|
Dear Shareholders,
Your Directors hereby present the sixty fourth Annual Report of Elgi
Equipments Limited ("Elgi/the Company") along with the audited financial
statements for the financial year ended March 31, 2024.
Financial Results
The highlights of the standalone performance of your Company during the
fiscal are given hereunder:
(Rs in millions)
| Particulars |
2023 - 24 |
2022 - 23 |
| Profit before depreciation, exceptional items & tax |
4,638.95 |
3,923.37 |
| Less: Depreciation and amortisation expenses |
359.38 |
383.60 |
| Less: Exceptional items |
- |
- |
| Profit Before Tax |
4,279.57 |
3,539.77 |
| Less: Income tax expense |
1,057.60 |
814.99 |
| Net Profit |
3,221.97 |
2,724.78 |
| Add: Opening balance in retained earnings |
10,305.70 |
7,956.07 |
| Less: Dividend paid during the year |
632.37 |
364.45 |
| - Transfer to general reserve |
- |
- |
| Add: Remeasurement of post-employment benefit obligation, net
of tax |
4.20 |
(11.79) |
| Transfer to retained earnings of gain from exercise of
Treasury shares |
12.92 |
- |
| - Income tax on gain from exercise of treasury shares |
(0.95) |
- |
| Transfer to retained earnings on Exercise of shares under
ESOP scheme |
8.21 |
1.09 |
| Closing balance in P&L account |
12,919.68 |
10,305.70 |
Review of Business Operations
The Company realised an operating revenue of ' 18,433.75 Million as
against ' 17,566.35 Million in 2022-23.
The details of division wise performance and other operational details
are discussed at length in the Management Discussion and Analysis section. There was no
change in the nature of business of the Company during the financial year ended March 31,
2024.
Share Capital
During the year under review, there were no changes in the issued and
paid-up share capital of the Company. The issued and paid-up share capital of the Company
consist of 31,69,09,016 equity shares of face value of ' 1/- each amounting to '
31,69,09,016/- as on the date of the report.
Transfer to reserves
The Company has not transferred any amount to the General Reserve
during the year under review. However, an amount of ' 2,613.98 million of the current
profits has been carried forward under the head retained earnings.
Dividend
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the
Dividend Distribution Policy of the Company is hosted in the Company?s website
https://www.elgi.com/in/policies/ dividend-policy.pdf. For the financial year 2023-24, in
line with the Dividend Distribution Policy, the Board of Directors at their meeting held
on May 27, 2024, has recommended a dividend of ' 2/- per share (200%) on the paid-up share
capital of 31,69,09,016 equity shares.
Subject to the approval of shareholders, an amount of ' 633.82 million
will be paid as dividend after deducting applicable taxes (Previous Year ' 633.82
million).
Transfer of Unclaimed Dividend/Shares to Investor Education and
Protection Fund
In terms of Sections 124 and 125 of the Companies Act, 2013,
("Act") unclaimed or unpaid dividend relating to the financial year 2016-17 is
due for remittance to the Investor Education and Protection Fund ("IEPF")
established by the Central Government.
Further, pursuant to Section 124(6) of the Act, read with IEPF
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 38,140 equity shares of '
1/- each on which dividend had remained unclaimed for a period of 7 years have been
transferred to the credit of demat account identified by the IEPF Authority during the
year under review.
Annual Return
The Annual Return of the Company for the financial year 2023-24 as
required under Section 92(3) of the Act is available on the website of the Company and can
be accessed on the Company?s website at the link https://www.elgi.com/in/financials/.
Board Meetings held during the year
During the year, five meetings of the Board of Directors were held. The
details of the meetings are furnished in the Corporate Governance Report which is attached
to this Report.
Committees
As on March 31, 2024, the Company has Audit Committee, Nomination and
Remuneration Committee, Compensation Committee, Stakeholders Relationship Committee, Risk
Management Committee and Corporate Social Responsibility Committee. Detailed note on the
composition of the Board and its Committees are provided in the Corporate Governance
Report attached to this Report.
