ELIN ELECTRONICS LIMITED

Regd. Office - 143, Cotton Street, Kolkata -700007

Tel: 033-22684329 Website- elinindia.com

CIN: U29304WB1982PLC034725 DIRECTORS' REPORT

To the members,

Yours Directors have pleasure in presenting the 37th Annual Report along with audited financial statements of the Company for the Year ended 31st March 2019.

FINANCIAL RESULTS

(Rupees in Lacs)

DIVIDEND

In view of the need to conserve resources for diversification & expansion, your directors do not recommend any dividend for the year.

PERFORMANCE AND STATE OF COMPANYS AFFAIRS

During the year under review, the revenue from operations net of excise duty (Standalone) increased by 24.95% to Rs. 61768.05 Lacs as against Rs. 49432.47 Lacs in the previous year. The net profit after tax increased by 12.41% to Rs. 1474.64 Lacs as against Rs. 1311.80 Lacs in the previous year.

The consolidated revenue from operations net of excise duty was Rs. 61768.05 Lacs as against Rs. 49432.47 Lacs in the previous year. The consolidated net profit after tax increased by 15.30% to Rs. 1766.46 Lacs as against Rs. 1532.06 Lacs in the previous year.

SHARE CAPITAL

There is no change in share capital during the year.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year and the date of this report.

QUALITY CERTIFICATION

The company continued to have ISO 9001:2008 certification for Quality Management System Standard and ISO 14001:2004 certification for Environment Management System Standard and TS: 16949: 2009 quality certifications for automotive parts.

RISK MANAGEMENT POLICY

Board has assessed the risk that the organization faces such as Strategic, Financial, Credit, Market, Liquidity, and Security, IT, Legal and other risks and there is an adequate Risk Management infrastructure in place to address those risks.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no material weakness in the design or operation were observed 

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary and Joint venture but has two Associate companies namely Elin Appliances Private Limited and Asian Magnetic Devices Private Limited as defined under the Companies Act, 2013 as at close of the year.

A statement containing salient features of the financial statements of associates as per the Act is provided as Annexure to the consolidated Financial Statements.

CONSOLIDATED FINANCIAL STATEMNTS

The Consolidated Financial Statements prepared in compliance with the requirements of the Act, read with the Companies (Accounts) Rules, 2014 and applicable Accounting Standards forms part of the Annual Report.

The Board of Directors in their meeting held on 3rd Nov'2018 have approved the scheme of amalgamation of Asian Magnetic Devices Pvt Ltd ("ASIAN") and Rosebud Holding Pvt Ltd ("ROSEBUD") with Elin Electronics Limited ("EEL"), under sections 230 and 232 of the Companies Act, 2013 with appointed date of the Scheme as April 1, 2018. The share conversion ratio proposed is to issue 5 fully paid up Equity Shares of Rs. 10 each of EEL for every 1 fully paid Equity Shares of Rs. 10 each of ASIAN and 1 fully paid up Equity Shares of Rs. 10 each of EEL for every 4 fully paid Equity Shares of Rs. 10 each of ROSEBUD. The scheme has been filled with National Company Law Tribunal, Kolkata Bench. The merger would be effective only once the order is received from Honorable National Company Law Tribunal and filed with the Registrar of Companies.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of investments covered under section 186 of the Companies Act, 2013 are given in notes to the financial statements. No loans or guarantees were made during the year by the Company under Section 186 of the Act.PUBLIC DEPOSITS

The company has not accepted any public deposits.

DIRECTORS

Smt. Sunita Baid, independent director of the Company, resigned and ceased to be director w.e.f. 27th March, 2019. The Board places on record its sincere appreciation for the valuable services rendered by Smt. Sunita Baid during her tenure as director of the Company.

Mr. Kishor Sethia and Mr. Sanjeev Sethia, directors of the company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointments. 

