The Directors are pleased to present their Thirty-Ninth Annual Report and AuditedFinancial Statements for the year ended 31st March 2021.
1. FINANCIAL SUMMARY
| ||31-03-2021 ||31-03-2020 |
|Net Sales ||753726072 ||962224762 |
|Other Income ||9276000 ||13481145 |
|Sales and Other Income ||763002072 ||975705907 |
|Operating Profit (before Depreciation and Tax) ||30631694 ||73438115 |
|Less : Depreciation ||27305133 ||23934474 |
|Profit before tax ||3326561 ||49503641 |
|Less :Provision for tax || || |
|Current Tax ||1796854 ||15709352 |
|Deferred Tax Credit ||-824711 ||-90491 |
|Profit after Tax ||2354418 ||33884780 |
2. Operations/State of Company's Affairs
During the year under review sales value reduced by 22 % to Rs. 753726072 from RsRs.962224762/- in the previous year. The profit after tax reduced by 93% to Rs.2354418/- from Rs. 33884780/- in the previous year.
The Company had closed its manufacturing plant and office with effect from March 242020 following countrywide lockdown due to Covid- 19. The Company has gradually commencedoperations from April 18 2020 after obtaining necessary approvals. The Company'soperations were impacted in the financial year 2020-21 due to scaling down/suspendingproduction due to reduction in demand and supply chain constraints drastic increase inRaw Material prices and 4 to 5 fold increase in ocean freight rates which could not beentirely passed on to the Customers because of time lag in implementing the priceincrease.
Due to ongoing COVID-19 pandemic Mr. Jaymin B. Desai Managing Director of the Companyhad voluntarily waived his right to receive remuneration for the period from 1st April2020 to 30th September 2020 The Board of Directors would like to place on record its deepappreciation towards Mr. Jaymin B. Desai Managing Director for the kind gesture showntowards the Company and its stakeholders in these testing times.
Currently major part of Company's contribution is derived from supplying SurfaceProtection Films which is mainly dependent upon the real estate and construction industrywhich was badly affected due to the migrant issue coupled with the ability of buyers topay in time. With each corona wave there was a severe impact on our orders therebyaffecting our operations and limping back to normal took almost a period of six months.Further the efforts to enter in to new customers/markets also took a beating as ourpotential customers were themselves busy in normalising their businesses and in thisprocess addition of a new customer took a back seat.
The company is working on increasing sales by expanding its customers base with specialfocus on increasing sales of specialty products. In view of the currently prevailingsecond wave of Covid 19 in India the management is unable to predict performance for theFY 2021-22.
However the management is continuously working out ways to negate/reduce the effect ofCovid 19 on its operations.
No significant and material orders have been passed by the regulators or Courts orTribunals impacting the going concern status and the company's operations in future duringthe year under review.
3. MEASURES AGAINST COVID 19 PANDEMIC
The Company has taken following measures to prevent Covid infection.
Free vaccination camps for Employees above the age of 45 years at the Factory.
Ensuring social distance & Mandating the usage of Masks at the workplace.
Thermal Scanning & hand sanitising of every person visiting the Factory.
Periodic Sanitisation of entire facility
For conserving financial resources of the Company the Board of Directors do notrecommend any dividend for the year.
5. BOARD MEETINGS:
The Board of Directors met Eight times during the Financial Year 2020-21.
6. DIRECTORS AND KEY MANANGERIAL PERSONNEL:
Mr. Jehangir Moos (DIN: 00020609) resigned from the Board with effect from theconclusion of the Board Meeting held on 11th August 2021 The Board places onrecord the sincere appreciation for the assistance and guidance provided by Mr. JehangirA. Moos (DIN: 00020609) during his tenure as Director of the Company
Mrs. Charulata Patel (holding DIN 00233935) Director of the Company would retire byrotation at the ensuing Annual General Meeting and being eligible offers herself forre-appointment.
The members at the 36th Annual General Meeting held on 14th September 2018 had approvedthe appointment of Mr. Jaymin Desai (holding DIN 00156221) as Managing Director of theCompany for a period of 3 years from 1st October 2018 to 30th September 2021. The Boardproposes to reappoint him as the Managing Director for a further period of 3 years i.efrom 1st October 2021 to 30th September 2024 at the ensuing AnnualGeneral Meeting.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee at its Meeting held on 11th February 2021 had appointed Mr. AtulBaijal (holding DIN 09046341) as the additional Whole Time Director of the Company. Hewill hold the office till the conclusion of this ensuing Annual General Meeting. The Boardproposes to appoint him as the Director and Whole Time Director of the Company for aperiod of 3 years i.e from 11th February 2021 to 10th February 2024 at the ensuing AnnualGeneral Meeting.
7. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declarations from each of the Independent Directorof the Company under Section 149(7) of the Companies Act 2013 that they meet the criteriaof Independence laid down in Section 149(6) of the Act and there has been no change in thecircumstances which may affect their status as independent director during the year. Inthe opinion of the Board the Independent directors possess appropriate balance of skillsexperience and knowledge as required.
8. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of Listing Regulations the Company has put inplace a familiarization program for the Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the working of the Company natureof the industry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the company and can be accessed by web link http ://www.ecoplastindia. com/familiarization-pro gramme-of-independent- directors.html.
9. AUDIT COMMITTEE
The Audit Committee of the Board has been constituted in terms of Listing Regulationsand Section 177 of the Act. The constitution and other relevant details of the AuditCommittee are given in the Corporate Governance Report. All the recommendations made bythe Audit Committee were accepted by the Board of Directors
10. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR INDEPENDENTDIRECTORS
The Remuneration Policy for directors and senior management and the Criteria forselection of candidates for appointment as directors independent directors seniormanagement are placed on the website of the Company weblink <http://www.ecoplastindia.com/ Remuneration Policy for directors and seniormanagement.html>
There has been no change in the policies since the last fiscal year.
We affirm that the remuneration paid to the directors is as per the terms laid out inthe remuneration policy of the Company
11. VIGIL MECHANISM
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. To maintain these standards the Company encourages itsemployees who have concerns about suspected misconduct to come forward and express theseconcerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower)mechanism formulated by the Company
provides a channel to the employees and Directors to report to the management concernsabout unethical behaviour actual or suspected fraud or violation of the Codes of conductor policy. The mechanism provides for adequate safeguards against victimization ofemployees and Directors to avail of the mechanism and also provide for direct access tothe Managing Director/ Chairman of the Audit Committee in exceptional cases. The saidWhistle Blower Policy has been disseminated on the Company's website athttps://www.ecoplastindia.com/wp-content/uploads/2020/10/Whistle-blower-policy-F-Final-to-be-adopted-29-09-2014.pdf
12. DIRECTOR'S RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by thecompany in consultation with the experts and that such internal financial controls areadequate and were operating effectively.
(f) the directors have devised proper systems in consultation with the experts toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
13. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has a proper and adequate system of internal financial controlscommensurate with its nature and size of business and meets the following objectives:
Providing assurance regarding the effectiveness and efficiency of operations;
Efficient use and safeguarding of resources;
Compliance with policies procedures and applicable laws and regulations; and
Transactions being accurately recorded and reported timely.
The Company has a budgetary control system to monitor expenditures andoperations against budgets on an ongoing basis.
The Internal Auditor also regularly reviews the adequacy of internal financialcontrol system.
14. SUBSIDIARY COMPANY
A Statement Containing the Salient features of the Financial Statements of thesubsidiary Company is annexed as Annexure- I as a part of this Report.
During the year under review No Company has become or ceased to be Company'ssubsidiary joint venture or associate company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company along with relevant documents and separate audited accounts in respect ofthe subsidiary are available on the website of the Company.
15. ANNUAL RETURN:
As per the requirements of Section 92(3) of the Act and Rules framed there under theannual return for FY 2020-21 is uploaded on the website of the Company. The same isavailable on https://www.ecoplastindia.com/investors/
As per the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 M/s. Y.B. Desai & Associates Chartered Accountants Surat(ICAI Registration No. 102368W) were appointed as Statutory Auditors of the Company for aperiod of five years from the conclusion of the Thirty Fifth AGM to the conclusion of theFortieth AGM to be held in 2022 subject to ratification by shareholders at each AGM.However in terms of the Notification issued by the Ministry of Corporate Affairs datedMay 7 2018 the proviso requiring ratification of the Auditors appointment by theshareholders at each AGM has been omitted. Accordingly the ratification of appointment ofStatutory Auditors would not be required at the AGM and M/s. Y.B. Desai & AssociatesChartered Accountants Surat (ICAI Registration No. 102368W) would continue to act as thestatutory auditors of the Company for five years up to the conclusion of the Fortieth AGMto be held in 2022.
17. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 Parikh & AssociatesPractising Company Secretaries wereappointed as the Secretarial Auditors for auditing the secretarial records of the Companyfor the financial year 2020-21.
Secretarial audit report of the Company as provided by M/s Parikh & AssociatesPractising Company Secretaries is annexed to this Report as Annexure- II.
18. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT:
The Auditors' Report and Secretarial Auditors' Report do not contain anyqualifications reservations or adverse remarks.
19. COST AUDITORS
The provisions of section 148 (2) for appointment of Cost Auditors are not applicableto the Company The Company has maintained the cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the companies act 2013.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with Clause (m) of Sub-section (3) of Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 is annexed to thisReport as Annexure -III.
The Company has not accepted any deposits during the year under report.
22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
As on 31st March 2021 the Company has made the following Investments undersection 186 of the Companies Act 2013.
Investments; Rs. 7537914 /- for 1195360 Equity Shares of Rs.10 each fully paid upin Synergy Films Private Limited Wholly Owned Subsidiary.
23. RISK MANAGEMENT POLICY:
The Company has adopted a Risk Management Policy which is implemented throughout theOrganisation; Special Emphasis on Risk Management is given during the Annual BudgetingProcess and Periodical Monthly Meetings.
24. CORPORATE SOCIAL RESPONSIBILTY POLICY:
To fulfil its CSR Obligations The Company has spent an amount of Rs.1000000/- forthe year as CSR contribution towards the operating expenditure of running the specialschool Jaina Anupam N Parmar Charitable Trust which is a not-for-profit organizationlocated at Valsad devoted to work for children/adult with intellectual and developmentaldisabilities and running the special school. This NGO has been running the special schoolfor the mentally challenged children/adult under the name & style of Jalaram ManosVikas Kendra at Valsad.
Information in accordance with The Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed to this Report as Annexure -IV.
25. RELATED PARTY TRANSACTIONS
Particulars of Contracts or Arrangements with Related parties referred to in Section188(1) in Form AOC- 2 are annexed as Annexure - V to this Report.
26. FORMAL ANNUAL EVALUATION:
An annual evaluation of the Board's own performance Board committees and individualdirectors was carried out pursuant to the provisions of the Act in the following manner:
|Sr. No. Performance evaluation of ||Performance evaluation performed by ||Criteria |
|1. Each Individual director ||Nomination and Remuneration Committee ||Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided key performance aspects in case of executive directors etc. |
|2. Independent directors; ||Entire Board of Directors excluding the director who is being evaluated ||Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided etc. |
|3. Board and its committees ||All directors ||Board composition and structure; effectiveness of Board processes information and functioning fulfilment of key responsibilities performance of specific duties and obligations timely flow of information etc. The assessment of committees based on the terms of reference of the committees and effectiveness of the meetings. |
27. PARTICULARS OF EMPLOYEES
Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the particulars of employees areannexed as Annexure - VI to this Report.
28. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made there under. All employees (permanent contractual temporarytrainees) are covered under this policy.
The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and has not received any complaint of sexualharassment during the financial year 2019-20.
29. LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2021-2022 toBSE where the Company's Shares are listed.
30. INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE
The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider
Trading) Regulation 2015 and is available on our websitehttp://www.ecoplastindia.com/code-of-practices- and-procedures.html
31. CORPORATE GOVERNANCE:
As per Listing Regulations a separate section on Corporate Governance forms part ofthis report. A Certificate from M/s Parikh & Associates Practicing Company Secretaryconfirming compliance of Corporate Governance forms part of this Report.
Certificate of the CEO/CFO confirming the correctness of the financial statementscompliance with the Company's Code of Conduct and the Audit Committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report.
32. MANAGEMENT DISCUSSION ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2018 theManagement's discussion and analysis is set out in this Annual Report.
33. SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.
The Directors wish to convey their appreciation to Customers Suppliers Bankers otherStakeholders and specially the employees for their co-operation. The Directors alsoappreciate the confidence reposed in the Management of the Company by its shareholders.
For and on behalf of the Board of Directors
Mukul B. Desai
Mumbai 13th May 2021