DIRECTORS' REPORT Dear Shareholders, 1. The Directors present the 52nd Annual Report along with the audited Balance-Sheet and Statement of Profit and Loss for the year ended March 31, 2015. 2. OVERVIEW AND THE STATE OF COMPANY'S AFFAIR: The Company's revenue during the year stood at Rs. 3701.57 lacs as compared to previous year of Rs. 2886.71 lacs, there is increase in the revenue by Rs. 814.86 lacs on account of increase in revenue from real estate segment. The real estate revenue continue to grow in near future as company is focusing in to enter into further lease agreements with prospective clients. The Company's focus is to reduce further the interest cost in near future. 3. CHANGE IN NATURE OF BUSINESS During the Financial Year 2014-15, Company has not changed its nature of business and has been continuing with the same line of business. 4. DIVIDEND: No dividend has been recommended by the Board of Directors of the Company for Financial Year 2014-15. However the register of members and share transfer books will remain closed on September 10, 2015. 5. AMOUNT PROPOSED TO BE TRANSFERRED TO RESERVES Your Directors do not propose to transfer any amount to reserves as on 31st March, 2015. 6. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES The Company has "Elpro Estates Limited" as a Subsidiary Company & "Dabri Properties & Trading Co. Ltd" as an Associate Company as at the end of financial year ended March 31, 2015. The audited financial statements of subsidiary company and associate company are available for inspection during business hours at the Registered Office of the company. Any member, who is interested in obtaining a copy of audited financial statement of subsidiary company, may write to the Company Secretary at the Registered Office of the Company. The salient features of performance of the Subsidiary and Associate Company as on March 31, 2015 in Form AOC- 1 is annexed herewith as 'Annexure I'. During the financial year, no company became or ceased to be the Subsidiary, Joint Venture or Associate Company. 7. CONSOLIDATED FINANCIAL STATEMENT The Consolidated Financial Statement have been prepared in accordance with the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of the Listing Agreement with the stock exchange and forms part of the Annual Report. 8. PUNE STOCK EXCHANGE LIMITED (PSE), PUNE The Company is voluntarily delisted w.e.f. January 9, 2015 from PSE in the year 2014-15 in accordance with the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 for Voluntary Delisting of Shares from the Stock Exchanges and SEBI circular CIR/MRD/DDS/18/ 2014 dated May 22, 2014. 9. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Madhav Srinivasan, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Ms. Samira Rathod, Independent Director of the Company resigned from the Directorship on 14th November, 2014. The Board places on record its deep appreciation for the valuable contribution made by her during her tenure as Director of the Company. Ms. Kalpana Unadkat is appointed as an Additional Director (Independent) with effect from 27th March, 2015. As per the provisions of the Companies Act 2013, Ms. Kalpana Unadkat holds office till the ensuing Annual General Meeting and being eligible, offers herself for appointment as Director. The Board recommends her appointment. The Companies Act, 2013, provides for the appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 provides that independent directors shall hold office for a term of up to five consecutive years on the board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Further, according to Sub-section (11) of Section 149, no independent director shall be eligible for appointment for more than two consecutive terms of five years. Sub-section (13) states that the provisions of retirement by rotation as defined in Sub-sections (6) and (7) of Section 152 of the Act shall not apply to such independent directors. None of the independent directors will retire at the ensuing Annual General Meeting. Mr. Anil Kumar Poddar, a Director was duly appointed under the Companies Act, 1956 as Director liable to retire by rotation. In the opinion of the Board, he fulfills the conditions for his appointment as an Independent Director as specified in the Companies Act, 2013, rules and the Listing Agreement. The Company has received declaration from him that he meets with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and under Clause 49 of the Listing Agreement. In order to give effect to the aforesaid provisions of the Act, it is proposed that Mr. Anil Kumar Poddar be appointed as an Independent Directors under Section 149 of the Companies Act, 2013 read with the amended clause 49 of the Listing Agreement, to hold office for a term upto 31st March, 2019. Notice pursuant to Section 160 of the Act have been received from the respective appointee Directors proposing their appointment/re-appointment and have been included as an item for each director in the notice convening the ensuing Annual General Meeting. Except the above, no other Director or Key Managerial Person had been appointed, resigned or retired during the year. 10. