THE MEMBERS OF
GANESHA ECOSPHERE LTD.
Your Directors have pleasure in presenting the Twenty Ninth Annual Report of theCompany together with the Audited Financial Statements for the financial year ended 31stMarch 2018.
The summarised financial results of the Company for the year ended 31st March 2018 ascompared to the preceding year are as under:
(Rs. in Lakhs)
| ||Current Year (2017-18) ||Previous Year (2016-17) * |
|Total Income ||76055.70 ||68849.09 |
|Profit before Finance Costs Depreciation and Amortization Expense ||8914.24 ||8153.74 |
|Less: Finance Costs ||1457.25 ||1487.74 |
|Less: Depreciation & Amortization Expense ||2048.37 ||2052.76 |
|Profit before Tax ||5408.62 ||4613.24 |
|Tax Expense ||(1885.54) ||(1630.59) |
|Profit after Tax ||3523.08 ||2982.65 |
|Add: Other Comprehensive Income ||18.22 ||2.21 |
|Total Comprehensive Income ||3541.30 ||2984.86 |
*Figures are re-stated as per Ind AS.
FINANCIAL AND OPERATIONAL PERFORMANCE
Your Company has prepared the Financial Statements for the year ended 31st March 2018for the first time in accordance with the Indian Accounting Standards (Ind AS) notifiedunder Section 133 of the Companies Act 2013 read with relevant rules issued thereunder.Previous year figures have been regrouped/re-classified wherever necessary and have beenre-stated as per Ind AS.
We are pleased to inform you that your Company posted a growth of 10.39% in revenuefrom operations of Rs. 75755.27 Lakh during the year under review as compared to Rs.68623.03 Lakh in the previous year. The Company achieved Earnings before DepreciationInterest and Taxation (EBITDA) of Rs. 8914.24 Lakh in financial year 2017-18 against Rs.8153.74 Lakh in financial year 2016-17 thereby registering a growth of 9.33% on year toyear basis. During the year under review the Net Profit of the Company is improved by18.12% at Rs. 3523.08 Lakh as against Rs. 2982.65 Lakh in previous year due to growth involumes and cost consciousness.
During the year the business landscape witnessed a historical tax reform in indirecttaxation causing initial disruption. The Goods and Services Tax (GST) regime has sincethen stabilized. The recent rationalization in GST rates is expected to trigger positivesentiments amongst consumers and we are optimistic about growth opportunities it maybring.
Despite rising commodity prices and high GST rates Ganesha continued to reinforce itsmarket position and product portfolio. Your directors are pleased to report thatCompanys additional production line at Temra has commenced commercial production ofRPSF with an installed capacity of 21000 TPA w.e.f. 1st February 2018 and full effectthereof will be reflected in the working of current financial year. With commissioning ofthe project the consolidated RPSF capacity of the Company has reached at 108600 TPA.
The performance of the Company during the current year continues to be encouraging andbarring unforeseen circumstances your Directors expect your Company to achieve betterresults during the year.
Your Directors are pleased to recommend for approval of the members a dividend of Rs.1.50 per share (i.e. @ 15%) on Equity Shares of Rs. 10/- each of the Company involvingcash outflow of Rs. 394.75 Lakh (inclusive of Dividend Distribution Tax of Rs. 67.31 Lakh)for the financial year 2017-18.
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 final dividendfor the financial year 2009-10 amounting to Rs. 463852/- being unclaimed for more than 7years from the date it was lying in the unpaid dividend account had been transferred bythe Company to the Investors Education and Protection Fund (IEPF) of the CentralGovernment.
During the current year your Company had made an allotment of 2652520 Equity Sharesof face value of Rs. 10/- each at a price of Rs. 377/- per share (including premium of Rs.367/- per share) aggregating to approx. Rs. 10000 Lakh to eligible QualifiedInstitutional Buyers in accordance with Chapter VIII of the SEBI (Issue of Capital andDisclosure Requirements) Regulations 2009.
The proceeds of the aforesaid issue are being utilized in accordance with the objectsstated in the offer document.
With the aforesaid allotment of Equity Shares the total Paid-up Equity Share Capitalof the Company stood increased from Rs. 1917.69 Lakh to Rs. 2182.94 Lakh.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") is provided in a separate sectionforming part of the Annual Report.
SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
The Company has no Subsidiary Associate and Joint Venture Companies during the yearas such; the requirement of furnishing information relating to performance and financialposition of the Subsidiary Associate and Joint Venture Companies is not applicable.
