Ecoplast Ltd Directors Report.

To

The Members,

The Directors are pleased to present their Thirty-Eight Annual Report and Audited Financial Statements for the year ended 31st March, 2020.

1. FINANCIAL SUMMARY

(In Rs.)

31-03-2020 31-03-2019
Net Sales 96,22,24,762 92,72,59,073
Other Income 1,34,81,145 1,08,12,432
Sales and Other Income 97,57,05,907 93,80,71,505
Operating Profit (before Depreciation and Tax) 7,34,38,115 5,99,83,052
Less : Depreciation 2,39,34,474 2,07,60,802
Profit before tax 4,95,03,641 3,92,22,250
Less :Provision for tax
Current Tax 1,57,09,352 1,08,33,539
Deferred Tax Credit -90,491 -55,01,595
Profit after Tax 3,38,84,780 3,38,90,306

2. Operations/State of Companys Affairs

During the year under review, sales value increased by 4 % to Rs.96,22,24,762/- from Rs 92,72,59,073/- in the previous year. The profit after tax reduced by 0.2% to Rs. 3,38,84,780/- from Rs. 3,38,90,306/- in the previous year.

Synergy Films Private Limited, wholly owned subsidiary of the Company has has discontinued its existing activities and has surrendered various Licenses for the said activities w.e.f 7th December 2019 for being economically unviable. As per Ind AS 36 Impairment of Assets , the investment in subsidiary has been tested for impairment and measured at the lower of carrying amount and recoverable amount and consequently, an impairment loss of Rs. 1,30,55,674 has been recognized in the standalone statement of profit and loss account for the financial year ended 31st March 2020.

Due to Covid 19 Pandemic, the Companys Valsad Factory was closed due to Nationwide Lockdown from 22nd March 2020 to14th April 2020.The Company has received permissions from various Government Authorities to resume operations with restricted manpower with effect from 15th April, 2020.

During the Nationwide Lockdown, economic activities across all sectors are adversely affected. Gradually all activities are resuming, however it is very much uncertain to assume the time by which the same will return to normalcy. This will certainly affect the operations including revenue and profitability and liquidity of the company. There are probabilities of company not meeting its financial commitments in time.

No significant and material orders have been passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future during the year under review.

3. DIVIDEND

The Board of Directors have recommended a dividend of Rs.1.5 per equity share ( 15%) for the year 2019-20.(Previous year Rs.1.5 per equity share 15 %) for approval at the Annual General Meeting. The dividend if approved, will result in a cash outflow of Rs 45 lacs as compared to Rs. 54.25 lacs including dividend distribution tax of 9.25 lacs in previous year.

4. BOARD MEETINGS:

The Board of Directors met Five times during the Financial Year 2019-20.

5. DIRECTORS AND KEY MANANGERIAL PERSONNEL :

Mrs. Charulata Patel(holding DIN 00233935), Director of the Company, would retire by rotation, at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

The members at the 33rd Annual General Meeting held on 12th September 2015, approved the appointment of Mr. Dhananjay Desai (holding DIN 00049574) as Independent Director of the Company for a period of 5 years from September 12, 2015 up to September 11, 2020.The Board recommends his re-appointment for a second term of 5 years i.e September 12, 2020 to September 11, 2025 at the ensuing Annual General Meeting.

6. DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declarations from each of the Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence laid down in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the Independent directors possess appropriate balance of skills, experience and knowledge, as required.

7. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Listing Regulations, the Company has put in place a familiarization program for the Independent Directors to familiarize them with their role, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also available on the website of the company and can be accessed by web link http://www.ecoplastindia.com/familiarization-programme- of-independent-directors.html.

8. AUDIT COMMITTEE

The Audit Committee of the company consists of following members.

I. Mr. Mukul Desai-Independent Director &Chairman

II. Mr. Jehangir Moos-Independent Director & Member

III. Mr. Bhupendra Desai-Independent Director & Member

9. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND CRITERIA FOR INDEPENDENT DIRECTORS

The Remuneration Policy for directors and senior management and the Criteria for selection of candidates for appointment as directors, independent directors, senior management are placed on the website of the Company weblink < http://www.ecoplastindia.com/ Remuneration Policy for directors and senior management.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 in the remuneration policy of the Company

10. VIGIL MECHANISM

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns 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 concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Managing Director/ Chairman of the Audit Committee in exceptional cases.

11. DIRECTORS RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company in consultation with the experts and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems in consultation with the experts to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has a proper and adequate system of internal financial controls commensurate 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 and operations against budgets on an ongoing basis.

• The Internal Auditor also regularly reviews the adequacy of internal financial control system.

