The Members of
Ecoboard Industries Limited
The directors submit annual report of Ecoboard Industries Limited (the"Company") along with the audited financial statements for the financial year(FY) ended on March 31st 2019. Consolidated performance of the Company hasbeen referred to wherever required.
Directors have tried to maintain coherence in disclosures and flow of the informationby clubbing required information topic-wise and thus certain information which isrequired in directors' report is clubbed elsewhere and has to be read as a part of boards'report.
1. FINANCIAL SUMMARY / HIGHLIGHTS
The financial performance of your Company:
(Amounts in Lakhs)
|Particulars ||Current Year ||Previous Year |
| ||2018-19 ||2017-18 |
| || || |
|Income: || || |
| ||2038.20 ||883.21 |
|Revenue from operations ||38.08 ||18.53 |
|Other Income || || |
| ||2076.28 ||901.74 |
|Total Income || || |
| || || |
|Expenditure: || || |
| || || |
|Cost of materials consumed ||1544.11 ||614.56 |
|Changes in inventories of finished goods work-in-progress ||212.14 ||161.61 |
|Employee benefits expense ||159.35 ||198.53 |
|Finance costs ||498.14 ||636.27 |
|Depreciation ||106.95 ||122.68 |
|Other expenses ||474.88 ||555.41 |
| ||2995.57 ||2289.06 |
| || || |
|Profit / (Loss) before exceptional items and tax ||(919.29) ||(1387.32) |
|Add/(Less): Exceptional items ||199.05 ||0.00 |
|Profit / (Loss) before tax ||(720.24) ||(1387.32) |
|Less: Tax expenses ||0.00 ||0.00 |
|Profit / (Loss) for the period ||(720.24) ||(1387.32) |
| || || |
|Other Comprehensive Income || || |
|Items that will not be reclassified into profit or loss ||0.46 ||11.29 |
| || || |
|Other Comprehensive income for the year (net of tax) ||0.46 ||11.29 |
|Total comprehensive income for the year ||(719.78) ||(1376.03) |
| || || |
|Earnings / (Loss) per Share (Rs.) || || |
|-Basic ||(4.04) ||(7.72) |
|-Diluted ||(4.04) ||(7.72) |
During the year 2018-19 your company has made turnover of Rs 2038.20 Lakhs as comparedto turnover of the previous financial year of Rs. 883.21 Lakhs whereas Loss for the yearis Rs.719.78 /- Lakhs as against Rs. 1376.03/- Lakhs in the previous financial year.Boards of Directors are very confident that the business of the Company will continue togrow in upcoming years.
|Year || |
| ||(Rs. Lacs) || |
|2014 ||2807.82 ||(810.75) ||(898.13) ||(5.04) |
|2015 ||1693.28 ||(673.20) ||(698.81) ||(3.92) |
|2016 ||2205.48 ||(1468.07) ||(1489.82) ||(8.35) |
|2017 ||1633.84 ||(975.13) ||(996.21) ||(5.59) |
|2018 ||883.21 ||(1387.32) ||(1387.32) ||(7.72) |
|2019 ||2038.20 ||(720.24) ||(720.24) ||(4.04) |
Company faced good tail-winds in "Bio-Energy" engineering division with newprojects in distilleries a traditional market. The turnover of "Bio-Panels"division was marginal as we couldn't procure raw material due to shortage of workingcapital. The Bio-panels division of the Company continues to upgrade the existingmachineries. The implementation of GST of 12 % has reduced the Ecoboard price deferentialwith its unorganized players and increased market share of Ecoboard and company is havinga positive effect.
Based on internal financial control framework and compliance systems established in theCompany the work performed by statutory internal and secretarial auditors and reviewsperformed by the management and/or relevant Audit and other Committees of the Board yourBoard is of the opinion that the Company's internal financial controls were adequate andeffective during the financial year 2018-19.
In view of paucity of funds in the current year and due to counting losses the theBoard of Directors does not recommend any dividend for the F.Y. 2018-19.
The unclaimed dividend pertaining for the year ended March 2009 transferred to theInvestor Education & Protection Fund.
3. DIRECTORS AND KMP:
The details of Appointment re-appointment and retiring by rotation of Directors andKey Managerial Personnel (KMP) are included in Corporate Governance Report and forms partof the board's report as "Annexure B".