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to the provision of Section 134 of the Companies Act, 2013, the Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material transactions; b) We have selected such accounting policies and applied them consistently and made judgements 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 loss of the Company for that period; c) We 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; and d) We have prepared the annual accounts on a "going concern" basis. e) We have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 11. BOARD INDEPENDENCE The following Non-Executive Directors are Independent Directors in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Companies Act, 2013: 1. Mr. Narayan T. Atal 2. Mr. Ashok Kumar Jain 3. Mr. Anil Kumar Poddar 4. Ms. Kalpana Unadkat The Company has received necessary declaration 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 Clause 49 of the Listing Agreement. 12. BOARD EVALUATION The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. On the basis of the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. A separate meeting of independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The Board approved the evaluation results as collated by the nomination and remuneration committee. 13. FAMILIARIZATION PROGRAMMES Independent Directors, on their appointment, are issued a Letter of Appointment setting out in details the terms of appointment, duties, responsibilities and expected time commitments. Also organize the interactive sessions with the member of Senior Management of the Company. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company are put up on the website of the Company. Weblink for the same is <http://www.elpro.co.in/Investor-relations.php> 14. BOARD COMMITTEES During the year, in accordance with the Companies Act, 2013 & Clause 49 of Listing Agreement, the Board reconstituted some of its Committees. There are currently following committees: 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholders' Relationship Committee 4. CSR Committee Details of all the Committees alongwith their charters, composition and meetings held during the year are provided in the "Corporate Governance Report", a part of this Annual Report. 15. MEETINGS OF THE BOARD Five meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. 16. PARTICULARS OF EMPLOYEES: In terms of the provisions of Section 197(12) of the Act read with Rules 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are appended as "Annexure - II" to the Directors' Report. None of the employees of the Company employed throughout the year were in receipt of remuneration in excess of the limits set out in the said rules. 17. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The current policy is to have an appropriate mix of Executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015, the Board consists of 7 members, two of whom are executive, one is non-executive promoter director and four are independent directors. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board on the recommendation of the Nomination and Remuneration Committee is attached herewith as 'Annexure III'. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. 18. FIXED DEPOSITS / PUBLIC DEPOSITS The Company has not accepted any fixed deposits or public deposits covered under chapter V of the Companies Act, 2013. 19. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 20. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. 21. AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS At the Annual General Meeting held on September 29, 2014, M/s. Todarwal & Todarwal, Chartered Accountants ((ICAI Firm Registration No. 111009W), were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Todarwal & Todarwal, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. There are no qualifications or reservation made by M/s. Todarwal & Todarwal, Statutory Auditors, in their report for the financial year 2014-15. SECRETARIAL AUDITOR Pursuant to Section 204 of the Companies Act, 2013 and Rules thereunder, the Secretarial Audit for the financial year 2014-15 was conducted by M/s. Jayshree A. Lalpuria & Co., Practising Company Secretary and their Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as "Annexure IV" to this Report. There are no qualifications or reservation made by M/s. Jayshree A. Lalpuria & Co., Secretarial Auditors, in their report for the financial year 2014-15. INTERNAL AUDITOR The Company has appointed Internal Auditor. The scope and authority of the Internal Auditor is as per the terms of reference approved by the Audit Committee. To maintain its objectivity and independence, the Internal Audit reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems accounting procedures and policies of the Company. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. issued by the regulatory bodies. 22. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of investments made, loans given and guarantees given are provided in the standalone financial statement. The purpose the loan given is as per JDA Agreement with Subsidiary Company, guarantee is given to the Public Charitable Trust and investments made by the Company are on long term basis. There are no securities provided by the Company. (Please refer to Note 13, 14 and 2(q) to the standalone financial statement). 