Ganesha Ecosphere Ltd.
|BSE: 514167||Sector: Industrials|
|NSE: GANECOS||ISIN Code: INE845D01014|
|BSE 00:00 | 20 Oct||256.05||
|NSE 00:00 | 20 Oct||256.05||
|Mkt Cap.(Rs cr)||559|
|Mkt Cap.(Rs cr)||558.96|
Ganesha Ecosphere Ltd. (GANECOS) - Director Report
Company director report
The Members of Ganesha Ecosphere Ltd.
Your Directors have pleasure in presenting the Thirtieth Annual Reportof the Company together with the Audited Financial Statements for the financial year ended31st March 2019.
The summarised financial results of the Company for the year ended 31stMarch 2019 as compared to the preceding year are as under:
( H in crores)
FINANCIAL AND OPERATIONAL PERFORMANCE
The financial statements for the financial year ended March 31 2019forming part of this Annual Report have been prepared in accordance with the IndianAccounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs.
The year under review had been a landmark in the history of theCompany as it crossed Turnover of H1000 crore. The performance has been exceptional asrevenue and profits mounted new heights. The Company recorded a substantial growth of34.76% in revenue from operations of H1020.49 crore during the year under review
as compared to H757.26 crore in the previous year. Earnings beforeDepreciation Interest and Taxation (EBITDA) stood at H133.56 crore in financial year2018-19 against H89.14 crore in financial year 2017-18 thereby recording a growth of49.83%. During the year under review the Company has achieved Net Profits of H61.95 croreas against H35.23 crore in previous year registering a splendid growth of 75.84%. Thisimprovement in performance of the Company has been mainly on account of increase in salesvolume due to addition in production capacity (commenced in last quarter of FY18) and costconsciousness.
The performance of the Company during the current year continues to beencouraging and barring unforeseen circumstances your Directors expect your Company toachieve better results during the year.
As at the end of the financial year your Company has been assigned thefollowing ratings from ICRA and CARE: i. A; Stable (Single A; Outlook Stable) for LongTerm Bank Facilities (Term Loan and Fund Based) signifying adequate degree of safetyregarding timely servicing of financial obligations. Such facilities carry low creditrisk. ii. A1 (A One) for Short Term Bank Facilities (Non-Fund based) signifying verystrong degree of safety regarding timely payment of financial obligations. Such facilitiescarry lowest credit risk.
Your Directors are pleased to recommend for approval of the members adividend of H2/- per share (i.e. @ 20%) on Equity Shares of H10/- each of the Companyinvolving cash outflow of H5.26 crore (inclusive of Dividend Distribution Tax of H0.90crore) for the financial year 2018-19.
Pursuant to the provisions of Section 124(5) of the Companies Act2013 final dividend for the financial year 2010-11 amounting to H8.65 lakh beingunclaimed for more than 7 years from the date it was lying in the unpaid dividend accounthad been transferred by the Company to the Investor Education and Protection Fund (IEPF)of the Central Government.
During the year under review your Company has issued and allotted2652520 Equity Shares of face value of H10/- each at a price of H377/- per share(including premium of H367/- per share) aggregating to approx. H100 crore to eligibleQualified Institutional Buyers in accordance with Chapter VIII of the SEBI (Issue ofCapital and Disclosure Requirements) Regulations 2009.
The proceeds of the aforesaid issue have been fully utilized inaccordance with the objects stated in the offer document.
With the aforesaid allotment of Equity Shares the total Paid-up EquityShare Capital of the Company stood increased from H19.18 crore to H21.83 crore.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is provided in aseparate section forming part of the Annual Report.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
The Company has no Subsidiary Associate and Joint Venture Companiesduring the year as such; the requirement of furnishing information relating toperformance and financial position of the Subsidiary Associate and Joint VentureCompanies is not applicable.
At the 29th Annual General Meeting held on 15th September 2018 thefollowing Whole Time Directors of the Company were re-appointed by the Company:
During the year under review Shri Shyam Sunder Sharmma (DIN:00530921) Chairman of the Company due to his advancing age and perceived need to elevatethe next generation had expressed his unwillingness to be re-appointed as ManagingDirector after expiry of his term of office on 17th September 2018. He is continuing as aNon-Executive Chairman of the Company thereafter.
Consequently the Board of Directors had elevated Shri Sharad Sharma(DIN: 00383178) Joint Managing Director to the post of Managing Director and ChiefExecutive Officer of the Company w.e.f. 18th September 2018 till the expiry of his termon 31st January 2019 and on recommendation of Nomination and Remuneration
Committee re-appointed him as such for a further period of 5 yearsw.e.f. 1st February 2019 subject to the approval of members.