Statement on compliance with Secretarial Standards
The Directors have devised proper systems to ensure compliance with the
provisions of all applicable Secretarial Standards and such systems are adequate and
operating effectively.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(3)(c) of the Act, with
respect to Directors? Responsibility Statement, it is hereby confirmed that:
a. In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departures from those standards;
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 that period;
c. The Directors have taken proper and sufficient care for maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
d. The Directors have prepared the annual accounts on a going concern
basis;
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; and
f. The Directors had devised proper systems to ensure compliance with
the provisions of all the applicable laws and such systems were adequate and operating
effectively.
Details in respect of frauds reported by Auditors under Section 143(12)
of the Act, other than those which are reportable to the Central Government
There were no instances of frauds identified or reported by the
Statutory Auditors during the course of their audit pursuant to Section 143(12) of the
Act.
Declaration of Independent Directors
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of independence as
prescribed both under the Act and SEBI Listing Regulations. Regulations and that their
name is included in the data bank as per Rule 6(3) of the Companies (Appointment and
Qualification of Directors) Rules, 2014 (as amended).
Remuneration policy of the Company
The Board has based on the recommendation of the Nomination and
Remuneration Committee, framed a policy for fixing and revising remuneration of Directors,
Key Managerial Personnel, Senior Management Personnel and other employees of the Company.
The
Remuneration policy is annexed herewith as Annexure A to this
report. The Remuneration policy of the Company can be accessed on the Company?s
website at the link https://www.elgi.com/in/policies/remn-policy.pdf.
Comments on Auditors' Report
With respect to the remarks made by the Statutory Auditors, M/s. Price
Waterhouse Chartered Accountants LLP, your directors wish to state as follows:
| Remarks by Statutory Auditor |
Response from the Management |
| Based on our examination, which included test checks, the
Company has used two accounting software for maintaining its books of account which has
feature of recording audit trail (edit log) facility and except that the audit trail
feature for payroll software did not operate throughout the year; and for other accounting
software, the feature of recording audit trail (edit log) facility was enabled from
November 06, 2023; |
Consequent to proviso Rule 3(1) of the Companies (Accounts)
Rules, 2014, for the financial year commencing on or after the 1st day of April 2023, the
Company is required to ensure that the accounting software and payroll software have a
feature of recording audit trail of each and every transaction, creating an edit log of
each change made in the books of account along with the date when such changes were made
and also ensure that the audit trail cannot be disabled. |
| During the course of performing our procedures, except for
the aforesaid instances, where the question of our commenting on whether the audit trail
has been tampered with does not arise, we did not notice any instances of the audit trail
feature being tampered. (refer note below to the standalone financial statements) |
The Company had undertaken steps to ensure compliance with
the above requirement from the beginning of the year and also considered the evolving
guidance in this connection. |
|
1. In payroll software, audit trail for changes by end user
is completely enabled from February 2024. However, due to limitation in the software, the
audit log does not capture some specific changes and pre-modified values. From April 2024,
the company has transitioned the payroll and employee records to a different software. The
company is in the process of obtaining necessary information to ensure compliance. |
|
2. In respect of the accounting software, the feature of
recording audit trail (edit log) facility was enabled from November 06, 2023 meeting all
the statutory requirements. |
With respect to the remarks made by the Secretarial Auditors, M/s. MDS
& Associates LLP, your directors wish to state as follows:
| Remarks by Secretarial Auditor |
Response from the Management |
| The National Stock Exchange of India and BSE Limited have
issued an Advisory Letter to the Company under Regulation 30 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 for partial disclosure of the information in the matter pertaining to the acquisition
of stake in First Energy TN1 Private Limited. |
The advisory letter was issued pursuant to the Company?s
disclosure on Intimation of acquisition of shares of First Energy TN1 Private Limited. The
matter pertained to reporting of the change in Company?s shareholding in First Energy
Private Limited ("FEPL") and time of completion of acquisition that was reported
to the Stock Exchanges. The Company clarified that the change in % was on account of
change in Mega Watt of power purchased from FEPL and delay in dematerialization of shares
by FEPL. |
| Remarks by Secretarial Auditor |
Response from the Management |
|
The Board of Directors in its meeting held on August 11,
2023, took note of the advisory letter issued by NSE and the Company filed its response as
noted by the Board to the stock exchanges. |
|
The Management has taken efforts to ensure continuous
disclosure to stock exchanges. |
| The Company has reported certain events, which are covered
under Regulation 30 read with Schedule III and Regulation 39(3) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, to the stock exchanges beyond the prescribed time specified thereunder. |
With reference to the observations made by the Secretarial
Auditors, we wish to state that the delay in filing/intimating to Stock Exchange under
Regulation 30 and Regulation 39(3) has been caused inadvertently. The Management has taken
efforts to ensure that returns/intimation to Stock Exchange are done in time and will also
do so going forward. |
Particulars of Loans, Guarantees or Investments made under Section 186
of the Act
Details of loans given, investments made, guarantees given and
securities provided pursuant to the provisions of Section 186 of the Act have been given
in the notes to the Financial Statements.