23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF COMPANIES ACT, 2013 The particulars of contracts or arrangements with related parties referred to in Section 188(1) of Companies Act, 2013, as prescribed in Form AOC - 2, is appended as "Annexure - V". The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link <http://www.elpro.co.in/Investor-relations.php> 24. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT The equity shares of the Company of face value of Rs. 10/- (Rupees Ten only) each, have been sub-divided into 5 (Five) Equity Shares of Rs. 2/- (Rupees Two Only) each through Postal Ballot vide notice dated 30th March, 2015, the results of which were declared on 15th May, 2015 and subsequently the Clause V of the Memorandum of Association had been altered to give effect to the aforesaid sub-division. At the meeting held on 28th May, 2015, the Board of Directors recommended issue of equity bonus share in the ratio of 2:1 subject to the approval of shareholders. It is proposed to increase Authorised Share Capital of the Company from Rs. 10,00,00,000/- (Rupees Ten Crores Only) to Rs. 20,00,00,000/- (Rupees Twenty Crores Only) by creation and addition of 5,00,00,000 (Five Crores) Equity Shares of Rs. 2/- (Rupees Two Only) each and subsequently alter the Clause V of the Memorandum of Association of the Company, through Postal Ballot, vide notice dated 20th July, 2015, the result for which shall be declared on 27th August, 2015. There is no other occurrence of material change and commitment made between the end of the financial year and date of this report which has affected the financial position of the company. 25. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has established a vigil mechanism / whistle blower policy for Directors and employees to report their genuine concerns. The whistle blower policy is also uploaded on company's website. 26. RISK MANAGEMENT FRAMEWORK The company has in place a mechanism to identify, assess, monitor and mitigate various risks to the Company. The Company has also formulated a Risk Management policy. 27. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as "Annexure - VI" to the Board's report. 28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION: a) Conservation of Energy i) Steps taken for energy conservation, inter alia, include the following: • Improvement in energy efficiency by replacement of CFL to LED lights in offices • Operational control of HVAC system (air conditioning) in winding premises • Compressed air pressure reduction in non-use time • Closing of unwanted opening from air conditioned premises reducing cooling loss • Access control on air conditioning. Installation of remote control switch in office optimising operating temperature ii) Steps taken by the Company for utilizing alternate sources of energy: • Electric water heater being replaced with solar water heater • Open the blinds/curtains in offices to use natural lights iii) Capital investment on energy conservation equipments: • Proposal for Solar Energy generation by installation of fixed tilt Solar rooftop Photovoltaic System is being under consideration. b) Technology Absorption: Not Applicable. c) Expenditure incurred on Research and Development: NIL 29. FOREIGN EXCHANGE EARNINGS AND OUTGO: Earning and outgo in foreign exchange during the year under review were Rs. 204.18 lacs and Rs. 86.09 Lacs as against Rs. 97.12 lacs and Rs. 19.04 lacs respectively in the previous year. 30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. 31. SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company is committed to providing work environment that ensures every employee is treated with dignity and respect and afforded equitable treatment. The Company is also committed to creating a healthy working environment that enables employee to work without fear of prejudice, gender bias and sexual harassment. A policy on Anti Sexual Harassment of employees at workplace or other places involving employees of the Company has been adopted during the financial year 2014-15. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. During the financial year 2014-15 there were no cases reported under Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 32. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Corporate Social Responsibility and Governance Committee (CSR&G Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website. The contents of the policy along with the annexure specified in Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed herewith as 'Annexure VII'. 33. CORPORATE GOVERNANCE: The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. 34. MANAGEMENT DISCUSSION AND ANALYSIS: Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. 35. INDUSTRIAL RELATIONS: Employee relations were by and large satisfactory. No man days were lost due to strikes and lock out and the like. 36. ACKNOWLEDGEMENTS: Your Directors wish to place on record their sincere appreciation for the assistance and support extended by Customers, Employees, Banks, Governments, Vendors, Shareholders and others associated with the activities of the Company and look forward to their continued support. For and on behalf of the Board of Directors Elpro International Limited Sd/- Ram Swarup Dabriwala Chairman & Managing Director Place : Mumbai Date : August 12, 2015 |