48th Annual Report 2007-08 ELECON ENGINEERING ......Elecon Engineering Company Limited - Annual Report 2007-08 5five years at a glance Particulars 2007-08 2006-07 2005-06 2004-05 2003-04

Elecon Engineering Company Limited - Annual Report 2007-08 1

ELECON ENGINEERING COMPANY LIMITED

Let’s Preserve Our envirOnment

48th Annual Report 2007-08

Elecon Engineering Company Limited - Annual Report 2007-082

“It is our task in our time and in our generation, to hand down undiminished to those who come after us, as was handed down to us by those who went before, the natural wealth and beauty which is ours.”

- John F. Kennedy

about the coverNature thrives on conservation; a state of harmony between humans and the environment. We at Elecon take this responsibility seriously and are committed to conserving our natural resources while exercising our right to develop and effectively use them for the betterment of all.

“Let’s preserve our environment.”


Board of Directors 2

Five years at a Glance 3

Financial Summary 4

Performance Indicators 5

Material Handling Equipment Division 8

Gear Division 10

Directors’ Report 12

Management Discussion & Analysis 16

Elecon Worldwide 20

Secretarial Audit Report 23

Corporate Governance Report 24

Auditor’s Report 37

Balance Sheet 40

Profit and Loss Account 41

Cash Flow Statement 42

Schedues Forming Part of the Balance Sheet 44

Schedules Forming Part of the P&L A/c. 51 Notes Forming Part of the Accounts 54

Notice 66

contents

Gear tooth profile tester


Elecon at a GlanceElecon Engineering is one of the India’s leading manufacturers of Power Transmission and Material Handling Equipment with technology-based products and solutions deployed across a wide range of industrial applications ranging from defense, mining, power generation, plastic, sugar and cement amongst others applications across the world.

Elecon’s strategy for long-term growth is based on customer-driven focus and global mindset.

Social Responsibility Always geared up to help society in need to live, learn and succeed.

Elecon is committed to improving lives in communities where we live and work. We endeavor to make an even greater difference by focusing on education and career building. Elecon aims to help children and young adults get a robust start by helping create sound infrastructure, provide scholarships, sponsor learning aids and educational programmes at various schools and institutes that help enhance their ability to gain knowledge and develop skills to succeed.

An equal emphasis is accorded to supporting business events and industrial exhibitions that help create new opportunities for businesses to mature and thrive.

board of directors

The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance periodically. The Chairman & Managing Director manages the business of the Company under the overall supervision, guidance and control of the Board.

Shri Prayasvin B. Patel Chairman & Managing Director

AuditorsThacker Butala DesaiChartered AccountantsNavsari

BankersState Bank of India Bank of BarodaState Bank of SaurashtraEXIM BankAxis Bank LimitedCiti Bank N.A.

Registered OfficeAnand Sojitra RoadVallabh Vidyanagar 388120Gujarat, India

Chief Financial OfficerShri Hemendra C. Shah

Company SecretaryShri Paresh M. Shukla

Shri Upendra M. Patel

Shri Hasmukhlal S. Parikh

Dr. Amritlal C. Shah

Shri Pradip M. Patel

Shri Chirayu R. Amin

Shri Ashok J. Patel


five years at a glance

Particulars 2007-08 2006-07 2005-06 2004-05 2003-04 US$ Mn Rs. Mn.

TURNOVER 206.0 8,264 7,206 4,424 2,777 1,608

TOTAL INCOME 208.4 8,362 7,289 4,507 2,807 1,643

EARNING BEFORE DEPRECIATION, 32.5 1,305 1,078 596 379 179 INTEREST & TAX

DEPRECIATION 3.5 142 122 94 82 78

PROFIT AFTER TAX 16.7 672 549 278 100 21

EQUITY DIVIDEND 3.4 139 46 30 14 5

DIVIDEND (%) - 75% 75% 50% 25% 10%

EQUITY SHARE CAPITAL 4.6 186 61 57 56 56

RESERVE & SURPLUS 54.3 2,181 1,817 969 676 594

NET WORTH 59.0 2,367 1,874 1,003 682 569

GROSS FIXED ASSETS 74.9 3,165 2,511 2,133 1,732 1503

NET FIXED ASSETS 44.1 1,931 1,267 952 620 455

TOTAL ASSETS 252.5 10,131 7,441 5,349 3,351 2380

NUMBER OF EMPLOYEES 801 746 680 682 679

KEY INDICATORS US $

BASIC EARNINGS PER SHARE (Rs.) 0.18 7.24 18.3 9.87 3.56 3.84

DEBT EQUITY RATIO (TOTAL DEBT:EQUITY) - 1.73 1.51 2.05 1.41 1.21

EBDIT*/ TURNOVER (%) - 15.79 14.95 13.48 13.65 11.14

NET PROFIT MARGIN (%) - 8.13 7.62 6.30 3.61 1.35

RETURN ON NET WORTH (%) - 28.39 29.29 27.78 14.70 3.81

RETURN ON CAPITAL EMPLOYED (%) - 10.13 11.44 8.94 5.00 1.67

Exchange Rate: 1 US $ = Rs. 40.1150 (as on 31-03-2008). *Extraordinary items and other income are not considered for calculating EBIDTA. Figures are rounded of to nearest US $ mn / Rs. in lacs.

Rs. in Mn.


financial summary

Net Sales – Rs. 8,264 million, up 14.68%

EBITDA – Rs. 1,305 million, up 16.83%

Profit After Tax – Rs. 672 million, up 22.41%

Market Capitalization – Rs. 17,569 million, up 45.69%

Earnings Per Share – Rs. 7.24 per share, up 18.69%

Dividend – 75%


14.68%

2004-2008

Rs. 8,264 2008

Rs. 7,231 2007

Rs. 4,424 2006

Rs. 2,777 2005

Rs. 1,608 2004

Net Sales Rs. in Mn

increase from 2007

16.83%

2004-2008

Rs. 1,305 2008

Rs. 1,117 2007

Rs. 596 2006

Rs. 379 2005

Rs. 179 2004

EBIDTA Rs. in Mn

increase from 2007

22.41%

2004-2008

Rs. 672 2008

Rs. 549 2007

Rs. 278 2006

Rs. 100 2005

Rs. 22 2004

Profit After Tax Rs. in Mn

increase from 2007

45.69%

2004-2008

Rs. 17,569 2008

Rs. 12,059 2007

Rs. 7,867 2006

Rs. 970 2005

Rs. 149 2004

Market Capitalisation Rs. in Mn

increase from 2007

18.68%

2004-2008

Rs. 7.24 2008

Rs. 6.10 2007

Rs. 3.29 2006

Rs. 1.18 2005

Rs. 1.28 2004

Earnings Per Share* Rs. in Mn

increase from 2007

2004-2008

75% 2008

75% 2007

50% 2006

25% 2005

10% 2004

Dividend In %

“Enhancement of stakeholder’s value is the primary value component, without which no business can survive and provide for long term agility to an organisation”

- Hemendra Shah Vice-President (Commercial) & CFO

performance indicators

*EPS for 2004-07 has been recast to make it comparable with 2007-08



We’re creating opportunities to expand our potential. We foster learning and skill development at every level and encourage exchange of ideas within the enterprise. We’re developing an aptitude for excellence and an attitude that drives continuous improvement.

Bird’s eye view of Elecon Gear Division


material handling equipment division

Manufacturing StrengthThe division has a manufacturing facility spread over 1,17,000

sq. mts., housing CNC machine tools for manufacturing

and state of the art test equipment for quality control.

• Have the technology and experience to design,

build and erect robust reliable Material Handling

solutions for diverse industrial segments.

Achievements- Order worth Rs. 2,370 mn from NTPC Ltd. for their

NCTPP, Dadri Stage-II, Thermal Power plant.

- Order worth Rs. 3,790 mn from Damodar Valley

Corporation, Kolkata for their Mejia plant.

From elevators and conveyors to full blown bulk material

handling solutions, Elecon has moved up the value chain.

Over the years Elecon has supplied hi-tech material

handling equipment to core industry sectors in Steel,

Fertilizer, Cement, Power, Coal, Lignite & Iron ore Mines

and Port Mechanization across the globe.

Industry Firsts in India• First company in India to design, build and erect a

Stacker Reclaimer at Santaldih Power Station

• First company in India to design, build and erect a

Barrel Reclaimer at Bukaro Steel.

Barrel-type blender reclaimer


The Power sector was the highest contributor with almost 50% share followed by Cement with 20.69% share

Sales Industrywise

1.54% OthersSteel 14.62%

Wind Mill 4.21%Port 0.06%

Cement 20.69%

Mines 9.33%

49.55% Power

- Order worth of about Rs. 1,541 mn from Steel Authority of India Ltd., Burnpur, W.B. for Supply & Erection of Equipment for Expansion of IISCO Steel Plant - RMHS - Yard machines.

- Order worth Rs. 524 mn from GIPCL for design, Engineering supply, civil structure, Erection and Commissioning of Mechanical Equipment for lignite stone handling system.

- Order worth Rs. 371 mn from Sical Iron Ore Terminals Ltd., Chennai for Wagon Tippler, Ship Loader and Stacker Reclaimer.

Growth DriversInvestments in Mining and Power generation are expected to pick up in tandem with implementation of mega power projects in the country, thus creating a strong demand for bulk material handling solutions.

The mushrooming scenario in the Indian infrastructure sector and fast paced development initiated by the government in Power, Steel, Coal, Ports and other industries has helped increased revenue for the MHE Division.

6.76%

2006-2008

Rs. 4,373 2008

Rs. 4,096 2007

Rs. 2,106 2006

increase from 2007

“Elecon is continually exploring new ways to apply its engineering expertise and knowledge. Several of Elecon’s successful projects have extended beyond the scope of conventional engineering solutions.”

- A J Patel, President - Operations, MHE Division

Order book for MHE Division increased by 231% to Rs. 12,260 Mn from Rs. 3,700 Mn in 2006-07

Net SalesRs. in Mn

Orderbook Industrywise

1.72% Mining

Steel 17.16%

Cement 3.24%

Port 4.62%

Wind Mill 1.77%

71.45% Power

0.04% Other


gear division

Elecon is Asia’s largest manufacturer of industrial gears and was the first company in India to introduce modular design concept, case hardened and ground gear technology. Elecon is the gear supplier of choice to core sectors like Sugar, Cement, Steel, Fertilizer, Plastic Extrusion and Rubber. Elecon was the first industrial gear manufacturer in India to achieve ISO 9001 in 1994 and again the first to achieve ISO 9001:2000 in 2001.

Manufacturing InfrastructureThe manufacturing facility spread over 173,098 sq. mts., populated with CNC machine tools, quality control and testing equipment, for gear components to AGMA/DIN specifications. The gear grinding facility at Elecon is acknowledged as one of the most modern in the Gear industry.

Growth DriversCapacity augmentation and modernisation projects by heavy engineering industries.

Growth in exports and introduction of import substitute products.

“Elecon’s reputation is built on strong and positive customer relationship. Service is what counts for customers and has been pivotal to our success.”

- Vilas Kalyankar, CEO, Gear Division

Net sales for Gear Division increased 25.12% to Rs. 3,891 Mn from Rs. 3,110 Mn in 2006-07

Net Sales Rs. in Mn

25.12%

2006-2008

Rs. 3,891 2008

Rs. 3,110 2007

Rs. 2,318 2006

increase from 2007


16% Cement

Steel Conversion 9%

Plastic 3%

Others 15%

Rubber 8%

Process / 4%Fertilizers

Lift Gears 7%

10% Sugar

22% Material Handling/ Power

Spong Iron 6%

8% Sponge Iron

7% Lift Gears

3% Plastic

10% Steel Conversion

Process / Fertilizer 3%

16% Cement

Others (Rest) 10%Marine 5%

Rubber 8%

Material Handling/ 20% Power

10% Sugar

Orderbook IndustrywiseSales Industrywise

Custom built gearboxes for Sugar and Steel sector


Dear Members,

I am very pleased to report that our Company has again performed strongly in 2007-08.

We have over many years pursued a strategy which has enabled us to build a robust business.

On behalf of the Board of Directors of your Company, it is my privilege to present the 48th Annual Report and Audited Statement of Accounts for the financial year ended on 31st March 2008.

Your Directors are pleased to inform you that during the year, your Company has achieved the:-• Highest-ever turnover• Highest-ever production• Highest-ever earnings per share• Highest-ever market capitalisation• Highest profit, since its inception

DividendYour Directors are pleased to recommend Dividend of Rs. 1.50 per share (previous year Rs. 1.50 per share on 3,09,23,650 equity shares of Rs. 2 each) on 9,28,61,510 equity shares of Rs. 2 each for the year ended on 31st March, 2008.

BonusThe Company has issued 2 (two) Bonus Shares of Rs. 2/- each fully paid up for every 1 (One) Equity Share of Rs. 2/- each, to those Members whose names appeared on the Register of members on 11th October, 2007. Total 6,18,47,300 Equity Shares of Rs. 2/- each were allotted on 18th October, 2007.

Review of OperationsFor the year ended on 31st March, 2008, the Company has achieved Turnover of Rs. 82643.52 lacs and Net Profit of Rs. 6720.42 lacs as against the Turnover of Rs. 72064.52 lacs and Net Profit of Rs. 5490.31 lacs respectively during the previous year, representing growth in Turnover of 14.68% and in Net Profit of 22.41%.

The Company is having an unexecuted order book of about Rs. 1286 Crores comprising of Rs. 1084 Crores for MHE division and Rs. 202 Crores for Gear Division as on March 31, 2008.

The Company is having Substantial live enquiries on hand.

directors’ report

Prayasvin B. Patel Chairman & Managing Director


Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to the Directors‘ Responsibility Statement, it is hereby confirmed that: • in the preparation of the annual accounts of the

Company for the year ended on March 31, 2008, the applicable accounting standards have been followed;

• the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended on that date;

• the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

• the accounts have been prepared on a “going concern” basis.

Corporate Governance As per Clause 49 of the Listing Agreement, a report on Corporate Governance, together with Management Discussion and Analysis and a certificate from the Company’s Auditors form part of this report.

Your Company, acknowledging its corporate responsibility, has voluntarily obtained a ‘Secretarial Compliance Report’ from Shri Ashwin Shah, Company Secretary in whole-time practice, which is annexed to this Report.

In line with global practices, your Company is committed to maintain the highest standards of Corporate Governance, reinforcing the relationship between the Company and its Stakeholders.

Fixed DepositsDuring the year under review, your Company has not accepted any fixed deposits under the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Public Deposits) Rules, 1975. There are no unclaimed deposits as on 31st March 2008.

Particulars of Emplyoees The number of employees as on 31st March, 2008 was 801 as against 746 as on 31st March, 2007.

Statement as per Section 217(2A) of the Companies’ Act, 1956 read with the Companies (particulars of employees) Rules, 1975 as amended is annexed to this Report as Annexure – A, forming part of this Report.

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

The particulars required to be furnished under Section 217(1)(e) read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are given in Annexure – B, forming part of this report.

DirectorsIn accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Hasmukhlal S. Parikh and Dr. A.C. Shah, Directors retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

Auditors The Company has received a letter from the Statutory Auditors intimating the change of name of their firm from M/s. Thakorebhai – Shirish Desai & Butala–(a division of Thacker Butala Desai), Chartered Accountants to M/s. Thacker Butala Desai, Chartered Accountants Navsari.

The Company’s Auditors M/s. Thacker Butala Desai, Chartered Accountants, Navsari (formarly known as M/s. Thakorebhai - Shirish Desai & Butala, Division of Thacker Butala Desai, Chartered Accountants, Navsari) retire as Statutory Auditors at the ensuing Annual General Meeting of the Company and being eligible offer themselves for reappointment.

