Elecon Engineering Co.Ltd. — Annual Report 2020

Jun 26, 2020

26th June, 2020

To,

The Manager (Listing),	The Manager (Listing),
The BSE Ltd.	National Stock Exchange of India Ltd.
Mumbai	Mumbai
Company's Scrip Code: 505700	Company's Scrip Code: ELECON

Sub Outcome of Board Meeting held on Friday, 26th June, 2020

Ref Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Dear Sir/Madam,

In terms of the subject referred regulation, this is to inform you that the Board of Directors of the Company has, at its meeting held today i.e. 26th June, 2020, inter alia, taken following decisions:

• 1. Approved the Audited Financial Results (Standalone & Consolidated) alongwith Auditors' Report of the Company for the year ended on 3151 March, 2020 as per Regulations 33 and 52 & 54 of the SEBI (LODR) Regulations, 2015 and also the Declaration with respect to Audit Report with unmodified opinion on the said financials.
• 1. The Board of Directors has recommended no .dividend for the financial year 2019-20.

The meeting commenced at 12:00 Noon and concluded at '-f : ltCp.m ..

You are requested to take the same on your records.

Thanking you. '" .. . . ,. ~ --. -..,.·-. · .II

Yours faithfully, For Elecon Engineering Company Limited,

~ Isarani

Bharti Company Secretary & Compliance Officer

Encl.: As above

Gearing industries. Gearing economies.

ELECON ENGINEERING COMPANY LIMITED, Post Box# 6, Vallabh Vidyanagar- 388 120, Gujarat, India. Tel.: +91 - 2692 · 238701, 238702. Fax: +91 - 2692 · 227484. CIN L29100GJ1960PLC001082 I infogear@elecon.com I www.elecon.com

Reason forchangeviz.appointment,resignation,removal, death or otherwise;	Not Applicable
Date of Re-appointment	1st July, 2020
Term of Appointment	Re-appointed as Chairman and Managing Director andKMP of the Company for a term of 3 years with effect from1st July, 2020
Brief Profile	Shri Prayasvin B. Patel has 44 years of experience inEngineering industry. He started his career as Sales Directorof Prayas Casting Pvt. Ltd., Vallabh Vidyanagar. Thereafter,he joined Elecon Engineering Company Limited as JointManaging Director on 1st July, 1983. From 1st July, 1993; hehas taken over the responsibility of the Managing Directorof the Company, and in the year 2006 took charge of theoverall responsibilities of Elecon Group of Industries as theChairman and Managing Director. Today, he is a GroupChairman which has a turnover of approximately Rs. 2000Crores.
	He is actively involved in the decision making for varioustechnical and commercial matters including the marketingfor both Gear and MHE Divisions. Elecon has become thesupplier of choice for various sectors like Thermal PowerStations, Fertilizer Plants, Steel Plants, Coal HandlingPlants, Lignite and Iron Ore Mines, Cement Industries,Chemicals, Plastic Extrusion, Rubber and Sugar Industry.His ability to catch the wave of the market and his visionaryapproach led Elecon to make its first internationalacquisition by acquiring Benzlers-Radicon Group from theDavid Brown Gear Systems.
Disclosureofrelationships	Wife's Brother of Shri Pradip M. Patel, Director
between Directors (in case of
appointment as a Director)

Mining Cement Industry

Sr.No.	Particulars
1	Revenue from operations
2	Other income
3	Income (1 +2)
4	Cost of materials consumed	2,112.69	13,145.15		32,022.29	44,860.62
	Changes in inventories of finished goods and work-in-progress	4,506.98	(5,045.26)		646.51	(2,421.86)
	Manufacturing expenses and erection charges	5,878.95	4,695.12	4,429.79	19,170.08	21,039.89
	(d) Employee benefits expense	1,987.29	1,764.32	1,627.27	7,145.43	7,286.99
	(e) Finance costs	1,640.41	1,824.63	1,984.40	6,963.25	6,408.15
	(f) Depreciation and amortisation expense	1,170.58	1,064.04	1,086.83	4,369 33	4,357.75
	(g) Other expenses	4,396,26	3,732.87	3,687,52	14,059,72	13,431 .66
	Total Expenses
5	Profit before tax (3-4)
	6 Tax expenses
	Current tax				118.13
	of tax relating to earlier periods					345,40
	Deferred tax charge I (credit)		191.27	568.55	(19.07)	1,232.97
	Deferred tax (credit)-one time (Refer note 6 (a) & (b))				(7,213.16)
7	Net Profit for the period after tax (5-6)		434.42	237.63	7,241.89	1,207.29
	8 Other comprehensive income/(expenses) (net of tax)
	Items that will not be reclassified to profit or loss		(4,14)		(29.53)
	Tax relating to items that will not be reclassified to profit or loss
	9 Total comprehensive income for the period (7+8)
	10 Paid-up equity share capital(Face value per equity share INR 2/-)	2,244.00	2,244,00	2,244.00	2,244 00	2,244,00
	11 Debt capital#				10,000.00	10,000.00
	12 Other equity (including debenture redemption reserve)				75,981 .93	71,757.37
	13 Debenture redemption reserve				2,500.00	2,500,00
	14 Earnings per share (of INR 2/- each) (not annualised) (In Rupees)
	(a) Basic	5.54	0.39	0.21	6.45	1,08
	(b) Diluted	5.54	0.39	0 21	6.45	1.08
	15 Debt Equity Ratio				0 50	0,64
	16 Debt Service Coverage Ratio				1 51	0,85
	17 Interest ServiceRatio				1.02	1.55
#	Represents Non convertible debentures
	Ratios have been computed as follows :a) Debt Equity Ratio : Debt I EquityDebt: Non-current borrowings + Current maturity of non-current borrowings+ Current borrowings + Lease liabilitiesEquity : Equity share capital + Other equity
	b) Debt Service Coverage Ratio: (EBIT-Tax expenses) I Debt to be servicedEBIT : Profit Before Tax+ Interest on Debt
	Debt to be serviced _:_ln:erest ~n Debt : Sch~~uled principal repayment of non-current borrowings +Current maturity of lease liabilities
	c) Interest Service/ Interest on Debt
	J. · ,;-·····'

Cranes Rubber Industry Marine Industry Plastic Industry Power Industry Steel Industry Sugar Industry

Gearing industries. Gearing economies .

ELECON ENGINEERING COMPANY LIMITED, Post Box# 6, Vallabh Vidyanagar- 388 120, Gujarat, India. Tel.: +91 -2692-238701, 238702. Fax: +91 -2692-227484.