Particulars of contracts or arrangements with Related Parties
All transactions entered into with related parties as defined under the
Act and Regulation 23 of the SEBI Listing Regulations during the financial year 2023-24
were in the ordinary course of business and on an arm?s length pricing basis.
The particulars of contract or arrangement entered into with related
parties referred to in Section 188(1) of the Act which are material in nature are
disclosed in the prescribed Form AOC-2 and annexed herewith as Annexure B to this
report.
The Audit Committee and the Board of Directors have approved the
Related Party Transactions Policy and the same has been hosted on the Company?s
website at https://www.elgi.com/in/policies/rpt-policy.pdf.
The Policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions between the Company and related
parties.
Material Changes and commitments affecting the financial position of
the Company
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the financial year as on
March 31, 2024, and the date of this report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information on foreign exchange earnings and outgo, technology
absorption, conservation of energy stipulated under Section 134(3)(m) of the Act, read
with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure C.
Risk Management
Pursuant to the requirement of Regulation 21 of the SEBI Listing
Regulations, the Company has constituted a Risk Management Committee ("RMC"),
consisting of Board members and senior executive of the Company. The Company has in place
a Risk Management framework to identify, evaluate business risks and challenges across the
Company both at corporate level as also separately for each subsidiary.
The top 10 risks for the Company have been mapped by the operating
management (with additional support of external guidance) after extensive deliberations on
the nature of the risk being a gross or a net risk and thereafter in a prioritized manner
presented to the Board for their inputs on risk mitigation/management efforts. Based on
this framework, a Risk Management policy has been adopted.
The RMC engages in the Risk Management process and has set out a review
process so as to report to the Board the progress on the initiatives for the major risks
of each of the businesses that the Company is into. The RMC reviews the top 10 risks. The
results of the mitigation measures implemented by the Company are given below:
| S.No. Risk Category |
Risk Summary |
Risk Response/Mitigation actions/Position |
| 1 Compliance Risks |
The Company's business is subject to legal and regulatory
requirements globally; non- compliance could result in severe consequences |
The Company had implemented a professional software. |
|
|
Proof of compliance is collected or reported by the
compliance owners every quarter end. The status is reported to the Audit Committee and
Board during their quarterly meetings. |
|
|
The process of revisiting the checklist for existing entities
in rotation is being continued. Further, whenever there is a new entity created in a new
geography, we engage a law firm to get the compliance list created within the first year
of incorporation. As part of the above process, we have revisited the checklist for ELGi
USA with the help of a USA based law firm. Consequently, new set of compliances have been
added. |
| 2 Human Resource Risks |
Recruiting and retaining strong talent is key to achieving
the Company's aspirations; any gaps in these efforts could impact the achievement of
revenue and profitability targets. |
The talent acquisition process is getting further
strengthened. We now use outcome-based Job Description for all key roles. The new
competency behaviour model is used in key hiring. We have involved global leadership in
the new leadership hiring process. |
|
|
On the other hand, the Company is also investing well in the
Talent development model. The project titled "Integration of Talent" was kick
started in early September 2021 with the intention to align, design and implement
Integrated Talent Management Strategy. The objective being "grow talent pool for
global success". After completion of the first phase of the project consisting of
rolling out and training of Behavioural Competency model, the second phase involving
assessment against the Individual development plan, career dialogue with the identified
successor and key talent are progressing well as per the project plan |
|
|
The Company had moved to a decentralized compensation
decision mechanism (instead of HR managing this centrally) which has seen well received by
the businesses and employees... This is also an important enabler to the talent management
program, as the Company's managers become more aware and start investing in their human
resources at a strategic level. |
| 3 Economic & Market Risks |