Foreign Currency Convertible Bonds All the 9,000 FCCBs of US $ 1,000 each aggregating to US $ 9.00 mn have been converted into equity shares of the Company till the end of financial year 2007-2008, of which 100 FCCBs of US $ 1,000 each aggregating to US $ 0.10 mn have been converted during the financial year 2007 – 2008. During the year under review, 90,560 Equity Shares have been issued against the Conversion of FCCBs.


Elecon is surging ahead, seizing new opportunities to expand our global presence with innovative solutions for the engineering industry. We’re thinking beyond conventional engineering wisdom, in our quest for focussed future growth. At the heart of Elecon lies a commitment to innovation and creating enduring relationships. At the same time, we’re building on our culture to evolve from strong to stronger... while becoming leaner, more flexible, and quicker to respond to market dynamics.

- Prayasvin Patel

equipments having the capacity of 600 KWs each in Maharasthra. Thus, your Company has done good beginning in this Sector, which is one of the most lucrative sectors.

Main vision of your Company is to become a major international player besides having a well-built leadership position in the global market by delivering better-quality customized as well as traditional products based on state-of-the-art-technologies at very aggressive prices.

Statutory DisclosuresNone of the Directors of your Company is disqualified as per provisions of Section 274(1)(g) of the Companies Act, 1956. Your Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement.

Insurance The Company has taken adequate insurance cover for all movable & immovable assets of the Company for various types of risks.

As on the date of this report, no FCCBs are outstanding for conversion.

New BusinessesSince inception, Elecon Engineering Company Ltd. has always been ahead in innovations and technology in the manufacturing and has persistently strived to achieve new enhanced objectives of overall excellence in order to keep itself adapted to the changing technical scenario.

With a strategy of diversification, your Company has started a new business of setting up of Wind Turbine Generator (WTG) farms and manufacturing of Wind Turbine Generator Gear Boxes. During the year under review, the Company has installed 6 WTG in Gujarat. Your Company has also supplied 4 WTG in Maharashtra.

Upto 31st March, 2008 your Company has developed a Wind Farm in Gujarat where 6 Wind Turbine Generators (WTG) having the capacity of 600 KWs each have been commissioned. The Company has also supplied 4 WTG

directors’ report


Industrial Relations/Personnel During the year, Industrial Relations scenario continues to be harmonious. Your Company continues to invest in the development of its employees by way of various internal and external training programmes.

AcknowledgementYour Directors wish to express their grateful appreciation for the cooperation and support received from vendors, traders, customers, banks, financial institutions, shareholders and the society at large. Your Directors also take, on record, their appreciation for the contribution and hard work of employees across all levels. Without their commitment, inspiration and hard work, your Company’s consistent growth would not have been possible.

The Directors also wish to place on record their sincere thanks and appreciation to the bankers, financial institutions, Central and State Government officials, solicitors, advisors and all our well wishers for their

continuance guidance provided to the Company and look forward to their continued support.

Your Directors recognize all shareowners, business partners and members of Elecon family for their sustained support in growth. Your Directors would like to place on record their appreciation for the support received from the Company’s Bankers, Financial Institutions, other Lenders, Auditors, Customers, Vendors and Government Authorities.

For and on behalf of Board of Directors

Prayasvin B. Patel

Chairman & Managing Director

Mumbai, May 26, 2008


Industry Structure and DevelopmentThe Company has started the production of the Wind

Turbine Generators (WTG) and related equipments

during the year under review. Day by day, overall

consumption of power is going to increase vigorously

due to industrial growth, expansion and diversification,

which needs to be catered with very scarce resources.

In such a situation the means of using WTGs for energy

generation will be one of the key sectors. This will

help a lot to the Company to keep the pace of growth

accelerating in the coming years.

Key demand driver for the industry in which the

Company exists is the rate of economic growth and it

is affected by the macro-economic environment and

the changes in the overall economy. Positive macro-

economic factors such as increases in GDP translates into additional investment in the economy and infrastructure, modernisation of plants and increased repairs and maintenance work. Such investment in the economy benefits both of our Material Handling Equipment division and gear division as its products form an essential part of most manufacturing facilities.

The material handling equipment industry manufactures and supplies equipment to core industries such as coal, steel, cement, fertilisers, mining, ports, power, petrochemicals and civil construction.

Opportunities and ThreatsIn order to keep pace with the global movements of diversification, the Company has during the year under review, started Wind Mill Gear Boxes manufacturing Unit.

management discussion & analysis

Machining of casing PQF. Custom Gearbox for Seamless Tubemill Plant


The Company has also taken measures to cut cost, increase productivity and reduce manpower to turn more competitive. It is also considering diversifying its business by entering into new product line in conjunction with existing production line.

Segmentwise PerformanceDuring the financial year 2007 – 2008, the Company has achieved a Turnover of Rs. 82643.52 Lacs as against Rs. 72064.52 Lacs in the previous year, which shows a growth of 14.68% over the previous year.

The Turnover of Gear Division has increased to Rs. 38909.68 Lacs from Rs. 31099.11 Lacs in the previous year, which shows an increase of 25.12%.

The Turnover of MHE Division has increased to Rs. 43733.84 Lacs as against Rs. 40965.41 Lacs in the previous year, which shows an increase of 6.76%.

The Profit Before Tax has increased to Rs. 9867.92 Lacs from Rs. 8440.76 Lacs in the previous year resulting into an increase of 16.91 %.

The Profit After Tax has increased from Rs. 5490.32 Lacs to Rs. 6720.42 Lacs, resulting into an increase of 22.40 %, over the previous year.

OutlookThe upturn in the economy and rapid industrial growth have been encouraging for the growth of the Company. The several upcoming and ongoing infrastructure projects have created good opportunity for the material handling equipment division.

Looking to the entry in to the new sector like manufacturing of Wind Mill and other related equipments, your Directors feel that Company will be in a position to achieve more new/repetitive orders from this sector/supplier. The Company has also started manufacturing of Wind Mill Gear Box for Wind Mills having capacity of 1 MW to 2 MW, which is the import substitute. Your Company is the first Indian Company to manufacture gearboxes of such sizes.

Risk and ConcernsMHE Division

The growth drivers for MHE division of your Company is directly related to the growth in core sector viz.

Power, Mining, Steel, Cement, Fertilizer, Port etc. Your Company has taken all necessary steps to hedge to a great extent against the recent volatility in Steel & other raw material prices.

Gear Division

Your Company is supplying Power Transmission Gearboxes to almost all sectors of industry. If there is a recession in one indusry, the other sector will continue to generate the orders for the Company.

Apart from the normal business risk, no major risks are foreseen.

Internal Control SystemThe Company has adequate internal control procedures commensurate with its size and nature of its business. The objectives of these procedures are to ensure efficient use and protection of the Company’s resources, accuracy in financial statements and due compliance of statutes and Company’s policies and procedures.

Development in Human Resources/Industrial frontThe Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite the competition, the enthusiasm and unstinting efforts of the employees enabled the Company to maintain its growth pace in its business areas of presence.

The number of employees as on 31st March, 2008 was 801 as against 746 as on 31st March, 2007

Cautionary NoteThe statements forming part of this Report may contain certain forward looking remarks within the meaning of applicable laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements.

Significant factors could make a difference to the Company’s operations include domestic and international economic conditions, changes in Government regulations, tax regime and other statutes.

The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis, of any subsequent developments, information or events.


We’re building strong ever lasting bond with customers. We understand their business and help achieving their goals. And we share their pride as Elecon products and services fuel our mutual success.

3000 mm x 2000 mm CNC Horizontal Machining Centre



elecon worldwide

South Africa

UAE

China

Singapore

Elecon Head Office

Elecon Global Sales Network

Countries serviced by Global Sales Network. Other regions are managed by HO.

We are where our customers are…

With strategic presence across the world, our customers receive the same quality, service and training they’ve come to expect no matter where they are.

Eighteen output shaft gearbox for Sizing Reducing Mill

Australia

India

21Elecon Engineering Company Limited - Annual Report 2007-08

ANNEXURE – A TO DIRECTORS’ REPORT

a. Information pursuant to Section 217 (2A)(a)(i) of the Companies Act, 1956 read with the Companies (particulars of

employees) Rules, 1975 and forming part of this Directors’ Report for the financial year ended on 31st March, 2008.

Name Age Qualification Date of Designation Gross Experience Last

Joining Remuneration in years Employment

(Rs. in Crores)

Shri P. B. Patel 50 years B. E. (Mech.) 1/7/83 Chairman and 4.14 26 Business

M.B.A. Managing

(U.S.A.) Director

b. Names of employee employed for part of the year and were in receipt of remuneration at a rate of not less than

Rs. 2 Lacs p. m. in terms of Section 217 (2A) (a) (ii) of the Companies Act, 1956.

NIL

Notes:

1. The appointment is contractual.

2. The gross remuneration received includes Salary, Housing Allowance, Medical Allowance, Commission, and Company’s

Contribution to Provident Fund, Superannuation and Gratuity Fund. Monetary value of perquisites is in accordance with

provision of Income Tax Act, 1961.

3. Experience includes number of years of service elsewhere, wherever applicable.

4. Shri Prayasvin B. Patel, Chairman and Managing Director of the Company is relative of Mr. P. M. Patel, Director of the

Company.

22 Elecon Engineering Company Limited - Annual Report 2007-08

ANNEXURE – B TO DIRECTORS’ REPORT

Information required under Section 217 (1) (e) of the Com-

panies Act, 1956 read with the Companies (Disclosure of

Particulars in the Report of Board of Directors) Rules, 1988.

1. CONSERVATION OF ENERGY

(a) Energy Conservation measures taken

(i) Company has inducted Fork Lift instead of Hydro

Crane to minimize the consumption of the

power.

(ii) Company has re-organized material flow to reduce

movement and thereby reduced energy

consumption.

(iii) Company, wherever possible, has started using

small size compressors in place of bigger ones to

reduce consumption of power.

(iv) Company has improved cutting process to

minimize cleaning process of cut material.

(v) Company has replaced all high voltage consuming

lighting systems into low voltage consuming FL

tubes in all across the company complex and

workshop to conserve energy.

(vi) Also we have adopted variable frequency drivefor saving power for crane application in new wind

mill shed for 132kw load and saved power

approx.10%.

(b) Additional investments and proposal if any, being

implemented for reduction of consumption of energy

(i) Continuous efforts are made to find out, how the

consumption of energy can be reduced by the

electrical department.

(c) Impact of measures at (a) and (b) above for reduction

of energy consumption and consequent impact on the

cost of production of goods

Implementation of above referred measures have

resulted in conservation of energy and cost reduction.

2. TECHNOLOGY ABSORPTION

(I) Research and Development

(a) Specified areas in which R & D carried out by the

Company: Continuous research and development

being done to update all our products. However,

separate research and development cell is not

formed in the organization.

(b) Benefits derived as a result of R & D: It results

into the improvement of quality of the products

of the Company on continuous basis.

(c) Future plan of action: The Company is considering

to establish the efforts on R & D.

(d) Expenditure on R & D: Not applicable

(b) Technology absorption, adaptation and innovation

(a) The Company has already signed a Technical

Collaboration Agreement for availing the

technology to design and manufacture the Lift

Gear Boxes with Haisung Industrial System

Company Limited of Korea. Company has also

remitted two installments out of three

installments towards the Technical Know how

Fees.

The Company has also signed the Technical

Collaboration Agreement with RENK AG, of

Germany for availing technology for design and

manufacture of Vertical Roller Mill Gear Boxes.

Company has also remitted one installment out

of three installments towards the Technical Know

how Fees.

(b) Benefits derived as a result of the above efforts :

Presently, the Vertical Roller Mill Gearboxes are

being imported by the Indian manufacturers and

hence, it will substitute the import market and

create new market for the Company for this

segment.

(c) Technologies imported during the last five years:

Technologies Imported Year of import

Ship Loader with Slewing Boom 2003

NIL 2004

LHD8118 & LHD912 Axles & its spares 2005

Wind Electric Generators 2005

NIL 2006

Lift Gear Boxes 2007

Vertical Roller Mill Gear Box 2007

3. FOREIGN EXCHANGE DETAILS

Please refer Notes to the Accounts, Schedule – 17.

Particulars 2007-2008 2006-2007

Earnings 3,703.30 2,430.7

Outgo 14,081.37 7,223.1

(Rs. in Lacs)


SECRETARIAL AUDIT REPORT

To

The Board of Directors


1. I have examined the registers, records and documents

of Elecon Engineering Company Limited (“the

Company”) for the financial year ended on March 31,

2008 maintained under the provisions of :-

• The Companies Act, 1956 and the Rules made under

the Act;

• The Depositories Act, 1996 and the Regulations and

the Bye laws framed under the Act;

• The following Regulations and Guidelines

prescribed under the Securities and Exchange Board

of India Act, 1992 (“SEBI Act”)

• The Securities and Exchange Board of India

(Substantial Actuations of Shares and

Takeovers) Regulation, 1997;

• The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations,

1992;

• The Securities Contracts (Regulation) Act, 1956

(‘SCRA’) and Rules made under the Act; and

• The Equity Listing Agreement with Bombay Stock

Exchange Limited and National Stock Exchange of

India Limited.

1. Based on my examination and verification of the

records for the year ended on 31st March 2008

produced before me and according of the

information and explanations given to me by the

Company, I report that the Company has, in my

opinion, complied with the provisions of the

companies Act, 1956 (the Act) and the rules made

under the Act and Memorandum and Articles of

Association of the Company, with regard to :

(a) Maintenance of various statutory registers and

documents and making necessary entries therein.

(b) Closure of Register of Members.

(c) Forms, returns, documents and resolutions required

to be filed with the Registrar of companies.

(d) Service of documents by the Company on its

Members.

(e) Notice of Board Meetings and Committee meetings

of Directors.

(f ) The meetings of Directors and Committees of

Directors including passing of resolutions by

circulation.

(g) The annual general meeting held on September 13,

2007.

(h) Minutes of proceedings of General meeting and of

Board and other meetings.

(i) Allotment of Securities

(j) Approvals of shareholders, the Board of Directors,

the committee of Directors and competent

authorities, wherever required.

(k) Constitution of the Board of Directors and

appointment, retirement and reappointment of

directors.

(l) Remuneration paid to the Directors other than

Managing

(m) Appointment and remuneration of Auditors.

(n) Declaration and payment of dividends.

(o) Transfer of certain amounts as required under the

Act to the Investor Education and Protection Fund.

(p) Borrowing and registration, modification and

satisfaction of charges.

(q) Investment of Company’s fund including inter

corporate loans and investments and loans to

Directors and others.

(r) Generally, all other applicable provisions of the Act

and the rules made under that Act.

2. I further report that:

(a) The Company’s Directors have complied with the

requirements as to Disclosure of interest and concern

in contracts and arrangements, shareholding/

debenture holdings and directorships in other

companies and interests in other entities.

(b) The Directors have complied with the disclosure

requirements in respect of their eligibility of

appointment, their being independent and

compliance with the Code of Conduct for Directors

and Management Personnel.

(c) There was no prosecution initiated against or show

cause notice received by the Company and no fines

or penalties were imposed on the Company under

the Act against the Company, its Directors and

Officers.

(d) The Company has obtained all necessary approvals

of the Central Government and/ or other authorities

under the Act.

3. I further report that the Company has complied with the

provision of the Depositories Act, 1996 and Bye-laws

framed thereunder by the Depositories with regard to

dematerialisation / rematerialisation of securities and

reconciliation of records of dematerialized securities with

all securities issued by the Company.

4. I further report that;

(a) The Company has complied with the requirement under

the listing Agreements entered into with Mumbai

stock Exchange Limited and National Stock Exchange

of India Limited.

(b) The Company has complied with the provision of

the Securities and Exchange Board of India

(Substantial Acquisition of shares and takeover)

Regulation, 1997 with regard to the disclosures and

maintenance of records required under the

Regulations.

(c) The Company has complied with the provision of

the Securities and Exchange Board of India (Insider

Trading) Regulation 1992 with regard to the disclosure

and maintenance of records required under the

Regulations.