CIN L29100GJ1960PLC001082 1 infogear@elecon.com I www.elecon.com

Notes:

• The above audited standalone financial results for the quarter and year ended 31 March 2020 were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on 26 June 2020. The statutory auditors have expressed an unqualified opinion on these standalone financial results.The audit report has been filed with the stock exchange and is available on the Company's website.
• 2 Figures for the quarter ended 31 March, 2020 and corresponding quarter ended in the previous year as reported in these standalone financial results are the balancing figures in respect of the full financial year and the published year-to-date figures up to the end of third quarter of the relevant financial year. Also the figures upto the end of third quarter had only been reviewed and not subjected to audit.
• 3 During the year ended 31 March, 2020, a Scheme of Amalgamation ('the Scheme') between the Company and its wholly owned subsidiary Elecon Transmission International Limited, Mauritius ('ETIL') was sanctioned by the National Company Law Tribunal, Ahmedabad Bench, with an appointed date of 1 April, 2019. Consequently, impact of the Scheme has been given from appointed date (i.e. 1 April, 2019) in the aforesaid audited standalone financial results. As per the Scheme, all assets and liabilities of ETIL as at appointed date (i.e. 1 April 2019} have been recorded at their carrying values determined in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (lnd AS) prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted Tn India and the difference between net assets and equity, after eliminating inter-company balances, has been adjusted to 'Other Equity'.
• 4 As per lnd AS 108 'Operating Segments', the Company has reported segment information under two segments i.e. 1) Material Handling Equipment and 2) Transmission Equipment.
• 5 Effective 1 April, 2019, the Company has adopted lnd AS 116- 'Leases' using modified retrospective approach. This has resulted in recognition of right of use assets equal to lease liabilities as on 1 April, 2019. The adoption of the standard did not have any material impact on the audited standalone financial results.
• 6 a) On 20 September 2019, vide the Taxation Laws (Amendment) Ordinance 2019 ('the Ordinance'), the Government of India inserted Section 115BAA in the Income Tax Act, 1961 which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective 1 April 2019, subject to certain conditions. Tax expenses for the year ended 31 March 2020 reflect the impact of expected adoption of this option by the Company basis Management's internal evaluation,

b) At the time of transition to Indian Accounting Standards (lnd AS) with effect from April 01 , 2015, the Company had recognised the fair value of its land parcels in the books of account and had also recognised corresponding deferred tax liability considering the future tax obligation that would arise upon sale of land in the expected manner in future (sale of land parcels on a piecemeal basis, delinked from the business).

During the year, the Company has reassessed the expected manner of recovery of the carrying value of all land parcels and has now determined that a number of such land parcels would not be delinked from the business as they either form an integral part of the business operations or are proximate to the factory premises. Consequently, the Company currently expects that in the event of disposal of most of the land parcels in future, these would only be disposed off along with the business and in a slump sale arrangement thereby resulting in no temporary difference between the accounting position and position as per tax laws upon such future disposal

Basis the above, deferred tax liability recognised on such land parcels at the time of transition to lnd AS, has been reversed in the Statement of Profit and Loss during the year,

7 Consequent to the COVID-19 pandemic throughout the world, nationwide lockdown was implemented from 25th March 2020 and accordingly operations of the Company were suspended from that date. The Company is involved in design and manufacturing of Material Handling Equipment and Industrial Gears and is also involved in providing erection and commissioning solutions for its products. The Company restarted operations with minimum capacity from 23rd April 2020 with a gradual increase in the level of operations since then considering social distancing norms and material availability.

Management's early assessment indicates that possible delays in collections from customers along with temporary reduction in demand for the Company's products could put the liquidity position under further stress. However, the management expects the situation to normalize in the second half of the current fiscal year and has taken specific steps by way of negotiating better payment terms for new orders and cost rationalization initiatives to manage the cash flows.

Management believes that no precise estimation can be made about the actual impact of the pandemic on the overall economy. specific industry sectors and the Company itself at this stage but is closely monitoring the emerging situation.

ve be·en regrouped I reclassified wherever necessary.

' .. ··

AUDITED STANDALONE SEGMENT WISE REVENUE, RESULTS, ASSETS AND LIABILITIES FOR THE QUARTER AND YEAR ENDED 31 MARCH 2020
		Quarter Ended			{Amounts in INR LakhsYear ended
	31 Mar 2020	31 Dec 2019	31 Mar 2019	31 Mar 2020	31 Mar 2019
Particulars	_[Audited)	{Unaudited)	Audited	Audited)	(AUdltecl)
	·Refer Note 2		Refer Note 2
1. SEGMENT REVENUE
(a} Material Handling Equipment	3,107.93	6.497.46	8,656.17	22,897.76	34,513.11
(b) Transmission Equipment	17.061.26	14.976.47	16,556.42	60,676.06	61,033.01
Net Sales/Income from Operations	20 169.19	21 473.93	25 212.59	83 573.82	95 546.12
2. SEGMENT RESULTS PROFIT {+)/LOSS(-) BEFORE TAX & INTEREST
(a} Material Handling Equipment	(2,243.50}	111 .53	(662.07}	(1,862.92}	(396.87)
(b) Transmission Equipment	2.486.72	2,599.11	3,500.02	9.470.54	10.453.11
Total	243.22	2 710.64	2 837.95	7.607.62	10 056.24
Less:
il Finance Cost	1,640.41	1,824.63	1,984.40	6,963.25	6.408.15
ii} Other unallocated corporate overheads	438.57	312.23	177.06	1,212.00	1,149.16
iii} Unallocable income	(472.36}	(51.91}	(129.69}	(695.42}	(286.73}
Total Profit before Tax	1 363.40	625.69	806.18	127.79	2,785.66
3. SEGMENT ASSETS
(a} Material Handling Equipment	48,300.02	52,796.18	60,765.51	48,300.02	60,765.51
(b) Transmission Equipment	116,397.78	128.423.88	115,340.44	116,397.78	115,340 44
(c) Unallocated	18,938.41	15,649.70	18,605.52	18,938.41	18,605.52
Total	183 636.21	196 869.76	194-711.47	183.636.21	194711.47
4. SEGMENT LIABILITIES
(a} Material Handling Equipment	36,824 88	36,218.69	40.408.66	36,824.88	40.408.66
(b) Transmission Equipment	65,686.26	78,379.83	70.491 68	65,686.26	70.491 .68
(c) Unallocated	2,899.14	10,257.30	9,809.76	2,899.14	9,809.76
Total	105 410.28	124 855.82	i20 710.10	105,410.28	120710.10
5. NET CAPITAL EMPLOYED	78 225.93	72 013.94	74 001.37	78 225.93	74.001 .37

' $~~Co~ ~~~half Bo~ ofDirectors, v.v. ~~ !J )fF1\L ~ v ") NGAR "3 eO ~~ ~ . . ·. V, . p. raya svi ~ - , ''"-""-~ ~• •.•• ;1o Chairman & Managing Director '··· . . . ·. DIN : 00037394

Place : Vallabh Vidyanagar

Date : 26 June, 2020

STANDALONE STATEMENT OF ASSETS AND LIABILITIES

			(Amounts in INR Lakhs)
Particulars		As at31 Mar 2020(Audited)	As at31 Mar 2019(Audited)
ASSETS
I. Non-current assets
(a) Property, plant and equipment		58,469.68	67,136.28
(b) Right-of-use assets		3,914.42
(c) Capital work-in-progress		18.17	460.93
(d) Investment properties		2,559.99	273.37
(e) Intangible assets		426.76	612.99
(f) Intangible assets under development			24.50
(g) Financial assets
(i) Investments		11 ,915.16	16,022.18
(ii) Loans		6.53	52.43
(iii) Other financial assets		581.69	59.45
(h) Non-current tax assets (net)		2,336.29	2,000.14
(i) Other non-current assets		1,244.90	2,331 .90
		81,473.59	88,974.17
II. Current assets
(a) Inventories		22,835.51	23,882.56
(b) Financial assets
(i) Trade receivables		55,899.34	54,669.81
(ii) Cash and cash equivalents		521.80	352.75
(iii) Bank balance other than (ii) above		1,952.43	455.91
(iv) Loans		1,391 .70	484.06
(v) Other financial assets		15,469.44	19,629.23
(c) Other current assets		4,092.40	6,262.98
		102,162.62	105,737.30
	Total Assets	183,636.21	194,711.47
EQUITY AND LIABILITIES
Equity
(a) Equity share capital		2,244.00	2,244.00
(b) Other equity		75,981 .93	71,757.37
		78,225.93	74,001.37
LIABILITIES
I. Non-current liabilities
(a) Financial liabilities
(i) Borrowings		13,130.67	21,694.00
(ii) Lease liabilities		2,718.52
(b) Provisions		199.32	450.79
(c) Deferred tax liabilities (net)		769.12	8,011.67
		16,817.63	30,156.46
II. Current liabilities
(a) Financial liabilities
(i) Borrowings		20,388.89	23,429.46
(ii) Lease liabilities		969.03
(iii) Trade payables
Total outstanding dues of micro and small enterprises		8,191 .05	7,791.33
Total outstanding dues of other than micro and small enterprises		37,619.26	26,436.68
(iv) Other financial liabilities		5,310.31	17,949.48
(b) Other current liabilities		12,162.28	11,650.50
(c) Provisions		2,139.02	1,601.51
(d) Current tax liabilities (net)		1,812.81	1,694.68
		88,592.65	90,553.64
	Total Liabilities	105,410.28	120,710.10
	Total Equity and Liabilities		194.711.47
	'";•

