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ECE Industries Ltd.

BSE: 532491 Sector: Engineering
NSE: ECEIND ISIN Code: INE588B01014
BSE 00:00 | 04 Mar ECE Industries Ltd
NSE 00:00 | 22 Jan 219.90 0.35
(0.16%)
OPEN

212.55

HIGH

230.00

LOW

212.55

OPEN 115.00
PREVIOUS CLOSE 125.00
VOLUME 700
52-Week high 125.00
52-Week low 0.00
P/E 2.39
Mkt Cap.(Rs cr) 97
Buy Price 117.00
Buy Qty 100.00
Sell Price 123.40
Sell Qty 10.00
OPEN 115.00
CLOSE 125.00
VOLUME 700
52-Week high 125.00
52-Week low 0.00
P/E 2.39
Mkt Cap.(Rs cr) 97
Buy Price 117.00
Buy Qty 100.00
Sell Price 123.40
Sell Qty 10.00

ECE Industries Ltd. (ECEIND) - Director Report

Company director report

TO

THE SHAREHOLDERS

Dear Shareholders

We have pleasure in presenting the Seventy Second Annual Report with Audited Accountsof the Company for the year ended 31st March 2018.

FINANCIAL RESULTS

(Rs. in Lakh)

Particulars 31.03.2018 31.03.2017
Turnover (Net of Excise Duty) 26002.52 26058.62
Profit/(Loss) before Depreciation Exceptional Items & Tax 5267.92 675.76
Gain from Exceptional items 1169.44 2251.97
6437.36 2927.73
Less: Depreciation 177.29 213.07
Profit/(Loss) before Tax 6260.07 2714.66
Provision for:
(i) Current Income Tax 365.08 592.93
(ii) Tax / MAT Charge / (Credit) for earlier years (73.92) -
(iii) Deferred Tax Charge/(Credit) 340.77 (569.27)
Profit for the year 5628.14 2691.00

IND AS - IFRS CONVERGED STANDARDS

Your Company has adopted Indian Accounting Standards ("IND-AS") with effectfrom 1st April 2017. Financial Statements for the year ended 31st March 2017 have beenre-stated to confirm to IND-AS. Notes to the financial statement provides furtherexplanation on the transition to the IND-AS. Your Company has shared all four quartersre-stated IND- AS Profit & Loss Statement with investors along with quarterly resultsfor comparisons. Your Company has accordingly prepared IND-AS financials for the yearended 31st March 2018 along with comparable figures as on 31st March 2017 and openingStatement of Assets and Liabilities as on 1st April 2016.

REVIEW OF PERFORMANCE AND OUTLOOK

India through reforms such as 'Power for all' is on the path of becoming major powernation among the developing economies. The government in transmission sector has decidedto increase its investment which result in high demand for Power and Distributiontransformers in near future. Your company focuses on quality manufacturing of transformersand expects to get more orders in coming years. Improve designs and cost reductiontechniques will help us to gain more in coming years.

Real estate reforms affordable housing infrastructure projects and high risebuildings are the key growth triggers in Elevator business. Adoption of global trendswhich include energy efficient safe and reliable equipment manufacturing by your companyhelp us to gain more market share.

DIVIDEND

We recommend payment of Dividend for the year 2017-18 @ Rs. 2.50 per share (25%) whichwill be paid after obtaining your approval in the Annual General Meeting.

SHARE CAPITAL

During the year ended 31st March 2018 there is no change in the issued and subscribedshare capital of your Company. The number of equity shares outstanding as on 31st March2018 are 7288645 of Rs.10/- each.

GOODS AND SERVICES TAX (GST)

The Goods and Services Tax (GST) is a landmark reform which will have a lasting impacton the economy and on businesses. Implementation of a well-designed GST model that appliesto the widest possible base at a low rate can provide stimulus to the business. YourCompany has successfully implemented and migrated to GST with effect from 1st July 2017and made the necessary changes in its tax application systems.