ASHWIN SHAH

Place : Ahmedabad COMPANY SECRETARY

Date : 26-05-2008 C.P. No. 1640


CORPORATE GOVERNANCE REPORT

INTRODUCTION

Effective Corporate Governance is necessary to maintain public trust and to achieve business success. Corporate Governance

is about commitment to values and ethical business conduct. It is about how an organization is managed. This includes its

corporate and other structures, its culture, policies and the manner in which it deals with various stakeholders. As

shareholders across the globe evince keen interest in the practices and performance of Companies, Corporate Governance

has emerged on the centre stage of the way the corporate world functions.

The detailed report on implementation by the Company, of the Corporate Governance Code as incorporated in the Clause

49 of the Listing Agreement with the Stock Exchanges is set out below :

A. MANDATORY REQUIREMENTS

(I) Company’s Philosophy on the code of Governance

ELECON recognizes the ideals and importance of corporate Governance and acknowledges its responsibilities towards

all stakeholders including Government, employees, customers, suppliers, regulatory authorities and the shareholders.

ELECON Philosophy on Corporate Governance is to bestow high standard of transparency, fairness and accountability

for performance at all levels and to ensure best performance through professionalism, social responsiveness, business

practices and maximization of operational efficiency. The Company’s Corporate Governance is based on the values of

integrity, transparency and accountability. The Company endeavors to maximize the shareholders’ value and to protect

the interest of stakeholders by strengthening the best practices, professionalism and empowerment of employees.

(II) Board of Directors

The Company is managed by the Board of Directors consisting highly qualified and experienced professionals from

different fields, which formulates strategies, policies and reviews its performance periodically. The Chairman &

Managing Director manages the business of the Company under the overall supervision, guidance and control of the

Board.

Composition

The Company has an Executive Chairman and the number of Non-Executive Independent Directors is more than 50%

of the total number of Directors. The Board of Directors consists of 7 Directors including one Chairman & Managing

Director, One non-independent non-executive and Five independent non-executive Directors. The Board of Directors

thus, has an adequate combination of executive and non-executive Directors.

None of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5

Committees (as per Clause 49 (D)(ii) of Listing Agreement) across all the companies in which he is a Director.

Necessary disclosures have been made by the Directors.

BOARD MEETINGS AND PROCEDURES

(A) Scheduling and selection of Agenda items for Board Meetings

(i) The meetings are being convened by giving appropriate advance notice after obtaining the approval of the

Chairman of the Board. Detailed agenda, management reports and other explanatory statements are circulated

in advance amongst the members for facilitating meaningful, informed and focused decisions. To address specific

urgent need, meetings are also being called at shorter notice. The Board is also authorized to pass Resolution

by circulation for all such matters, which are of utmost urgent nature.

(ii) Where it is not practicable to attach any document or the agenda is of confidential nature, the same is placed

on the table with the approval of the Chairman of the Board. In special and exceptional circumstances, additional

or supplemental item(s) on the agenda are permitted. Sensitive subject matters are discussed at the meeting

without written materials being circulated.

(iii) The agenda papers are prepared by the officials concerned and submitted to the Chairman and Managing Director

for his approval. Duly approved agenda papers are circulated amongst the Board members by the Company

Secretary.

(iv) As per the convenience of the members of the Board, The Board meetings are usually held at the Company’s

Registered office in Vallabh Vidyanagar, Dist. Anand or at Mumbai.


(v) The members of the Board have complete access to all information of the Company. The Board is also free torecommend inclusion of any matter in agenda for discussion. Senior management officials are called to provideadditional inputs to the items discussed by the Board as and when necessary.

(B) Recording minutes of proceedings at the Board Meeting

Minutes of the proceedings of each Board meeting is recorded and the same is read in the next Board Meeting. The

minutes of the proceedings of the meetings are entered in the Minutes Books and the same are signed by the Chairman

as prescribed in the Companies Act, 1956.

(C) Compliance

The Compliance Officer while preparing the agenda notes, is responsible for and is required to ensure adherence to

all the applicable provisions of law, rules, guidelines etc. The Company Secretary has to ensure compliance to all the

applicable provisions of the Companies Act, 1956, SEBI Guidelines, Listing Agreements, and other statutory requirements

pertaining to capital market. The Board of Directors reviews a quarterly Compliance Report confirming adherence to

all applicable laws, rules, and guidelines.

BOARD MEETINGS

During the year 2007-2008, the Board Meetings were held on 5th April 2007, 15th June 2007, 28th July 2007, 13th

September 2007, 25th October 2007, and 29th January, 2008 and the gap between two Board meetings was well within

the limit of four months.

The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year

and at the last Annual General Meeting, as also the number of Directorship and Committee positions, as held by them

in other Public Limited Companies, as on 31st March, 2008 are given below:

The Company did not have any material pecuniary relationship or transactions with the Non-Executive Directors during the year

2007-2008.

Name of Nature of No. of Board No. of Attendance No. of No. of Committee

Directors Directorship Meetings held Board at AGM other Chairmanship/during the Meetings Director- Membership

tenure of Attended ship Chairman- Member-Directorship ship ship

Shri Prayasvin B. Patel Non- 6 6 Yes 12 — 3(Chairman & IndependentManaging ExecutiveDirector) Director

Shri Pradip M. Patel Non- 6 5 Yes 3 — 1IndependentNon ExecutiveDirector

Shri Upendra M. Patel Independent 6 2 Yes 4 — 1Non-ExecutiveDirector

Shri Chirayu R. Amin Independent 6 2 Yes 7 1 —Non-ExecutiveDirector

Shri Ashok J. Patel Independent 6 2 No 5 — 1Non-ExecutiveDirector

Shri Hasmukhlal Independent 6 6 Yes 3 3 5S. Parikh Non-Executive

Director

Dr. Amritlal C. Shah Independent 6 5 No 5 1 3Non-ExecutiveDirector


Disclosure regarding Directors retiring by rotation and being re-appointed:

Shri Hasmukhlal S. Parikh and Dr. A.C. Shah, Directors retire by rotation at the ensuing Annual General Meeting and beingeligible, offer themselves for re-appointment. Shri Hasmukhlal S. Parikh and Dr. A.C. Shah are not related to any otherDirectors of the Company.

(III) Audit Committee

The term of reference of the Audit Committee are in accordance with the Section 292A of the Companies Act, 1956and Clause 49 II C, D and E of the Listing Agreement.

Audit Committee comprises of experts specialising in accounting/financial management. The Chairman of the AuditCommittee is a Non - Executive and Independent Director. The Composition of the Audit Committee as on 31 st March,2008 is as follows:

Name Designation Category

Shri Hasmukhlal S. Parikh Chairman Independent & Non-Executive Director

Shri Ashok J. Patel Member Independent & Non-Executive Director

Shri Pradip M. Patel Member Non-independent & Non-Executive Director

Dr. Amritlal C. Shah Member Independent & Non-Executive Director

The Audit Committee met Five times on the following dates during the last financial year:

05-04-2007 15-06-2007 28-07-2007 25-10-2007 29-1-2008

Attendance of Audit Committee Meeting :

Name of Directors No. of Meetings Held No. of Meetings Attended

Shri Hasmukhlal S. Parikh 5 5

Shri Ashok J. Patel 5 2

Shri Pradip M. Patel 5 4

Dr. Amritlal C. Shah 5 5

The Vice President (Commercial), Statutory Auditors, Internal Auditors are permanent invitees to the meeting and attended

& participated at the meeting of the Committee. Company Secretary was present at all the above meetings.

The Chairman of the committee was present at the Annual General Meetting held on 13th September, 2007.

(IV) Shareholders’/Investors’ Grievance Committee

Terms of Reference: To look into the Investors’ complaints, if any, and to redress the same expeditiously. Besides that the

Committee also considers and approves the transactions as may be referred to it by the Share Transfer Committee/

Committee of Directors.

The Shareholders’ Grievance Committee comprises of the following Directors :


Shri Ashok J. Patel Chairman Independent & Non-Executive Director

Shri Hasmukhlal S. Parikh Member Independent & Non-Executive Director

Shri Pradip M. Patel Member Non-independent & Non-Executive Director

Shri Paresh Shukla, Company Secretary is the Compliance Officer and Secretary of the Committee.

One Meeting was held, during the financial year 2007-08, on 15th June, 2007.

Attendance of Shareholders’ / Investors’ Grievance Committee Meeting :

Name of Directors No. of Meetings Held No. of Meetings Attended

Shri Ashok J. Patel 1 -

Shri Pradip M. Patel 1 1

Shri Hasmukhlal S. Parikh 1 1


Report on Communication received from the Investors during the year 2007-2008.

Nature of Queries (Correspondence) Total Total Pending Remark

Received Replied

Inquiry pertaining to non- receipt of shares sent for transfer 17 17 — —

Inquiry on Dematerialization of Shares 19 19 — —

Name Correction/deletion 84 84 — —

Address correction 139 139 — —

Letter Received from SEBI/ other Statutory Bodies 9 9 — —

Loss of Shares & issue of duplicate Share 73 73 — —

Split/Consolidation of Shares 7 7 — —

Transmission of shares 27 27 — —

Demat — — — —

(V) Remuneration Committee

The Remuneration Committee has been constituted to recommend the remuneration package of the Managing Director

based on the performance and defined criteria.

The Remuneration Committee of the Company as on 31st March 2008 consists of the following Directors:


Shri Hasmukhlal S. Parikh Chairman Independent & Non-Executive Director

Shri Ashok J. Patel Member Independent & Non-Executive Director

Shri Pradip M. Patel Member Non-Independent & Non-Executive Director

Shri Paresh Shukla, Company Secretary of the Company is the Secretary of the Committee.

No Remuneration Committee Meeting was held during the financial year 2007-08.

(VI) Remuneration of Directors

a. Non-Executive Directors

The Non-Executive Directors do not draw any remuneration from the Company other than sitting fees. The Company pays

the sitting fees to all the non-executive Directors at the rate of Rs. 15,000/- for each meeting. The sitting fees paid to Non-

Executive Directors for attending Board and Committee Meetings during the year 2007-08 is as follows :

Directors Sitting fees

Amount in Rs.

Shri Pradip M. Patel 1,50,000

Shri Upendra M. Patel 3,00,000

Shri Chirayu R. Amin 30,000

Shri Ashok J. Patel 60,000

Shri Hasmukhlal S. Parikh 1,80,000

Dr. Amritlal C. Shah 1,50,000

There were no other pecuniary relationship or transactions of the Non-Executive Director vis-a-vis the Company.


b. Executive Directors

The Company pays remuneration by way of salary, perquisites, allowances and Commission to the Managing Director.

The salary paid during the year to the Managing Director is within the ceiling prescribed by Section 198, 309 and the

Provisions of Schedule XIII of the Companies Act, 1956.

The remuneration paid to the Managing Director for the year 2007-08 is as follow:

Rs. in Lacs

Salary Perquisites Commission Total

Shri Prayasvin B. Patel 90.00 -- 297.00 387.00*

* Does not include the Company’s contribution to Provident Fund, Superannuation Fund to the extent not taxable and Gratuity

and encashment of leave at the end of tenure, as per the rules of the Company.

(VII) Committee of Directors

In addition to the above Committees, the Board has constituted a Committee of Directors comprising of the following

Directors as on 31-03-2008 :

Shri Prayasvin B. Patel Chairman

Shri Upendra M. Patel Member

Shri Ashok J. Patel Member

Attendance :

Name of Member No. of Meetings Held No. of Meetings Attended

Shri Prayasvin B. Patel 18 18

Shri Upendra M. Patel 18 18

Shri Ashok J. Patel 18 —

The Committee met on the following dates during the last financial year:

14-04-2007 11-08-2007 02-11-2007 04-02-2008

12-05-2007 10-09-2007 21-11-2007 20-02-2008

11-06-2007 18-09-2007 20-12-2007 10-03-2008

06-07-2007 02-10-2007 29-12-2007

02-08-2007 18-10-2007 02-01-2008

Attendance at the Committee of Directors meetings during the year were as follow :


During the year ended 31st March, 2008, no resolution has been passed by the members through Postal Ballot.

At an ensuring AGM, there is no resolution proposed to be passed through Postal Ballot.

The Board of Directors at its meeting held on 26th May 2008 has approved a resolution u/s. 372A to be passed through Postal

Ballot, but the same has not been finalised. Therefore, at an ensuring AGM, there is no resolution proposed to be passed through

Postal Ballot.

* During the year 2006-2007, dividend was declared at the rate of Rs. 1.50 per share having face value of Rs.2/- each.

Stock Options

The Company has not issued any Stock options to its Directors/Employees.

Equity Shares held by Directors (as on 31-3-2008)

(IX) Disclosures on Materially significant related party transactions

Full disclosure of related party transactions as per Accounting Standard - 18 issued by the Institute of Chartered

Accountants of India are given under Note No. 16 of Notes on Annual Accounts.

Year Rate (%) Per Share (Rs.) Amount (in Rs.)

2003-2004 10% 1.00 56,47,410

2004-2005 25% 2.50 1,41,18,525

2005-2006 50% 5.00 3,06,52,000

2006-2007 75% 1.50* 4,63,85,475

(VIII) Details of General Meetings

Location, date and time of Annual General Meetings held during last 3 years:

Year Location AGM/ Date Day Time No. of

EGM Special

Resolution

Passed

2004 - 05 Elecon Engineering Co. Ltd. AGM 15-9-2005 Thursday 11.00 a.m. 3

Audio Visual Hall

Gear Division

Anand Sojitra Road

Vallabh Vidyanagar – 388 120

2005 - 06 As above AGM 12-9-2006 Tuesday 2.30 p. m. 5

2006 - 07 As above AGM 13-9-2007 Thursday 11.00 a. m. 4

Name of Directors No. of shares Held

Shri Prayasvin B. Patel 3,74,820

Shri Pradip M. Patel 62,412

Shri Upendra M. Patel —-

Shri Chirayu R. Amin —-

Shri Ashok J. Patel —-

Shri Hasmukhlal S. Parikh 11,250

Dr. Amritlal C. Shah —-

Dividend History


(X) Details of Non-compliance by the Company, penalties, strictures imposed on the Company by the StockExchange, SEBI or any Statutory Authorities on any matter related to capital market during the last threeyears

The Company has complied with the requirements of the Stock Exchanges, SEBI and Statutory Authorities on allmatters related to Capital Market during the last three years.

All Returns/Reports were filed within stipulated time with Stock Exchanges/other authorities.

No penalties or strictures were imposed by SEBI, Stock Exchanges or any Statutory Authorities for any matter relatingto Capital Market during the last three years.

(XI) Code of Conduct

i) For prevention of Insider Trading

The Company has a comprehensive code of conduct for its management, staff and directors for prevention of insidertrading. The code lays down guidelines and procedures to be followed and disclosures to be made while dealing withthe shares of the Company and cautioning them on the consequences of non-compliances. The Company Secretary hasbeen appointed as a Compliance Officer and is responsible for adherence to “Code for Prevention of Insider Trading”.

ii) For Board of Directors and Senior Management

The Board of Directors of the Company has laid down a “Code of Conduct” for all Board Members and members ofsenior management of the Company. The code of conduct is posted on the website of the Company, www.elecon.com.

The Board members and Senior Management have affirmed compliance with the “Code of Conduct” for the yearended March 31, 2008.

(XII) CEO / CFO Certificate

The Managing Director and the Chief Financial Officer of the Company have furnished the requisite certificate tothe Board of Directors under Clause 49 VII of the Listing Agreement.

(XIII) Disclosures on Whistle Blower Policy

Though there is no formal Whistle Blower Policy, the Company takes cognizance of complaints made and suggestionsgiven by the employees and others. No employee of the Company has been denied access to the Audit Committee.