Place : Vallabh Vidyanagar Date : 26 June, 2020

Chairman & Managing DlrectG DIN : 00037394

ELECON ENGINEERING COMPANY LIMITED

STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2020

		(Amounts in INR Lakhs)
Particulars	Year ended	Year ended
	31 Mar 2020	31 Mar 2019
	(Audited)	(Audited)
Cash flow from operating activities
Profit before Tax	127.79	2,785.66
Adjustments for:
(i) Depreciation and amortisation expense	4,369.33	4,357.75
(ii) Finance costs	6,963.25	6,408.15
(iii) (Gain)/loss on fair valuation of investment	81 .19	17.13
(iv) (Gain)/loss on sale of property plant and equipment (net)		(32.68)
(v) Loss on assets sold/discarded (net)	81 .61
(vi) Interest income	(249.90)	(702.75)
(vii) Dividend income	(67.60)	(48,28)
(viii) Bad debts written off	3,136.74	3,685.91
(ix) Sundry balances written off		746.62
(x) Unrealised exchange loss/(gain)	396.54	(1 ,32)
(xi) Provision for contractualliabilities,warranty and others	494.88	1,091 ,91
(xii) Reversal of provision for onerous contract	(89.52)	(955.77)
(viii) Balances written back		(1 ,090.73)
(xiv) Excess provision on doubtful debts written back	(2,861 .73)	(3,306.73)
	12,382.58	12,954.87
Working Capital Adjustments
(lncrease)/decrease in trade receivables	(1,446.491	6,509.09
Decrease/(increase) in inventories	1,047.05	(3,817.93)
Decrease/(increase) in financial assets	3,182.93	(9,268.50)
Decrease in other current and non-current assets	3,176.23	921.16
Increase/( decrease) in trade payables	11 ,062.49	(1 ,660.08)
Increase/( decrease) in provisions, current and non-current liabilities	191.20	(4,665.34)
(Decrease)/increase in other financial liabilities	(12,253.94)	6,372.18
Cash generated from operations	17,342.05	7,345.45
Taxes paid (net of refunds)	(293.18)	(243.95)
Net cash generated from operating activities (A)	17,048.87	7 101.50
Cash flow from investing activities
Payments for purchase of property, plant and equipment	(1,238.47)	(1 ,437.45)
Proceeds from sale of property, plant and equipment	36.32	100.57
Interest received	259.76	702.75
Dividend received	67.60	48.28
Bank balances not considered as cash and cash equivalent (net)	(984.13)	1,946.69
Other bank balances acquired pursuant to merger	423.65
Proceeds from redemption of investments	139.21
	(1,296.06)	1,360.84

ELECON ENGINEERING COMPANY LIMITED

STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2020

		(Amounts in INR Lakhs)
Particulars	Year ended	Year ended
	31 Mar 2020	31 Mar 2019
	(Audited)	(Audited)
Cash flow from financing activities
Proceeds from non current borrowings		9,974 ,57
Repayment of borrowings (net) (Note 3)	(12,043.92)	(12,260. 76)
Proceeds from financing arrangements	4,199.15
Repayment against financing arrangements	(570.64)
Finance cost paid	(6,839.98)	(6,384.56)
Dividend paid (including dividend distribution tax)	(290.98)	(270.53)
Principal payment of lease liabilities	(37.39)
Net cash (used in) financing activities (C)	(15,583.76)	(8,941.30)
Net (decrease) I increase in cash and cash equivalents (A+B+C)	169.05	(478.95)
Cash and cash equivalents at 1 April	352.75	631.70
Cash and cash equivalents as at Balance Sheet date	521.80	352.75
Components of cash & cash equivalents :
Cash on hand	0.26	0.02
Balances with banks
-In current accounts	521 .54	352.73
	521.80	352.75

Notes:

1, Cash and cash equivalents includes bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

2 The above Statement of Cash Flow has been prepared under the "Indirect Method" as set out in Indian Accounting Standard (lnd AS 7) - Statement of Cash Flows.

1. In accordance with para 22 of lnd AS 7 - Statement of Cash Flows, cash flows from current borrowings have been reported on net basis since these being working capital facilities, the maturities are short.

2. Movement in financial liabilities and financial assets arising from financing activities:

Particulars	Borrowings	Dividends paid(includingtaxes)	Finance costs
Balance at the beginning of the year/period	47,410.54		211.72
Proceeds from borrowings
Repayment of borrowings	(12,043,92)
Dividends paid (including taxes)		(290.96)
Interest paid			(6,639.96)
Net cash outflows	35,366.62	(290.98}	{6,628.26)
Charge to statement of profit and loss			6,963 25
Foreign exchange fluctuation
Balance at the Balance Sheet date	35,366.62		334.99

' .... ' .. .... , Prayasvin Pate Chairman & Managing Director DIN : 00037394

Place : Vallabh Vidyanagar Date : 26 June, 2020

Chartered Accountants

303, 3rd Floor Ocean Building, Beside Center Square Mall, Opp. Vadodara Central Mall, Dr. Vikram Sarabhai Marg, Vadodara 390023, India

Telephone +91 (265) 619 4200

Independent Auditors' Report

To the Board of Directors of Elecon Engineering Company Limited

Report on the audit of the Standalone Annual Financial Results

Opinion

We have audited the accompanying standalone annual financial results of Elecon Engineering Company Limited (hereinafter referred to as the "Company"') for the year ended 31 March 2020, attached herewith, being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,20 I 5, as amended ("Listing Regulations").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone annual financial results:

• a. are presented in accordance with the requirements of Regulation 33 of the Listing Regulations in this regard; and
• b. give a true and fair view in conformity with the recognition and measurement principles laid down in the applicable Indian Accounting Standards, and other accounting principles generally accepted in India, of the net profit and other comprehensive income and other financial information for the year ended 31 March 2020.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results section of our report. We are independent of the Company, in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that arc relevant to our audit of the financial statements under the provisions ofthe Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our opinion on the standalone annual financial results.

B S R & Co (a partnership firm with Registration No. BA61223) converted into B S R & Co. LLP (a Limited Liability, Partnership with LLP Registration No. AAB.S181) with effect from October 14, 2013

Registered Office: 5th Aoor, lodha Excelus Apollo Mills Compound N. M. Joshi Marg, Mahalaxmi Mumbai - 400 011. India

Independent Auditors' Report on Standalone Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Management's and Board of Directors' Responsibilities for the Standalone Annual Financial Results

These standalone annual financial results have been prepared on the basis of the standalone annual financial statements.