The company has received declarations from Sh. Kamal Singh Baid, the independent director of the company confirming that he meets the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013.

DIRECTOR RESPONSIBILITY STATEMENT

The directors hereby confirm that

a)      in the preparation of the annual accounts, the applicable accounting standards had been followed and there have been no material departures from the same;

b)      the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c)       the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d)     the directors had prepared the annual accounts on a going concern basis; and

e)      the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MEETINGS OF THE BOARD

During the year Nine meetings of the Board were held on 30th April18, 31st May18, 22nd June18, 23rd July18, 30th August18, 26th September18, 03rd November18, 24th January19 and 25th March19.   Mr. M. L. Sethia, Mr. Vinay Kumar Sethia and Mr. Kamal Sethia, attended all nine meetings, Mr. Kishor Sethia & Mr. Sanjeev Sethia attended eight meetings, Mr. Kamal Singh Baid, Independent Director attended five meetings and Ms. Sunita Baid, Independent Director attended four meetings.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. Kamal Singh Baid, independent director as Chairman, Mrs. Sunita Baid, independent director as member and Mr. Kamal Sethia as its member. Three meetings of the audit committee were held during the year on dated 31st May18 23rd July18 and 03rd November18. All Committee members attended all the meetings.

VIGIL MECHANISIM

The company has in place a vigil mechanism for directors and employees to report genuine concerns and grievances. Adequate safe guards are provided against victimization of those who want to avail of the mechanism.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

During the year, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Committee (NRC) comprises of Mr. Kamal Singh Baid, Non-Executive Independent Director as Chairman, Mrs. Sunita Baid, Non-Executive Independent Woman Director as member and Mr. Kamal Sethia, wholetime director as member. One meeting of the Nomination and Remuneration Committee (NRC) was held during the year on dated 30th April, 2018.

The Nomination and Remuneration Policy as approved by Board contains the criteria for determining qualifications, positive attributes & independence of a director and their remuneration; to identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in the policy; to recommend to the Board the appointment and removal of Directors and Senior Management. The appointment of Managing and wholetime directors shall not be for a period exceeding five years at a time. An Independent Director shall hold office for a term up to five consecutive years on the Board and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. No Independent Director shall hold office for more than two consecutive terms of upto maximum of five years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. The Remuneration to be paid to Managing Director/ Whole-time Directors shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company. The Non-Executive/Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Act.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility committee comprises of Mr. Kamal Sethia as Chairman; Mr. Sanjeev Sethia, as member and Mr. Kamal Singh Baid, independent director as member. Two meetings of the CSR committee were held during the year on 23rd July, 2018 and 20th December, 2018. The CSR policy focuses on addressing critical, social, environmental and economic needs of the under privileged section of the Society of India and also undertake other need based initiatives in compliance with Schedule VII of the Act. The committee monitors the implementation of the CSR projects or programs or activities undertaken by the Company. Disclosure on CSR is annexed herewith as an Annexure I to this Report.

STATUTORY AUDITORS & AUDITORS REPORT

M/s. Oswal Sunil & Company, Chartered Accountants (Firm Registration number 016520N) were appointed as the Statutory Auditors of the Company for a term of five consecutive years, at the 35th annual general meeting held on 29th September, 2017 till the conclusion of 40th AGM. They have confirmed that they are not disqualified from continuing as auditors of the Company.

Auditors Report for the financial year 2018-19 does not contain any qualifications or adverse remarks.

COST AUDITORS

The Board has appointed M/s Bhavna Jaiswal & Associates, Cost Accountants (Firm Registration number 100608), as Cost Auditor for conducting the audit of cost records of the company for the financial year 2019-20. A proposal for ratification of remuneration of the Cost Auditors for the financial year 2019-20 is placed before the shareholders. 

SECRETARIAL AUDITOR

The Board has appointed M/s Akshat Garg & Associates, Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report in form no. MR-3 for the financial year ended 31st March, 2019 is annexed herewith as an Annexure II to this Report. The said report does not contain any qualification, reservation or adverse remarks.