Means of communication

a) Quarterly, Half-yearly and Annual Results :

The Board of Directors of the Company approves and takes on record quarterly, half yearly and yearly financial resultsin the Proforma prescribed by Clause 41 of the Listing Agreement within one month of close of the reporting period.

In compliance with Clause 41 of the Listing Agreement, the Company sends the quarterly / half-yearly / auditedresults to the Stock Exchanges within 15 minutes of the end of the Board Meetings at which they are taken on record.These financial statements are normally published in prominent daily newspapers viz. The Economic Times, FinancialExpress, The Business Line, Gujarat Samachar, Sandesh, Divya Bhashkar, Jansatta, Naya Padkar having wide circulationacross the country and also displayed on the website of the Company on www.elecon.com and simultaneously postedon the Electronic Data Information Filing and retrieval website namely www.sebiedifar.nic.in. The website is alsoaccessible through a hyperlink “EDIFAR” from SEBI’s official website, www.sebi.gov.in.

b) The Company also informs by way of intimation to the Stock Exchanges all price sensitive matters or such othermatters which in its opinion are material and of relevance to the shareholders.

c) The Company’s financial results and official news releases and the presentation made to the investors, financialanalyst are displayed on the Company’s website www.elecon.com

d) Management Discussion and Analysis Report is attached with the Directors Report in this Annual Report.

Compliance Officer

Mr. Paresh Shukla

Company Secretary

Elecon Engineering Company Limited

Anand-Sojitra Road

Vallabh Vidyanagar – 388 120 (Gujarat)

Phone No. : +91 2692 227109, 230166

Email : [email protected]


(XIV) GENERAL SHAREHOLDERS INFORMATION

a) Annual General Meeting

Date and Time : 29th July, 2008 at 11.00 A.M.

Venue : “ELECON” Hall, Vitthal Udyognagar Industries Association,

Near GIDC Office, GIDC, Vitthal Udyognagar,


Gujarat

b) Financial Calendar : April 01 to March 31

c) Date of Book Closure : Tuesday, 15th July, 2008 to Saturday, 19th July, 2008.

(both days inclusive)

d) Dividend Payment date : on or before 3rd August, 2008

e) Listing on Stock Exchange : The Company’s securities are listed at the

Bombay Stock Exchange Limited, Mumbai

The National Stock Exchange of India Limited, Mumbai

The Company has paid the annual Listing fees to the Stock Exchanges

for the financial year 2008-2009.

f) Stock code : The Bombay Stock Exchange Limited, Mumbai

(Physical Segment) : BSE 5700

The Bombay Stock Exchange Limited, Mumbai

(Demat Segment) : BSE 505700

The National Stock Exchange of India Limited

(Demat Segment) : ELECON

Demat ISIN in NSDL and CDSL for Equity Shares : INE 205 B01023

g) Stock Market Price Data :

Monthly share price movement during the year 2008-09 at BSE & NSE

* Ex-Bonus Price. (Bonus Shares have been issued on 18.10.2007 in the ratio of 2 equity shares aginst

1 equity share each).

Performance in comparison to broad-based indices such as

BSE Sensex


h) Share Registrar & Transfer Agent :

The Company has appointed following Registrar & Transfer Agent for Physical Transfer & Demat of the Shares:

M/s. Intime Spectrum Registry Limited

1st floor, Jaldhara Complex,

Opp. Manisha Society

Off. Old Padra Road, Vasna Road,

VADODARA - 390 015

Email : [email protected]

Phone : 0265 - 3249857

i) Share Transfer System :

The Company’s Shares are in compulsory Demat List and are transferable through the Depository system.

Depository transfers as well as physical transfers are handled by Intime Spectrum Registry Limited having their

registered office at 260 A, Shanti Industrial Estate, Sarojini Naidu Road, Mulund (West), MUMBAI -400 080.

j) Share holdings pattern as on 31-03-2008

Category No. of Shares held (%) of total

Promoters 3,91,57,943 42.18

Banks, Financial Institutions and Insurance Companies 23,940 0.03

Foreign Institutional Investors 55,98,956 6.03

Mutual Funds and UTI 2,02,53,572 21.81

N.R. I. / O.C. B. 5,31,740 0.57

Bodies Corporate 54,37,595 5.85

Public 2,18,57,764 23.53

TOTAL 9,28,61,510 100.00

Performance in comparison to broad-based indices such as NSE NiftyPrice Nifty Graph

0

100

200

300

400

500

600

700

800

April-'0

7

May-'0

7

June

-'07

July-

'07

Aug.-'0

7

Sept.-'

07

Oct.-'0

7

Nov.-'0

7

Dec.-'0

7

Jan.-

'08

Feb.-'0

8

Mar.-'0

8

MONTHS

PRIC

E

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

NIF

TY

EECL Share Price NIFTY

Prices from October 2007 onwards are Ex-Bonus Price.


l) Dematerialization of Shares and Liquidity

As on 31st March 2008, 8,69,01,245 Shares were in dematerialized form representing 93.58% of total shares.

The Company’s shares are traded on the Bombay Stock Exchange Limited, and The National Stock Exchange

of India Limited, Mumbai.

m) Outstanding GDRs/ADRs/Warrants or any other convertible Instruments, conversion date and likely

impact on equity as on 31st March, 2008 :

The Company had issued 9,000 Foreign Currency Convertible Bonds of US $ 1,000 each aggregating to US

$ 9 mn at 1% premium. The Conversion was at the option of the Bondholders. All the 9,000 Foreign Currency

Convertible Bonds were converted into Equity shares till the end of the financial year 2007-2008.

n) Unclaimed Dividend

As per the provisions of Section 205A read with Section 205C of the Companies Act, 1956 the Company is

required to transfer the unpaid dividend remained unclaimed and unpaid for a period of seven years from

the due dates to the investor Education and protection Fund (IEPF) set up by the Central Government.

Herebelow are the proposed dates for transfer of the unpaid dividend to IEPF by the Company.

* Indicative dates, actual date may vary.

o) Plant Locations : Works

1. Material Handling Equipment Division (MHE-Div.)

Anand –Sojitra Road,

Vallabh Vidyanagar – 388 120. Gujarat.

2. Gear Division



3. Wind Mill Division



Address of Regd. Office : Anand –Sojitra Road,

Vallabh Vidyanagar – 388 120. Gujarat

Internet Website : www.elecon.com

Financial Year Date of declaration Proposed date for transfer to IEPF*

2003-2004 03-09-2004 02-10-2011

2004-2005 15-09-2005 14-10-2012

2005-2006 12-09-2006 11-10-2013

2006-2007 13-09-2007 12-10-2014

k) Distribution of Shareholding as on 31-03-2008

Category No. of Percentage No. of shares Percentage

Shareholders

1 - 500 24909 70.7743 5508732 2.9661

501 - 1000 4811 13.6696 3920076 2.1107

1001 - 2000 2444 6.9442 3839608 2.0674

2001 - 3000 1028 2.9209 2681018 1.4436

3001 - 4000 333 0.9462 1203950 0.6483

4001 - 5000 261 0.7416 1196352 0.6442

5001 - 10000 641 1.8213 4472206 2.408

Above 1000 768 2.1821 162901078 87.7118

TOTAL 35195 100.00 185723020 100.00


Address for Correspondence :

The Shareholders may address their communications/suggestions/grievances/queries to :

Mr. Paresh Shukla

Company Secretary and Compliance Officer


Post Box No. 6, Anand-Sojitra Road

Vallabh Vidyanagar – 388 120 (Gujarat)

Tal. & Dist. Anand

Tel No. (02692) 227109, 230166

Fax No. (02692) 236457, 236527

Email address : [email protected]

B. NON-MANDATORY REQUIREMENTS

A) CHAIRMAN OF THE BOARD

The Company has an Executive Chairman and hence, the requirement pertaining to reimbursement of expenses to

a non-executive Chairman does not arise.

B) REMUNERATION COMMITTEE

A remuneration committee comprising all non-executive and independent directors is functioning since 2001, the

details of which are mentioned elsewhere in this Annual Report.

C) SHAREHOLDER RIGHTS TO RECEIVE FINANCIAL RESULTS

The financial performance of the Company for every quarter are extensively published in the newspapers and are

also put on the Company’s website besides being available on the SEBI website www.sebiedifar.nic.in.

D) POSTAL BALLOT

The provisions relating to Postal Ballot will be complied with in respect of matters where applicable.

E) AUDIT QUALIFICATIONS

During the year under review, there was no audit qualification in the Company’s financial statements. The Company

continues to adopt best practices to ensure the regime of unqualified financial statements.

F) TRAINING OF BOARD MEMBERS

During the Audit and Board Meetings, the management and working Directors give extensive briefings to the Board

Members on the business of the Company.

G) OFFICE SPACE FOR NON EXECUTIVE CHAIRMAN

The Company has an Executive Chairman and therefore the issue of providing office to non Executive Chairman does

not arise.

The Company has no specific tenure specified for Independent Directors.


AUDITORS’ CERTIFICATE ON COMPLIANCE WITH MANDATORY REQUIREMENTS OF

CORPORATE GOVERNANCE TO THE MEMBERS OF ELECON ENGINEERING COMPANY

LIMITED

To

The Members


We have examined the compliance of the conditions of Corporate Governance by Elecon

Engineering Company Limited for the year ended on 31st March, 2008 as stipulated in Clause 49 of

the Listing Agreement of the Company with the Stock Exchanges in India.

The compliance of the conditions of Corporate Governance is the responsibility of the management.

Our examination was limited to the procedures and implementation thereof, adopted by the

company for ensuring the compliance of the conditions of the Corporate Governance. It is neither

an audit nor an expression of an opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanation given to us, the

Company has complied with the conditions of the Corporate Governance as stipulated in the

above Listing Agreement.

We state that in respect of investor grievance received during the year ended on 31st March,

2008, no investor grievances are pending against the Company as per records maintained by the

Company and presented to the Investors’/Shareholders’ Grievance Committee of the Company.

We further state that such compliance is neither an assurance as to the future viability of the

Company nor the efficiency or the effectiveness with which the management has conducted

the affairs of the Company.

For and on behalf of

THACKER BUTALA DESAI

Chartered Accountants

M. T. Desai

Place : Navsari Partner

Date : 27-05-2008 M. No. : 30911


DECLARATION

To

The Members


I, Shri Prayasvin B. Patel, Chairman and Managing Director and Chief Executive Officer of the Company,

do hereby declare that the Directors and Senior Officers of the Company have exercised their authorities

and powers and discharged their duties and functions in accordance with the requirement of the Code

of Conduct as prescribed by the Company and have adhered to the provisions of the same.

For Elecon Engineering Company Limited

Prayasvin Patel

Place : Mumbai Chairman and Managing Director

Date : 26-05-2008 and Chief Executive Officer


AUDITOR’S REPORT

To

The Shareholders of


Vallabh Vidyanagar

1. We have audited the attached Balance Sheet of

ELECON ENGINEERING COMPANY LIMITED as at

March 31, 2008 and also the Profit and Loss Account

and Cash Flow Statement of the Company for the

year ended on that date annexed thereto. These

financial statements are the responsibility of the

Company’s management. Our responsibility is to

express an opinion on these financial statements

based on our audit.

2. We conducted our audit in accordance with auditing

standards generally accepted in India. Those Standards

require that we plan and perform the audit to

obtain reasonable assurance about whether the

financial statements are free of material

misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and

disclosures in the financial statements. An audit

also includes assessing the accounting principles

used and significant estimates made by the

management, as well as evaluating the overall

financial statement presentation. We believe that our

audit provides a reasonable basis for our opinion.

3. As required by the amended Companies (Auditors’

Report) Order, 2003 issued by the Central

Government of India in terms of sub-section (4A) of

section 227 of the Companies Act, 1956, we annex

hereto a statement on the matters specified in

paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to

in paragraph (3) above, we report that :

(a) We have obtained all the information and

explanations, which to the best of our

knowledge and belief were necessary for the

purpose of our audit;

(b) In our opinion, proper books of account, as

required by the law have been kept by the

Company so far as it appears from our

examination of those books;

(c) The Balance Sheet, Profit and Loss Account and

Cash Flow Statement dealt with by this report

are in agreement with the books of account;

For THACKER BUTALA DESAIChartered Accountants

M. T. DESAI


Date : 27-05-2008 Membership No. : 30911

(d) In our opinion, the Balance Sheet, Profit and

Loss Account and Cash Flow statement dealt

with by this report comply with the applicable

Accounting Standards referred to in sub-section

(3C) of section 211 of the Companies Act, 1956 ;

(e) Based on representations made by all the

Directors of the Company as on 31st March,

2008 and taken on record by the Board of

Directors of the Company and according to the

information and explanations made available to

us by the Company, none of the Directors of

the Company has any disqualification as

referred to in clause (g) of sub-section (1) to

section 274 of the Companies Act, 1956; and

(f ) In our opinion and to the best of our

information and according to the explanations

given to us, the said accounts read together

with the notes thereon, give the information

required by the Companies Act, 1956, in the

manner so required and give a true and fair

view in conformity with the accounting

principles generally accepted in India;

(i) In the case of the Balance Sheet, of the

state of affairs of the Company as at March

31, 2008;

(ii) In the case of the Profit and Loss Account,

of the Profit of the Company for the year

ended on that date; and

(iii) In the case of the Cash Flow Statement, of

the cash flows for the year ended on that

date.


ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph 3 of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of

its fixed assets.

(b) Certain items of Plant and Machineries were physically verified by the management during the year in accordance

with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at

reasonable intervals. According to the information and explanations given to us no material discrepancies were

noticed on such verification.

(c) The Company has not disposed off a substantial part of the fixed assets during the year under review. Therefore,

going concern status of the Company has not been affected.

(ii) (a) As explained to us, inventories were physically verified by the management at the end of the year.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification

of inventories followed by the management were reasonable and adequate in relation to the size of the Company

and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper

records of its inventories and discrepancies noticed on physical verification have been properly dealt with in the

books of account of the Company.

(iii) (a) According to the information & explanations given to us, the Company has neither granted nor taken any Loan,

secured or unsecured, to or from companies, firms or other parties covered in the register maintained under

section 301 of the Companies Act, 1956.

(b) In view of (iii) (a) above, this clause regarding rate of interest and other terms and conditions of such loans is not

applicable.

(c) The view of (iii) (a) above, this clause regarding recovery and repayment etc. is not applicable.

(d) In view of (iii) (a) above, this clause regarding overdue amounts of such loans is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system

commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets

and for the sale of goods and services.

(v) (a) According to the information and explanations given to us, transactions with the parties listed in the register

maintained under section 301 of the Companies Act, 1956 have been entered in the register upon ratification of

the same by the Board of Directors of the Company.

(b) We are informed that in case of the transactions with the parties listed in the register maintained under section 301

of the Companies Act, 1956 no comparison of prices could be made as there was either no alternate source of

supply or that the management preferred the supplier’s products and services on quality grounds or peculiarity of

the products sold or services rendered.

(vi) According to the information and explanations given to us, the company has complied with the provisions of the

directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA or other relevant provisions of the

Companies Act, 1956 and the rules framed there under in respect of accepted deposit.

(vii) The Company has appointed a firm of Chartered Accountants to carry out internal audit work. The said internal audit

system operating in the Company commensurate with the size of the company and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of

cost records under section 209(1)(d) of the Companies Act, 1956 in respect of any of the products of the company.

(ix) (a) According to the records of the Company undisputed statutory dues including Provident Fund, Investor Education

& Protection Fund, Employees’ State Insurance, Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty, Service

Tax, Cess and other statutory dues have been regularly deposited during the period with appropriate authorities.

There was no outstanding statutory dues as at the end of the year outstanding for a period of more than six months

from the date they became payable.

(b) According to information and explanations given to us, the Company has not paid the following statutory dues on

account of the demand being disputed by the Company.


