To the Members of Ganesha Ecosphere Ltd.
Your Directors have pleasure in presenting the Twenty Eighth Annual Report of theCompany together with the Audited Financial Statements for the financial year ended 31stMarch 2017.
The summarised financial results of the Company for the year ended 31st March 2017 ascompared to the preceding year are as under:
| ||Current Year ||Previous Year |
|Particulars ||(2016-17) ||(2015-16) |
|Total Revenue ||676.43 ||648.75 |
|Profit before Finance Costs Depreciation and Amortization Expense ||81.52 ||75.29 |
|Less: Finance Costs ||14.87 ||19.86 |
|Less: Depreciation & Amortization Expense ||20.43 ||21.05 |
|Profit before Tax ||46.22 ||34.38 |
|Tax Expense ||(16.28) ||(9.52) |
|Profit after Tax ||29.94 ||24.86 |
FINANCIAL AND OPERATIONAL PERFORMANCE
Your Company recorded a growth of 4.15% with revenue from operations of Rs 674.18Crore during the year under review as compared to Rs 647.29 Crore in FY 2015-16. Theincrease in revenue is primarily on account of volume growth. Earnings beforeDepreciation Interest and Taxation (EBITDA) with Rs 81.52 Crore witnessed a growth of8.27% as compared to Rs 75.29 Crore in the previous year. During the year under reviewthe Net Profit of the Company increased by 20.43% at Rs 29.94 Crore as against Rs 24.86Crore in previous year.
Despite disruption caused by demonetization in second half of F.Y. 2017 your Companyhas been able to maintain growth and to achieve satisfactory results during the year.
Your Directors are pleased to report that the expansion project of Recycled PolyesterStaple Fibre (RPSF) of 21000 TPA at Temra Bilaspur Distt. Rampur (U.P.) is progressingsatisfactorily and expected to be operational during second half of F.Y. 2018.
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 Rs1.20 per share (i.e. @ 12%) on Equity Shares of Rs 10/- each of the Company involvingcash outflow of Rs 27697005/- (inclusive of dividend distribution tax of Rs 4684753/-)for the financial year 2016-17. Dividend has been kept at last year's level due torequirement of cash for funding ongoing expansion project.
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 Interimdividend for the financial year 2009-10 amounting to H397086/- being unclaimed for morethan 7 years from the date it was lying in the unpaid dividend account had beentransferred by the Company to the Investors Education and Protection Fund (IEPF) of theCentral Government.
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 notapplicable.
Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Articlesof Association of the Company Shri Vishnu Dutt Khandelwal (DIN: 00383507) Director ofthe Company retires from the Board by rotation at the ensuing Annual General Meeting ofthe Company and being eligible he has offered himself for re-appointment.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company had received the declarations u/s 149(7) of the
Companies Act 2013 from all Independent Directors that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(i)(b) of the Listing Regulations.
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:
|Sl. No. ||Name of the person ||Designation |
|1. ||Shri Shyam Sunder Sharmma ||Chairman and Managing 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 March2017 confirm that:-
a) in preparation of the Annual Accounts the applicable Accounting Standards have beenfollowed along with proper explanation relating to material departures if any;
b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that year;
c) they have taken proper and sufficient care for the maintenance of adequateAccounting Records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) they have prepared Annual Accounts on a going concern' basis.
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and 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 year2016-17 are given under the Corporate Governance Report.
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 anintegral part of this Report.
The Equity Shares of the Company are presently listed at BSE Limited and National StockExchange of India Ltd. and the listing fee for the year 2017-18 for both the StockExchanges is paid upto date.
AUDITORS AND AUDITORS' REPORT
a. Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act 2013 and Rules madethere under the term of office of the present auditors of the Company M/s. MehrotraRakesh Kumar & Co. Chartered Accountants Kanpur will expire at the conclusion ofthe ensuing Annual General Meeting.
The Board of Directors places on record its appreciation to the services rendered byM/s. Mehrotra Rakesh Kumar & Co. as the Statutory Auditors of the Company.
The Board of Directors of your Company has recommended the appointment of M/s. NarendraSinghania & Co. Chartered Accountants New Delhi as the Statutory Auditors of theCompany for a term of 5 (five) consecutive years to hold office from the conclusion ofthis 28th Annual General Meeting until the conclusion of the 33rd Annual General Meetingsubject to the approval of the Members.