4. SEGMENT WISE AND PRODUCT-WISE OPERATIONAL PERFORMANCE:
The details are given under Notes to Accounts of financial statements.
5. Details of significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations in future.
There are no such orders except those which have been appropriately challenged beforethe judiciary and no impact on going concern status and Company's operation in future ofsuch matters are expected or visualized at the current stage at which they are.
6. Details in respect of adequacy of internal financial controls with referenceto the Financial Statements.
Your Company has an internal Control System which commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function lieswith the Audit Committee of Directors. The Audit Committee monitors and evaluates theefficacy and adequacy of internal control systems accounting procedures and policies. TheCompany has not appointed Internal Auditors yet.
7. DETAILS OF HOLDING/SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES :
The Company has no subsidiary/joint venture/associate company and hence consolidationand applicable provision under the Companies Act 2013 and Rules made there under are notapplicable to the Company.
8. Board Evaluation
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations the Board carried out an annual performance evaluation of the Board itsCommittees Individual Director and Chairperson. The manner in which the evaluation hasbeen carried out has been explained in the Corporate Governance Report.
9. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has a Vigil Mechanism Policy in place to deal with instances if any ofthe fraud mismanagement misappropriations if any and the same is placed on theCompany's website.
10. MANAGERIAL REMUNERATION:
Details as required pursuant to Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are contained in Corporate Governance Report.
11.NUMBER OF PERMANENT EMPLOYEES
During the period under review there are 54 permanent employees of the Company.
12.DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013: a. that in the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; b. the directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit and loss of the company forthat period; c. the directors had taken proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. that the annual accounts have been preparedon a going concern basis; e. the directors had laid down proper internal financialcontrols which were in place and that the financial controls were adequate and wereoperating effectively. f. that the directors have devised proper systems to ensurecompliance with the provisions of all applicable laws were in place and were adequate andoperating effectively.
13.MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2018-19 the Company held 7 (Seven) board meetings of theBoard of Directors as per Section 173 of Companies Act 2013 which is summarized below.The provisions of Companies Act 2013 and Listing Regulations were adhered to whileconsidering the time gap between two meetings.
|Name of Director ||Category || |
Attendance during 2018-19 of meeting
|*No. of other Directorship |
| || ||Board ||Last AGM || |
|#Mr. V.S. Raju ||Chairman ||2 ||Yes ||1 |
|Mr. Ramakrishna Raju Gottumukkala ||Managing Director ||5 ||Yes ||1 |
|Mr. Praveen Kumar Raju Gottumukkala ||Executive Director ||6 ||Yes ||0 |
|Mr. Uttam Sampatrao Kadam ||Non-Executive & Independent ||7 ||Yes ||11 |
|#Mr. Satya Narayan Banka ||Non-Executive & Independent ||0 ||No ||0 |
|Mrs. Venkata Sujani Indukuri ||Executive Director ||5 ||Yes ||0 |
|Mr. Siva Sankar Kalive ||Non-Executive & Independent ||7 ||Yes ||0 |
|Mr. P. V. V. Rama Raju ||Non-Executive & Independent ||1 ||No ||0 |
# Mr. V.S. Raju Ceased to be Director w.e.f. 10.11.2018
# Mr. Satya Narayan Banka ceased to be Director w.e.f. 30.10.2018
14.PARTICULARS OF LOANS ADVANCES GUARANTEES AND INVESTMENTS
Pursuant to section 186 of Companies Act 2013 and Schedule V of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("Listing Regulations") disclosure on particulars relating to Loansadvances guarantees and investments are provided as part of the financial statements.
18. LISTING REGULATIONS COMPLIANCE
Your Company's Equity Shares are listed on BSE Ltd. and their listing fees for theFinancial Years 2018-19 and 2019-20 is pending and the provisions of the ListingObligation and Disclosures Requirement Regulations 2015 have been complied with.
Your Company has not accepted any deposits from public and as such no amount onaccount of principal or interest on public deposits was outstanding as on the date of thebalance sheet.