VOLUNTARY DELISTING

During the financial year 2016-17 your Company has applied to National Stock Exchangeof India Limited (NSE) for voluntary delisting of its equity shares in terms of SEBI(Delisting of Equity Shares) Regulations 2009. An exit opportunity to the publicshareholders has already been provided and shareholding of the promoter group has beenreached upto 90.23% of the total paid-up equity share capital of the Company as on 31stMarch 2017. The final application for delisting has already been filed by the Companywith NSE.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) Regulations 2015 is presented in a separatesection forming part of the Annual Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with Companies (Accounts) Rules 2014 are set out in a separate statementattached hereto and forming part of the report. (Annexure-I)

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to Corporate Governance and is fully compliantwith the conditions of Corporate Governance stipulated in SEBI (LODR) Regulations 2015. Aseparate section on compliance with the conditions of Corporate Governance and aCertificate from the firm of Practicing Company Secretaries dated 1st May 2018 in thisregard is annexed hereto and forms a part of the report.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to applicable provisions of the Companies Act 2013 ("the Act") readwith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 ("The Rules") all unpaid or unclaimed dividends arerequired to be transferred by the Company to the Investor Education and Protection Fund(IEPF) established by the Central Government after completion of seven years. Furtheraccording to the Rules the shares in respect of which dividend has not been paid orclaimed by the Members for seven consecutive years or more shall also be transferred tothe demat account created by the IEPF Authority. The Company had sent individual noticesand also advertised in the newspapers seeking action from the Members who have not claimedtheir dividends for seven consecutive years or more. Accordingly the Company hastransferred such unpaid or unclaimed dividends and corresponding shares upto the financialyear 2009-10.

Members/claimants whose shares unclaimed dividend have been transferred to the IEPFDemat Account or the Fund as the case may be may claim the shares or apply for refund bymaking an application to the IEPF Authority in Form IEPF-5 (available onhttp://www.iepf.gov.in ) along with requisite fee as decided by the IEPF Authority fromtime to time. The Member/claimant can file only one consolidated claim in a Financial Yearas per the IEPF Rules.

Members are requested to ensure that they claim the dividends and shares referredabove before they are transferred to the said Fund. Due dates for Transfer of UnclaimedDividend to IEPF are provided in the Notes to the Notice.

Details of shares/shareholders in respect of which dividend has not been claimed areprovided on our website. The shareholders are therefore requested to verify their recordsand claim their dividends of all the last seven years if not claimed.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

(including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees)

• Policy on Directors' Appointment

Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 and the SEBI (LODR) Regulations 2015 and good corporate practices.Emphasis is given to persons from diverse fields and professions.

• Policy on Remuneration

Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -

> Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen is industry driven in which it is operating taking into account the performanceleverage and factors such as to attract and retain quality talent.

> For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS

The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The result of the evaluation issatisfactory and adequate and meets the requirement of the Company.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in the aforesaid section.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 the Boardof Directors of your company state that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

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

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

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

(e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

During the year 2017-18 Mrs. Moulishree Gani Director of the Company is retiring byrotation and being eligible offer herself for re-appointment.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

There were six meetings of the Board of Directors and one meeting of the IndependentDirectors held during the year ended on 31st March 2018.

DETAILS OF COMMITTEE OF DIRECTORS

Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors and Stakeholders Relationship/Grievance Committee of Directors number ofmeetings held of each Committee during the financial year 2017-18 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report and forming part of the report.

The recommendation by the Audit Committee as and when made to Board has been acceptedby it.

KEY MANAGERIAL PERSONNEL

Your Company has designated Mr. Prakash Kumar Mohta the Managing Director Mr. RajatSharma CFO and Mr. Piyush Agarwal Company Secretary as the Key Managerial Personnel.

PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY

There is no transaction with Related Party which requires disclosure under Section134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014.

LOANS INVESTMENT AND GUARANTEES BY THE COMPANY

There is no loan given guarantee given or security provided by the Company to anyentity during the year ended 31st March 2018. Further the investments made by theCompany are within the limits and in conformity with the provisions as specified underSection 186 of the Companies Act 2013.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits from the public as well as employeesduring the financial year ended 31st March 2018.

RISK MANAGEMENT

Your Directors periodically discuss and monitors the risk management plans as well asevaluated various risks and that there is no element of risk identified that may threatenthe existence of the Company. There is an adequate risk management infrastructure in placecapable of addressing those risks.

A detailed report on significant risks and mitigation is forming part of Management'sDiscussion and Analysis. CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE

Your Company has constituted a Centralized Internal Complaints Committee in terms ofthe provisions of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year the Company does not fall in the ambit of the provisions of Section135 of Companies Act 2013 relating to applicability of Corporate Social Responsibility.