EXTRACT OF ANNUAL RETURNS

Extract of the Annual Return in form no. MGT-9 is annexed herewith as an Annexure III to this Report.

TRANSACTIONS WITH RELATED PARTIES

All related party transactions entered during the financial year were in ordinary course of business and were on arms length basis. The particulars of such related party transactions in form no. AOC-2 is as per Annexure IV to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A.              CONSERVATION OF ENERGY:

Efforts are being made to use natural light and air flow as far as possible and by replacing conventional Tube light in to LED Light and by replacing conventional Diesel Burner into PNG Burner to conserve the energy in all possible manners. The capital investment on energy conservation equipments during the year is NIL

B.               TECHNOLOGY ABSORPTION:

Self reliance in new products, product development, improved production process for better productivity, import substitution and cost reduction attempts are made for sourcing of material and components for cost effectiveness. The input cost has been reduced and in some cases the quality has improved. Imported Technology (imported during the last 3 years) NIL

EXPENDITURE ON RESEARCH AND DEVELOPMENT

During the financial year, expenditure on research and development including capital expenditure was Rs. 785.14 lacs as against Rs. 640.29 lacs in the previous year.

C.               FOREIGN EXCHANGE EARNING & OUTGO

During the financial year, the foreign exchange earned in terms of actual inflows was Rs 254.75 Lacs as against Rs. 401.14 lacs in the previous year and foreign exchange outgo in terms of actual outflows was Rs. 9931.57 lacs as against Rs. 7078.47 lacs in the previous year               

ACKNOWLEDGEMENT

Your Directors wish to thank all Government Authorities and Company's Bankers State Bank of India and others for their continued help and support to the Company.

Your Directors also wish to place on record their deep appreciation for the services rendered by staff and workers of the company at all levels and for dedication to their work and loyalty.

For and on behalf of the Board

            For Elin Electronics Limited

 Place: New Delhi                                                                        (M.L. SETHIA)                                    

Date:   14th June, 2019                                            CHAIRMAN & MG. DIRECTOR                             

                                                                                                                 DIN: 00081367

PERFORMANCE AND STATE OF COMPANY’S AFFAIRS During the year under review, the revenue from operations net of excise duty (Standalone) increased by 24.95% to Rs. 61768.05 Lacs as against Rs. 49432.47 Lacs in the previous year. The net profit after tax increased by 12.41% to Rs. 1474.64 Lacs as against Rs. 1311.80 Lacs in the previous year. The consolidated revenue from operations net of excise duty was Rs. 61768.05 Lacs as against Rs. 49432.47 Lacs in the previous year. The consolidated net profit after tax increased by 15.30% to Rs. 1766.46 Lacs as against Rs. 1532.06 Lacs in the previous year.

A. CONSERVATION OF ENERGY: Efforts are being made to use natural light and air flow as far as possible and by replacing conventional Tube light in to LED Light and by replacing conventional Diesel Burner into PNG Burner to conserve the energy in all possible manners. The capital investment on energy conservation equipments during the year is NIL

A. TECHNOLOGY ABSORPTION: Self reliance in new products, product development, improved production process for better productivity, import substitution and cost reduction attempts are made for sourcing of material and components for cost effectiveness. The input cost has been reduced and in some cases the quality has improved. Imported Technology (imported during the last 3 years) – NIL

A. FOREIGN EXCHANGE EARNING & OUTGO During the financial year, the foreign exchange earned in terms of actual inflows was Rs 254.75 Lacs as against Rs. 401.14 lacs in the previous year and foreign exchange outgo in terms of actual outflows was Rs. 9931.57 lacs as against Rs. 7078.47 lacs in the previous year

DIRECTOR RESPONSIBILITY STATEMENT The directors hereby confirm that a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there have been no material departures from the same; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; and e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.