ECE Industries Ltd Directors Report

Dear Members,

Your directors have pleasure in presenting the 78^th (Seventy Eighth) Annual Report on the business and operations of the Company with audited financial statements for the financial year ended March 31, 2024.

FINANCIAL PERFORMENCE

(Amount in Lakh)

Particulars	31.03.2024	31.03.2023
Revenue from Operations	71,409.86	58,244.51
Other Income	2,870.89	2,268.33
Total Income	74,280.75	60,512.84
Less: Total Expenses before Depreciation, Tax and Other Amortization	68,990.78	56,613.52
Profit/Loss from before Depreciation, Tax and Exceptional Income	5,289.97	3,899.32
Less: Depreciation and Amortization Expenses	469.52	401.05
Profit/Loss before exceptional items and Tax	4,820.45	3,498.27
Exceptional Items	-	(948.44)
Profit/Loss after exceptional items and Tax	4,820.45	4,446.71
Tax Expenses
i) Current Income Tax	926.34	537.73
ii) Current tax for earlier years	-	(0.40)
iii) Deferred Tax Charge/(Credit)	1,058.59	147.12
Profit/Loss for the year	2,835.52	3,762.25
Other Comprehensive Income for the year (Net of Tax)	135.55	209.33
Total Comprehensive Income for the year	2,971.07	3,971.59
Earning per equity share	67.74	70.01

IND AS IFRS CONVERGED STANDARDS

Your Company has already adopted Indian Accounting Standards (“IND-AS”) prescribed by the Institute of Chartered Accountants of India (ICAI) with effect from 1st April, 2017. Your Company has accordingly prepared IND-AS financials for the year ended 31 ^st March, 2024 along with comparable figures as on 31^st March, 2023.

HIGHLIGHTS AND STATE OF COMPANYS AFFAIRS AND OPERATIONS

The turnover for the current year is INR 71,409.86 as compared to the Previous Year INR 58,244.51. The total Other Comprehensive Income for the year ended on 31^st March, 2024 is INR 2971.07 as compared to Previous year INR 3,971.59.

During the Financial Year 2023-24, your Company has managed the affairs in a fair and transparent manner and there was no change in the business of the Company.

THE AMOUNTS, IF ANY, WHICH IT PROPOSES TO CARRY TO ANY RESERVES

During the year under review, the Company has decided not to transfer any amount to any specific Reserve.

PARTICULARS OF HOLDING/SUBSIDIARY/ASSOCIATE/JOINT VENTURES COMPANIES

The Company have two wholly owned subsidiary viz. ECE Elevators Limited and ECE Transformers Limited incorporated on 23 ^rd February, 2022 and 26 ^th February, 2022 respectively, The details are attached as statement in the prescribed Form AOC-1 annexed herewith at Annexure-I. There has been no material change in the nature of the business of subsidiaries.

SUBSIDIARY COMPANY

1. ECE Elevators Limited

The Company deals in the business of manufacturing of elevators, elevator components, escalators, travelators and moving walkways including its maintenance and installations.

In the year under review, the Company has not generated any revenue from its main business activity.

2. ECE Transformers Limited

The Company deals in the business of manufacturing of of iron and steel founders and manufacturers; mechanical, electrical and g eneral engineers and contractors; manufacturers of and dealers in electric, magnetic, galvanic, and other apparatus; iron and street converters, tool-makers, brass founders, plate-makers, metal workers, boiler-makers, manufacturers of steel-casting and manufacturers including maintenance of all kinds of electrical and electronic goods such as transformers & its equipments, refrigerators, motors, fans, measuring instruments, insulations, switchgears, power plants, domestic, and industrial equipments.

In the year under review, the Company has not generated any revenue from its main business activity.

CONSOLIDATED FINANCIAL STATEMENTS

The statement as required under Section 129 of the Companies Act, 2013, in respect of the subsidiaries of the Company viz. ECE Elevators Limited and ECE Transformers Limited are annexed and forms an integral part of this Report. Consolidated Financial Statements prepared in accordance with Indian Accounting Standards (“IND-AS”) prescribed by the Institute of Chartered Accountants of India (ICAI), form part of the Annual Report and Accounts.

DIVIDEND

The Board of Directors of your Company has recommended a final dividend of INR 15/- per share (i.e., @ 150%) on 37,81,845 Equity Shares of INR 10/- each. The dividend proposal is subject to the approval of members at the ensuing Annual General Meeting.