The Board of Directors of the Company at their meeting held on 1stAugust 2019 on the recommendation of Nomination and Remuneration Committee and subjectto the approval of members have designated and appointed Shri Rajesh Sharma (DIN:02228607) Whole Time Director as Joint Managing Director of the Company with effect from1st August 2019 till the end of current term of his appointment i.e. 18th June 2023.
In terms of the requirements of the Companies Act 2013 theIndependent Directors of the Company were appointed for a period of five years at the 25thAnnual General Meeting held on 29th September 2014. Such term of appointment of theIndependent Directors shall come to an end at the ensuing Annual General Meeting. In viewof the same the Board of Directors have on the basis of the recommendation of theNomination and Remuneration Committee proposed to re-appoint Shri Abhilash Lal Shri AnoopGupta Shri Pradeep Kumar Goenka Shri Surendra Kumar Kabra and Shri Vishwa Nath Chandakas the Independent Directors of the Company for a second term. A resolution proposingre-appointment of Independent Directors of the Company for the second term pursuant toSection 149(6) of the Companies Act 2013 forms part of the Notice of Annual GeneralMeeting.
Shri Narayanan Subramaniam Independent Director of the Company didnot offer his candidature for re-appointment by shareholders in the ensuing Annual GeneralMeeting. Consequently he will cease from the position of the Independent Director on theconclusion of ensuing Annual General Meeting. The Board places on record its deep sense ofgratitude and appreciation for Shri Subramaniam's immense contribution and strategicguidance provided during his tenure as an Independent Director of the Company.
All Independent Directors have given declaration that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of the Listing Regulations.
Pursuant to the provisions of Section 152 of the Companies Act 2013and the Articles of Association of the Company Shri Shyam Sunder Sharmma (DIN: 00530921)Director of the Company retires from the Board by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible he has offered himself for reappointment.
Appropriate Resolution(s) seeking your approval for appointment/re-appointment of the directors are placed in the Notice of ensuing Annual GeneralMeeting.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company had received the declarations u/s 149(7) of the CompaniesAct 2013 from all Independent Directors that they meet the criteria of independence aslaid down under Section 149(6) of the Companies Act 2013 and Regulation 16 (1) (b) of theListing Regulations.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company comprises of six Directors out ofwhich five Directors are independent. The composition and other details are provided inthe Corporate Governance Report of the Company. During the year all the recommendationsmade by the Audit Committee were accepted by the Board.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability in respect of the financial yearended 31st March 2019 confirm that: -a) in preparation of the Annual Accounts theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures if any; b) they have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that year; c) they have taken properand sufficient care for the maintenance of adequate Accounting Records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) they have prepared AnnualAccounts on a Going Concern' basis. e) they have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating effectively. f ) they have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company has in place adequate internal financial controlscommensurate with the size of the Company and the nature of its business with referenceto financial statements. The Audit Committee of the Board of Directors regularly reviewsthe adequacy and effectiveness of the internal control systems and suggests improvementsto strengthen the same.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during thefinancial year 2018-19 are given under the Corporate Governance Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review the Company has duly complied with theapplicable provisions of the Secretarial Standards on Meetings of the Board of Directors(SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries ofIndia.
The extract of the Annual Return in Form MGT-9 as required underSection 92(3) of the Companies Act 2013 read with Rule 12(1) of the Companies (Managementand Administration) Rules 2014 is included in this Report as "Annexure A" andforms an integral part of this Report.
As required under Section 134(3)(a) of the Companies Act 2013 thecopy of Annual Return is also placed in the Company's website and can be accessed at http://ganeshaecosphere.com/wp-content/uploads/2019/08/Annual-Return-FY-2017-18.pdf
The Equity Shares of the Company are presently listed at BSE Limitedand National Stock Exchange of India Limited and the listing fee for the year 2019-20for both the Stock Exchanges is paid.
AUDITORS AND AUDITORS' REPORT a. Statutory Auditors
M/s. Narendra Singhania & Co. Chartered Accountants New Delhiwere appointed as Statutory Auditors of the Company at the 28th Annual General Meeting ofthe Company held on 25th September 2017 who shall hold office till the conclusion of the33rd Annual General Meeting in accordance with the provisions of the Companies Act 2013.