The Company's Management and the Board of Directors are responsible for the preparation and presentation ofthese standalone annual t1nancial results that give a true and fair view of the net profit and other comprehensive income and other financial information in accordance with the recognition and measurement principles laid down in Indian Accounting Standards prescribed under Section 133 of the Act and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone annual financial results that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone annual financial results, the Management and the Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone annual financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone annual financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone annual financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act, we are also responsible for expressing our opinion through a separate report on the complete set of financial statements on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

Independent Auditors' Report on Standalone Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results (Continued)

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial results made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the appropriateness of this assumption. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone annual financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone annual financial results, including the disclosures, and whether the standalone annual financial results represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Other Matters

The standalone annual financial results include the results for the quarter ended 31 March 2020 being the balancing figure between the audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the current financial year which were subject to limited review by us.

ForB S R & Co. LLP Chartered Accountants Firm's Registration No. 10 1248W /W -100022

Rupen Shah Partner Membership No. 116240

Place: Vallabh Vidyanagar Date: 26 June 2020 ICAI UDIN: 20116240AAAABR5185

Sr.No.	Particulars1 Revenue from operations2 Olher income (Refer note 1 0)3 Total Income (1+2)4 Expenses(a) Cosl of materials consumed(b) Changes in inventories of finished goods and work-in-progress(c) Manufacturing expenses and erection charges(d) Employee benefits expense(e) Finance costs(f) Depreciation and amortisation expense~1 Other expensesTotal Expenses5 Profit before share In profit of associate and tax (3-4)6 Share in orofit of associate (net of tax)7 Profit before tax (5+6)	31 Mar2020(Audited)Refer Note 226,849 38565226 905.905,886.104,050,785,923.443,418 811,878.971,603,094,743 7627,504.95(599.05)	Quarter Ended31 Dec 2019(Unaudited)28.209,82332.0228,541.8416,181.50(4,772,81)4,790 623,432 151,983511,251 964,575 31	31 Mar 2019(Audited) ReferNote232.795 4673.8232.869.2813,738 612,174.414,517.863,202.062,179 841,174 684,354 88	Year Ended31 Mar 2020(Audited)108.846 49784 95109 631.4444,479_51653.0719,433.3213,391 687,703 525,325 81	31 Mar 2019(Audited)122.484 436,556 39129 040.8257,821 .86(1,310.11)21,366.4713,887.317,297.10
						4,789.25
					16,851 ,18	16,749.01
			27,442.24	31,342.34	107,838.09	120,600.89
			1,099.60	1,526.94	1,793.35	8,439.93
		19.56	47.67	131.27	15769	385.89
		(579.49)	1.147.27	1,658.21	1,951.04	8.825.82
	8 Tax expenses
	Curren! tax	104 72	3218	138 69	216 73	300 82
	Adjustrnant of tax relating to earlier periods	-		(0.42)	-	344.98
	Dtalerred tax charqe I (credit)	1491 53)	187.70	506.51	(22.68)	1,16910
	Deferred tax (credit)-one time (Refer note 6 (a) & (b))	(7.21316)	-		(7.213.16)
	9 Net Profit for the period after tax (7-8)	7,020.48	927.39	1,013.43	8,970.15	7,010.92
	10 Non-controlling interest	-		-
	11 Net Profit after tax and non controlling interest (9-10)	7,020.48	927.39	1,013.43	8,970.15	7,010.92
	12 Other comprehensive lncome/(expenses) (net of tax)(i) Items that will not be reclassifed to profit or loss	(733.11)	(4.14)	(49129)	(745,52)	(478.14)
	Tax relating to items that will not be reclassified to profit or loss	15031	146	1194	154.65	7.50
	(ii) Items that will be reclassified to profit or loss	470.26	363,49	(109 66)	504,20	(350.51)
	13 Total comprehensive Income/( expenses) for the period (11+12)	6,907.94	1,288.20	424.42	8,883.48	6,189.77
	14 Paid-up equity share capital
	(Face Value per equity share INR 2/-)	2,244 00	2,244.00	2,244.00	2,244 00	2,244.00
	15 Debt capital #				10.000 00	10.000 00
	16 other equity (including debenture redemption reserve)				83,175 38	74,562 44
	17 Debenture redemption reserve				2,500,00	2,500,00
	18 Earnings per share (of INR 21- each) (not annualised) (In Rupees)
	(a) Basic	625	0 83	0.90	7.99	625
	(b) Diluted	625	0 83	0 90	7.99	6 25
	19 Debt Eouitv Ratio				057	0.71
	20 Deb! Service Coveraqe Ratio				1 55	2 92
	21 Interest Service Co/eraoe Rallo				1.29	3.22
	# Represents Non convertible debentures
	Ratios have been computed as follows:
	a) Debt Equity Ratio : Debt/ Equity
	Debt: Non-current borrowings + Current maturity of non-current borrowings + Current borrowings + Lease liabilities
	Equity : Equity share capital + Other equity
	b) Debt Service Coverage Ratio : (EBIT-Tax expenses) I Debt to be serviced
	EBIT : Profit Before Tax+ Interest on Debt
	Debt to be serviced : Interest on Debt+ Scheduled principal repay!flnt of no-current bor:rowi.~gs + Current maturity of lease liabilities		""'
	. .c) Interest Service Coverage Ratio : EBIT /Interest on Debt	~'.			-

ELECON ENGINEERING COMPANY LIMITED, Post Box# 6, Vallabh Vidyanagar- 388 120, Gujarat, India. Tel.: +91- 2692-238701, 238702. Fax: +91 - 2692-227484. CIN L29100GJ1960PLC001082 1 infogear@elecon.com I www.elecon.com

Cranes Rubber Industry Marine Industry Plastic Industry Power Industry Steel Industry Sugar Industry Mining Cement Industry Gearing industries. Gearing economies.

Notes:

• The above audited consolidated financial results for the quarter and year ended 31 March 2020 were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on 26 June 2020, The statutory auditors have expressed an unqualified opinion on these consolidated financial results The audit report has been filed with the stock exchange and is available on the Company's website
• Figures for the quarter ended 31 March, 2020 and corresponding quarter ended in the previous year as reported in these consolidated financial results are the balancing figures in respect of the full financial year and the published year-to-date figures up to the end of third quarter of the relevant financial year Also the figures upto the end of third quarter had only been reviewed and not subjected to audit
• 3 During the year ended 31 March, 2020, a Scheme of Amalgamation ('the Scheme') between the Holding Company and its wholly owned subsidiary Elecon Transmisslon International Limited, Mauritius ('ETIL') was sanctioned by the National Company Law Tribunal, Ahmedabad Bench, with an appointed date of 1 April, 2019 Consequently, impact of the Scheme has been given from appointed date (i.e. 1 April, 2019) in the aforesaid audited consolidated financial results. As per the Scheme, all assets and llabllilies of ETIL as at appointed date (i e. 1 April 2019) have been recorded at their carrying values detemnined in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (lnd AS) prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India and the difference between net assets and equity, after eliminating inter-company balances, has been adjusted to 'Other Equity'.
• 4 As per lnd AS 108 'Operating Segments', the Group has reported segment infomnation under two segments i e. 1) Material Handling Equipment and 2) Transmission Equipment
• 5 Effective 1 April, 2019, the Company has adopted lnd AS 116 'Leases' using modified retrospective approach This has resulted in recognition of right of use assets equal to lease liabilities as on 1 April, 2019 The adoption of the standard did not have any material impact on the audited consolidated financial results,
• 6 a) On 20 September 2019, vide the Taxation Laws (Amendment) Ordinance 2019 ('the Ordinance'), the Government of India inserted Section 115BAA in the Income Tax Act, 1961 which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective 1 April2019, subject to certain conditions. Tax expenses fa the year ended 31 March 2020 refiect the impact of expected adoption of this option by the Holding Company basis Management's internal evaluation.

b) At the time of transition to Indian Accounting Standards (lnd AS) with effect from April 01, 2015, the Holding Company had recognised the fair value of its land parcels in lh~ books of account and had also recognised corresponding deferred tax liability considering the future tax obligation that would arise upon sale of land in the expected manner In future (sale of land parcels on a piecemeal basis, delinked from the business).

