DIRECTORS' REPORT TO, THE MEMBERS OF ECOBOARD INDUSTRIES LIMITED The Directors take pleasure in presenting the 24th Annual Report together with the audited financial statements for the year ended 31st March, 2015. The Management Discussion and Analysis Report have also been incorporated into this report. Directors have tried to maintain coherence in disclosures and flow of the information by clubbing required information topic-wise, and thus certain information which is required in directors report is clubbed elsewhere and has to be read as a part of directors' report. Due to work on this project, production of particle boards on existing line of 13.5'x6' boards was suspended in April 2014 as a result the Sales Revenue for Company's Product has gone down during the financial year 2014-15 as compared to last year. Further we are pleased to inform you that Company has completed the work of improving material preparation section of board line and has re-started production of particle boards of 13.5'x6' size. However Work on setting up of new production line is still in progress. During this period from April 2014 to February 2015, Company carried activity of only laminating plain particle boards. Management is hopeful that the decision of Modification of existing line of 13.5'x6' boards and also setting up of New production line at its Velapur unit will result in:- a) Reduction in our cost of Production on account of reduction in power consumption by at least 25%. b) Reduction in ratio of Raw material consumption and inputs. c) Reduction in manpower on account of automation. d) Increase in penetration in the market aggressively 8' x 4' boards which presently we are unable to market. e) With added capacity derive the benefit of Economics of Scale. Management sincerely feels that, this will not only help the company to cover up the losses but also to gain profit in near future. Based on internal financial control framework and compliance systems established in the Company, the work performed by statutory, internal and secretarial auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. 2. DIVIDEND In view of paucity of funds in the current year and due to counting losses, the Board of Directors does not recommend any dividend for the F.Y. 2014-15. The unclaimed dividend pertaining for the year ended March, 2008 will be transferred to Investor Education and Protection Fund this year. The unclaimed dividend pertaining for the year ended March, 2009 will be transferred to the Investor Education & Protection Fund after the period of 7 years. 3. DIRECTORS AND KMP: The details of Appointment, reappointment and retiring by rotation of Directors and Key Managerial Persons (KMP) are included in Corporate Governance Report, and forms part of the director'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. DIRECTORS RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013: a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the loss of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. that the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 6. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has constituted an internal complaints Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year no complaint was filed before the said Committee. 8. LOANS, GUARANTEES AND INVESTMENTS The Company has not given any Loans, Guarantees and made Investments under section 186 of the Companies Act, 2013 for the financial year ended 31st March 2015. 9. RISK MANAGEMENT Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are taken into account while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives: • 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 and associated opportunities and to respond to them with effective actions. 10. ANNUAL REVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. It covers various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was carried out by the entire Board. 11. INDEPENDENT DIRECTORS AND DECLARATION Composition of the independent director is in compliance with the provisions of the Companies Act, 2013 and clauses of Listing Agreement. The Board of Directors of the Company hereby confirms that all the Independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013. 12. CODE OF CONDUCT i) Code of Conduct for Director and Senior Management of the Company. The Company has adopted the Code of Conduct for the Directors and Senior Management of the Company. All Board Members and Senior Management Personnel have affirmed compliance with the code as on March, 2015. ii) Code of Conduct for prevention of Insider Trading: the Company has its own Code of Conduct for Prevention of Insider Trading 13. CORPORATE GOVERNANCE: As a listed Company necessary measures are taken to comply with provisions of the listing agreement entered with Bombay Stock Exchange and SEBI. The Report on Corporate Governance along with a certificate as stipulated confirming compliance with the conditions of Corporate Governance, the Managing Director's declaration as stipulated under the aforesaid Clause 49 and Management Discussion and Analysis Report forms part of the Annual Report. 14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION , FOREX EARNING AND OUTGO: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A". 15. EXTRACT OF ANNUAL RETURN IN FORM MGT-9 The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure B". 16. COMPENSATION AND DISCLOSURE ANALYSIS: The Companies Act, listing agreement through various provisions require disclosure and analysis on executive, director's, KMP's and other employees' compensation. And the said information forms part of director's report annexed herewith as "Annexure C 17. RELATED PARTY TRANSACTIONS: Related party disclosures pursuant to sub-section (1) of section 188 of the Companies Act, 2013 are forming part of the Board report and is annexed herewith as "Annexure D". 18. STATUTORY AUDITORS: The Company's Auditors, M/s Chaturvedi SK & Fellows, Chartered Accountants, Mumbai, (Firm Regn. No. 112627W) were appointed in AGM 2014 for a period of two audit periods and their appointment needs to be ratified in general meeting. 19. 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 has appointed M/s Abhijit Jagtap & Associates, Pune, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. Secretarial Audit Report is annexed herewith as "Annexure E" in FORM MR3 20. COMMENTS ON OBSERVATIONS ON SECRETARIAL AUDIT REPORT The director's comments on the observations of secretarial auditor have been covered as Annexure- I of the secretarial audit report. FOR ECOBOARD INDUSTRIES LIMITED Sd/- V. S. RAJU Chairman Place: Pune Date: 22/08/2015 |