Our global operations are subject to economic and market
risks in the geographies we operate in. |
The Company's strategic investment in creating and growing
global market presence is continuing to help the company deliver top line growth and
improved profitability during and after the Covid period. The Company was able to leverage
and cross deploy resources to manage shifting demands. |
|
|
The risk mitigation efforts, supported through serving broad
range of industry segments, with wide range of products is serving the Company well. |
| 4 Growth Risks |
Acquisitions, joint ventures, and investments could be
unsuccessful or consume management time and resources, which could adversely affect our
operating results |
The Company has not made any acquisitions in recent years.
The company has recognised the key success factors learning from earlier acquisitions and
post-acquisition Integration is given adequate weightage and priority |
| 5 Strategic Risks |
Business continuity could be severely affected due to natural
disasters or unexpected events like COVID 19 pandemic |
The company's Insurance policies and coverages are
commensurate with business requirements These policies are periodically reviewed to
strengthen the scope as required. |
|
|
Given our expanding global presence and the changing risk
landscape, the Company has engaged a leading Insurance solution provider to assess the
current global Insurance coverage & present their recommendations for a robust risk
mitigation. |
|
|
The Company has a disaster management plan in place and
continues to refine it regularly to meet the changing requirements. |
| 6 Supply Chain Risks |
Disruptions in supplies due to concentration
of manufacturing facilities in a single location and reliance on one or few suppliers
present risks to business stability |
The Company continues to explore responses
to manufacturing concentration including strategic stocking in various parts of India and
rest of the world in the short to mid-term and is planning to have assembly operations in
global regions in the mid to long-term. Till the scale and volume justifies manufacturing
and assembly in multiple locations, the company uses alternate mitigations such as
warehousing in domestic and foreign location to prevent disruption of deliveries to its
customers. |
|
|
The supplier base is being widened
continuously to reduce dependence on fewer suppliers and geographies. While developing a
global network of suppliers is a continuous activity, the company has road map to
continuously mitigate suppliers concentration |
|
|
Further, the Company will continue to carry
out strategic, selective backward integration such that manufacture of most critical parts
are moved in-house. |
| 7 Information Technology Risks |
Cyber security risks could disrupt the
Company's technology systems, infrastructure, and networks. Gaps in data protection could
result in non-compliance of applicable regulations |
The company is continuously monitoring,
reviewing its infrastructure and tools to ensure security. • VAPT testing is carried
out every quarter and any open issues are immediately address • Progressively all the
applications and data are moved to cloud which is more secured. • Upgrade, implement
latest tools that ensures high level of security at various levels including end points
security • Security Information and Event Management (SIEM) solution is
systematically implemented and being upgraded. • Annual IT security audit is
conducted |
| 8 Financial Risks |
Exchange rate fluctuations in the various
currencies that Company deals in could adversely affect the Company's financial
performance |
To minimize fluctuation risks, the Company
has hedging process a policy in place, besides leveraging the natural hedge that is
available. The Company also continuously monitors the exchange rates relevant for its
geographies and takes suitable actions to offset adverse changes by adjusting selling
prices and costs. During the year, the Company has not had any major impact. |
|
|
The Company gets timely advice from the
bankers through our close, frequent interaction. |
| 9 Environmental Risks |
Global climate change and related
regulations can negatively impact our business |
The Company focuses heavily on Electric
Powered Screw Air Compressors (EPSAC) and Oil Free Screw Air Compressors (OFSAC) for its
future growth, gradually reducing the dependence on Diesel Powered Screw Air Compressors
(DPSAC) in its overall portfolio. Environmental factors and regulatory changes taking
place globally are closely monitored to effect appropriate actions to align the Company's
products with these requirements. |
|
|
The Company had embarked on a major
Environmental, Social & Governance (ESG) initiative. The ESG strategy was defined
basis a comprehensive materiality survey, maturity assessment and compliance requirements.