SHARE CAPITAL

a) The Authorized Share Capital of the Company as on 31^st March, 2024 is INR 15,00,00,000/- (Rupees Fifteen Crore only) divided into 1,43,00,000 Equity Shares of INR 10/- each and 7,00,000 Preference Shares of INR 10/- each. b) The Issued Capital of the Company as on 31^st March, 2024 is INR 3,78,18,450/- (Rupees Three Crore Seventy Eight Lakhs Eighteen Thousand Four Hundred Fifty only) divided into 37,81,845 Equity Shares of INR 10/- each (excluding forfeited Shares)

c) The Subscribed and Paid up Capital of the Company as on 31^st March, 2024 is INR 3,78,18,450/- (Rupees Three Crore Seventy Eight Lakhs Eighteen Thousand Four Hundred Fifty only) divided into 37,81,845 Equity Shares of INR 10/- each.

During the financial year under review, there were following changes in the capital structure of the Company.

A. Change in authorized, Issued, Subscribed and Paid-up share capital:

The Subscribed and Paid-up Share Capital of the Company has been decreased to 3,78,18,450/- (Rupees Three Crore Seventy Eight Lakhs Eighteen Thousand Four Hundred Fifty only) divided into 37,81,845 Equity Shares of INR 10/- each pursuant to buyback of 12,60,604 (Twelve Lakh Sixty Thousand Six Hundred Four) fully paid-up equity shares of face value INR 10/- each at a premium of INR 165/- aggregating to a price of INR 175/- per equity share.

B. Equity shares with differential rights:

During the financial year, the Company has not issued any equity share with differential rights.

C. Buy Back of Securities:

During the financial year, the Company bought back 12,60,604 (Twelve Lakh Sixty Thousand Six Hundred Four) fully paid-up equity shares of face value INR 10/- each (representing 25% of total number of the total outstanding equity shares of the Company through shareholders approval) at a price of INR 175/- (Rupees One Hundred and Seventy Five only) per equity share (“the Buy-back offer price”) aggregating to INR 22,06,05,700/- (Rupees Twenty Two Crore Six Lakh Five Thousand Seven Hundred only). ,

D. Sweat Equity:

During the financial year, the Company has not issued any Sweat Equity Shares.

E. Bonus Shares:

During the financial year, the Company has not issued any Bonus Shares.

F. Stock Option Plan:

During the financial year, the Company has not given any Stock Options.

CHANGE IN REGISTERED OFFICE OF THE COMPANY

During the Financial Year, the company has not changed its Registered office.

SCHEME OF ARRANGEMENT

During the Financial Year, the company has not entered into Scheme of Arrangement.

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

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts)

Rules, 2014 are set out in a separate statement attached hereto and forming part of the report as

Annexure-II.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to applicable provisions of the Companies Act, 2013 (“the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“The Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government, after completion of seven years. Therefore, the Company is required to transfer the unpaid or unclaimed dividends pertaining to Financial Year 2016-17 to the IEPF authority

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the Members for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. However, all the shares on which dividend remained unpaid or unclaimed of the F.Y. 2016-17 are not in existence on the date of this report, as the same was redeemed by the Company after converting them into the Preference Shares in pursuance of the Para 11(iv) of the Scheme of Amalgamation attached as annexure to Honble National Company Law Tribunal (“NCLT”) order dated 12th January, 2022, in the matter of Scheme of Arrangement entered between Kumar Metals Pvt Ltd (“transferor Company”) and ECE Industries Ltd (“transferee Company”) for (a) Amalgamation of Transferor and Transferee Company; and (b) Re-organization of Capital of Transferee Company.

Therefore, the Company is not required to comply with requirements pertaining to the transfer of Shares to the IEPF authority in accordance with the provisions of Rule 6(5) and 6(8) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

The details of the nodal officer appointed by the Company under the provisions of IEPF Rules are available on the website of the Company at www.eceindustriesltd.com.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Pursuant to the provisions of Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy of the Company on Directors appointment and remuneration, including the criteria for determining qualification, positive attributes, independence of directors and other matters like Board Diversity are given on the website of the Company at www.eceindustriesltd.com. Salient features of the policy:

Policy on Directors Appointment

Policy on Directors appointment is to follow the criteria as laid down under the Companies Act, 2013 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 of the Company is that

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

For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS

COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made there under.

STATEMENT ON OPINION OF BOARD OF DIRECTORS WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE OF INDEPENDENT DIRECTORS APPOINTED DURING THE FINANCIAL YEAR 2023-24

During the year under review, No Independent Director was appointed on the Board of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

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

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

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

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

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

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

NATURE OF BUSINESS

There has been no change in the nature of business of your Company during the year under review.

DIRECTORS / KEY MANAGERIAL PERSONNEL- APPOINTMENT, RE-APPOINTMENT & RESIGNATION

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Sakate Khaitan (DIN: 01248200), Non-Executive Director of the Company retires by rotation and being eligible, offers himself for re-appointment.