During the year, the Holding Company has reassessed llle expected manner of recovery of the carrying value of all land parcels and has now deternllned that a number of such land parcels would no.l be de linked from lhe business as they either fomn an integral part ot the us~s operations or are pro.x1mate to the ractory premises. Consequently. the Holding Company currently expects that in the event of disposal of most of the land parcels in future. these would only be disposed off along with the business and in a slump sale arrangement thereby resulting in no temporary difference between the accounting position and position as per tax laws upon such future disposal

Basis the above, deferred tax liability recognised on such land parcels at the time or transition to lnd AS, has been reversed in the Statement of Profit and Loss during the year

7 Consequent to the COVID-19 pandemic throughout the world, nationwide Jockdown was implemented from 25th March 2020 and accordingly operations of the Holding Company were suspended from that date The Holding Company is involved in design and manufacturing of Material Handling Equipment and Industrial Gears and is also involved in providing erection and commissioning solutions for its products~ The Holding Company restarted operations with minimum capacity from 23rd Apnl 2020 with a gradual increase in the level or operations since then considering social distancing norms and material availability.

Management's eariy assessment indicates that possible delays in collections from customers along with temporary reduction in demand for the Holding Company's products could put the liquidity position under further stress However, the management expects the situation to normalize in the second half of the current fiscal year and has taken specific steps by way of negotiating better payment temns for new orders and cost rationalization initiatives to manage the cash fiows

Management believes that no precise estimation can be made about the actual impact of the pandemic on the overall economy, specific industry sectors and the Company ltsott at this stage but is closely monitoring the emerging situation,

• 8 These audited consolidated financial results have been prepared in accordance with lnd AS 110 "Consolidated Financial Statements" and tnd AS 28 "Investments in Assoqate$ and Joint Ventures" Business combinations are accounted in accordance with lnd AS 103 "Business Combinations" Any goodwill arising on business combinations is no I amortised but tested for impaimnent annually,
• 9 Other comprehensive income mainly comprises of remeasurement of defined benefit p1a~ qn~ exchange differt:nc~s ~translation of financial statements of foreign operations
• 10 'Other income' for year ended 31 March 2019 includes INR 3,670.33 Lakhs of profit on sale of i erty by-an overseas subsidiary,
• 11c

--· ._,

		Quarter Ended		Year Ended	(Amounts in INR LakhS)Year Ended
	31 Mar 2020	31 Dec 2019	31 Mar 2019	31 Mar 2020	31 Mar 2019
Particulars	(Audited)	(Unaudited)	(Audited) Refer	(Audited)	(Audited)
	Refer Note 2		Note 2
1. SEGMENT REVENUE
(a) Material Handling Equipment	3,107 93	6,497 46	8,65617	22.897.76	34,513.11
(b) Transmission Equipment	23,741 45	21.712.36	24.139 29	85.948 73	87.971 .32
Net Sales/Income from Ooerations	26 849.38	28.209.82	32 795.46	108.846.49	122.484.43
2. SEGMENT RESULTS(PROFIT)(+)/LOSS(-) BEFORE TAX & INTEREST FROM EACHSEGMENT
(a) Material Handling Equipment	(2,243.50)	11153	(662 07)	(1,862 92)	(396.87)
(b) Transmission Equipment	4.14841	2,930 00	4,497,75	12,340 14	16,645.26
Total	1.904.91	3.041.53	3 835.68	10.477.22	16.248.39
Less:
i) Finance cost	1.878.97	1.983.51	2.179 84	7.703 52	7.297.10
ii) Other unallocated corporate overheads	780 38	10 34	251 33	1,29168	718,26
iii) Unallocable income	(174 95)	(99 59)	(253 70)	(469 02)	(592.79)
Total Profit before tax;	579.49	1147.27	1 65821	1 951.04	8.825.82
3. SEGMENT ASSETS
(a) Material Handling Equipment	48.300 02	52.796 18	60.765.51	48.300.02	60.765 51
(b) Transmission Equipment	157,848.06	168.677.51	148,155.17	157,848 06	148.155,17
(c) Unallocated	7.350.23	3,324,08	8.02868	7.350.23	8.028.68
Total	213.498.31	224 797.77	216.949.36	213.498.31	216.949.3&
4. SEGMENT LIABILITIES
(a) Material Handling Equipment	36,824 88	36,218.69	40,408 66	36,824 88	40,408,66
(b) Transmission Equipment	88,330 71	99,743 05	89,862 06	88.330.71	89.862.06
(c) Unallocated	2.923.34	10.324.58	9.872,20	2.923.34	9.872.20
Total	128 078.93	146.286.32	140.142.92	128 078.93	140 142.92
5.NET CAPITAL EMPLOYED	85,419.38	78,511.45	76,806.44	85,419.38	76,806.44

AUDITED CONSOLIDATED SEGMENT WISE REVENUE, RESULTS, ASSETS AND LIABILITIES FOR THE QUARTER AND YEAR ENDED 31 MARCH 2020

Place : Vallabh Vidyanagar Date : 26 June, 2020

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(Amounts in INR Lakhs)
Particulars	As at	As at
	31 Mar 2020	31 Mar 2019
	(Audited)	(Audited)
ASSETS
I. Non-current assets
(a) Property, plant and equipment	58,952.82	67,768.66
(b) Right-of-use assets	6,539.90	-
(c) Capital work-in-progress	40.50	523.36
{d) Investment properties	2,559.99	273.37
(e) Goodwill	9,890.03	9,618.55
(f) Other intangible assets	1.952.41	2,223.31
(g) Intangible assets under development	-	24.50
(h) Financial assets
(i) Investments	5,254.19	5,397.95
(ii) Loans	6.53	52.43
(iii) Other financial assets	581 .69	59.46
(i) Deferred tax assets (net)	561 .25	443.33
Ul Non-current tax assets (net)	2,336.29	2,000.14
(k) Other non-current assets	1 244.90	2.331 .89
	89.920.50	90 716.95
II. Current assets
(a) Inventories	30,655.12	31,922.56
(b) Financial assets
(i) Trade receivables	61,207.21	59,281 .37
(ii) Cash and cash equivalents	7,728.06	5,604.25
(iii) Bank balances other than (ii) above	3,020.18	1,954.73
(iv) Loans	578.95	484.06
(v) Other financial assets	15,478.56	19,637.63
(c) Other current assets	4,909.73	7,347.81
	123 577.81	126 232-41
Total Assets	213 498.31	216 949.36
	2,244.00	2,244.00
	83.175.38	74.562.44
	85 419.38	76 806.44
(a) Financial liabilities
(i) Borrowings	14,643.16	24,385.65
(ii) Lease liabilities	4,854.61	-
(b) Provisions	6,266.94	5,640.47
(c) Deferred tax liabilities (net)	793 32	8,074.10
(d) Other non-current liabilities	5,58	26.24
	26 563.61	38 126.46
(a) Financial liabilities
(i) Borrowings	25,514.08	28,143.24
(ii) Lease Liabilities	1.485.52	-
(iii) Trade payables
-Total outstanding dues of micro and small enterprises-Total outstanding dues of creditors other than micro and small enterprises	8,191 .05	7,791.33
(iv) Other financial liabilities	43,734 86	32,310.32
	5,310.32	17,949.48
(b) Other current liabilities	13,209.19	12,453.46
(c) Provisions	2,257.49	1,673 95
(d) Current tax liabilities (net)	1,8 12.8 1	1 694.68
	101 515.31	102 016.46
Total Liabilities	128,078.93	140,142.92
EQUITY AND LIABILITIESEquity(a) Equity share capital(b) Other equityLIABILITIESI. Non-current liabilitiesII. Current liabilitiesTotal Equity and Liabilities	213 498.31	216.949.36