We have engaged a leading consultant partner to help us in this journey. Additionally, we
have also initiated an assurance audit by a leading consulting firm. |
|
|
The Company's operations are constantly
upgraded to adopt green manufacturing practices. |
| 10 Strategic Risks |
The Company's large dependence on India
makes it susceptible to the economic fortunes of a single geography |
The Company's revenue mix is now well spread
across geographies and the dependence in India is consistently reducing India sales to
total sales has gone down to 45%, compared to 56% in 2019. It is expected to go further
down in the coming years. |
|
|
The Company's strategic plan for the
mid-term and the strategic initiatives are aligned to this goal to diversify the revenue
mix. |
Corporate Social Responsibility Initiatives
The brief outline of the Corporate Social Responsibility
("CSR") Policy of the Company and the initiatives undertaken by the Company on
CSR activities during the year are set out as Annexure D to this report in the
format prescribed in the Companies (CSR Policy) Rules, 2014. For other details regarding
the CSR Committee, refer to the Corporate Governance Report, which is a part of this
report. The policy is available on the website of the Company.
Performance Evaluation of the Board, its Committees and the Directors
Pursuant to the provisions of the Act and SEBI Listing Regulations, the
Board of Directors has carried out 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 attached as an Annexure to this report.
Statement regarding opinion of the Board with regard to integrity,
expertise and experience (including the proficiency) of the Independent Directors
The Board of Directors have evaluated the Independent Directors during
the year 2023-24 and opined that the integrity, expertise and experience (including
proficiency) of the Independent Directors is satisfactory.
Directors and Key Managerial Personnel
Mr. Anvar Jay Varadaraj, Executive Director retires by rotation at the
ensuing AGM and being eligible, offers himself for re-appointment. Your directors
recommend his re-appointment.
A resolution seeking approval of the Members for the re-appointment of
Mr. Anvar Jay Varadaraj as Director have been incorporated in the Notice to the AGM of the
Company along with brief details about him.
Mr. Harjeet Singh Wahan, Non - Executive Director of the Company
retired on November 5, 2023, and Mr. Mohan Nambiar, Independent Director retired on April
10, 2024. The Board wishes to place on record its appreciation for the invaluable services
rendered by them during their tenure as independent directors of the Company.
Pursuant to the recommendation of the Nomination and Remuneration
Committee, the Board of Directors of the Company at their meeting held on May 27, 2024
have recommended the appointment of Mr. Suman Kumar Das, Mr. Srinivasan
Ravindran and Mr. Srinivasan Krishnamurthi as Independent Directors of the Company for a
term of consecutive five years with effect from July 31, 2024.
Ms. Aruna Thangaraj was appointed as an independent director of the
company pursuant to Section 149 of the Companies Act, 2013 for the first term of 5 years
and will hold officeupto August 1,2024. Consideringher knowledge, expertise and experience
and the contributions made by her during her tenure as an independent director since her
appointment, the Nomination and Remuneration Committee and the Board has recommended the
re- appointment of Ms. Aruna Thangaraj as independent director on the board of the
company, to hold office for the second term of five consecutive years commencing from
August 2, 2024, and not liable to retire by rotation.
The company has also received declaration from the appointee directors
that they fulfill the criteria of independence as prescribed under Section 149(6) of the
Companies Act, 2013 as well as Regulation 16(1)(b) of the SEBI Listing Regulations.
Further, the Company has received notices from the members under Section 160(1) signifying
their intention to propose the candidature of the aforesaid persons for the office of
independent director(s) of the Company.