Sr. Nature of liability Amount Pending Before

No. (Rs. in Lacs)

1. Excise Duty, penalties & interest thereon 137.36 C.E.S.T.A.T.

2. Excise Duty, penalties & interest thereon 109.49 Central Excise

Commissioner (Appeal)

3. Income Tax, Wealth Tax and interest & Penalty thereon 3.32 I.T.A.T.

4. Income Tax, Wealth Tax and interest & Penalty thereon 995.80 C.I.T [Appeal]

5. Sales Tax, Purchase Tax, Works Contract 347.56 Orissa State Sales Tax

Tax and interest & Penalty thereon Appellate Tribunal

6. Sales Tax, Purchase Tax, Works Contract 216.29 Gujarat High Court

Tax and interest & Penalty thereon

(x) According to the records of the Company, it has no accumulated Losses. The Company has not incurred cash losses duringthe financial year under review or during the immediately preceding financial year.

(xi) According to our audit procedure and on the basis of information and explanations given by the management, theCompany has not defaulted in repayment of dues to any Financial Institution or Bank. The Company has not issued anyDebenture.

(xii) According to our audit procedure and on the basis of information & explanations given to us, the Company has notgranted any loan on the basis of security by way of pledge of shares, debentures and other securities. Therefore, thequestion of adequacy or otherwise of maintenance of documents and records in respect thereof does not arise.

(xiii) According to our audit procedure and on the basis of information & explanations given to us, the Company has notindulged in any chit fund activity during the year under review. Therefore, the question of compliance with provisions ofany special statute applicable to chit fund does not arise.

(xiv) According to our audit procedure and on the basis of information & explanations given to us, the Company has notindulged in dealing or trading in shares, securities, debentures and other investments. In respect of long term investmentmade by the Company, according to the information and explanations given to us, all the investments have been held inthe name of the Company only.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which thecompany has given guarantee for loans taken by others from banks or financial institutions are prima-facie not prejudicialto the interest of the Company.

(xvi) In our opinion and according to the information & explanations given to us, the term loans obtained during the year underreview have been applied for the purpose for which they were raised.

(xvii) In our opinion and according to the information & explanations given to us, and on an overall examination of the BalanceSheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to our audit procedure and on the basis of information & explanations given to us, during the under review, theCompany has not make any preferential allotment of shares to the parties or companies listed in the register maintainedunder section 301 of the Companies Act,1956. Therefore, the question of impacts of the prices recovered in respect ofsuch shares on the interest of the Company does not arise.

(xix) According to our audit procedure and on the basis of information & explanations given to us, during the year underreview, the Company has not issued any secured or unsecured debentures. Therefore, the question of creation ofsecurities or charge in respect thereof does not arise.

(xx) According to our audit procedure and on the basis of information & explanations given to us, during the year underreview, the Company has not raise money by way of public issue of shares. Therefore, the question of disclosure andverification of end use of money so raised does not arise.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraudon or by the Company has been noticed or reported during the year under review.

For THACKER BUTALA DESAIChartered Accountants

M. T. DESAI


Date : 27-05-2008 Membership No. : 30911


BALANCE SHEET AS AT 31ST MARCH, 2008Rs. in Lacs

Schedules As at 31-03-08 As at 31-03-07

SOURCES OF FUNDS

Share Capital 1 1,857.23 618.47

Reserves and Surplus 2 21,815.39 18,171.90

23,672.62 18,790.37

LOANS

Secured 3 32,091.06 26,728.57

Unsecured 4 8,835.03 1,637.37

40,926.09 28,365.94

Deferred Tax Liability 1,865.13 1,752.51

Deferred Tax Assets (154.37) (75.56)

Net Deferred Tax 1,710.76 1,676.95

TOTAL 66,309.47 48,833.26

APPLICATION OF FUNDS

Fixed Assets 5 19,306.74 12,673.75

Investments 6 945.55 803.97

Current Assets, Loans and Advances 7 80,963.70 60,871.21

Less : Current Liabilities and Provisions 8 35,003.64 25,558.94

Net Current Assets 45,960.06 35,312.27

Miscellaneous Expenditure - - -

(To the extent not written off )

Deferred Expenditure 9 97.12 43.27

(Technical Know How Expenses )

TOTAL 66,309.47 48,833.26

Notes forming part of Accounts 17

As per our report of even date attached

For and on behalf of For and on behalf of the Board of Directors

THACKER BUTALA DESAIChartered Accountants

P. B. Patel H. S. Parikh

Chairman and Director

Managing Director

M. T. Desai Paresh Shukla

Partner Company Secretary

M. No. 30911

Place : Navsari Place : Mumbai

Date : 27-05-2008 Date : 26-05-2008


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008Rs. in Lacs

Schedule Year ended 31-03-08 Year ended 31-03-07

INCOME

Sales 10 83,209.29 75,995.82Less: Excise Duty (10,141.71) (9,349.28)

Net Sales 73,067.58 66,646.54Erection and other Charges 9,575.93 5,417.98Other Income 11 978.66 823.65

83,622.17 72,888.17EXPENDITUREConsumption of Materials, Sub-Contracts, Erection and other charges 12 59,906.12 49,862.03Power and Fuel 677.64 624.28Employees’ Remuneration and Benefits 13 3,427.75 2,708.61Administrative, Selling & General Exp. 14 10,290.29 8,834.52Interest 15 2,742.66 1,936.35Depreciation 1,419.80 1,222.30

78,464.26 65,188.09 (Increase)/Decrease in Stock 16 (4,710.00) (970.44)

73,754.26 64,217.65

PROFIT BEFORE TAXATION AND EXTRA ORDINARY ITEMS 9,867.91 8,670.52

Extra Ordinary Items - 229.77

PROFIT BEFORE TAXATION 9,867.91 8,440.75

Provision for Taxation (including Wealth tax) 2,932.00 2,450.05Deferred Tax 164.49 466.44Fringe Benefit Tax 51.00 33.96

PROFIT AFTER TAXATION 6,720.42 5,490.30

Adjustment of previous years - (0.74)

Balance brought forward from last year 1,550.60 403.72

PROFIT AVAILABLE FOR APPROPRIATION 8,271.02 5,893.28

APPROPRIATION

Proposed Dividend 1,392.92 463.85

Tax on Proposed Dividend 236.73 78.83

Transfer to General Reserve 1,000.00 3,800.00

Balance Carried Forward 5,641.37 1,550.60

Earning Per Share- Before Extra Ordinary Items

(i) Basic 7.24 6.36

(ii) Diluted 7.24 6.35

- After Extra Ordinary Items

(i) Basic 7.24 6.10

(ii) Diluted 7.24 6.10

Face Value Per Share (Rs.) 2.00 2.00

Notes forming part of Accounts 17


For and on behalf of

THACKER BUTALA DESAI

Chartered Accountants

M. T. Desai

Partner

M. No. 30911

Place : Navsari

Date : 27-05-2008

For and on behalf of the Board of Directors

P. B. Patel H. S. Parikh


Managing Director

Paresh Shukla

Company Secretary

Place : Mumbai

Date : 26-05-2008


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008

Rs. in Lacs

Particulars As at 31-03-2008 As at 31-03-2007

Amount Amount Amount Amount

[A] CASHFLOW FROM OPERATING ACTIVITIES

- Net Profit before Interest, Tax ,

Extra- ordinary Items & Profit on sale

of Assets & Investments 12,628.50 10,391.86

- Adjustments for:

- Depreciation 1,419.80 1,222.30

- Interest Income (79.67) (190.94)

- Dividend Income (87.76) (60.20)

1,252.37 971.16

Operating Profit Before Working

Capital Changes 13,880.87 11,363.02

- Adjustments for Working Capital changes:

- Trade & Other Receivables

Trade receivables (10,433.01) (17,380.99)

Loans and Advances (1,559.37) (901.26)

- Trade & Other payables

Trade payables 7,130.70 5,114.42

Advances 641.15 (1,330.94)

- Inventories (8,364.62) (505.14)

(12,585.15) (15,003.91)

CASH GENERATED FROM OPERATIONS 1,295.72 (3,640.89)

- Less: Direct Taxes Paid (3,242.13) (2,519.40)

(3,242.13) (2,519.40)

Add: Prior period adjustments - - (0.74) (0.74)

CASHFLOW BEFORE EXTRA-ORDINARY ITEMS (1,946.41) (6,161.03)

- Deferred Expenditure

- Technical Know How Fees (75.11) - (51.92) -

- (75.11) - (51.92)

NET CASHFLOW FROM OPERATING ACTIVITIES [A] (2,021.52) (6,212.95)


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008Rs. in Lacs

Particulars As at 31-03-2008 As at 31-03-2007

Amount Amount Amount Amount

[B] CASHFLOW FROM INVESTING ACTIVITIES

- Purchase of Fixed Assets (8,193.85) (4,431.39)

- Sale of Fixed Assets 144.38 272.05

- Purchase of Investments (141.58) (175.30)

- Sale of Investments 91.45 -

- Return of Share Application Money - 1.11

- Interest Income 79.67 190.94

- Dividend Income 87.76 60.20

NET CASHFLOW FROM INVESTING ACTIVITIES [B] (7,932.16) (4,082.39)

[C] CASHFLOW FROM FINANCING ACTIVITIES

- Issue of Equity Capital (Including Share Premium) 45.28 3,577.10

- Proceeds from Long Term borrowings 8,229.08 4,986.09

- Repayments against Long Term Borrowings (2,635.03) (6,667.77)

- Proceeds from Other Borrowings 23,219.02 10,176.12

- Repayments against Other Borrowings (16,221.18) (695.01)

- Interest Paid (2,665.49) (1,934.44)

- Dividends Paid (541.67) (341.54)

NET CASHFLOW FROM FINANCING ACTIVITIES [C] 9,430.01 9,100.55

[D] NET INCR./(DECR.) IN CASH & CASH EQUIVALENTS [A+B+C] (523.66) (1,194.79)

[E] CASH & CASH EQUIVALENTS AS ON 01-04-2007/ 01-04-2006 1,275.90 2,470.69

[F] CASH & CASH EQUIVALENTS AS ON 31-03-2008 / 31-03-2007 [D+E] 752.24 1,275.90



THACKER BUTALA DESAIChartered Accountants P. B. Patel H. S. Parikh


Managing Director

M. T. Desai Paresh Shukla

Partner Company Secretary

M. No. 30911

Place : Navsari Place : Mumbai

Date : 27-05-2008 Date : 26-05-2008


SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH, 2008Rs. in Lacs

As at 31-03-08 As at 31-03-07

SCHEDULE - 1

SHARE CAPITAL

(A) Authorised Share Capital

(i) 22,50,00,000 (Previous Year 15,00,00,000) Equity Shares of Rs. 2/- each 4,500.00 3,000.00

(ii) 2,50,00,000 (Previous Year NIL) Cumulative Redeemable Preference

Shares of Rs. 2/- each 500.00 -

5,000.00 3,000.00(B) Issued, Subscribed and Paid-up Capital :

9,28,61,510 Equity Shares of Rs. 2/- each fully paid up(Previous Year 3,09,23,650 shares of Rs. 2/- each fully paid up) 1,857.23 618.47

Notes : Of the above(i) 3,42,100 equity shares of Rs. 2/- each in above (originally allotted

68,420 equity Shares of Rs. 10/- each) were issued as fully paid-up,pursuant to a contract without payment being received in cash.

(ii) 1,73,38,890 equity shares of Rs. 2/- each in above (originally allotted34,67,778 equity Shares of Rs. 10/- each) have been issued as Bonus Shares by way of capitalisation of Share Premium and Reserves.

(iii) 54,98,160 equity shares of Rs. 2/- each in above (originally allotted 10,99,632equity Shares of Rs. 10/- each) have been as fully paid-up shares on conversionof debentures.

(iv) 27,16,787 Equity Shares of Rs 2/- were allotted as fully paid-up shares onconversion of FCCB of Series ‘A’ 9,000 nos. of $ 1,000 each. Out of this 30,187equity shares and additionally 60,373 nos. as Bonus share have been allottedduring the year.

(v) 6,19,07,673 Equity Shares of Rs 2/- each in above have been issued as BonusShares by way of capitalisation of Share Premium and Reserves during the year. 1,857.23 618.47

SCHEDULE - 2

RESERVES AND SURPLUS

(A) Capital ReserveAs per Last Balance Sheet 54.79 54.79Less : Transferred to Share Premium Account “ For issue of Bonus Shares” 54.79 -

- 54.79(B) Preference Share Capital Redemption Reserve :

As per Last Balance Sheet - 24.00Less : Transferred to General Reserve - (24.00)

- -(C) Security Premium Account

As per Last Balance Sheet 40.65 40.65Less : Transferred to Share Premium Account “ For issue of Bonus Shares” 40.65 -

- 40.65(D) Share Premium Account

As per Last Balance Sheet 3,976.17 446.76Add : Amount transferred from Capital Reserve 54.79 -

Add : Amount transferred from Security Premium Account 40.65 -

Add : Amount arising on conversion of FCCB in to equity shares 44.68 3,529.41

Less : Amount Utilized for issue of Bonus Shares ( 1,238.15) -

2,878.14 3,976.17(E) General Reserve

As per Last Balance Sheet 12,549.69 8,725.69 Add : Transferred from Cap. Red. Reserve - 24.00 Add : Transferred during the year from P&L account 1,000.00 3,800.00Add : Amount transferred from deferred Tax on Gratuity for Transitional Liability 130.69 - Less : Amount provided for Gratuity for Transitional Liability (384.50) -

13,295.88 12,549.69

(F) Profit and Loss Account 5,641.37 1,550.60

21,815.39 18,171.90


SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH, 2008Rs. in Lacs

As at 31-03-08 As at 31-03-07

SCHEDULE - 3

SECURED LOANS

(See Note 2 of Schedule-17)A. Loans and Advances from State Bank of

India/ Bank of Baroda/ State Bank of Saurashtra/

Exim Bank / UTI Bank /Citi Bank

(a) Cash Credit / Working Capital Demand Loan 23,334.78 21,876.05

(b) Term Loan 8,624.60 4,098.04

(Repayable within a year Rs. 3,201.54 Lacs

Previous year Rs. 1,905.00 Lacs)

B. Other Loans and Advances

(a) HDFC Bank Limited - 224.00

(Fully repaid during the year)

(b) Bharat Overseas Bank Limited (IOB) - 403.88


(c) HP from Other Banks 131.68 126.60

(Repayable within a year Rs. 30.58 Lacs

Previous Year Rs. 34.57 Lacs)

32,091.06 26,728.57

SCHEDULE - 4

UNSECURED LOANSA. Fixed and Loan Deposits - 87.05


B. Foreign Currency Convertible Bonds - 45.28

0.5% Series ‘A’ Bonds (Refer Note 5 in Schedule 17)

C. Short Term Loan from Banks :

a. From : HDFC Bank - 432.84


b. From : HDFC Bank 1,203.00 -

Repayable within a year Rs 1,181.98 Lacs (Previous Year NIL)

c. From : ING Vysya Bank 1,000.00

Repayable within a year Rs 1,000.00 Lacs

(Previous Year NIL)

d. From : Centurion bank of Punjab 1,017.51

Repayable within a year Rs 998.73 Lacs (Previous Year NIL)

e. From : Standard Chartered Bank 1,180.00

Repayable within a year Rs 1,180.00 Lacs

(Previous Year NIL)

D. Working Capital Demand Loan :

a. From : EXIM Bank 3,000.00 -

b. From : Indusind Bank 507.59 -

E. Loans and Advances from Others : 926.93 1,043.71

Repayable within a year Rs 69.76 Lacs

Previous Year Rs 196.97 Lacs)

F. Interest accrued and due on above - 28.49

8,835.03 1,637.37


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SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH, 2008 Rs. in Lacs

As at 31-03-08 As at 31-03-07

SCHEDULE - 6

INVESTMENTS (AT COST) - LONG TERM

Quoted :

(1) Non-Trade Investment 217.29 217.29

- 9,58,426 Shares (Previous year 9,58,426 Shares)

of Rs. 10 each of M/s. Eimco Elecon (India) Ltd

(Market Value Rs. 3,066.96 Lacs


- 1,16,880 Shares (Previous year 1,16,880) 67.19 67.19

of Rs. 10 each of HDFC Ltd.