Further, the Board of Directors namely Mr. Basant Kumar Daga & Mr. Anant Suresh Jatia resigned from their Directorship.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

There were 6 (Six) meetings of the Board of Directors were held i.e., on 22.04.2023, 09.06.2023, 30.08.2023, 06.12.2023. 02.02.2024 and 16.03.2024 and 1 (One) meeting of the Independent Directors held on 14.03.2024 during the year ended on 31st March, 2024.

DETAILS OF COMMITTEE OF DIRECTORS

The Company has duly constituted the Audit Committee, Nomination and Remuneration Committee and CSR Committee of Directors in terms of the provisions of Companies Act, 2013. During the financial year 2023-24, the desired number of meeting of the Committee(s) were held and attended by each member of the Committee as required under the Companies Act, 2013 and rules made thereunder.

The recommendation by the Audit Committee and Nomination and Remuneration Committee and CSR Committee when made to Board has been accepted by it.

The Composition of Audit Committee is set out below:

Name of the Member	Category
Mr. Mahendra Kumar Jajoo (Chairman of the Committee)	Independent Director
Mr. Yogesh D. Korani- Member	Independent Director
Mr. Prakash Kumar Mohta	Managing Director

The Composition of Nomination & Remuneration Committee is set out below:

Name of the Member	Category
Mr. Mahendra Kumar Jajoo (Chairman of the Committee)	Independent Director
Mr. Yogesh D. Korani- Member	Independent Director
Mr. Sakate Khaitan	Director

The Composition of CSR Committee is set out below:

Name of the Member	Category
Mr. Prakash Kumar Mohta	Managing Director
Mr. Sakate Khaitan	Director
Mr. Yogesh Dahyalal Korani	Independent Director

KEY MANAGERIAL PERSONNEL

Your Company has designated Mr. Prakash Kumar Mohta (DIN: 00191299), as the Managing Director and Mr. Rajat Sharma, CFO as the Key Managerial Personnel of the Company.

PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY

All the related party transactions for the year under review are entered on arms length basis and in the ordinary course of business under Section 188(1) of the Companies Act, 2013. There is no transaction with Related Party which requires disclosure under Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014. The details of the transactions with related party are provided in schedules/ notes to the financial statements under Note No. 41 (iii) forming part of the Annual Report.

LOANS, INVESTMENT AND GUARANTEES BY THE COMPANY

There is no loan given, guarantee given or security provided by the Company to any entity during the year ended 31st March, 2024. Further, the investments made by the Company are within the limits and in conformity with the provisions as specified under Section 186 of the Companies Act, 2013. The details of the investments are provided in schedules/ notes to the financial statements under Note No. 2 forming part of the Annual Report.

DEPOSITS

Your Company has not accepted any deposits from the public as well as employees during the financial year ended 31st March, 2024.

RISK MANAGEMENT

Your Directors periodically discuss and monitors the risk management plans as well as evaluated various risks and that there is no element of risk identified that may threaten the existence of the Company. There is an adequate risk management infrastructure in place capable of addressing those risks. The risk management policy is available on the website of the Company i.e., www.eceindustriesltd.com.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company is committed to the highest standards of ethical, moral and legal business conduct. Accordingly, Vigil Mechanism/Whistle Blower Policy was formulated which provides a robust framework for dealing with genuine concerns & grievances. The Policy provides for adequate safeguard against victimization of employees who avail the mechanism and also provides direct access to the Chairperson of the Audit Committee. Specifically, employees can raise concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against your Company. Further, the company also place its Vigil Mechanism Policy on its website www.eceindustriesltd.com.

DISCLOSURE ABOUT RECEIPT OF ANY COMMISSION BY MD/WTD FROM A COMPANY AND ALSO RECEIVING COMMISSION/RENUMERATION FROM ITS SUBSIDIARY AS PER SECTION 197(14) OF COMPANIES ACT, 2013: Nil

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY

As per the requirement of “The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act)” and Rules made there-under, your Company has constituted Centralized Internal Complaint Committees (ICC). The Company has zero tolerance for sexual harassment at workplace. While maintaining the highest governance norms, the Company has also appointed external independent persons, who have requisite experience in handling such matters. During the year, the Company has not received any complaint of sexual harassment.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has the policy of giving back to the society and in line with the requirement of Section 135 of the Companies Act, 2013, has carried a host of CSR activities this year. The CSR Policy of the Company is available on its website www.eceindustriesltd.com. For implementation of CSR activities, a robust system of reporting and monitoring has been put in place to ensure effective implementation of planned CSR initiatives. During the year, the Company has obligation to spent INR 52.08 Lakh on CSR activities. The annual report of CSR annexed herewith at Annexure-III to this report.

Subsequently, following the issuance of MCA General Circular No. 14/2021 on August 25, 2021, the disclosure of expenditures falling short of the CSR obligation is mandatory.

