Dear Members,
Your Directors have pleasure in presenting the 30th Annual Report on the business and
operations of your Company along with the Audited Financial Statements for the Financial
Year ended March 31, 2019.
FINANCIAL RESULTS
The financial performance of your Company for the Financial Year ended March 31, 2019
is summarized below
|
|
|
(Rs. In Crores) |
Particulars |
Standalone |
Consolidated |
|
Financial Year ended 31.03.2019 |
Financial Year ended 31.03.2018 |
Financial Year ended 31.03.2019 |
Financial Year ended 31.03.2018 |
Revenue from operations |
77.32 |
158.68 |
77.32 |
158.68 |
Other Income |
6.66 |
5.14 |
6.66 |
5.14 |
Operating Profit (EBITDA) |
(13.08) |
14.31 |
(13.08) |
14.31 |
Finance Costs |
10.31 |
11.37 |
10.31 |
11.37 |
Depreciation and Amortisation Expense |
1.99 |
2.16 |
1.99 |
2.16 |
Profit / (Loss) before Exceptional items and Tax |
(25.38) |
0.88 |
(25.38) |
0.88 |
Exceptional Items |
- |
- |
- |
- |
Profit/(Loss) before Tax |
(25.38) |
0.88 |
(25.38) |
0.88 |
Less: Tax Expense |
(1.39) |
0.44 |
(1.39) |
0.44 |
Profit/(Loss) after Tax |
(23.99) |
0.44 |
(23.99) |
0.44 |
Profit/(Loss) for the year |
(23.99) |
0.44 |
(23.99) |
0.44 |
Other Comprehensive Income |
0.20 |
0.09 |
0.20 |
0.09 |
Total Comprehensive Income |
(23.79) |
0.53 |
(23.79) |
0.53 |
Earnings per Share (In Rupees) |
(14.19) |
0.27 |
(14.19) |
0.27 |
(Face Value of Rs.5/- per Equity Share) |
|
|
|
|
FINANCIAL HIGHLIGHTS
During the financial year under review, your Company has achieved Sales and Other
Income of Rs.83.98 Crores as against Rs.163.82 Crores in the previous financial year
2017-18 The Loss before Interest Taxes and Depreciation for the year ended March 31, 2019
stood at Rs. 13.08 Crores as against an EBITDA of Rs. 14.31 Crores during the previous
year.
The Loss before Tax for the financial year ended March 31, 2019 stood at Rs. 25.38
Crore as against a profit of Rs.0.88 Crores earned during the previous financial year
ended March 31, 2018. The Loss after Tax for the current year stood at Rs. 23.99 Crore
against a Profit after Tax Rs. 0.44 Crores earned during the previous year ended 31st
March, 2018. The decline in the operations of the Company during the year under review has
been due to the liquidity crunch being experienced by your Company during the past one
year or so on account of delay in realization of receivables from one of its major
customers for whom the Company has executed orders during the previous year. As the
payments from the customers was considerably delayed beyond the expected realization
period this resulted in an acute pressure on the Company's cash flows which affected the
operations of the Company resulting in shortfall in turnover and operating loss during
2018-19.
Your Directors are fully seized of the Company's performance related issues and have
also initiated proactive measures by initiating steps in the following directions:-
(a) Consolidation of operations and implementation of cost control measures to reduce
fixed costs and thereby curtail losses
(b) Disposal of Investments in Mutual Funds and Bonds and thereby repaying loans raised
against these investments from Standard Chartered Bank and RBL Bank Limited leading to
reduction in interest and thereby improving the profitability and cash flows of the
Company.
(c) Strengthening Relationship Management with all stake holders including potential
customers.
Efforts are also afoot to further strengthen the Company's internal Management in areas
of Marketing, Sales and Recoveries.
Consolidated financial statements
The Consolidated Financial Statements of your Company for the financial year 2018-19,
have been prepared in compliance with the applicable provisions of the Companies Act,
2013, Indian Accounting Standards and the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
Dividend and reserves
In light of the loss incurred by the Company during the year, your Directors do not
recommend any Dividend for the year under review.
The Company has not transferred any amount to General Reserve during the financial year
2018-19.
Directors and key managerial personnel
Appointments / resignations
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in
terms of the Articles of Association of the Company, Mr. Vinay Mahendru, Joint Managing
Director is liable to retire by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment. Appropriate resolution seeking your approval
to his re-appointment as Director is included in the Notice. The Board recommends his
re-appointment.