(Market value Rs. 2,786.13 Lacs


- 500 Shares (Previous year 500 Shares) 0.05 0.05

of Rs. 10/- each of HDFC Bank Ltd.

(Market Value Rs. 6.60 Lacs

Previous year Rs. 4.75 Lacs)

- 10,989 Shares (Previous year 10,989 Shares) 21.19 21.19

of Rs. 10/- each of Bank of Baroda

(Market Value Rs. 31.20 Lacs

Previous year Rs. 23.67 Lacs)

Unquoted :

(1) Trade Investment (Equity) 0.10 0.10

- 250 Shares @ Rs. 100 fully paid of Prayas Engineering Limited

(Previous year 1,000 Shares @ Rs. 10 each of VVN Mfg. & investa Ltd.

VVN Mfg. & Investa amalgamated with Prayas Casting Ltd., and emerged

in a new Company as Prayas Engineering Limited.

(2) Non-Trade Investment

- NIL Shares (Previous year 5,70,010

share) of Rs. 10/- each of Power Build

Elecon Gear Ltd. - 57.00

- 2,49,500 Shares (Previous year 2,49,500

share) of Rs. 10/- each of Wizard Fincap Ltd. 24.95 24.95

- 1,29,965 Shares (Previous year 1,29,965 shares ) ofRs. 10/- each of Ringspann Elecon (India) Ltd. 13.00 13.00

- 2,00,000 Shares (Previous year 2,00,000)of Rs.10 each of Eimco Elecon Electricals Ltd. 20.00 20.00

- 12,000 Shares (Previous year 12,000)of Rs.10 each of Madhuban Prayas Resorts Ltd 1.20 1.20



As at 31-03-08 As at 31-03-07

(3) Investment in Foreign Companies

- 4,48,922 Shares (Previous year 4,48,922)

of S$ 1/- each of Elecon Singapore Pte. Ltd. 124.59 124.59


of Aus$ 1/- each of Elecon Australia Pty. Ltd. 31.45 31.45


of Rand 1/- each of Elecon Africa Pty. Ltd. 12.50 12.50

- 3 Shares (Previous year 3 Shares)

of AED 1,00,000/- each of Elecon Middle East FZCO 36.31 36.31

- 49,942 Shares (Previous year 49,942) of US$ 1/=

each of Elecon Engineering (Suzhou) Co. Ltd, Chaina 22.08 22.08

(4) Investment in Bonds / Funds

- Investment in Reliance Fund 90.00 35.00

5,17,942 Nos. NAV as on 31-03-08 Rs. 93.61 Lacs

Previous Year 3,08,572 Nos. NAV Rs. 34.07 Lacs )

- Investment in Principal Growth Fund - 66.15 35.00


(previous year 3,47,658 Nos.NAV Rs. 33.28 Lacs )

- Investment in Franklin India Flexicap 106.32 35.00


(previous year 1,91,136 Nos. NAV Rs. 33.16 Lacs)

- Investment in Rural Elec. Corp. Bond 59.00 50.00

590 Nos. of Bonds @ Rs. 10,000 each

(Previous year 500 Nos. of Rs. 10,000 each)

- Investment in Principal Resurgent India Fund 32.11 -


(previous year NIL, NAV 31-03-07 NIL)

(5) Investment in Others

- 1 Share (Previous year 1 Share) of Rs. 100/= each

of Charotar Gramoddhar Sahakari Mandal Limited 0.00 0.00

- 80 Shares (Previous year 80 Shares) of Rs. 10/= each of

Karamsad Urban Co-operative Limited 0.01 0.01


Anand Auto Vehicle Owners Co-operative Credit Society Ltd. 0.01 0.01


Anand Mercantile Co-operative Bank Limited 0.00 0.00

- 10 Shares (Previous year 10) of Rs. 500 each

of Charotar Gas Sahakari Mandali Limited 0.05 0.05

945.55 803.97

Aggregate value of Quoted Investment Rs. 5,890.89 Lacs

(Previous year Rs. 4,534.53 Lacs)

23,000 equity shares of HDFC Ltd. were pledged as security for availing short term

unsecured loan from HDFC Bank which is now paid and release of pledge is in process.



As at 31-03-08 As at 31-03-07

SCHEDULE - 7

CURRENT ASSETS, LOANS AND ADVANCES

(A) Current Assets :

(I) Stock of Stores, Loose Tools, Dies

Mechanical, Electrical and Electronic

Spares (as taken, valued and certified

by the Management) at lower of cost 1,272.71 1,185.70

or net realisable value

(II) Stock-in-Trade (as taken, valued and

certified by the Management)

(i) Raw Materials (at lower of

cost or net realisable value) 10,226.30 6,784.72

(ii) Semi-Finished Goods (at lower of

cost or net realisable value) 12,282.45 8,136.52

(iii) Finished Goods (at lower of

cost or net realisable value) 1,304.87 740.80

(iv) Goods-in-Transit (at Cost) 174.04 48.00

(v) Land as Stock in Trade (For Wind Mill)

(III) Sundry Debtors (Unsecured,

Considered Good) : 49,231.61 38,798.60

(i) Outstanding for a period

exceeding six month 13,965.12 6,312.86

(ii) Others 35,266.49 32,485.74

(IV) Cash and Bank Balances :

(a) Cash on Hand 7.48 7.19

(b) Balance with Scheduled Banks:

(1) In Current Account 468.52 532.18

(2) Bank Deposit 255.68 717.00

(3) Unpaid Dividend Bank A/c. 20.56 19.53

(B) Loans and Advances (Unsecured Considered Good) :

(1) Loans to Staff 17.08 15.73

(2) Advances recoverable in Cash or

Kind or for value to be received 3,671.86 3,117.02

(3) Balance with Collector of Custom,

Port Trust, Excise etc. 1,834.06 830.88

(4) Advance Payment of Income Tax (Net of Provision) 196.48 (62.66)

80,963.70 60,871.21



As at 31-03-08 As at 31-03-07

SCHEDULE - 8

CURRENT LIABILITIES AND PROVISIONS

(A) Current Liabilities

* Sundry Creditors (Refer Note No. 9 of Schedule 17) 27,526.23 20,395.53

Advance from Customers 5,185.15 4,544.00

Dividend Warrants issued but not encashed (Unpaid) 20.56 19.53

Interest accrued but not due 162.85 57.19

32,894.79 25,016.25

(B) Provisions

Provision for Gratuity 479.20 -

Proposed Dividend 1,392.92 463.86

Tax on Proposed Dividend 236.73 78.83

35,003.64 25,558.94

* Includes an amount of Rs. 3,868.73 Lacs (Previous Year Rs. 1,776.36 Lacs) on account of Acceptances.

SCHEDULE - 9

DEFERRED EXPENDITURE

Balance as per Last Year 43.27 229.77

Add : Addition during the year 75.11 51.93

118.38 281.70

Less : Written off during the year 21.26 238.43

97.12 43.27


SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

Rs. in Lacs

Year ended 31-03-08 Year ended 31-03-07

SCHEDULE - 10

SALES

Material Handling Equipments 30,812.56 35,102.13

Gear (Transmission Equipments) 35,873.70 28,423.36

WTG Sales & Electricity Generation 1,960.53 123.31

Export Sales 3,703.30 2,430.70

Miscellaneous Sales 717.49 567.04

73,067.58 66,646.54

SCHEDULE - 11

OTHER INCOME

* Dividend Income 87.76 60.20

** Interest Income 79.67 190.94

Profit on Sales of Assets / Investments (Net) 94.79 215.01

Gain on account of Exchange Variation (Net) 351.73 168.38

*** Miscellaneous Income 364.71 189.12

978.66 823.65

* Includes an amount of Rs. 0.03 Lacs (previous year Rs.NIL) dividend on Trade Investments

** Includes an amount of Rs. 0.48 Lacs (previous year Rs.1.58 Lacs) of TDS

*** Includes an amount of Rs. 212.24 Lacs (previous year Rs. 60.53 Lacs) as Insurance claims received

SCHEDULE - 12

CONSUMPTION OF MATERIALS, SUB-CONTRACTS, ERECTION AND OTHER CHARGES

Raw Materials Consumed 52,446.21 44,753.03

Stores, Tools and Spares Consumption 1,267.59 496.94

Sub-Contracts 5,277.60 3,805.84

Erection and other charges 274.95 198.90

Other manufacturing expenses 512.83 586.50

**** Technical Know how and Design Fees 126.94 20.82

59,906.12 49,862.03

**** Includes an amount of Rs. 21.26 Lacs (previous year Rs. 8.65 Lacs) as written off for Deferred Expenditure.


SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008 Rs. in Lacs


SCHEDULE - 13

EMPLOYEES’ REMUNERATION AND BENEFITS

Salaries and Wages (Incl. Managerial Remuneration) 2,756.75 2,241.33

Contribution to Provident Fund 129.26 116.21

Employees’ Welfare Expenses 303.74 199.71

Employees’ Retirement Benefits 238.00 151.36

3,427.75 2,708.61

SCHEDULE - 14

ADMINISTRATIVE, SELLING AND GENERAL EXPENSES

Rent 28.01 8.60

Computer Software Charges 140.27 94.53

Rates & Taxes 229.33 219.87

Excise Duty (excluding duty recovered from Customers) 122.92 285.86

Repairs and Maintenance :

Buildings 317.85 319.14

Machineries 536.78 433.86

Others 50.27 63.88

Insurance (net of recoveries) 104.57 109.67

Travelling Expenses 340.62 193.96

Bank Charges 605.55 520.58

Directors’ Fees 9.00 7.85

Packing, Forwarding & Distribution Expenses (Net of Recoveries) 866.08 713.13

Commission & Brokerage 3,607.93 3,246.49

Rectification Expenses 56.08 72.63

Bad Debts Written Off 779.31 976.07

Liquidated Damages 890.61 335.97

Advertisements & Sales Promotion Expenses 471.46 213.29

Payment to Auditors 15.43 13.33

Donations 37.93 71.43

Lease Rentals 37.58 9.28

Royalty Paid 31.11 -

Technical Inspection Consultancy Fees 18.77 14.72

Other Professional Consultancy Fees 489.84 342.14

General Administrative Charges 502.99 568.24

10,290.29 8,834.52


SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

Rs. in Lacs


SCHEDULE - 15

INTEREST

On Fixed Period Loan 631.57 338.87

On Working Capital 1,532.23 1,304.17

On Others 578.86 293.31

2,742.66 1,936.35

SCHEDULE - 16

INCREASE/DECREASE IN STOCK

Opening Stock :

Semi-finished Goods (WIP) 8,136.52 5,980.13

Finished Goods 740.80 1,926.75

8,877.32 7,906.88

Closing Stock :

Semi-finished Goods (WIP) 12,282.45 8,136.52

Finished Goods 1,304.87 740.80

13,587.32 8,877.32

(Increase)/Decrease in Stock (4,710.00) (970.44)


SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT AS AT

31ST MARCH 2008.

SCHEDULE – 17

NOTES ON ACCOUNTS

1. ACCOUNTING POLICIES

Significant accounting policies adopted in the preparation and presentation of the accounts are as under:

a) Basis of accounting

The accounts have been prepared on the basis of historical costs. The Company adopts the accrual system of

accounting and the accounts are prepared on a going concern concept.

b) Fixed Assets

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment

losses, if any. Cost comprises of the purchase price and attributable cost of bringing the Assets to its working

condition for its intended use, but excludes Cenvat / service tax / VAT credit availed.

c) Borrowing Cost

Financing costs relating to deferred credits or borrowed funds attributable to construction or acquisition of fixed

assets for the period up to the completion of construction or acquisition of fixed assets are included in the cost

of the assets to which they relate.

d) Depreciation

Plant & Machinery are depreciated on Straight Line Method at the rates specified in Schedule XIV to the

Companies Act, 1956.

In respect of all other Fixed Assets, depreciation is provided on Written Down Value Method, at the rates

specified in Schedule XIV to the Companies Act, 1956.

Depreciation is provided on pro-rata basis:

i) From the date of addition, in case of additions during the year to the Fixed Assets; and

ii) Up to the date of disposal, in case of disposals during the year to the Fixed Assets.

e) Inventories

Inventories are valued at lower of cost or estimated net realizable value. The cost of inventories is arrived at

on the following basis:

Raw Materials and stores : Weighted Average Cost

Stock-in-process : Raw Materials at Weighted Average Cost &

absorption of Labour and Overheads

Finished Goods : Raw Materials at Weighted Average Cost &

absorption of Labour and Overheads

f ) Investments

Investments are generally of Long Term nature and are stated at cost unless there is a permanent fall in their

value as at the date of Balance Sheet.

Investments in foreign companies are stated at cost of acquisition.


g) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable

estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) possible obligation

which will be confirmed only by the future event not wholly within the control of the company or (ii) Present

obligations arising from past events where it is not probable that an outflow of resources will be required to settle

the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not

recognized in the financial statements.

h) Revenue recognition

i) Sale of goods is generally recognized on dispatch to customers and is shown net of recoveries.

ii) Income on turnkey contracts is accounted on the basis of billings made on customers against mutually

agreed billing schedules.

Advances received from customers in respect of contracts, which are not in relation to work performedthereon, are shown as “Advance from Customers”.

Amounts retained by customers until satisfaction of conditions specified in the contract for release of suchamounts are reflected as Sundry debtors.

Credits are taken for claims in respect of cost escalation and extra work as and when and to the extentadmitted by customers.