M/s. Narendra Singhania & Co. have confirmed their eligibility and qualificationrequired under the Act for holding the office as Statutory Auditors of the Company.
The Auditor's Report for the financial year 2016-17 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 2016-17. TheSecretarial Audit Report for the financial year ended 31st March 2017 is annexed herewithas "Annexure B" to this report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
c. Cost Auditors
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 Fibre'respectively for the financial year 2017-18.
As required under the Companies Act 2013 the resolutions seeking Member'sratification 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. Kapoor Tandon & Co.CharteredAccountants Kanpur to conduct the Internal Audit of the functions and activities of theCompany for the Financial Year 2016-17. The Internal Audit Report is placed before theAudit Committee of the Company time to time.
RELATED PARTY TRANSACTIONS
The Company's Policy on Related Party Transactions is disclosed on the website of theCompany at the link http://ganeshaecosphere.com/wp-content/uploads/2016/05/related-party-transaction.pdf
During the financial year under review all transactions entered into with RelatedParties were in the ordinary course of business and on an arm's length basis and they areplaced before the Audit Committee as also to the Board for approval. Omnibus approval fromthe Audit Committee was obtained on annual basis for transactions which are of repetitivenature. During the year the Company had not entered into any contract/ arrangement /transaction with related parties which could be considered material in accordance with theCompany's Related Party Transactions Policy. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(Rs) of the Companies Act 2013 in FormAOC-2 is not applicable. The related party transactions are disclosed under Note No. 37 ofthe Notes to Financial Statements for the year ended 31st March 2017.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS BY THE COMPANY
Your Company has not made any investments given loans and guarantees attractingprovisions 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 of Company'scode of conduct. The details of the policy are explained in the Corporate GovernanceReport.
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 detailed policy on director's appointment and remuneration including criteria fordetermining positive attributes qualifications and independence of a director as requiredunder Section 178(3) of the Companies Act 2013 is available on the website of the Companyat the link http://ganeshaecosphere. com/wp-content/uploads/2016/08/Policy-on-Nomination-
Remuneration-And-Board-Diversity.pdf and is also annexed as "Annexure C"to this report. Further we affirm that the remuneration paid to the Directors is as perthe terms laid out in Nomination and Remuneration Policy of the Company.
The Board of Directors at its meeting held on 1st February 2017 had evaluated its ownperformance and of its committees along with performance of individual directors includingindependent directors. The Evaluation Process was conducted through a structuredquestionnaire prepared after taking into consideration the various aspects laid down underthe "Nomination Remuneration and Board Diversity Policy" of the Company.The Board of Directors expressed satisfaction with the evaluation process.
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theperformance evaluation of the Chairman the Non-Independent Directors the Board and itsCommittees was carried out by the Independent Directors at its meeting held on 1stFebruary 2017.
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 in foreignexchange rates and prices of raw material as well as finished products.
The Risk Management Policy has been uploaded on the Company's 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 Company's CSR policy.
The Report on CSR activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as "Annexure D". The CSRPolicy has been uploaded on the Company's website and may be accessed at the linkhttp://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 H4650000/- as unsecured loansfrom the directors and the balance outstanding as on 31st March 2017 was H32800000/-.
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 2016-17 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 absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureE".
PARTICULARS OF EMPLOYEES
The Disclosure required under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed as "Annexure F" and forms an integral part of this Report. Theinformation showing names and other particulars of employees as per Rule 5(2) and 5(3) ofthe aforesaid Rules forms part of this report. However as per first proviso to Section136(1) of the Act the Annual Report excluding the aforesaid information is being sent tothe members of the Company and others entitled thereto. The said information is availablefor inspection by members at the registered office of the Company during business hours onall working days upto the date of ensuing Annual General Meeting. Any member interested inobtaining a copy thereof may also write to the Company Secretary.
As required under Schedule V to the Listing Regulations a separate section onCorporate Governance together with Certificate from the Company's Auditors confirmingcompliance of the conditions of Corporate Governance forms an integral part of thisReport.
POLICY ON SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace with amechanism of lodging complaints in line with the provisions of Sexual Harassment of Womenat Workplace (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 2016-17.
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 |
| ||(Shyam Sunder Sharmma) |
|Place : Kanpur ||Chairman and Managing Director |
|Date : 12th August 2017 ||DIN: 00530921 |