Place : Vallabh Vidyanagar Date 26 June, 2020

ELECON ENGINEERING COMPANY LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2020

		(Amounts in INR Lakhs)
Particulars	Year ended31 Mar 2020	Year endedMar 31 2019
	(Audited)	(Audited)
CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax	1,793.35	8,439.93
Adjustments for:
(i) Depreciation and amortisation expense	5,325.81	4,789.25
(ii) Finance costs	7,703.52	7,297.10
(iii) Loss on fair valuation of investment	81.19	17.13
(iv) (Gain) on sale of property, plant and equipment (net)		(3,698.09)
(v) Loss on assets sold/discarded (net)	69.23
(vi) Interest income	(240.95)	(730.35)
(vii) Dividend income	(0.50)	(0.34)
(viii) Bad debts written off	3,224.18	3,759.64
(ix) Sundry balances written off		746.62
(x) Unrealised exchange loss/(gain)	35.56	(145.94)
(xi) Provision for contract liabilities, warranty and others	532.65	1,276.17
(xii) Reversal of provision for onerous contract	(89.52)	(955.77)
(xiii) Balances written back		(1,090.73)
(ix) Excess provision on doubtful debt written back	(2,861.73)	(3,393 66)
	15,572.79	16,310.96
Working Capital Adjustments
(lncrease)/decrease in trade receivables	(2,066.47)	8,272.84
Decrease/(increase) in inventories	1,267.44	(3,410.50)
Decrease/(increase) in financial assets	4,167.02	(9,812.04)
Decrease in other current and non-current assets	3,443.72	1.063.59
Increase/( decrease) in trade payables	11,295.40	(4,522.49)
Increase/( decrease) in provisions, other current and non-current liabilities	1,252.43	(4,861 .76)
(Decrease)/increase in other financial liabilities	(12,324.52)	6,362.01
Cash generated from operations	22,607.81	9,402.61
Taxes paid (net of refunds)	(391.78)	(668.53)
Net cash generated from operating activities (A)	22,216.03	8,734.08
Cash flow from investinq activities
Payments for purchase of property, plant and equipment	(1,355.54)	(4,507.48)
Proceeds from sale of property, plant and equipment	49.92	6,053.97
Interest received	145.14	730.35
Dividend received	0.50	0.34
Bank balances not considered as cash and cash equivalents (net)	(1,577.83)	1,641.76
Dividend received from associate	67.11	47.94
Proceeds from redemption of investments	139.21
Net cash (used in)/generated from investing activities (B)	(2,531.49)	3,966.88

ELECON ENGINEERING COMPANY LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2020

	(Amounts in INR Lakhs)
Particulars	Year ended31 Mar 2020	Year endedMar 31 2019
	(Audited)	(Audited)
Cash flow from financing activities
Proceeds from non-current borrowings		9,974.57
Repayment of borrowings (net) (Note 3)	(12,811.67)	(14,206.92)
Proceeds from other financing arrangements	4,199.15
Repayment against other financing arrangements	(570.64)
Finance cost paid	(7,580.22)	(7,273.54)
Dividend paid (including dividend distribution tax)	(290.98)	(270.52)
Principal payment of lease liabilities	(506.37)
Net cash (used in) financing activities (C)	(17,560.73)	(11,776.41)
Net increase in cash and cash equivalents (A+B+C)	2,123.81	924.55
Cash and cash equivalents at 1 April	5,604.25	4,679.70
Cash and cash equivalents as at Balance Sheet date	7,728.06	5,604.25
Components of cash and cash equivalents :-
	0.26	0,02
Cash on handBalances with banks
-In current accounts	7,727.80	5,604.23
	7,728.06	5,604.25

Notes:

Date : 26 June, 2020

1. Cash and cash equivalents includes bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2. The above Statement of Cash Flow has been prepared under the "Indirect Method" as set out in Indian Accounting Standard (lnd AS 7) - Statement of Cash Flows.

3. In accordance with para 22 of lnd AS 7 - Statement of Cash Flows, cash flows from current borrowings have been reported on net basis since these being working capital facilities, the maturities are short.

4. Movement in financial liabilities and financial assets arising from financing activities:Particulars	Borrowings	Dividends paid(includinq taxes)	Finance costs
Balance at the beginning of the year	54,815.97		211 .69
Proceeds from non-current borrowingsRepayment of borrowings (net)Dividend paid (including taxes)Finance cost paid	(12,811 .67)	(290.98)	(7,580.22)
Net cash outflows	42,004.30	(290.98)	(7,368.53)
Charge to statement of profit and lossForeign exchange fluctuation			7,703.52
Balance at the Balance Sheet date			334.99

334.99 Prayasvin Pa

-· .. ·'

Chairman & Managing Director DIN : 00037394 Chartered Accountants

303, 3rd Floor Ocean Building, Beside Center Square Mall, Opp. Vadodara Central Mall, Dr. Vikram Sarabhai Marg, Vadodara 390023, India

Telephone +91 (265) 619 4200

Independent Auditors' Report

To the Board of Directors of Elecon Engineering Company Limited

Report on the audit of the Consolidated Annual Financial Results

Opinion

We have audited the accompanying consolidated annual financial results of Elecon Engineering Company Limited (hereinafter referred to as the "Holding Company") and its subsidiaries (Holding Company and its subsidiaries together referred to as "the Group") and its associates for the year ended 31 March 2020 (the "consolidated annual financial results"), attached herewith, being submitted by the Holding Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations").

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate audited financial statements of the subsidiaries and an associate, the aforesaid consolidated annual financial results:

• a. include the annual financial results of the entities as per Annexure-- I;
• b. are presented in accordance with the requirements of Regulation 33 of the Listing Regulations in this regard; and
• c. give a true and fair view in conformity with the recognition and measurement principles laid down in the applicable Indian Accounting Standards, and other accounting principles generally accepted in India, of the consolidated net profit, other comprehensive income and other financial information of the Group for the year ended 31 March 2020.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Companies Act, 2013 ("the Act"). Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results section of our report. We are independent of the Group and its associates in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of audit reports of the other auditors referred to in sub paragraph (a) of the "Other Matters" paragraph below, is sufficient and appropriate to provide a basis for our opinion on the consolidated annual financial results.

B S R & Co (a partnership firm with Registration No. BA61223) converted into B S R & Co. LLP (a Umited Uability, Partnership with LLP Registration No. AAB-8181) with effect from October 14. 2013

Registered Office: 5th Aoor, Lodha Excelus Apollo Mills Compound N. M. Joshi Marg, Mahalaxmi Mumbai - 400 011. India

Independent Auditors' Report on Consolidated Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Management's and Board of Directors' Responsibilities for the Consolidated Annual Financial Results

These consolidated annual financial results have been prepared on the basis of the consolidated annual tlnancial statements.

The Holding Company's Management and the Board of Directors are responsible for the preparation and presentation of these consolidated annual financial results that give a true and fair view of the consolidated net profit, other comprehensive income and other financial information of the Group including its associates in accordance with the recognition and measurement principles laid down in Indian Accounting Standards prescribed under Section 133 of the Act and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The respective Management and Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of each company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records. relevant to the preparation and presentation of the consolidated annual tinancial results that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated annual financial results by the Management and the Directors of the Holding Company, as aforesaid.