During the current year the Board of Directors has re-appointed the following WholeTime Directors of the Company upon expiry of their term of office:
|Name ||Designation ||Tenure |
|Shri Vishnu Dutt Khandelwal ||Executive Vice ||5 years (w.e.f. 19th June 2018) |
|(DIN: 00383507) ||Chairman || |
|Shri Rajesh Sharma ||Executive ||5 years (w.e.f. 19th June 2018) |
|(DIN: 02228607) ||Director || |
|Shri Gopal Singh Shekhavat ||Director ||5 years (w.e.f. 1st June 2018) |
|(DIN: 06591844) ||(Administration) || |
Appropriate Resolution(s) seeking your approval for re-appointment of the directors areplaced in the Notice of ensuing Annual General Meeting.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Articlesof Association of the Company Shri Gopal Singh Shekhavat (DIN: 06591844) Director of theCompany retires from the Board by rotation at the ensuing Annual General Meeting of theCompany and being eligible he has offered himself for reappointment.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company had received the declarations u/s 149(7) of the Companies Act 2013 fromall Independent Directors that they meet the criteria of independence as laid down underSection 149(6) of the Companies Act 2013 and Regulation 16(i)(b) of the ListingRegulations.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee of the Company comprises of six Directors out of which fiveDirectors are independent. The composition and other details are provided in the CorporateGovernance Report of the Company. During the year all the recommendations made by theAudit Committee were accepted by the Board.
KEY MANAGERIAL PERSONNEL
During the year under review following are the Key Managerial Personnel of theCompany:
|S. No. ||Name of the person ||Designation |
|1. ||Shri Shyam Sunder ||Chairman and Managing |
| ||Sharmma ||Director |
|2. ||Shri Sharad Sharma ||Joint Managing Director |
|3. ||Shri Gopal Agarwal ||Chief Financial Officer |
|4. ||Shri Bharat Kumar Sajnani ||Company Secretary & |
| || ||Compliance Officer |
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability in respect of the financial year ended 31st March2018 confirm that:-a) in preparation of the Annual Accounts the applicable AccountingStandards have been followed along with proper explanation relating to materialdepartures if any; b) they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive 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 controls commensurate with thesize of the Company and the nature of its business with reference to financialstatements. The Audit Committee of the Board of Directors regularly reviews the adequacyand effectiveness of the internal control systems and suggests improvements to strengthenthe same.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the financial year2017-18 are given under the Corporate Governance Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review the Company has duly complied with the applicableprovisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by The Institute of Company Secretaries of India.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in Form MGT-9 as required under Section 92(3) of theCompanies Act 2013 read with Rule 12(1) of the Companies (Management and Administration)Rules 2014 is included in this Report as "Annexure A" and forms an integralpart of this Report.
The Equity Shares of the Company are presently listed at BSE Limited and National StockExchange of India Limited and the listing fee for the year 2018-19 for both the StockExchanges is paid.
AUDITORS AND AUDITORS REPORT
a. Statutory Auditors
M/s. Narendra Singhania & Co. Chartered Accountants New Delhi were appointed asStatutory Auditors of the Company at the 28th Annual General Meeting of the Company heldon 25.09.2017 who shall hold office till the conclusion of the 33rd Annual GeneralMeeting in accordance with the provisions of the Companies Act 2013. However thisappointment was subject to ratification by the members at every Annual General Meeting tobe held thereafter during their tenure of office. The Auditors have confirmed theireligibility and qualification under Section 141 of the Companies Act 2013 and thereforetheir ratification for appointment as Statutory Auditors for the year 2018-19 is beingsought from the Members of the Company at the ensuing Annual General Meeting.
The Auditors' Report for the financial year 2017-18 does not contain any qualificationreservation or adverse remark.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board has appointed M/s. S.K. Gupta & Co. Company Secretaries asSecretarial Auditor to undertake Secretarial Audit for the financial year 2017-18. TheSecretarial Audit Report for the financial year ended 31st March 2018 is annexed herewithas "Annexure B" to this report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
c. Cost Auditors
Pursuant to the Rules made by the Central Government of India the Company is requiredto maintain cost records as specified under Section 148 (1) of the Companies Act 2013 inrespect of its products and accordingly such accounts and records are made and maintained.
M/s. R. M. Bansal & Co. Cost Accountants (Firm Regn. No.:00022) and M/s. RakeshMisra & Co. Cost Accountants (Firm Regn. No.: 00249) have been appointed as CostAuditors of the Company to conduct the audit of the Cost Accounts of the Company inrespect of its products Yarn and Recycled Polyester Staple Fibrerespectively for the financial year 2018-19.
As required under the Companies Act 2013 the resolutions seeking Members'ratification for the remuneration payable to Cost Auditors forms part of the Noticeconvening the Annual General Meeting.
d. Internal Auditors
Pursuant to the provisions of Section 138 read with Rule 13 of the Companies (Accounts)Rules 2014 your Company engaged the services of M/s. Ashok & Ajai CharteredAccountants Kanpur to conduct the Internal Audit of the functions and activities of theCompany for the Financial Year 2017-18. The Internal Audit Report is placed before theAudit Committee of the Company at regular intervals.
RELATED PARTY TRANSACTIONS
The Companys Policy on Related Party Transactions is disclosed on the website ofthe Company at the link http://ganeshaecosphere.com/wp-content/uploads/2016/05/related-party-transaction. pdf During the financialyear under review all transactions entered into with Related Parties were in the ordinarycourse of business and on an arms length basis and they are placed before the AuditCommittee as also to the Board for approval. Omnibus approval from the Audit Committee wasobtained on annual basis for transactions which are of repetitive nature. During the yearthe Company had not entered into any contract/ arrangement / transaction with relatedparties which could be considered material in accordance with the Companys RelatedParty Transactions Policy. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3)(Rs.) of the Companies Act 2013 in Form AOC-2 is notapplicable. The related party transactions are disclosed under Note No. 35 of the Notes tothe Financial Statements for the year ended 31st March 2018.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS BY THE COMPANY
Your Company has not made any investments given loans and guarantees or providedsecurities attracting provisions of Section 186 of the Companies Act 2013.
WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act 2013 and the Listing Regulations theCompany has adopted Whistle Blower Policy for vigil mechanism for Directors and employeesto report to the management about the unethical behavior fraud or violation ofCompanys code of conduct. The details of the policy are explained in the CorporateGovernance Report.
The Policy has been posted on the website of the Company and may be accessed at thelink 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 an appropriate mix ofExecutive and Non-Executive Directors including the independent directors to maintain thediversity and independence of the Board.
The broad parameters covered under the Policy are Attributes Qualifications andRemuneration of Executive and Non-Executive Directors including Independent Directors KMPand Senior Management Personnel. It also covered performance evaluation criteria of theBoard its Committees and individual directors.
The Nomination Remuneration and Board Diversity Policy of the Company is available onthe website of the Company at the link http://ganeshaecosphere.com/wp-content/uploads/2016/08/Policy-on-Nomination-Remuneration-And-Board-Diversity.pdf. There has been nochange in the policy during the year under review. We affirm that the remuneration paid tothe Directors is as per the terms laid out in the Policy.
The Board of Directors at its meeting held on 13th February 2018 has carried out anannual evaluation of its own performance board committees and individual directorspursuant to the provisions of the Act & Listing Regulations. Performance Evaluation ofIndependent Directors was done by the entire board excluding the director beingevaluated. 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 13th February 2018 performanceof non-independent directors the Chairman of the Company and the Board as a whole wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors.
Risk management is an ongoing process and embedded in the operating framework of yourCompany. Your Company believes that managing risks helps in maximizing returns. The Boardmembers are regularly informed about the potential risks their assessment andminimization procedures. The Board frames a plan for elimination / minimization of therisk and further lays out the steps for implementing and monitoring of the risk managementplan.
There are no risks which in the opinion of the Board are of the nature that canthreaten the existence of the Company. However the risks inter-se those are generallydealt in regular course of business and have to be taken care of are fluctuations inforeign exchange rates and prices of raw material as well as finished products.
The Risk Management Policy has been uploaded on the Companys website and may beaccessed 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 improving lives bycontributing towards communities around which it operates. The Company works primarilythrough its CSR Trust i.e. "Ganesh Memorial Trust" towards supporting projectsin the area of promoting education among differently abled eradicating hunger andpromoting healthcare including preventive healthcare. These projects are in accordancewith Schedule VII to the Companies Act 2013 and the Companys CSR Policy.
The Report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as "Annexure C". The CSR Policyhas been uploaded on the Companys 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 nor renewed any depositfrom public in terms of the provisions of Sections 73 and 76 of the Companies Act 2013read with the Companies (Acceptance of Deposits) Rules 2014.
In terms of Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules 2014the Company during the year has accepted an amount of Rs. 347 Lakh as unsecured loansfrom the Directors and the balance outstanding as on 31st March 2018 was Rs. 675 Lakh.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year 2017-18 and the date of this Report.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 material orders passed bythe regulators or courts or tribunals which would impact the going concern status of theCompany and its future operations.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorptionforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act readwith 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
Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as "Annexure E" and forms anintegral part of this Report. The information showing names and other particulars ofemployees as per Rule 5(2) and 5(3) of the aforesaid Rules forms part of thisreport. However as per first proviso to Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company and othersentitled thereto. The said information is available for inspection by members at theregistered office of the Company during business hours on all working days upto the dateof ensuing Annual General Meeting. Any member interested in obtaining a copy thereof mayalso write to the Company Secretary.
As required under Schedule V to the Listing Regulations a separate section onCorporate Governance together with Certificate from M/s. S. K. Gupta & Co. PracticingCompany Secretaries confirming compliance of the conditions of Corporate Governanceforms an integral part of this Report.
POLICY ON SEXUAL HARASSMENT
Prevention and control of sexual harassment at workplace constitutes an important partof corporate culture while aligning with best practices and improving managementprocesses. The Company has zero tolerance for sexual harassment at workplace and hasadopted 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 2017-18.
Your Directors take this opportunity to place on record appreciation for theco-operation and support extended by various departments of the Central and the StateGovernment(s) Bankers and Business associates.
Your Directors also wish to place on record appreciation to the employees at alllevels whose hard work co-operation and support helped us face all challenges anddeliver results. We are also grateful to all the Shareholders customers dealers agentssuppliers and bankers of the Company for reposing continued trust support and confidencein the management of the Company.
| ||For and on behalf of the Board |
|Place : Kanpur ||(Shyam Sunder Sharmma) |
|Date : 9th August 2018 ||Chairman and Managing Director |
| ||DIN: 00530921 |