During the financial year, the company failed to spend the total amount required under its CSR obligation. This was due to the companys inability to identify suitable opportunities for deploying the unutilized CSR funds. However, the CSR obligation for the financial year 2023-2024, amounting to INR 52.08 lakh, has been spent within 6 months from the closure of the financial year.

PARTICULARS OF EMPLOYEES

During the financial year under review, none of the Companys employees was in receipt of remuneration as prescribed under Section 197 of the Companies Act, 2013 read with the Rule 5(2) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended and hence no particulars are required to be disclosed in this report.

STATUTORY AUDITORS AND REPORT

The Company auditors M/s VSD & Associates, Chartered Accountants (Firm Regn. No.008723N), were appointed as the Statutory Auditors of the Company to hold office upto the conclusion of 78 ^th Annual General Meeting (AGM) of the company at a remuneration to be fixed by the Board. No ratification of their appointment is required as per notification dated May 7, 2018 issued by the Ministry of Corporate Affairs.

Audit Reports on Standalone and Consolidated Financial Statements are self- explanatory and do not call for any further comments under Section 134 of the Companies Act, 2013. The Auditors Report to the shareholders for the year under review does not contain any adverse qualification.

However, M/s. Kumar Bhagwad & Co (FRN:0014509N), Chartered Accountants, being eligible to offer themselves for appointment at this Annual General Meeting for a period of 5 (Five) years as the Statutory Auditors of the Company pursuant to provisions of Sections 139 of Companies Act, 2013 and the Companies (Audit and Auditors} Rules, 2014, be and is hereby appointed and shall hold office from the conclusion of this Annual General Meeting (AGM) up to the conclusion of AGM to be held in the year 2029.

COST AUDITORS AND REPORT

The Board of Directors has appointed M/s K.L. Jaisingh & Co., Cost Accountants as the Cost Auditors for conducting the audit of cost account records made and maintained by the Company for the financial year 2024-25 pursuant to Section 148 of the Companies Act, 2013.

In accordance with the provisions of section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditor for FY 2024-25 is required to be ratified by the members; the Board recommends the same for approval by members at the ensuing AGM.

Cost Audit Report of the Company are self-explanatory and do not call for any further comments from the management of the Company.

SECRETARIAL AND AUDIT REPOT

The Board of Directors has appointed M/s NJ & Associates, as the Secretarial Auditor of the Company for conducting the audit of Secretarial records made and maintained by the Company for the financial year 2024-25 pursuant to Section 204 of the Companies Act, 2013.

The secretarial Audit Report for the year ended 31^st March, 2024 in prescribed form duly audited by the Practicing Company Secretary, M/s. NJ & Associates is annexed herewith as Annexure-IV and forming part of the Directors report. The Secretarial Audit Report in Form MR-3 to the shareholders for the year under review does not contain any adverse qualification. No frauds have been reported by the Secretarial Auditors under Section 204 of the Companies Act, 2013 requiring disclosure in the Boards Report.

INTERNAL AUDIT AND REPORT

The Company continued to engage M/s K.N. Gutgutia & Co., Chartered Accountants as its Internal auditors at its units. Their scope of work and plan for audit is discussed and reviewed by the Audit Committee. The report submitted by them is regularly reviewed and suitable corrective action taken on an ongoing basis to improve efficiency in operations.

REPORTING OF FRAUDS BY AUDITORS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Board under Section143(12) of Act and Rules framed thereunder.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with the provisions of the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India. The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectively.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

INSURANCE

Adequate insurance cover has been taken for properties of the company including buildings, plant and machineries and stocks against fire, earthquake and other risks as considered necessary.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014, the extract of annual return has been placed on the website of the Company i.e., www.eceindustriesltd.com.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016, DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

No application is made nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF: Not Applicable

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED AFTER THE DATE OF BALANCE SHEET

The major events occurred after the date of balance sheet of the Company for the year ended on March 31, 2024, are as follows:

The Board of Directors of the Company in its Board Meeting dated 19th day of June, 2024 proposed to shift its Registered Office from the “UNION TERRITORY OF DELHI” to the “STATE OF UTTAR

PRADESH”.

The application for such change is pending before the Regional Director, Northern Region for approval.

ACKNOWLEDGEMENTS

Your Directors place on record their thanks for the dedicated services rendered by all the employees of the company in its factories and offices and also acknowledge the co-operation, assistance and support extended by the Companys bankers and stakeholders.

For and on Behalf of the Board of Directors

	Sd/-
(Prakash Kumar Mohta)	(Sakate Khaitan)
Managing Director	Director
DIN: 00191299	DIN: 01248200

 

Place : New Delhi

Date : 05.09.2024