In preparing the consolidated annual financial results, the Management and the respective Board of Directors of the companies inc! uded in the Group and of its associates are responsible for assessing the ability of each company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group and of its associates is responsible for overseeing the financial reporting process of each company.

Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results

Our objectives are to obtain reasonable assurance about whether the consolidated annual financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated annual financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated annual financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Independent Auditors' Report on Consolidated Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Auditor's Responsibilities for the Audit of the Consolidated Annual Financial Results (Continued)

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act, we are also responsible for expressing our opinion through a separate report on the complete set of financial statements on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the consolidated financial results made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the appropriateness of this assumption. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated annual financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and its associates to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated annual financial results, including the disclosures, and whether the consolidated annual financial results represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial results/financial information of the entities within the Group and its associates to express an opinion on the consolidated annual financial results. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the consolidated financial results of which we are the independent auditors. For the other entities included in the consolidated annual financial results, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in sub paragraph (a) of the "Other Matters" paragraph in this audit report.

We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated annual financial results of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

We also performed procedures in accordance with the circular No CIR/CFD/CMDJ/44/2019 issued by the SEBI under Regulation 33(8) of the Listing Regulations, as amended, to the extent applicable.

Independent Auditors' Report on Consolidated Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Other Matters

• (a) The consolidated annual financial results include the audited financial information of 11 subsidiaries, whose financial information reflects total assets (before consolidation adjustments) of Rs. 36,118.50 Lakhs as at 31 March 2020, total revenue (before consolidation adjustments) of 29,006.81 Lakhs, total net profit after tax (before consolidation adjustments) of Rs. 1,784.47 Lakhs and net cash inflows ofRs. 1,954.76 Lakhs for the year ended on that date, as considered in the consolidated annual financial results, which have been audited by their respective independent auditors. The consolidated annual financial results also include the Group's share of net profit after tax (and other comprehensive income) of Rs. 157.54 Lakhs for the year ended 31 March 2020, in respect of one associate whose financial results have been audited by its independent auditor. The independent auditor's reports on financial results I financial information of these entities have been furnished to us by the management and our opinion on the consolidated annual financial results, in so far as it relates to the amounts and disclosures included in respect of these entities, is based solely on the report of such auditors and the procedures performed by us are as stated in paragraph above.
• (b) The consolidated annual financial results also include the Group's share of net profit after tax (and other comprehensive income) of Rs. Nil for the year ended 31 March 2020, in respect of three associates, whose financial information has not been audited by us or by other auditors. This unaudited financial information as approved by the respective management of these entities, has been furnished to us by the Board of Directors and our opinion on the consolidated annual financial results, in so far as it relates to the amounts and disclosures included in respect of these associates is based solely on such unaudited annual financial information. In our opinion and according to the information and explanations given to us by the Board of Directors, this unaudited financial information is not material to the Group.

Our opinion on the consolidated annual financial results is not modified in respect of the above matters with respect to our reliance on the work done, and the reports of the other auditors and the financial information certified by the Board of Directors.

(c) The consolidated annual financial results include the results for the quarter ended 31 March 2020 being the balancing figure between the audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the current financial year which were subject to limited review by us.

For B S R & Co. LLP Chartered Accountants Firm's Registration No. I 0 I248W /W -100022

~· Rupen Shah

Partner Membership No. I 16240

Place: Vallabh Vidyanagar Date: 26 June 2020 ICAI UDIN: 20II6240AAAABP5846

Independent Auditors' Report on Consolidated Annual Financial Results of Elecon Engineering Company Limited pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (continued)

Annexure-					1: List of entities whose financials results are included in the Consolidated Annual
Financial Results

Sr. No.	Name of Entity	Relationshin
I	Radicon Transmission UK Limited (includingitsfollowingWhollyOwnedStep-downsubsidiaries):a) Benzlers Systems ABb) AB Benzlersc) Radicon Drive Systems Inc.d) Benzlers Transmission A.Se) Benzlers Antriebstechnik GmbH	Wholly Owned Subsidiary
	f) Benzlers TBA B.V.g) OY Benzlers ABh) Benzlers ltalia s.r.l
2	Elecon Singapore Pte. Limited	Wholly Owned Subsidiary
3	Elecon Middle East FZE	Wholly Owned Subsidiary
4	Eimco (Elecon) India Limited	Associate
5	Elecon Eng. (Suzhou) Co. Limited	Associate
6	Elecon Africa Pty. Limited	Associate
7	Elecon Australia Pty. Limited	Associate

26th June, 2020

To,

The Manager (Listing),	The Manager (Listing),
The BSE Ltd.	National Stock Exchange of India Ltd.
Mumbai	-Mumbai
Company's Scrip Code: 505700	Company's Scrip Code: ELECON

Sub Declaration with respect to Audit Report with unmodified opinion to the Audited Financial Results for the financial year ended 31st March, 2020

Dear Sir/Madam,

We hereby declare that the Statutory Auditors M/ s. B S R & Co. LLP, Chartered Accountants (Firm Reg. No. 101248W /W100022) have issued the Audit Report with Unmodified Opinion on the Standalone and Consolidated Audited Financial Results for the quarter and year ended on 31st March, 2020.

The above declaration is m!lde in pursuant to Regulations 33, 52 and 54 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

You are requested to take the same on your records.

Thanking you.

Yours faithfully, For vn Engineering Company limited,

~ .

Narasimhan R Chief Financial Officer

Gearing industries. Gearing economies.

ELECON ENGINEERING COMPANY LIMITED, Post Box# 6, Vallabh Vidyanagar- 388 120, Gujarat, India. Tel.: +91 -2692 . 238701, 238702. Fax: +91 • 2692.227484. CIN L29100GJ1960PLC001082 I infogear@elecon.com 1 www.elecon.com

Elecon Engineering announces FY20 Results CONSOLIDATED FY20 NET REVENUE AT RS. 1088.5 CRORES

Vallabh Vidyanagar, India, June 26, 2020- Elecon Engineering Company Limited ("Elecon"), one of the largest manufacturers of gears in Asia and a leading player in MHE segment, announces its financial results for the Fourth Quarter (Q4FY20) and Full Year (FY20) period ended March 31st, 2020.

Financial Performance

Standalone FY20 REVIEW

• Total Operating income was Rs. 835.7 Crores for FY20 as compared to Rs. 955.5 Crores in the corresponding period of the previous year reflecting a decline of 12.5%.
• EBITDA stood at Rs. 114.6 Crores for FY20 as compared to Rs. 135.5 Crores during the corresponding period of previous year, a decline of 15.4%.
• EBITDA Margin at 13.6% for FY20 as against 13.9% in FY19.
• Profit before Tax stood at Rs. 1.3 Crores for FY20 as compared to Rs 27.9 Crores in the corresponding period of the previous year, a decline of 95.4%.
• Net Profit stood at Rs. 72.4 Crores for FY20 as compared to Rs. 12.1 Crores in the corresponding period of the previous year, the profit is due to one-time deferred tax credit.

Consolidated FY20 Review

• Total Operating income was Rs. 1088.5 Crores for FY20 as compared to Rs. 1224.8 Crores in the corresponding period of the previous year reflecting a decline of 11.1%.
• EBITDA stood at Rs. 148.2 Crores for FY20 as compared to Rs. 205.3 Crores during the corresponding period of previous year, a decline of 27.8%.
• EBITDA Margin at 13.5% for FY20 as against 15.9% in FY19.
• Profit before Tax stood at Rs. 19.5 Crores for FY20 as compared to Rs. 88.3 Crores in the corresponding period of the previous year.
• Net Profit stood at Rs. 89.7 Crores for FY20 as compared to Rs. 70.1 Crores in the corresponding period of the previous year, the profit is due to one-time deferred tax credit.