Provision is made in full for claims or penalties payable arising out of delays in completion or from any othercauses as and when admitted.

iii) Interest revenues are recognized on a time proportion basis taking into account the amount outstanding and

the rate applicable.

iv) Dividend from investments in Shares is accounted for on the basis of the date of declaration of dividend

falling within the accounting year.

v) Consistent with past practice, export incentives are accounted for as and when the claims thereof have beenadmitted by the authorities.

i) Foreign Currency Transactions

i) Transactions in foreign currencies are generally recorded by applying to the foreign currency amount, the

exchange rate existing at the time of the transaction. However, where Forward Exchange Contracts are

entered into, the forward rates specified in the related Forward Exchange Contracts have been used as the

basis of measuring and recording the transactions.

ii) Gains or losses on settlement, in a subsequent period of transactions entered into in an earlier period are

credited or charged to the Profit and Loss Account.

j) Deferred Revenue Expenditure

Expenditures like VRS Compensation, Technical Know How Expenditures, which are having the benefits of enduring

nature, are treated as deferred revenue expenditure and are being written off over a period as may be decided by

the management.

k) Retirement benefits -

Retirement benefits to employees are being provided for by way of payments to Gratuity and Provident Funds.

i) The Gratuity liability & liability in respect of Leave Encashment is determined based on the Actuarial Valuation

done by Actuaries in context of the Revised AS-15 issued by the ICAI, as follows :-

Rs. in Lacs

PARTICULARS Gratuity Funded Leave Encashment

Expense recognized in the Statement of Profit & Loss account for the year ended March 31, 2008

Current Service Cost 45.07 16.21

Interest Cost 45.63 10.83

Employer Contribution 83.51 -

Expected Return on Plan Assets 20.58 -


Net Actuarial (Gains) / Losses 105.52 6.73

Past Service Cost - -

Settlement Cost - -

Total Expenses 175.64 33.77

Net Asset / (Liability) recognized in the Balance Sheet as at March 31,2008

Present value of Defined Benefit Obligation as at March 31, 2008 743.45 151.52

Fair value of plan assets as at March 31, 2008 264.25 -

Funded status [Surplus / (Deficit)] (479.20) -

Net asset / (liability) as at March 31, 2008 (479.20) (151.52)

Change in Obligation during the Year ended March 31, 2008

Present value of Defined Benefit Obligation at beginning of the year 577.55 137.15

Current Service Cost 45.07 16.21

Interest Cost 45.63 10.83

Settlement Cost - -

Past Service Cost - -

Employer Contributions - -

Acturial (Gains) / Losses 75.20 6.73

Benefits Payments - (19.40)

Present value of Defined Benefit Obligation at the end of the year 743.45 151.52

Change in Assets during the Year ended March 31, 2008

Plan assets at the beginning of the year 193.04 -

Assets acquired in amalgamation in previous year - -

Settlements - -

Expected return on plan assets 20.58 -

Contributions by Employer 80.94 -

Actual benefits paid - -

Actuarial (Gains) / Losses (30.31) -

Plan assets at the end of the year 264.25 -

Actuarial Assumptions:

Discount Rate 7.93%

Expected rate of return on plan assets 9.00%

Mortality pre retirement LIC (1994-96) Ultimate Published Table of Rates

Turnover rate 3% TO 1%

Rate of escalation in salary (p.a.) 5.00%

a. The rate of escalation in Salary (p.a.) considered in actuarial valuation is worked out after taking into

account inflation, seniority, promotion and other relevant factors such as supply and demand in the

employment market. Mortality rates are obtained from the relevant data of Life Insurance

Corporation of India.

b. During the year the company has withdrawn Rs. 253.81 Lacs (Net of deferred tax of Rs. 130.69 Lacs)

from General Reserve towards the transitional provision for Gratuity liability in accordance with the

provisions of AS - 15.

c. The liability for the gratuity as shown in the balance sheet of Rs. 479.20 Lacs is after adjusting the Fair

value of plan assets (Invested with LIC) as at March 31, 2008 of Rs. 264.25 Lacs.

ii) Liability in respect of Superannuation benefits extended to eligible employees is contributed by the

company to Life Insurance Corporation of India against a Master Policy @ 15% of the basic Salary of all

the eligible employees. The Company is providing for the outstanding Liability amount allocable to the

broken period till the balance sheet date.

iii) Liability in respect of Provident Fund is provided on actual contribution basis.


l) As regards Insurance premium and Guarantee commission, the Company is providing for prepaid amount

allocable to period falling beyond the date of Balance Sheet under review.

m) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment

loss is charged to the profit & loss account in the year in which the asset is identified as impaired. The

impairment loss recognized in prior periods is reversed if there has been a change in the estimate of

recoverable amount.

2. The loans referred to in Schedule 3 are secured as under

i) Fund Based and Non fund based Working Capital Facilities [3A(a)] granted by Consortium of Banks consisting

of State Bank of India (As Lead Bank), Bank of Baroda, State Bank of Saurashtra , Exim Bank, AXIS(UTI) Bank Ltd.

and Citi Bank N.A. are secured by an equitable mortgage on the immovable properties and hypothecation of

movable plant and machinery and assets of the Company’s Materials Handling Equipment Division excluding

certain assets specifically/ exclusively charged to other banks/ financial institutions but including the whole of

the Company’s Currents Assets, inventories, receivables and book debts ranking pari passu inter se in respect

of working capital facilities and guarantees issued by them in favour of various clients of the Company. This

is further secured by a second pari passu charge over immovable assets of Gear Division.

ii) Term Loans [3A(b)] obtained from State Bank of India, Bank of Baroda, Exim Bank (for import of machinery) and Axis

Bank is secured by exclusive charge by way of Hypothecation on specific assets for which payments were made

out of the term loan.

iii) Short Term Loan obtained from HDFC Bank Ltd. [3B(a)] & Term loan obtained from Indian Overseas Bank (erstwhile

known as Bharat Overseas Bank Ltd.) [3B(b)] were repaid in full during the year under review.

iv) Capital assets acquired on HP Loans from Banks [3B(c)] are secured by exclusive charge on respective assets

purchased through those loans.

3. Contingent Liabilities

No provision has been made in the accounts in respect of the following:

a) Disputed Excise Duty Rs. 246.85 Lacs (previous year Rs. 108.18 Lacs), against demand notices received so far.

b) Disputed Sales Tax/ Works Contract Tax Rs 563.85 Lacs (previous year Rs. 563.85 Lacs).

c) In respect of disputed Income Tax demands:

(i) Disputed by Company Rs. 999.12 Lacs (previous year Rs. 34.65 Lacs)

(i) Disputed by Income Tax Authorities NIL (previous year NIL)

d) Guarantees issued by the Company’s Bankers Rs. 30,429.67 Lacs (previous year Rs. 15,307.96 Lacs)

e) Liability for export obligation under Export Promotion Capital Goods Rs. 13,228.68 Lacs (previous year Rs. 13,995.99

Lacs).

f ) Sales Bills discounted under LC with Banks Rs. 1,841.38 Lacs (previous year Rs. 3,697.97 Lacs).

g) Corporate Bank Guarantees given on account of advance received from customers Rs. 733.57 Lacs (Previous Year

Rs. 118.81 Lacs) and on account of performance Rs. 998.99 Lacs (Previous Year Rs. 1,195.94 Lacs)

4. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 6,300.50 Lacs

(previous year Rs. 1,350.09 Lacs).

5. Remaining 100 FCCB bonds (of US$ 1,000 each) have been converted into 90,560 equity shares of Rs. 2/- each during

the year under review. The issue of 90,560 nos. of Equity Shares includes 60,373 nos. as fully paid Bonus Shares issued

in terms of the issue and in legal compliance of statutory enactments. With this conversion entire FCCB conversion

of US$ 9.00 Million stands fully converted.

6. Technical Know how fees paid to Overseas Collaborators in pursuance of different Technology Know how Agreements

during earlier years including current year has been treated as Deferred Revenue Expenditure, and to be written off over

a period of 6 years. In this account there was a balance of Rs 118.38 Lacs, out of which Rs 21.26 Lacs (previous year

Rs. 8.65 Lacs) has been charged to Profit & Loss Account.

7. Profit on sale of Investment shown under the head of other income in Profit & Loss account includes an amount of

Rs. 80.14 Lacs pertaining to profit on sale of investment in Shares of Power Build Elecon Gears Limited.


8. Sundry Debtors more than six months includes retention money amounting to Rs. 7,867.23 Lacs retained by various

customers against big turnkey contracts as per the terms of agreement and are receivable after satisfactory completion

of the respective contracts.

9. There are no Micro and Small Enterprise, to whom company owes dues, which are outstanding for more than 45 days as

at 31st March, 2008. This information as required to be disclosed under the Micro, Small and Medium Enterprise

Development Act (MSMED Act), 2006 has been determined to the extent such parties have been identified on the basis

of information available with the company.

10. Payments to Auditors includes the following amounts paid or adjusted as paid to them during the year.

(Rs. In Lacs)

In capacity of 2007-08 2006-07

A. As Auditor 7.00 7.00

B. As Advisor, in respect of :

1. Taxation Matters 2.86 1.68

2. Company Law Matters 0.60 1.15

C. In any other Capacity 4.00 3.00

D. Re-imbursement of Expenses 0.97 0.50

TOTAL 15.43 13.33

The above figures do not include Service Tax of Rs. 1.78 Lacs (Previous Year Rs. 1.03 Lacs)

Over & above the aforesaid payments, an amount of Rs. 1.88 Lacs (Previous Year Rs. 0.74 Lacs) has been paid to a firm in which

one of the partner of auditor’s firm is interested.

11. a) The sales are shown net of Sales Tax amounting to Rs. 2,253.49 Lacs.

b) The Sales figure includes Deemed Export Sales of Rs. 693.44 Lacs (previous year Rs. 583.78 Lacs). The Gross Export

Sales for the year is Rs. 3,703.30 Lacs (previous year Rs. 2,430.70 Lacs).

12. Managerial Remuneration

a) Managerial Remuneration under Section 198 of the Companies Act, 1956.

Sr. Particulars 2007 - 08 2006 - 07

No.

i) Remuneration 90.00 66.15

ii) Perquisite - 0.03

iii) Commission on Net Profit 297.00 284.00

iv) Contribution towards PF, 26.79 24.11

Gratuity & Superannuation

TOTAL 413.79 374.29

b) Computation of Net Profits in accordance with Section 309(5) of the Companies Act, 1956 :

(Rs. in Lacs)

Particulars 2007 - 2008 2006 - 2007

Profit as per Profit and Loss Account 9,867.91 8,440.75

Add : Managerial Remuneration : 413.79 374.29

Compensation for VRS/Gratuity - 229.77

Directors’ Fees 9.00 7.85

Total 10,290.70 9,052.66

Less : Capital Profit on Sales of Fixed Assets - 215.01

Capital Profit on Sales of Investment 91.44 -

10,199.26 8,837.65

(Rs. in Lacs)


13. Information about Business Segment Rs. in Lacs

2007 - 2008 2006 - 2007Segment Revenue

Material Handling Equipment 47,053.79 44,843.49

Transmission Equipment 38,909.68 31,099.11

Total 85,963.47 75,942.60

Less: Inter Segment Revenue 3,319.95 3,878.08

Net Sales / Income from Operation 82,643.52 72,064.52

Segment Profit & Loss Before Tax & Interest



Total 14,200.91 11,950.84

Less : a) Interest 2,742.66 1,936.35

b) Unallocated Corporate Expenses (net of un-allocable income) 1,590.34 1,573.74

Total Profit Before Tax 9,867.91 8,440.75

Capital Employed

1. a) Segmentwise Assets



b) Unallocated Assets - -

2. a) Segmentwise Liabilities



b) Unallocated Liabilities - -

3. a) Segmentwise Capital Employed



b) Unallocated Capital Employed - -

65,266.80 47,986.04Notes

a. Since, the figures of Alternate Energy Division (AED) are not reportable segment, as per the requirements of AS – 17,

they are not shown separately.

b. The Company has disclosed Business Segment as primary segment.

c. Segments have been identified and reported taking into account the nature of products and services, the differing risks

and returns, the organization structure and the internal financial reporting systems.

d. The Segment Revenue, Results, Assets and Liability include the respective amounts identifiable to each of the segment

and amounts allocated on a reasonable basis.

e. Inter Segment Transfer Pricing Policy – the Gear supplied to Material Handling Equipment Division is based on cost.

14. Deferred Taxation

Deferred Tax Assets and Liabilities are recognized as per Accounting Standard AS-22 on Accounting for Taxes on Income,

issued by the Institute of Chartered Accountants of India.

During the year 2007-08, the Deferred tax assets and liabilities comprise of tax effect of following timing differences :

(Rs. in Lacs)

2007 - 2008 2006 - 2007

Def. Tax Liability Def. Tax Assets Def. Tax Liability Def. Tax Assets

Difference between book & Tax W. D. V. 1,865.13 - 1,752.51 -

Disallowance under the Income Tax Act. - 23.68 - 75.56

Transitional Provision for Gratuity as per - 130.69 - -

provision of AS – 151,865.13 154.37 1,752.51 75.56

Net Deferred Tax Liability - 1,710.76 - 1,676.95

During the year the company has withdrawn Rs. 253.81 Lacs (Net of deferred tax of Rs. 130.69 Lacs) from General Reservetowards the transitional provision for Gratuity liability in accordance with the provisions of AS - 15.


16. Related party disclosure

Related Party disclosure as required by AS-18, are given below:

i) Relationship:

a) Subsidiary of the Company :

! NIL

b) Associates and Joint Ventures! Power Build Elecon Gears Limited! PWH Materials Handling Limited! Wizard Fincap Limited! Ringspann Elecon (I) Limited! Eimco Elecon (I) Limited

c) Individual having control/ significant influence! Shri Prayasvin B. Patel

d) Key management Personnel

! Shri Prayasvin B. Patel

15. Basic and Diluted Earning per share (EPS) computed in accordance with Accounting Standard (AS) 20

“Earning per Share”.

(Rs. in Lacs)

2007 - 2008 2006 - 2007

A) Net Profit for Basic Earnings Per Share as per P & L A/c.

- Before Extra Ordinary Items 6,720.42 5,720.08

- After Extra Ordinary Items 6,720.42 5,490.30

Adjustments for the purpose of Diluted EPS

- Interest on FCCB (Net of Tax) - 1.15

Net Profit for Diluted Earnings Per Share

- Before Extra Ordinary Items 6,720.42 5,721.23

- After Extra Ordinary Items 6,720.42 5,491.45

B) Weighted average number of equity shares :

" No. of Shares at the beginning of the year 309,23,650 85,616,745

" No. of Shares issued on conversion of FCCB of US$ 0.1 mn. 30,187 -

" No. of Shares issued on conversion of FCCB of US$ 7.9 mn. - 7,54,205

" No. of Shares on issue of Bonus shares 6,19,07,673 -

" Weighted average Shares for:

- Basic Earnings Per Share 92,793,466 89,991,510

- Diluted Earnings Per Share 92,793,466 90,080,583

C) Earning Per Share

" Before Extra Ordinary Item

- Basic (Rs.) 7.24 6.36

- Diluted (Rs.) 7.24 6.35

" After Extra Ordinary Item

- Basic (Rs.) 7.24 6.10

- Diluted (Rs.) 7.24 6.10

D) Face Value Per Share (Rs.) 2.00 2.00

The Earning Per Shares for the previous year has been recast to make it comparable with the Earnings per share of theyear under report.


e) Enterprises over which (c) or (d) above have significant influence

! Bipra Investments & Trusts Private Limited

! Devkishan Investment Private Limited

! K. B. Investments Private Limited

! Elecon Information Technology Limited

! Emtici Engineering Limited

! Prayas Engineering Ltd.

! Speciality Wood Pack Private Limited

! Power Build Limited

! Kirloskar Power Build Gears Limited

! Akaaish Mechatronics Limited

! Narmada Travels Limited

! Akaaish Printing & Stationery

! Elecon Australia Pty. Limited

! Elecon Africa Pty. Limited

! Elecon Singapore Pte. Limited

! Elecon Middle East FZCO

! Elecon Engineering (Suzhou) Co. Ltd., China

ii. The following transactions were carried out with the related parties in the ordinary course of business.

(Rs. in Lacs)

Sr. Nature of Transaction (a) (b) (e)

No. 2007 - 2006 - 2007 - 2006 - 2007 - 2006 -

2008 2007 2008 2007 2008 2007

1. Purchase of Material/fin. — — 697.89 549.38 6,999.18 6,389.87

Goods

2. Job work Income from — — 19.06 15.15 66.82 46.11

other Co.

3. Job work Expenses to — — 80.20 117.85 2,698.45 2,311.14

other Co.

4. Sale of Fin. Goods/ — — 514.59 191.10 948.98 —

Consumable Stores

5. Purchase of Fixed Assets — — — 200.00 — —

6. Sale of Fixed Assets — — — 2.83 — 14.78

7. Expenses Charged to — — 79.99 23.03 81.85 162.15

other Co.