13. SUBSIDIARY COMPANY

A Statement Containing the Salient features of the Financial Statements of the subsidiary 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 Companys subsidiary, joint venture or associate company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company along with relevant documents and separate audited accounts in respect of the subsidiary are available on the website of the Company.

14. EXTRACT OF ANNUAL RETURN:

As per the requirements of Section 92(3) of the Act and Rules framed there under, the extract of the annual return for FY 2019-20 is given in Annexure II in the prescribed Form No. MGT-9, which is a part of this report. The same is available on http://www.ecoplastindia.com/MGT 9.html

15. AUDITORS:

As per the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. Y.B. Desai & Associates, Chartered Accountants, Surat, (ICAI Registration No. 102368W) were appointed as Statutory Auditors of the Company for a period of five years from the conclusion of the Thirty Fifth AGM to the conclusion of the Fortieth 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 dated May 7, 2018, the proviso requiring ratification of the Auditors appointment by the shareholders at each AGM has been omitted. Accordingly, the ratification of appointment of Statutory Auditors would not be required at the AGM and M/s. Y.B. Desai & Associates, Chartered Accountants, Surat, (ICAI Registration No. 102368W) would continue to act as the statutory auditors of the Company for five years upto the conclusion of the Fortieth AGM to be held in 2022.

16. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, Parikh & Associates,Practising Company Secretaries were appointed as the Secretarial Auditors for auditing the secretarial records of the Company for the financial year 2019-20.

Secretarial audit report of the Company as provided by M/s Parikh & Associates, Practising Company Secretaries is annexed to this Report as Annexure- III.

17. AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT:

The Auditors Report and Secretarial Auditors Report do not contain any qualifications, reservations or adverse remarks.

18. COST AUDITORS

The provisions of section 148 (2) for appointment of Cost Auditors are not applicable to the Company, The Company has maintained the cost records as specified by the Central Government under sub-section (1) of section 148 of the companies act, 2013.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with Clause (m) of Sub-section (3) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure -IV.

20. DEPOSITS:

The Company has not accepted any deposits during the year under report.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

As on 31st March 2020 the Company has provided the following Loans, Guarantees and Investments under section 186 of the Companies Act, 2013.

i. Loans :Rs.15,65,494/- to Synergy Films Private Limited, Wholly Owned Subsidiary

ii. Investments; Rs. 68,16,805/- for 11,95,360 Equity Shares of Rs.10 each fully paid up in Synergy Films Private Limited Wholly Owned Subsidiary.

22. RISK MANAGEMENT POLICY :

The Company has adopted a Risk Management Policy which is implemented throughout the Organisation; Special Emphasis on Risk Management is given during the Annual Budgeting Process and Periodical Monthly Meetings.

23. CORPORATE SOCIAL RESPONSIBILTY POLICY :

The Provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013 are not applicable to the company during the FY 2019-20. However as a part of CSR initiative, The Company has adopted 15 Mentally Challenged Children who are under rehabilitation in Jaina anupam N.Parmar Charitable Trust, Valsad.

24. RELATED PARTY TRANSACTIONS

Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) in Form AOC- 2 are annexed as Annexure - V to this Report.

25. FORMAL ANNUAL EVALUATION:

An annual evaluation of the Boards own performance, Board committees and individual directors 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 directors 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, fulfillment 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.

26. PARTICULARS OF EMPLOYEES

Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the particulars of employees are annexed as Annexure - VI to this Report.

27. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,PROHIBITION AND REDRESSAL) ACT, 2013:

The company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has not received any complaint of sexual harassment during the financial year 2019-20.

28. LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 to BSE where the Companys Shares are listed.

29. INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE

The Board of Directors has adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and is available on our website http://www.ecoplastindia.com/code-of-practices-and-procedures.html

30. CORPORATE GOVERNANCE:

As per Listing Regulations, a separate section on Corporate Governance forms part of this report. A Certificate from M/s Parikh & Associates, Practicing Company Secretary confirming compliance of Corporate Governance forms part of this Report.

Certificate of the CEO/CFO, confirming the correctness of the financial statements, compliance with the Companys Code of Conduct and the Audit Committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report and forms part of this report.

31. MANAGEMENT DISCUSSION ANALYSIS

In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2018, the Managements discussion and analysis is set out in this Annual Report.

32. SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

33. ACKNOWLEDGMENT

The Directors wish to convey their appreciation to Customers, Suppliers, Bankers, other Stakeholders and specially the employees for their co-operation. The Directors also appreciate 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, 29 th June 2020 CHAIRMAN
DIN:00015126