ANALYSIS OF REMUNERATION

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration) Rules 2014 adisclosure on remuneration related information of employees Key Managerial Personnel andDirectors is annexed herewith and forming part of the report. (Annexure - II)

PARTICULARS OF EMPLOYEES

As per the provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1)of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended the details of employees are enclosed as Annexure- III

STATUTORY AUDITORS

The auditors M/s. VSD & Associates Chartered Accountants were appointed earlieras the Statutory Auditors of the Company to hold office upto the conclusion of 73rd AnnualGeneral Meeting (AGM) of the Company subject to ratification by shareholders at every AGMon such remuneration to be decided and fixed by the Board of Directors of the Company. Noratification of their appointment is required as per notification dated May 7 2018 issuedby the Ministry of Corporate Affairs.

COST AUDITORS

Your Company has appointed M/s. K.L. Jaisingh & Co. Cost Accountants as the CostAuditors for conducting the audit of cost account records for the products PowerTransformers and Elevators for the financial year ended 31st March 2019.

SECRETARIAL AUDIT REPORT

A Secretarial Audit Report for the year ended 31st March 2018 in prescribed form dulyaudited by the Practicing Company Secretary M/s. PTM & Co. is annexed herewith andforming part of the report. (Annexure-IV)

INTERNAL AUDIT

The Company continued to engage reputed firms of Chartered Accountants as the internalauditors at its units. Their scope of work and plan for audit is discussed and reviewed bythe Audit Committee. The report submitted by them is regularly reviewed and suitablecorrective action taken on an ongoing basis to improve efficiency in operations.

INSURANCE

Adequate insurance cover has been taken for properties of the company includingbuildings plant and machineries and stocks against fire earthquake and other risks asconsidered necessary.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return isannexed herewith and forming part of the report. (Annexure - V)

ACKNOWLEDGEMENTS

Your Directors place on record their thanks for the dedicated services rendered by allthe employees of the company in its factories and offices and also acknowledge theco-operation assistance and support extended by the Company's bankers and stakeholders.

For and on Behalf of the Board of Directors

(Prakash Kumar Mohta) (Shiban Ganju)
Managing Director Director
DIN:00191299 DIN:03434994
Place : Kolkata
Dated : 22nd August 2018

Information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014.

A. Conservation of Energy

In Transformer manufacturing continue using improvised Vacuum Pumps and also byimproving degree of vacuum the total heating time is reduced resulting into good saving ofEnergy. Further by improving the efficiency of heat run test of transformer andconsequent reduction in time there has being appreciable saving of energy.

The Company is continuously engaged in the process of energy conservation not only inmanufacturing and manufacturing process but also promotion of elevators which are energyefficient. Gearless lifts which save considerable energy has been introduced in the marketfew years back. The range of capacity and speed has been extended further during the yearand several lifts are now running.

B. Technology Absorption

Efforts made in technology absorption as per Form-B are furnished below:

Form-B

(Form for disclosure of Particulars with respect of Technology Absorption)

1. Research and Development (RSiD)

In Design of Core Assembly of Transformers the Company has already adopted using thehigher grade CRGO material and also step lap construction which enabled to reduce CoreLoss in transformers. Further by providing tank shielding as per latest technology thestray losses are minimized thereby getting proper reduction in the total loss oftransformers.

Design & Development of lifts using energy efficient Permanent Magnet SynchronousMotor (Gearless Machines) which is the latest in technology of lifts was undertaken lasttwo year have been well absorbed in the market. Lifts with speeds of 1.75 mps have beencommissioned during the year. Design of 2 & 2.5mps speed lifts has been taken up andthese lifts are expected to be commissioned during the next year. Also design of low speedand high capacity Gearless Goods and Automobile lifts have been completed.

2. Technology Absorption Adaptation & Renovation

In transformer manufacturing instead of normal paper copper conductors we are nowusing Bunched Conductors and Continuously Transposed Conductors (CTC) for winding as perlatest technology for higher capacity transformers which enabled appreciable reduction inelectrical losses making our transformers more energy efficient and compact in size.

Machine room less lifts using Permanent Magnet Synchronous Lifts range of speed andcapacity has been extended. Lift control system using serial communication was completedand several lifts have been successfully commissioned.

A few of the Legacy control systems have been phased out and state of the art WVFtechnology in combination with new control systems has been introduced in the geared liftsegment.

Several lifts with older technology have been modernized / upgraded successfully andthe company is aggressively pursuing educating the customer in adopting new technologies.

The automatic door control system has been upgraded using a compact PMSM door motorwith WVF technology.

C. Foreign Exchange Earnings & Outgo

During the year under review foreign exchange earnings was Nil and foreign exchangeoutgo was Rs.398.61 lakh.