Periodic assessments to identify the risk areas are carried out and management isbriefed on the risks in advance to enable the company to control risk through a properlydefined plan. The risks are classified as financial risks operational risks and marketrisks. The risks are taken into account while preparing the annual business plan for theyear. The Board is also periodically informed of the business risks and the actions takento manage them. The Company has formulated a policy for Risk management with the followingobjectives:
Provide an overview of the principles of risk management
Explain approach adopted by the Company for risk management
Define the organizational structure for effective risk management
Develop a "risk" culture that encourages all employees to identify risks andassociated opportunities and to respond to them with effective actions.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration andCompliance Committees. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department.
18.INDEPENDENT DIRECTORS AND DECLARATION
Composition of the independent director is in compliance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
19.CODE OF CONDUCT
i. Code of Conduct for Director and Senior Management of the Company: The Company hasadopted the
Code of Conduct for the Directors and Senior Management of the Company. All BoardMembers and Senior Management Personnel have affirmed compliance with the code as onMarch 2015.
ii. Code of Conduct for prevention of Insider Trading: The Company has its own Code ofConduct for
Prevention of Insider Trading which has now been amended according to the SEBI(Prohibition of Insider Trading) Regulations 2015.
As the listed Company necessary measures are taken to comply with provisions of theSEBI (Listing Obligation and Disclosure Requirements) Regulation 2015. The Report onCorporate Governance along with the certificate as stipulated confirming compliance withthe conditions of Corporate Governance the Managing Director's declaration as stipulatedunder the aforesaid Clause Regulation and Management Discussion and Analysis Report formspart of Annual Report.
21.CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREX EARNING AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies
(Accounts) Rules 2014 is annexed herewith as "Annexure A".
22.EXTRACT OF ANNUAL RETURN IN FORM MGT-9
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as
"Annexure B". The link of annual report as per the CompaniesAmendment Act 2017 is as below; www.ecoboard.in
Your Directors state that no disclosure or reporting is required in respect of thefollowing items since there were no transactions in these matters and/or they are notapplicable to the Company during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underESOS.
4. No significant or material orders were passed by the Regulators / Courts orTribunals which would impact the going concern status of the Company and its futureoperations. 5. No fraud has been reported by the Auditors to the Audit Committee or theBoard.
The Directors state that applicable Secretarial Standards on Board Meetings (SS-1) andon General Meetings (SS-2) have been duly followed by the Company.
25. SHARE CAPITAL
The Paid up capital of the company is Rs.53000000. The Company issued Rs. Nil EquityShares either with or without differential rights during the F.Y. 2018-2019 and hence thedisclosure requirements under section 43 and Rule 4 (4) of the Companies (Share Capitaland Debentures) Rules 2014 is not applicable.
26.COMPENSATION AND DISCLOSURE ANALYSIS:
The Companies Act listing Regulations through various provisions require disclosureand analysis on executive director's KMP's and other employees' compensation. The saidinformation forms part of board's report annexed herewith as "Annexure C"
27.RELATED PARTY TRANSACTIONS:
Related party disclosures pursuant to sub-section (1) of section 188 of the CompaniesAct 2013 are forming part of the Board report and is annexed herewith as "AnnexureD".
The Company's Auditors B. M. Chaturvedi & Co. Chartered Accountants Mumbai(Firm Regn. No. 114317W). For the period of five consecutive years i.e. 01.04.2017 to31.03.2022. Section 40 of the Companies Amendment Act 2017 is notified w.e.f. May 072018. Which means that the first proviso of Section139(1) stands omitted. Therefore nowthe ratification of the appointment of the Statutory Auditors at every Annual GeneralMeeting is not required.
29.SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. S. R. Siddheshwar & Co. Pune a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. Secretarial Audit Report forthe financial year March 31 2019 is annexed herewith as
"Annexure E" in FORM MR-3.
30.COMMENTS ON OBSERVATIONS ON SECRETARIAL AUDIT REPORT
The observation and qualification is annexed with as "Annexure-E".
31.MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.
32.DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
33.INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION
PROHIBITION AND REDRESSAL) ACT 2014
The Company has constituted an internal complaints Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2014. Duringthe year no complaint was filed before the said Committee.
34.ACKNOWLEDGEMENTS AND APPRECIATION
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company. I am sure youwill join our Directors in conveying our sincere appreciation to all employees of theCompany for their hard work and commitment. Their dedication and competence has ensuredthat the Company will definitely overcome from such turbulent situation and emerge assignificant and leading player in the industry.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Ramakrishna Raju Guttumukkala
Chairman & Managing Director
Date: 14 /08/2019