Their appointment was subject to ratification by the members at everyAnnual General Meeting to be held thereafter during their tenure of office. Howeverpursuant to the amendments made to Section 139 of the Companies Act 2013 by the Companies(Amendment) Act 2017 the requirement of seeking ratification of the Members for theappointment of the Statutory Auditors has been withdrawn. Therefore the resolution fordispensing with the requirement for ratification of appointment of Statutory Auditors isbeing placed in the notice of the ensuing Annual General Meeting. The Auditors haveconfirmed that they are not disqualified from continuing as Statutory Auditors of theCompany.
The Auditors' Report for the financial year 2018-19 does notcontain any qualification reservation or adverse remark. b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013and rules made thereunder the Board has appointed M/s. S.K. Gupta
& Co. Company Secretaries as Secretarial Auditor to undertakeSecretarial Audit for the financial year 2018-19. The Secretarial Audit Report for thefinancial year ended 31st March 2019 is annexed herewith as "Annexure B" tothis report.
The Secretarial Audit Report does not contain any qualificationreservation or adverse remark. c. Cost Auditors
Pursuant to the Rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148 (1) of theCompanies Act 2013 in respect of its products and accordingly such accounts and recordsare made and maintained.
M/s. R. M. Bansal & Co. Cost Accountants (Firm Regn. No.:00022)and M/s. Rakesh Misra & Co. Cost Accountants (Firm Regn. No.: 00249) have beenappointed as Cost Auditors of the Company to conduct the audit of the Cost Accounts of theCompany in respect of its products Yarn' and Recycled Polyester StapleFibre' respectively for the financial year 2019-20.
As required under the Companies Act 2013 the resolutions seekingMembers' ratification for the remuneration payable to Cost Auditors forms part of theNotice convening the Annual General Meeting. d. Internal Auditors
Pursuant to the provisions of Section 138 read with Rule 13 of theCompanies (Accounts) Rules 2014 your Company engaged the services of M/s. Ashok &Ajai Chartered Accountants Kanpur to conduct the Internal Audit of the functions andactivities of the Company for the Financial Year 2018-19. The Internal Audit Report isplaced before the Audit Committee of the Company at regular intervals.
REPORTING OF FRAUDS
There was no instance of fraud during the year under reivew whichrequired the Statutory Auditors to report to the Audit Committee and / or Board underSection 143(12) of Act and Rules framed thereunder.
RELATED PARTY TRANSACTIONS
The Company's Policy on Related Party Transactions is disclosed onthe website of the Company at the link http://ganeshaecosphere.com/wp-content/uploads/2016/05/related-party-transaction.pdf
During the financial year under review all transactions entered intowith Related Parties were in the ordinary course of business and on an arm's lengthbasis and they were placed before the Audit Committee as also to the Board for approval.Omnibus approval from the Audit Committee was obtained on annual basis for transactions ofrepetitive nature. During the year the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material inaccordance with the Company's Related Party Transactions Policy. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC-2 is not applicable. The related party transactions aredisclosed under Note No. 33 of the Notes to the Financial Statements for the year ended31st March 2019.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS BY THE COMPANY
Your Company has not given any loans and guarantees or providedsecurities attracting provisions of Section 186 of the Companies Act 2013. However thedetails of investments made are provided in the Note No. 8.1 of the Notes to the FinancialStatements for the year ended 31st March 2019.
WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 and the ListingRegulations the Company has adopted Whistle Blower Policy for vigil mechanism forDirectors and employees to report to the management about the unethical behavior fraud orviolation of Company's code of conduct. The details of the policy are explained inthe Corporate Governance Report.
The Policy has been posted on the website of the Company and may beaccessed at the link http://ganeshaecosphere.com/wp-content/uploads/2016/05/whistle-blower-policy.pdf
NOMINATION AND REMUNERATION POLICY
Our current Nomination and Remuneration Policy is to have anappropriate mix of Executive and Non-Executive Directors including the independentdirectors to maintain the diversity and independence of the Board.
The broad parameters covered under the Policy are AttributesQualifications and Remuneration of Executive and Non-Executive Directors includingIndependent Directors KMP and Senior Management Personnel. It also covered performanceevaluation criteria of the Board its Committees and individual directors. The NominationRemuneration and Board Diversity Policy of the Company is available on the website of theCompany at the link http://ganeshaecosphere.com/wp-content/uploads/2016/08/Policy-on-Nomination-Remuneration-And-Board-Diversity.pdf.
There has been no change in the policy during the year under review. Weaffirm that the remuneration paid to the Directors is as per the terms laid out in thePolicy.