Mr. Ashish Bansal was appointed as an additional Non-Executive Independent Director on
1st April, 2019 and is proposed to be appointed as Non-Executive Independent Director of
the Company at the ensuing Annual General Meeting (AGM). His details as required under the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in
the accompanying Notice convening the ensuing AGM of your Company. Appropriate resolution
seeking your approval to his appointment as Independent Director is included in the
Notice.
Mr. Ashok Kumar Gupta was appointed as an additional Non-Executive Independent Director
on 1st April, 2019 and is proposed to be appointed as Non-Executive Independent Director
of the Company at the ensuing Annual General Meeting (AGM). His details as required under
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained
in the accompanying Notice convening the ensuing AGM of your Company. Appropriate
resolution seeking your approval to his appointment as Independent Director is included in
the Notice.
During the year Mr. Ajoy Kumar Ghosh, Independent Director resigned from the Board and
all committees w.e.f. January 25, 2019 due to his ill health. Mr. Ramesh Chander Bansal
amd Mr. Ranjan Sarkar on having attained the age of 75 years resigned from the Board w.e.f
1st April, 2019. Dr (Mrs.) Rashmi Vij resigned from the Company w.e.f 30th May, 2019 due
to her preoccupation. There was no material reason for resignation of the Directors other
than the one mentioned in their Resignation letters.
Key Managerial Personnel
Mr. Ved Prakash Mahendru, Chairman & Managing Director, Mr. Vivek Mahendru and Mr.
Vinay Mahendru, Joint Managing Directors, Mr. K B Satija, Chief Financial Officer and Mr.
Shiv Kumar Jha, Company Secretary & Compliance Officer are the Key Managerial
Personnel of your Company in accordance with the provisions of Section 2(51) and 203 of
the Companies Act, 2013 read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
Board evaluation
The Companies Act, 2013 mandates formal annual evaluation of the performance of the
Board, its Committees and individual Directors. Schedule IV to the Companies Act, 2013
provides that the performance evaluation of Independent Directors shall be done by the
entire Board of Directors, excluding the Directors being evaluated.
Pursuant to the provisions of the Companies Act, 2013 and the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the
Board has carried out annual evaluation of performance of Directors individually,
Committees of the Board and the Board as a Whole.
The manner in which the evaluation has been carried out is explained in the Corporate
Governance Report.
Meetings of the board and committees
Four meetings of the Board of Directors were held during the Financial Year 2018-19.
The details of number of Meetings of the Board and various Committees of your Company are
set out in the Corporate Governance Report. Besides in term of requirements of Schedule IV
to the Companies Act, 2013 and Regulation 25 of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of
the Independent Directors was heldon March 02, 2019 for the Financial Year 2018-19.
Declaration BY independent directors
All the independent directors have submitted their disclosures to the Board that they
fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so
as to qualify themselves to be appointed as Independent Directors under the provision of
Companies Act, 2013 and the relevant regulations.
Remuneration policy
In accordance with the provisions of Section 178 of the Companies Act, 2013 read with
rules made there under and the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Company's Policy on Nomination and
Remuneration of Directors, kmps and Senior Management of your Company is uploaded on the
website of the Company: http://www.eonelectric.com/investor10.php
AUDIT committee
As at 31st March, 2019, the Audit Committee of the Board of Directors of the Company
comprised of 3 members namely Shri Ramesh Chander Bansal, Independent Director, Shri
Ranjan Sarkar, Independent Director and Shri Vivek Mahendru, Joint Managing Director. Shri
Ramesh Chander Bansal is Chairman of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by the
Committee during the year.
Auditors and auditors' report statutory auditors
On recommendation of the Audit Committee, the Board, in its meeting held on August 31,
2017 and approval of the shareholders in the Annual General Meeting held on 27th September
2017, M/s Bansal and Co LLP., Chartered Accountants, (Firm Registration Number
001113N/N500079), have been appointed as the Statutory Auditors of the Company for a term
of five consecutive years i.e. From conclusion of the 28th AGM till the conclusion of 33rd
AGM to be convened in the year 2022.
Statutory auditors' report
The Board has duly examined the Statutory Auditors' Report on the Standalone and
Consolidated Financial Statements of the Company for the financial year ended March 31,
2019 by M/s Bansal and Co. LLP, Chartered Accountants. The Company has already initiated
steps to deposit the undisputed statutory dues as mentioned in the Auditors' Report with
the respective authorities.
Further no fraud has been reported by the Statutory Auditors in terms of Section
143(12) of the Companies Act, 2013 during the year.