Standalone Q4FY20 Review

• Total Operating income was Rs. 201.7 Crores for Q4FY20 as compared to Rs. 252.1 Crores in the corresponding period of the previous year, reflecting a decline of 20.0%.
• EBITDA stood at Rs. 14.5 Crores as compared to Rs. 38.8 Crores during the corresponding period of previous year, a decline of 62.7%.
• EBITDA Margin at 7.1% for Q4FY20 as against 15.3% in Q4FY19.
• Profit (Loss) before Tax stood at Rs. -13.6 Crores for Q4FY20 as compared to Rs. 8.1 Crores in the corresponding period of the previous year.
• Net Profit stood at Rs. 62.2 Crores for Q4FY20 as compared to Rs. 2.4 Crores in the corresponding period of the previous year, the profit is due to one-time deferred tax credit.

CONSOLIDATED Q4FY20 REVIEW

• Total Operating income was Rs. 268.5 Crores for Q4FY20 as compared to Rs. 328.0 Crores in the corresponding period of the previous year, reflecting a decline of 18.1%
• EBITDA stood at Rs. 28.8 Crores as compared to Rs. 48.8 Crores during the corresponding period of previous year, reflecting a decline of 40.9%.
• EBITDA Margin at 10.7% for Q4FY20 as against 14.9% in Q4FY19
• Profit (Loss) before Tax stood at Rs. -5.8 Crores for Q4FY20 as compared to Rs 16.6 Crores in the corresponding period of the previous year.
• Net Profit stood at Rs. 70.2 Crores for Q4FY20 as compared to Rs. 10.1 Crores in the corresponding period of the previous year, the profit is due to one-time deferred tax credit.

Management Comments

Commenting on the Company's performance, Mr. Prayasvin Patel, CMD said "We are living in challenging times. The Covid-19 pandemic has had an impact on all sectors of the economy and we have also been impacted by the same. Our revenues at about Rs. 1088.5 Crores came in marginally lower than what we did last year and we ended with a consolidated margin of about 14%. This is despite the much weaker performance in the material handling equipment which continues to be faced with multiple headwinds. We remain cautiously optimistic that the Company can see improved performance once the pandemic settles and the economy revives."

Segment Wise Performance (Q4FY20)

Performance of the overseas subsidiary

During the quarter, our overseas business under Benzlers and Radicon registered revenue of Rs. 66.02 Crores with EBITDA of Rs. 15.25 Crores.

Order Book and Outlook

During the quarter, we booked orders worth Rs. 125.40 Crores in gear business. This translates to an order backlog of Rs. 610.52 Crores for execution in the near to medium term. In the material handling business, we closed orders worth Rs. 49.26 Crores. The pending order book for MHE business now stands at Rs. 512.30 Crores.

About Elecon Engineering Company Limited

Elecon Engineering Company Ltd (BSE code: 505700, NSE code: ELECON) is one of Asia's largest gear manufacturing Company with vast experience of about six decades and significant business presence in India and abroad. The Company designs and manufactures worm gears; parallel shaft and right-angle shaft; helical and spiral level helical gears; fluid geared and flexible couplings, as well as planetary gear boxes. The Company also manufactures material handling equipment, mining equipment, casting processes amongst others. The Company was incorporated in 1960 by Shri Ishwarbhai B Patel and has its headquarters in Vallabh Vidyanagar, Gujarat. For more info, visit: www.elecon.com

If you have any questions or require further information, please feel free to contact

Narasimhan Raghunathan

Elecon Engineering Company Limited

P: 91-2692-238701/02/03/04

Email:- narasimhanr@elecon.com

Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors. That could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Elecon Engineering Company Ltd. will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

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26th June, 2020

To,

The Manager (Listing), The BSE Ltd. Mumbai Company's Scrip Code: 505700

Sub : Intimation under Regulation 52 (4) and 54 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Regulations")

Dear Sir/ Madam,

With reference to the subject referred regulations, we submit herewith below information with respect to listed 12.50% Senior Secured Rated Listed Redeemable Non-Convertible Debentures ('NCDs') issued by the Company on private placement basis of Rs. 100 Crores:-

Matters required to be disclosed underlation 52 4Re	Details disclosed as on 31st March, 2020
Credit Rating and change in credit rating (ifany);	AlltheNCDsratedasAminusBWRNegative) by Brickwork Ratings(Outlook-India Private Limited.
	Credit rating of said NCDs were reaffirmed at(pronounced BWR A Minus) andBWR A-outlook has been revised to "Negative" from"Stable".
Asset Cover available	1.71 times
Debt Equity Ratio (for financial year ended on31st March, 2020)	0.50 times
Previous due date for the payment of interest/dividend of non-convertible preference/repayment ofsharesprincipalofnonconvertiblepreferenceshares/nonconvertibledebtsecuritiespayableandwhether the same has beenaid or not.	Previous Due date for payment of Interest onNCDs for the period from 1st October, 2019 to31st March, 2020:-1st November, 2019 and 1st February, 2020.
Nextduedateforpaymentofinterest/ dividendofnon-convertiblepreference shares /principal alongwith theinterest/ dividendamountofofnonconvertible preference shares payable and theredemption amount.·.:;	Next due date for payment of interest onNCDs 1st April, 2020 to 30th September, 2020:-1st May, 2020 (as on date of this disclosure, thesame has been paid by due date) and 1stAugust, 2020 amounting to Rs. 3,11,95,556/-and Rs. 3,11,95,556/-respectively.
CranesRubber IndustryMarine IndustryPlastic Industry	Power IndustrySteel IndustrySugar IndustryMiningCement Industry
Gearing industries. Gearing economies.

ELECON ENGINEERING COMPANY LIMITED, Post Box# 6, Vallabh Vidyanagar- 388120, Gujarat, India. Tel.: +91- 2692-238701,238702. Fax: +91- 2692-227484. CIN L29100GJ1960PLC001082 1 infogear@elecon.com 1 www.elecon.com

	The Re-Eaxment of Princi:Ral on NCDs will be
	due as under for Series I:-
	1st August 2020 of Rs. 1,42,85,714/-
	ofDuedateforRedem2tion2axment
	Premium on instalment due for Series I:-
	1st August, 2020 of Rs. 89,545/-
Debt Service Coverage Ratio	1.51 times
Interest Service Coverage Ratio	1.02 times
Outstanding redeemable preference shares	Not Applicable
(quantity and value)
Capital Redemption Reserve/Debenture	Debenture Redemption Reserve:-Rs. 2,500.00
Redemption Reserve	Lakhs for the year ended 31st March, 2019 &
	for the year ended 31st March, 2020, additional
	Debenture Redemption Reserve not required
	to be created pursuant to the amendment of
	theCompanies(ShareCapitaland
	debentures) Amendment Rules, 2019 dated
	16th August, 2019 as the said NCDs are listed
	and privately placed.
Net Worth	Rs. 78,225.93 Lakhs
Net Profit After Tax	Rs. 7,241.89 Lakhs (Excl. OCI)
Earnings Per Share	Basic EPS before and after extraordinary
	items, net of tax expenses (not annualized) is
	Rs. 6.45 per share
	Diluted EPS before and after extraordinary
	items, net of tax expenses (not annualized) is
	Rs. 6.45 per share

Kindly, take the above on your record.

Thanking you,

Date:- 26th June, 2020 Place:- Vallabh Vidyanagar