable direction. Your Company has ability to attend
substantial live enquiries with excellence. During the current
financial year, the Company has begged orders worth Rs. 32614.31 Lacs.
Dividend
Your Directors are pleased to recommend dividend of Rs. 1.50/- per
share (Previous Year Rs. 1.50/- per share on 9,28,61,510 equity shares
of Rs. 21- each) on 9,28,61,510 equity shares of Rs. 21- each for the
year ended on 31 st March, 2010.
Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to the Directors Responsibility Statement, it is hereby confirmed
that:
in the preparation of the annual accounts of the Company for the year
ended on March 31, 2010, the applicable accounting standards have been
followed;
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 year ended on that date;
the Directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
the accounts have been prepared on a "going concern" basis.
Corporate Governance
As per Clause 49 of the Listing Agreement, a report on Corporate
Governance, together with Management Discussion and Analysis and a
certificate from the Companys Auditors form part of this report.
Your Company, acknowledging its corporate responsibility, has
voluntarily obtained a "Secretarial Compliance Report" from Mr. Ashwin
Shah, Company Secretary in whole-time practice, which is annexed to
this Report.
Your Company is committed to maintain the highest standards of
Corporate Governance, reinforcing the valuable relationship between the
Company and its Stakeholders.
Fixed Deposits
During the year under review, your Company has not accepted any fixed
deposits under the provisions of Section 58A of the Companies Act, 1956
read with Companies (Acceptance of Public Deposits) Rules, 1975. There
are no unclaimed deposits as on 31st March, 2010.
Particulars of Employees
Statement as per Section 217(2A) of the Companies Act, 1956 read with
the Companies (particulars of employees) Rules, 1975 as amended is
annexed to this Report as Annexure A, forming part of this Report.
Conservation Of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars required to be furnished under Section 217(1) (e) read
with the Companies (Disclosure of particulars in the report of Board of
Directors) Rules, 1988 are given in Annexure 8, forming part of this
report.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, ShriHasmukhlal S. Parikh and
Dr. A.C. Shah, Directors retire by rotation at the forthcoming Annual
General Meeting of the Company and being eligible, offer themselves for
reappointment.
Auditors
The Companys Auditors M/s. Thacker Butala Desai, Chartered
Accountants, Navsari retire as Statutory Auditors at the ensuing Annual
General Meeting of the Company and being eligible offer themselves for
reappointment.
The observations of the Auditors are self-explanatory.
Statutory Disclosures
None of the Directors of your Company is disqualified as per provisions
of Section 274(1 )(g) of the Companies Act, 1956. Your Directors have
made necessary disclosures, as required under various provisions of the
Act and Clause 49 of the Listing Agreement.
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
As stewards of the Company, the Directors acknowledge the unstinted
support received from Vendors, Traders, Customers, Banks, Financial
Institutions, Shareholders and the society at large.
The Directors also acknowledges the support of the Bankers, Auditors,
Central and State Government Officials, Solicitors, Advisors, Business
Partners and Members of Elecon family. The growth of the Company would
not have been possible without their unfailing support.
Your Directors look forward to having a long and fruitful relationship
with all of them.
For and on behalf of Board of Directors
Prayasvin B. Patel
Chairman & Managing Director
Vallabh Vidyanagar, May 10, 2010