The board of directors recommends the appointment of the independent
director(s).
Mr. Jayakanthan R relinquished his position as Chief Financial Officer
with effect from March 18, 2024, and Mr. Indranil Sen was appointed as the Chief Financial
Officer with effect from March 18, 2024. Mr. Prakash S resigned as the Company Secretary
with effect from December 4, 2023, and Mrs. Devika Sathyanarayana was appointed as the
Company Secretary with effect from May 27, 2024.
Pursuant to the provisions of Section 2(51) and 203 of the Act, the Key
Managerial Personnel of the Company are Mr. Jairam Varadaraj, Managing Director, Mr. Anvar
Jay Varadaraj, Executive Director, Mr. Indranil Sen, Chief Financial Officer and Mrs.
Devika Sathyanarayana, Company Secretary.
Subsidiaries, Joint Ventures and Associate Companies
The highlights of performance of subsidiaries, associates and joint
venture companies and their contribution to the overall performance of the Company during
the period review have been disclosed in the Management Discussion and Analysis Report.
The Company has 25 subsidiaries and 9 joint ventures/ associate
entities. The statement pursuant to Section 129(3) of the Act, containing the salient
features of the financial statements of subsidiary companies, in Form AOC-1 forms part of
this Annual report.
Elgi Compressors Vietnam LLC, a wholly owned subsidiary of the Company
was wound up during the year.
Elgi Compressors USA Inc., Elgi Compressors Europe S.R.L, Rotair SPA,
and Patton?s Inc., are the material subsidiaries of the Company based on the
financials for the year ended March 31, 2024. The Board has approved a policy for
determining material subsidiaries, which has been uploaded on the Company?s website
viz. www.elgi.com.
The consolidated financial statements of the Company and its
subsidiaries prepared in accordance with the applicable accounting standards have been
annexed to the Annual Report. The annual accounts of the subsidiary companies are hosted
on the website of the Company viz. www.elgi.com and will also be kept open for inspection
by the shareholders at the registered office of the Company till the date of AGM. The
Company will also provide a copy of the annual accounts of subsidiary companies to the
shareholders upon their request.
Deposits
Your Company has not accepted any deposit within the meaning of
provisions of Chapter V of the Act, read with the Companies (Acceptance of Deposits)
Rules, 2014 for the year ended March 31, 2024.
Details of significant and material orders passed by the Regulators or
Courts or Tribunals
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.
Internal Control Systems and their Adequacy
The Company has adequate internal control systems to monitor business
processes, financial reporting and compliance with applicable regulations. The systems are
periodically reviewed for identification of control deficiencies and formulation of time
bound action plans to improve efficiency at all the levels. The Audit Committee of the
Board constantly reviews internal control systems and their adequacy, significant risk
areas, observations made by the internal auditors on control mechanism and the operations
of the Company and recommendations made for corrective action through the internal audit
reports. The Committee reviews the statutory auditors? report, key issues,
significant processes, and accounting policies. The Directors confirm that the Internal
Financial Controls are adequate with respect to the operations of the Company. A report of
Auditors pursuant to Section 143(3) (i) of the Act certifying the adequacy of Internal
Financial Controls is annexed with the Auditors Report.
Statutory Auditors
Price Waterhouse Chartered Accountants, LLP (Firm Reg. No.:
012754N/N500016) Chartered Accountants, Chennai was appointed as the Statutory Auditors of
the Company for a second term of five years at the Sixty Second AGM of the Company held on
August 12, 2022, till the conclusion of the sixty seventh AGM to be held in the year 2027.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed MDS & Associates LLP, Company Secretaries, Coimbatore to undertake the
secretarial audit of the Company. The report of the secretarial auditor is attached as Annexure
E.
Cost Auditors
Pursuant to the provisions of Section 148(3) of the Act, the Board of
Directors had appointed STR & Associates, Cost Accountants, Trichy (Firm Registration
No.: 000029), as Cost Auditors of the Company, for conducting the audit of cost records
for the financial year ended March 31, 2024. The Audit is in progress and report will be
filed with the Ministry of Corporate Affairs within the prescribed period.