The Board of Directors at its meeting held on 9th February 2019 hascarried out an annual evaluation of its own performance board committees and individualdirectors pursuant to the provisions of the Act & Listing Regulations. PerformanceEvaluation of Independent Directors was done by the entire board excluding the directorbeing evaluated. The Evaluation Process was conducted through a structured questionnaireprepared after taking into consideration the various aspects laid down under the"Nomination Remuneration and Board Diversity Policy" of the Company. The Boardof Directors expressed satisfaction with the evaluation process.
In a separate meeting of Independent Directors held on 9th February2019 performance of non-independent directors the Chairman of the Company and the Boardas a whole was evaluated taking into account the views of Executive Directors andNon-Executive Directors.
Risk management is an ongoing process and embedded in the operatingframework of your Company. Your Company believes that managing risks helps in maximizingreturns. The Board members are regularly informed about the potential risks theirassessment and minimization procedures. The Board frames a plan for elimination
/ minimization of the risk and further lays out the steps forimplementing and monitoring of the risk management plan. There are no risks which in theopinion of the Board are of the nature that can threaten the existence of the Company.However the risks inter-se those are generally dealt in regular course of business andhave to be taken care of are fluctuations in foreign exchange rates and prices of rawmaterial as well as finished products.
The Risk Management Policy has been uploaded on the Company'swebsite and may be accessed at the link www.ganeshaecosphere.com/wp-content/uploads/2016/05/risk-management-policy.pdf
CORPORATE SOCIAL RESPONSIBILITY
Your Company is committed to focus on inclusive growth and improvinglives by contributing towards communities around which it operates. The Company worksprimarily through its CSR Trust i.e. "Ganesh Memorial Trust" towards supportingprojects in the area of promoting education among differently abled eradicating hungerand promoting healthcare including preventive healthcare. These projects are in accordancewith Schedule VII to the Companies Act 2013 and the Company's CSR Policy.
The Report on CSR activities as required under Companies (CorporateSocial Responsibility Policy) Rules 2014 is set out as "Annexure C". The CSRPolicy has been uploaded on the Company's website and may be accessed at the link http://ganeshaecosphere.com/wp-content/uploads/2016/05/corporate-social-responsibility-policy.pdf
During the year under review the Company has neither accepted norrenewed any deposit from public in terms of the provisions of Sections 73 and 76 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
In terms of Rule 2(1)(c)(viii) of the Companies (Acceptance ofDeposits) Rules 2014 the Company during the year has accepted an amount of H1.80 croreas unsecured loans from the Directors and the balance outstanding as on 31st March 2019was H4.47 crore.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year 2018-19 and the date of thisReport. Further there was no change in the nature of business of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there were no significant and materialorders passed by the regulators or courts or tribunals which would impact the goingconcern status of the Company and its future operations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information pertaining to conservation of energy technologyabsorption foreign exchange earnings and outgo as required under Section 134(3)(m) of theAct read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure D".
PARTICULARS OF EMPLOYEES
The Disclosure required under Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as "Annexure E" and forms an integral part ofthis Report. The information showing names and other particulars of employees as per Rule5(2) and 5(3) of the aforesaid Rules forms part of this report. However as per firstproviso to Section 136(1) of the Act the Annual Report excluding the aforesaidinformation is being sent to the members of the Company and others entitled thereto. Thesaid information is available for inspection by members at the registered office of theCompany during business hours on all working days upto the date of ensuing Annual GeneralMeeting. Any member interested in obtaining a copy thereof may also write to the CompanySecretary.
As required under Schedule V to the Listing Regulations a separatesection on Corporate Governance together with Certificate from M/s. S. K. Gupta & Co.Practicing Company Secretaries confirming compliance of the conditions of CorporateGovernance forms an integral part of this Report.
POLICY ON SEXUAL HARASSMENT
Prevention and control of sexual harassment at workplace constitutes animportant part of corporate culture while aligning with best practices and improvingmanagement processes. The Company has zero tolerance for sexual harassment at workplaceand has adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace with a mechanism of lodging complaints and has constituted an InternalComplaints Committee in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. No complaints were reported to the Board for sexual harassment of women at workplace during the financial year 2018-19.
Your Directors take this opportunity to place on record appreciationfor the co-operation and support extended by various departments of the Central and theState Government(s) Bankers and Business associates.
Your Directors also wish to place on record appreciation to theemployees at all levels whose hard work co-operation and support helped us face allchallenges and deliver results. We are also grateful to all the Shareholders customersdealers agents suppliers and bankers of the Company for reposing continued trustsupport and confidence in the management of the Company.