Cost auditors
Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act,
2013 and Rules made there under, Mr. Krishan Singh Berk, Cost Accountant (FRN: 102044
& Membership No. 2724), 365, Sector 15, Faridabad 121 007 Haryana, was appointed as
the Cost Auditor of the Company for the financial year ended March 31, 2019. Your Company
is required to maintain cost records as specified under Section 148(1) of the Companies
Act, 2013 and accordingly such accounts and records are made and maintained in the
prescribed manner.
Mr. Krishan Singh Berk, Cost Accountant (FRN: 102044 & Membership No. 2724),
carried out the cost audit during the year. The Board of Directors have appointed Mr.
Krishan Singh Berk, Cost Accountants as Cost Auditors for the financial year 2019-20. The
remuneration proposed to be paid to the cost auditors for 2019-20 is subject to
ratification by members at the ensuing Annual General Meeting.
Secretarial auditors & their report
The Company had appointed M/s Navneet K Arora & Co LLP, Company Secretaries, New
Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2019. The
Secretarial Auditor has submitted its Report, confirming compliance by the Company of all
the provisions of applicable corporate laws except delay in deposit of monthly statutory
dues under Employee Provident Fund and Miscellaneous Provisions Act, 1952 and Employees
State Insurance Act, 1948 and applicable rule made thereunder, which have since been
deposited by the Company. The Secretarial Audit Report for FY 2018-19 is annexed as Annexure
- A to this report.
A Secretarial Compliance Report for the financial year ended 31st March, 2019 on
compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder,
was obtained from M/s Navneet Arora & Co. LLP Secretarial Auditors, and submitted to
both the stock exchanges.
The Board has re-appointed M/s Navneet K Arora & Co. LLP Company Secretaries, New
Delhi as Secretarial Auditors of the Company for Financial Year 2019-20.
Extract of the annual return
The extract of the Annual Return in Form MGT 9 as stipulated under Section 92(3) of the
Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014,
is annexed herewith as Annexure-B', to this Report and is posted on the website of
the Company at www.eonelectric.com
Related PARTY transactions
In terms of Section 134(3)(h), there is no information to be provided regarding the
particulars of contracts or arrangements with related parties referred to in sub-section
(1) of Section 188 of the Companies Act, 2013, except the transactions as stated in Note
No. 43 of the Financial Statements. Accordingly, no transactions are being reported in
Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013 read with the Companies
(Accounts) Rules, 2014.
All related party transactions that were entered into during the year under review were
in the ordinary course of business and on an arm's length basis and were in compliance
with the applicable provisions of the Companies Act, 2013.
Material changes and commitments, IF any, affecting the financial position of the
company WHICH have occured between the end of the financial year of the company To WHICH
the financial statements relate and the date of the report
There are no material changes and commitments affecting the financial position of the
Company that have occurred between the end of financial year on March 31, 2019 to which
these Financial Statements relate and the date of this Report.
Change In the nature of business
There was no change in the nature of business of the Company during the financial year
ended March 31, 2019.
Conservation of energy, technology absorption and foreign exchange earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies
(Accounts) Rules, 2014 is annexed herewith as Annexure - C ' to this Report.
RISK management
Pursuant to the provisions of Section 134(3)(n) of the Companies Act, 2013 and the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has adopted a Risk Management Policy and established a risk
management framework to identify, mitigate and control the risks, which may threaten the
existence of the Company.
In ternal financial controls
The Company has a comprehensive Internal Financial Controls system with reference to
Financial Statements. During the year, such controls were tested and no reportable
material weakness in the design or operations were observed.
The report on the Internal Financial Control issued by the M/s. Bansal & Co. LLP
Chartered Accountants, (FRN: 001113N/N500079), the Statutory Auditors of the Company,
forms part of the Annual Report. In the opinion of the Board, the existing Internal
Financial Control framework is adequate and commensurate with the size and nature of the
business of the Company.
Whistle blower and VIGIL mechanism
The Company has adopted a Whistle Blower Policy, to provide a formal vigil mechanism to
the Directors and employees to report their concerns about unethical behaviour, actual or
suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy
provides for adequate safeguards against victimization of employees who avail of the
mechanism and also provides for direct access to the Chairperson of the Audit Committee.
It is affirmed that no personnel of the Company has been denied access to the Audit
Committee.
PARTICULARS of employees and related disclosures
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 as amended by the Companies (Appointment
and Remuneration of Managerial Personnel) amended Rules, 2016 are provided in the
Annexure - D' to this Report
Subsidiaries, associates and joint ventures
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies
(Accounts) Rules 2014, the statement containing salient features of the Financial
Statements of the Company's Joint Ventures / Associates (in form AOC-1) is attached to
this Report as Annexure - E'.