The cost accounts and records as specified by the Central Government
under sub-section (1) of Section 148 of the Act, are made and maintained by the Company.
Details of application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 during the year
No applications have been made and no proceedings are pending against
the Company under the Insolvency and Bankruptcy Code, 2016.
Details of difference between amount of the valuation done at the time
of one-time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof
The disclosure under this clause is not applicable as the Company has
not undertaken any one-time settlement with the banks or financial institutions.
Human Resources and Industrial Relations
The Company continues to enjoy cordial relationship with its employees
at all levels. The total strength of employees as on March 31, 2024, was 2172.
Particulars of Employees
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 as Annexure
F. 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.
Having regard to the provisions of the second proviso to Section 136(1)
of the Act and as advised, 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 Secretary.
Elgi Equipments Limited Employee Stock Option Plan, 2019
The Company has implemented the Elgi Equipments Limited Employees Stock
Option Plan 2019 to enable the Company and its subsidiaries to attract, retain and reward
appropriate human talent in its employment and to create a sense of ownership and
participation amongst the employees. The Compensation Committee administers and monitors
the Employees? Stock Option Plan of the Company through the Elgi Equipments Limited
Employee Stock Option Trust. The Compensation Committee has during the year under review
issued 1,75,900 options at a grant price of ' 430/- per option to the eligible employees
of the Company. No options were granted to the Directors.
The disclosure pursuant to the provisions of Securities and Exchange
Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is given
as Annexure G to this report.
The Company has received a Certificate from the Secretarial Auditors
that the above referred Scheme had been implemented in accordance with the SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by
the members in this regard.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
As per the requirement of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, your Company
has constituted an Internal Complaints Committee. During the year under review, one case
was received/filed pursuant to the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same was resolved during
the year. As on March 31, 2024, no complaint is pending for investigation and resolution.
Business Responsibility and Sustainability Report
In terms of Regulation 34 of the SEBI Listing Regulations, read with
relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed
under Business Responsibility and Sustainability Report ("BRSR"). The BRSR seeks
disclosure on the performance of the Company against nine principles of the "National
Guidelines on Responsible Business Conduct? (‘NGRBCs?). As per the SEBI
Circulars, effective from the financial year 2023-24, filing of BRSR Core is mandatory for
the top 1000 listed companies by market capitalisation. Accordingly, for the financial
year ended March 31, 2024, your Company being amongst top 1000 companies, BRSR is annexed
as Annexure H to this Report.
Corporate Governance
A report on corporate governance is annexed as Annexure I to
this report. The Company has complied with the conditions relating to corporate governance
as stipulated in SEBI Listing Regulations.
Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177(9) of the Act, read with Rule
7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulations 4 and 22
of the SEBI Listing Regulations and in accordance with the requirements
of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has a Whistle
Blower policy to deal with unethical or improper practice or violation of Company?s
Code of Business Conduct or any complaints regarding accounting, auditing, internal
controls or disclosure practices of the Company.
This Policy inter-alia provides a direct access to the Chairman of the
Audit Committee. Your Company hereby affirms that no Director/employee has been denied
access to the Chairman of the Audit Committee. Brief details about the policy are provided
in the Corporate Governance Report attached to this Report.
The Audit Committee of the Board reviews the Complaints received,
redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The
Whistle Blower policy is available on the website of the Company at the link
https://www.elgi.com/in/policies/wb-policy.pdf.
Acknowledgement
Your Directors thank the shareholders, customers, suppliers, bankers
and all other stakeholders for their continued support during the year. Your Directors
also place on record their appreciation of the contributions made by employees at all
levels towards the growth of the Company.
|
For and on behalf of the Board |
|
Jairam Varadaraj |
Anvar Jay Varadaraj |
| Place: Coimbatore |
Managing Director |
Executive Director |
| Date: May 27, 2024 |
DIN: 00003361 |
DIN:07273942 |
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