ECE Industries Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Main segments of companys activities relate to manufacture and sale of Equipments for Power & Distribution Transformers and Elevators.

OPPORTUNITIES & THREATS

There is strong need to revamp and revitalize the power and distribution system of the Country. Poor realization from State Electricity Boards and increasing cost of finance and raw-material resulting in lower income.

SEGMENTWISE PERFORMANCE

The business segments of the company i.e. "Equipment for Power Transmission and Distribution" & "Elevator" accounted for 76.41% and 23.59% of the gross turnover respectively in the year 2017-18.

A. Business Segment - Equipment for Power Transmission and Distribution

Particulars 2017-18 2016-17 % Change

(Negative)/Positive

Turnover 20039.06 22732.07 (11.85)
Operating Profit/(Loss)

(after depreciation and before interest & exceptional items)

1019.34 65.09 1466.05

B. Business Segment - Elevators :Rs :n :a:(h)

Particulars 2017-18 2016-17 % Change

(Negative)/Positive

Turnover 6540.07 6270.37 4.30
Operating Profit/(Loss)

(after depreciation and before interest 8i exceptional items)

(312.66) (639.22) 51.09

OUTLOOK

Your company focuses on quality manufacturing of transformers and expects to get more orders in coming years.

Improve designs and cost reduction techniques will help us to gain more in coming years. Adoption of global trends

in Elevator business which include energy efficient safe and reliable equipment manufacturing by your company help

us to gain more market share

RISKS AND CONCERNS

1. Fixed Assets of the Company i.e. Buildings, Plant and Machinery, Office equipments, Furniture 8i Fixtures and Vehicles are insured with a view to minimize the risk in case of fire and loss of profit.

2. Current Assets of the company i.e. Raw Materials, Work-in-Progress, Stores 8i Spares and Finished Goods are insured to minimize the risk.

3. The Company has taken cash/cash in transit insurance cover to safeguard itself from any theft/ burglary.

4. The Company has also kept its activities reasonably diversified in terms of products and locations with a view to minimize the risk.

5. The Company is having in-house Research 8i Development abilities to cater the needs of technological changes in the market and to upgrade its products.

6. To plug the operational hazards, the Company has vast base of suppliers to procure continuous supplies of raw material from its local and foreign suppliers.

7. The Company hedges its risk of fluctuation in foreign currency while taking loan from banks.

8. Keeping in view the size and infrastructure of the company, it is felt that the existing arrangement of Risk Management is reasonably sufficient.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

ECE has an internal control system that is geared towards achieving efficiency in operations, optimum utilization of resources, effecting monitoring and compliance with all applicable laws and regulations. A program of internal audit by an Independent firm of Chartered Accountants is reviewed by Management and documented policies, guidelines and procedures, supplements the internal control systems that are designed to ensure reliability of financial and all other records to prepare financial statements and other data and to maintain accountability of assets.

FINANCIAL REVIEW AND ANALYSIS

(Rs. in Lakh)

Highlights 2017-18 2016-17
Turnover (Net of Excise Duty) 26002.52 26058.62
Profit / (Loss) before Depreciation, Exceptional Items and Tax 5267.92 675.76
Gain from Exceptional Items 1169.44 2251.97
Depreciation 177.29 213.07
Profit before Tax 6260.07 2714.66
Income Tax including Deferred Tax (Charge) / Credit 49.61 23.66
Net Profit 5628.14 2691.00

OTHER INCOME

Other Income mainly consists of interest, dividend, investment profits, royalty, rent & license fee and liabilities / bad debts / provisions written back etc.

HUMAN RESOURCES DEVELOPMENT

ECE recognizes the need of training & development on regular basis. Continuous learning by individuals is necessary for the organization. It provides opportunity, appropriate working environment and scope to develop the younger

For and on Behalf of the Board of Directors

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