Significant and material orders passed BY the regulators or courts
There was no significant and material order passed by the Regulators or Courts or
Tribunals impacting the going concern status and the company's operations in future.
PARTICULARS of loans, guarantees or investments
During the Financial Year 2018-19, the provisions of Section 186 of the Companies Act,
2013 were not applicable on the Company
Corporate social responsibility (CSR)
The provisions of 135 of the Companies Act, 2013 read with Rule 8 of the Companies
(Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company
during the Financial year ended on 31st March, 2019.
Deposits
The Company has not accepted/received any deposits during the year under report falling
within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014.
Directors' responsibility statement
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with
respect to Directors' Responsibility Statement, it is hereby confirmed:
(a) that in the preparation of the annual accounts for the year ended March 31, 2019,
the applicable accounting standards and Schedule III to the Companies Act, 2013, have been
followed and there are no material departures from the same;
(b) that 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 as at March 31, 2019 and
of the loss of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of Companies Act, 2013 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls to be followed by the Company were laid
down and that such internal financial controls were adequate and operating effectively;
and
(f) that proper systems to ensure compliance with the provisions of all applicable laws
were in place and such systems were adequate and operating effectively.
Other information Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated
under the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is annexed herewith as Annexure - F' to this
Report.
Certificate on Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and
adhere to the Corporate Governance requirements set out by Securities and Exchange Board
of India. The report on Corporate Governance as stipulated under the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 forms an integral part of this Report and annexed herewith as Annexure - G' to
this Report. The requisite certificate from M/s. Bansal & Co. LLP, Chartered
Accountants, (FRN: 001113N/N500079), Statutory Auditors of the Company confirming
compliance with the conditions of Corporate Governance is annexed herewith to this Report.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and has adopted a
Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in
line with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide
protection to employees at the workplace and prevent and redress complaints of sexual
harassment and for matters connected or incidental thereto, with the objective of
providing a safe working environment, where employees feel secure. The Company has also
constituted Internal Committees at all its locations, known as the Prevention of Sexual
Harassment (POSH) Committees, to inquire into complaints of sexual harassment and
recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial
year 2018-19.
Transfer to Investor education and Protection Fund
Pursuant to Section 124 and 125 and other applicable provisions, if any, of the
Companies Act, 2013, read with the Investor Education and protection Fund Authority
(Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules') all unclaimed
and/ unpaid dividend, application money, debentures interest and interest on deposits, as
applicable, remaining unclaimed / unpaid for a period of seven years from the date they
became due for payment, were required to be transferred to the IEPF. Accordingly, all
unclaimed and unpaid dividend for a period of seven years from the date they became due
for payment, in relation to the Company have been transferred to the IEPF established by
the Central Government. No claim shall be entertained against the Company for the amounts
so transferred.
As per Section 124(6) of the Act read with the IEPF Rules as amended, all the shares in
respect of which dividend has remained unpaid/unclaimed for seven consecutive years or
more are required to be transferred to an IEPF Demat Account. The Company has sent notice
to all the Members whose dividends are lying unpaid / unclaimed against their name for
seven consecutive years or more. Necessary steps will be initiated by the Company to
transfer shares held by the members to IEPF as per applicable regulations. Please note
that no claim shall lie against the Company in respect of the shares so transferred to
IEPF. In the event of transfer of shares and the unclaimed dividends to IEPF, members are
entitled to claim the same from IEPF by submitting an online application in the prescribed
Form IEPF-5 available on the website www. Iepf.gov.in and sending a physical copy of the
same duly signed to the Company along with the requisite documents enumerated in the Form
IEPF- 5. Members can file only one consolidated claim in a financial year as per the IEPF
Rules.
Listing of Shares
The Shares of the Company are listed on the BSE Limited (BSE) and National Stock
Exchange of India Limited (NSE). The Company has paid annual Listing fee for the Financial
Year 2019-20 to the BSE Limited and the National Stock Exchange of India Limited.
Acknowledgements
Your Company's organizational culture upholds professionalism, integrity and continuous
improvement across all functions, as well as efficient utilization of the Company's
resources for sustainable and profitable growth. The Directors wish to place on record
their appreciation for the valuable co-operation and support received from the Government
of India, various State Governments, the Banks and other stakeholders such as,
shareholders, customers and suppliers, among others. The Directors also commend the
continuing commitment and dedication of the employees at all levels, which has been
critical for the Company's success. The Directors look forward to their continued support
in future.
|
For and on behalf of the Board of Directors |
|
Ved Prakash Mahendru |
Place: new Delhi |
Chairman & Managing Director |
Dated: August 13, 2019 |
DIN: 00005338 |
|