8. Exp. Charged by other Co. — — 139.80 43.25 373.00 349.16

9. Sales Commission — — — — 3,362.02 2,968.17

10. Deposit/ Loan taken — — — — — —

11. Deposit/ Loan given — — — — 10.00 95.72

12. Int. on above Loan/ Deposit — — — — — 5.74

13. Subscribe to Share Capital. — — — — — —

14. Sale of Shares of Co. — — — — — —

15. Others — — 2.14 54.98 — 26.87

Sr. No. Nature of Transaction Transaction with (c) & (d)

2007 - 2008 2006 - 2007

1. Remuneration 413.79 374.29


16. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details

Registration No. 0 1 0 8 2 State Code 0 4

Balance Sheet Date 3 1 - 0 3 - 2 0 0 8Date Date Month Year

II. Capital raised during the year (Amount in Rs. Thousands)

Public Issue N I L Rights issue N I L

Bonus issue 1 2 3 8 1 5 Private placement 6 0

(Conversion of FCCB into Shares)

III. Position of mobilisation and deployment of funds (Amount in Rs. Thousands)

Total Liabilities 6 6 3 0 9 4 7 Total Assets 6 6 3 0 9 4 7

Sources of Funds

Paid-up Capital 1 8 5 7 2 3 Reserve & Surplus 2 1 8 1 5 3 9

Secured Loans 3 2 0 9 1 0 6 Un secured Loans 8 8 3 5 0 3

Deferred Tax Liability 1 7 1 0 7 6

Application of Funds

Net Fixed Assets 1 9 3 0 6 7 4 Investments 9 4 5 5 5

Net Current Assets 4 5 9 6 0 0 6 Misc. Expenditure 9 7 1 2

IV. Performance of the Company (Amount in Rs. Thousands)

Turnover 8 3 6 2 2 1 7 Total Expenditure 7 3 7 5 4 2 6

Profit/Loss Profit/Loss

Before Tax + 9 8 6 7 9 1 After Tax + 6 7 2 0 4 2

(Please tick Appropriate box + for Profit – for Loss)

Earning per Dividend

Share in Rs. 7 . 2 4 Rate % + 7 5

(Basic after extraordinary item)

V. Generic names of Three Principal Products / Services of the Company (As per monetary terms)

Item Code No. Product Descript

843139.01 ELEVATORS, CONVEYORS & MOVING MACHINERY (Conveying Equipments)

842299.00 GEARS (Reduction Gears)

847420.02 CRUSHERS (Crushers, Screens, Feeders)


18. Information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI to the

Companies Act, 1956.2007 - 2008 2006 - 2007

A) Turnover Unit / Value Unit / Value

(Certified by the Management) Quantity Rs. in Lacs Quantity Rs. in Lacs

" Conveying Equipments 1,064 16,970.12 1,004 16,690.00

Tonnes Tonnes

" Wagon Tippler & Dust Trapping 11 Nos. 4,441.11 16 Nos. 5,516.00

Equipments

" Crushers, Screens & Feeders 164.40 2,425.29 352 2,578.00

Tonnes Tonnes

" Specialised Conveying Equipment, 1,454.81 7,535.20 1,055 8,963.00

Stacker Reclaimers, Blender Tonnes Tonnes

Reclaimers, Rotary Disc Loaders

" Reduction Gears & Geared Motors 37,055 37,924.03 35,893 31,352.46

Nos. Nos.

" Wagon Marshalling Equipment 13.46 347.56 93 916.00

Tonnes Tonnes

" EOT & Goliath Cranes — — — —

" Wind Turbine Generators 6 Nos. 1,798.81 — —

" Axles 112 Nos. 253.12 38 Nos. 82.93

" Others — 1,372.34 — 548.15

TOTAL 73,067.58 66,646.54

2007 - 2008 2006 - 2007

B) Raw Materials Consumed Unit / Value Unit / Value

Quantity Rs. in Lacs Quantity Rs. in Lacs

" Iron & Steel 32,281 20,013.97 17,690 10,746.96Tonnes Tonnes

" Pipes & Tubes 97,177 1,625.85 136,863 1,065.39Mtrs. Mtrs.

" Forgings — 4,659.59 — 4,708.79

" Bearings 590,300 6,681.85 498,966 5,888.98Nos. Nos.

" Beltings 4,554 295.93 7,363 303.00Mtrs. Mtrs.

" Electricals — 922.97 — 1,000.89

" Castings 3,136 3,449.99 3,253 3,296.24Tonnes Tonnes

" Other Components — 14,796.06 — 17,742.78

TOTAL 52,446.21 44,753.03


C) Stocks

2007 - 2008 2006 - 2007

Opening stock Closing stock Opening stock Closing stock

Unit Value Unit Value Unit Value Unit Value

Nos. Rs. in Lacs Nos. Rs. in Lacs Nos. Rs. in Lacs Nos. Rs. in Lacs

Reduction Gears & 1,281 740.80 2,374 1,304.87 4,098 1,926.75 1,281 740.80

Geared motors

D) Capacity and Production 2007 - 2008 2006 - 2007

(Certified by the Management) Capacity* Capacity*

Unit Licensed Installed Actual Licensed Installed Actual

Produc Produc-

tion+ tion +

" Conveying Equipments Tonnes 28,000 15,000 1,064.33 28,000 15,000 1,004

" Wagon Tippler & Nos. 16 Sets 16 Sets 11 16 Sets 16 Sets 16

Dust Trapping Equipment each each each each

" Crushers, Screens & Feeders Tonnes 1,500 1,000 164.40 1,500 1,000 352

" Specialised Conveying

Equipment, Stacker Reclaimers,

Blender Reclaimers,

Rotary Disc Loaders etc. Tonnes 10,000 3,000 1,454.81 10,000 3,000 1,055

" Reduction Gears and Geared Motors Nos. 55,000 55,000 38,148 55,000 55,000 35,136

" Wagon Marshalling Equipment Tonnes 300 300 13.46 300 300 93

" EOT Cranes & Goliath Cranes Nos. 230 100 — 230 100 —

" Wind Turbine Generators Nos. 2,500 50 6 2,500 50 —

" Axles** Nos. 1,500 1,500 112 1,500 1,500 38

* As certified by the Management. @ For Captive consumption

+ As per DGTD return.

Rs. in Lacs

E) Value of Imports on C.I.F. basis 2007 - 2008 2006 - 2007

Raw Material 9,363.45 4,673.73

Stores and Spares 345.70 212.93

Capital Goods 3,678.64 1,938.52

F) Expenditure in Foreign Currency

Interest 240.09 188.82

Technical know how 75.11 8.65

Technical Consultancy Fees 35.36 —

Legal and Professional fees 24.98 7.95

Others 318.04 192.52

TOTAL 693.58 397.94


G) Value of Raw Materials consumed

2007 - 2008 2006 - 2007

Value % of Total Value % of Total

Rs. in Lacs Consum. Rs. in Lacs Consum.

Imported 9,209.55 18 6,484.25 15

Indigenous 43,236.66 82 38,268.78 85

TOTAL 52,446.21 100 44,753.03 100

H) Value of Stores and Spares Consumed

2007 - 2008 2006 - 2007

Value % of Total Value % of Total

Rs. in Lacs Consum. Rs. in Lacs Consum.

Imported 76.06 6 132.81 27

Indigenous 1,191.53 94 364.13 73

TOTAL 1,267.59 100 496.94 100

Rs. in Lacs

2007 - 2008 2006 - 2007

I) Amount remitted during the year in Foreign

Currency on account of Dividend NIL NIL

J) Earnings in Foreign Exchange

Export of goods on FOB Basis

" Reduction Gears 2,340.08 2,334.83

" Conveying Equipments 1,363.22 95.87

18. Figures of previous year are regrouped and recast wherever necessary.

19. Schedules 1 to 17 form an integral part of Balance Sheet and Profit & Loss Account.

Signature to Notes on Balance Sheet and Profit & Loss Account and Schedules 1 to 17.



THACKER BUTALA DESAIChartered Accountants P. B. Patel H. S. Parikh

Chairman and DirectorManaging Director

M. T. Desai Paresh M. ShuklaPartner Company SecretaryM. No. 30911

Place : Navsari Place : MumbaiDate : 27-05-2008 Date : 26-05-2008


N O T I C E

NOTICE IS HEREBY GIVEN THAT the Forty-Eighth Annual

General Meeting of members of Elecon Engineering Com-

pany Limited will be held at “ELECON” Hall, Vitthal

Udyognagar Industries Association,Near GIDC Office, GIDC,

Vitthal Udyognagar, Vallabh Vidyanagar – 388 120 Gujarat

on Tuesday, the 29th day of July, 2008 at 11.00 a. m. to

transact the following business :

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance

Sheet as at 31st March 2008 Profit & Loss Account

for the year ended on that date and the Report of

Board of Directors and Auditors thereon.

2. To declare Dividend on Equity Shares.

3. To appoint a Director in place of Shri Hasmukhlal S.

Parikh, who retires by rotation and being eligible,

offers himself for re-appointment.

4. To appoint a Director in place of Dr. A.C. Shah, who

retires by rotation and being eligible, offers himself

for re-appointment.

5. To consider and if thought fit, to pass with or without

modifications, the following resolution as an Ordinary

Resolution:

“RESOLVED THAT pursuant to the provisions of the

Companies Act, 1956 and other applicable

provisions, M/s. Thacker Butala Desai, Chartered

Accountants (Formerly known as M/s. Thakorebhai –

Shirish Desai & Butala, a division of Thacker – Butala

– Desai, Chartered Accountants), be and are hereby

appointed as Auditors of the Company to hold office

from the conclusion of this Annual General Meeting

until the conclusion of next Annual General Meeting

of the Company at such remuneration plus Service

tax at the applicable rate, from time to time, plus

traveling and out-of- pocket expenses incurred by

them for the purpose of audit of the Company’s

accounts, exclusive of any remuneration, fees or

charges payable to them for rendering any other

services that may be rendered by them to the

Company from time to time other than in the

capacity of Auditors, as may be fixed by the Chairman

and Managing Director of the Company.”

By order of Board of Directors

Registered office:

Anand Sojitra Road


Gujarat Paresh Shukla

Date : 26-05-2008 Company Secretary

NOTES

1. A member entitled to attend and vote at the meeting

is entitled to appoint a proxy to attend and vote instead

of himself. The proxy need not be a member.

2. The instruments appointing proxy should however be

deposited at the Registered Office of the Company

not less than 48 hours before the commencement of

the meeting.

3. Information under clause 49 of the listing agreement(s)

regarding re-appointment of Directors (Item No. 3 &

4) and explanatory statement pursuant to Section 173

(2) of the Companies Act, 1956 in respect of special

business (Item No. 6) are annexed hereto.

4. The Register of Members and Share Transfer books will

remain closed from Tuesday, 15th, July 2008 to Saturday,

19th, July 2008 (both days inclusive)

5. Shareholders seeking any information with regard to

accounts are requested to write to the Company at

least 10 days before the meeting so as to enable the

management to keep the information ready.

6. All documents referred to in the accompanying notice

and explanatory statement are open for inspection at

the registered office of Company on all working days

between 11.00 a.m. to 1.00 p.m. prior to date of Annual

General Meeting.

7. Members are requested to bring their copy of Annual

Report at the meeting. Spare copies will not be

available.

8. Members who have not encashed their dividend

warrants may approach the Company at its registered

office for revalidating the warrants or for obtaining

duplicate warrants.

9. The annual listing fees of all the stock exchanges where

Company’s shares are listed for the year 2008-2009

have been paid.

10. Members who hold the shares in dematerialised form

are requested to bring their Client ID and DP ID for

easier identification of attendance at the AGM.

11. Members holding the shares in physical mode are

requested to notify immediately for change of their

address and bank particulars to the Company or its

Registrar and Share Transfer Agent.

In case the shares are held in dematerialised form, then

information should be furnished directly to their

respective depository participant only.


12. Any request by share holders for change of bank

particulars after dispatch of dividend warrant should

be accompanied by copy of Client Master list showing

the changed bank details.

13. In terms of Section 109A of the Companies Act, 1956,

nomination facility is available to individual

shareholders. The shareholders who are desirous of

availing this facility, may kindly write to Company’s

Registrar and Share Transfer Agent, M/s. Intime

Spectrum Registry Ltd., 308, 1st Floor, Jaladhara

Complex, Opp. Manisha Society, Off. Old Padra Road,

Vasna Road, Vadodara – 390 015, for nomination form

quoting their folio number.

14. The payment of dividend on equity shares as

recommended by the Directors for the year ended

31st March, 2008 when declared at the meeting will

be paid :

(i) to those members whose names appear in the

Register of Members of the Company on

Tuesday, the 15th Day of July 2008.

(ii) in respect of shares held in electronics form, to

those “deemed members” whose names appear

on the statement of beneficial ownership

furnished by National Securities Depository

Limited (NSDL) and Central Depository Services

(India) Ltd, (CDSL) at the end of business hours

on Friday, the 18th July 2008.

15. Members are requested to notify change in address, if

any, to the Company’s Registrar and Share Transfer

Agent at the address mentioned herein above in Note

13 quoting their folio number.

16. The Company has designated an exclusive email ID

called [email protected] for Redressal of

shareholders’/investors’ complaints/grievances. Hence,

please write to us at [email protected]

By order of Board of Directors

Registered Office :

Anand-Sojitra Road

Vallabh Vidyanagar - 388 120

Gujarat

Paresh Shukla

Date : 26-05-2008 Company Secretary


Details of the Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting

(Pursuant to Clause 49 of the Listing Agreement)

Name of Director

Date of Birth

Date of Appointment

Expertise in specific

Functional areas

Shri H. S. Parikh

16-03-1927

29-06-1998

Senior Chartered Accountant with Accounting,

Finance & audit background.

He is partner in Parikh & Shah

Chartered Accountants, Mumbai

Dr. A. C. Shah

16-10-1932

29-06-1998

Economic, Banking, Finance & Ruler

Development.

He was ex-Chairman & Managing Director of

Bank of Baroda.

He was also appointed as Advisor to Unit Trust

of India for setting up of UTI Bank.

He has chaired several committees on

banking, amongst them, one being the RBI

Committee for functioning of Non-Banking

Financial Companies (NBFCs)

Qualifications

List of Public/Private Com-

panies in which outside Di-

rectorship held as on 31st

March, 2008.

B. Com (F.C.A.)

• Eimco Elecon (I) Limited

• The Supreme Industries Limited

• Simplex Castings Limited

• Samek Investments Private Limited

M. A., Ph. D (Economics)

• S. Kumar Nation wide Limited

• Adani Enterprises Limited

• Gold Creast Finance (India) Ltd.

• Gujarat Petrosynthesis Limited

• Benchmark Mf : Trustee Company

Private Limited

• Graphiti Multimedia Pvt. Ltd.

Chairman/Member of the

Committees of the Public

Companies on which he is

a Director as on 31st March

2008

• Supreme Industries LimitedAudit Committee - ChairmanRemuneration Committee – Chairman

• Simplex Castings LimitedAudit Committee - MemberShareholders/Grievance Committee –MemberRemuneration Committee – Member

• Eimco Elecon (I) LimitedAudit Committee - ChairmanRemuneration Committee - MemberInvestors Grievance Committee - Member.

• S. Kumars Nationwide Limited

Audit Committee - Chairman

• Adani Enterprises Limited

Audit Committee - Member

Shareholders/Grievance Committee –

Member

• Gujarat Petrosynthesis Limited

Remuneration Committee – Member


Proxy Form


Registered Office : Anand Sojitra Road, Vallabh Vidyanagar 388 120, Gujarat, India

Folio No. DP ID NO. Client ID No.

No. of Shares held

I/We

of member/members of the above

named Company hereby appoint Mr./Mrs.

of or failing

him/her, Mr./Mrs. of

as my/our proxy to vote for me/us and on my/our behalf at 48th Anuual Meeting of the Company to be held on

Tuesday, 29th day of July, 2008 at 11.00 a.m. or any adjournment thereof.

Address

This from is to be used in favour of/against* the Resolution. Unless otherwise instructed, the proxy will act as he

thinks fit.

* Please Strike out whichever is not desired.

Note : The proxy form duly signed across the revenue stamp of One Rupee should reach at the Company’s

Registered Office at least 48 hours before the date of the meeting.

affix

Rs. 1

Revenue

Stamp

Signature


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Always a step ahead in technology

ElEcon EnginEEring coMPAnY liMiTEDPost Box #6, Vallabh Vidyanagar 388 120, Gujarat, India. Phones: +91(2692) 237016, 236521, 236469 • Fax: +91(2692) 236457, 236527 www.elecon.com

Documents

48th Annual Report 2007-08 ELECON ENGINEERING ......Elecon Engineering Company Limited - Annual Report 2007-08 5five years at a glance Particulars 2007-08 2006-07 2005-06 2004-05 2003-04