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21ST ANNUAL REPORT 2011-2012

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ECOBOARD INDUSTRIES LIMITED

21ST ANNUAL REPORT 2011 - 2012REGISTERED OFFICE : 36/1, Preet Chambers, 2nd Floor, Pune-Mumbai Road, Wakdewadi, Pune - 411 003.

Tel. (020) 41080800

BOARD OF DIRECTORS CORPORATE OFFICE (For Correspondance)

Mr. V.S Raju, Chairman 65/1A, “Ecohouse”, “Akarshak Building”

Mr. G.R. K. Raju, Managing Director Opp. Nal Stop, Karve Road,Pune-411004

Mr. P. Satyanarayana Raju, Director Tel.(020) 25432345/Fax.(020) 25465328

Mr. Srinivas Raju P., Director E-Mail [email protected]

Mr. Praveen Kumar Raju Gottumukkala, Director Website:www.ecoboard.in

Dr. N.A Ramaiah, Independent Director

Mr. Ramchandra Raju P.S, Independent Director

Mr. U.S Kadam, Independent Director REGISTRAR & TRANSFER AGENTS

Mr. V.P Rane, Independent Director M/s Link Intime India Private Limited

Mr. Narasimhan Krishnan, Independent Director 202-A, 2nd Floor, “Akshay Complex”

Off Dhole Patil Road, Pune- 411 001

COMPANY SECRETARY Tel. (020) - 2616 1629 Fax (020) 2616 3503

Mr. Pramod Patil Email : [email protected]

AUDITORS BANKERS

M/s. Chaturvedi SK & Fellows,Mumbai Bank of Maharashtra

410, Dev Plaza, SV Road, Andheri (W), Mumbai - 400 058 Andhra Bank

Tel. (022) 66943452 Fax (022) 66943453 State Bank of India

Bio Systems Division Factory (Particle Bagasse board Division)

65/1A, “Ecohouse”, “Akarshak Building” 1. Village Velapur, Taluka Malshiras,

Opp. Nal Stop, Karve Road,Pune-411004 District- Solapur, Maharashtra.

Tel.(020) 25432345 Fax.(020) 25465328 Tel.(02185) 245261/62, Fax- (02185) 245203

2. Village Jambhulwadi, Taluka- Walwa,

Dist: Sangli, Maharashtra.

BRANCHES

West Zone : Pune, Mumbai, Ahmedabad, Kolhapur

South Zone : Hydrabad, Banglore, Vizag, Cochin, Chennai, Bhubaneshwar, Coimbatore

North Zone: Delhi, Chandigarh, Bhopal, Kolkatta, Raipur

Note : All correspondence shall be made to Corporate Office address.


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NOTES


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CONTENTS

— Notice of AGM................................................................................................................ 04

— Directors’ Report............................................................................................................. 07

— Management Discussion & Analysis Report................................................................... 09

— Corporate Governance Report....................................................................................... 11

— Auditors Certificate on Corporate Governance .............................................................. 16

— Certification by Managing Director.................................................................................. 17

— Declaration for Compliance with the code of conduct..................................................... 17

— Auditors Report.............................................................................................................. 18

— Balance Sheet................................................................................................................ 20

— Statement of Profit and Loss.......................................................................................... 21

— Cash Flow Statement..................................................................................................... 22

— Notes Forming part of the Financial Statements............................................................ 23

— Attendance slip and Proxy form...................................................................................... 35


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NOTICE

Notice is given that the 21st Annual General Meeting of theMembers of ‘Ecoboard Industries Limited’ will be held onTuesday 25th September, 2012 at 11.00 a.m. at HotelShangrila Gardens, Off Karve Road, Near Nal Stop,Pune –411 004, to transact the following business :

A. ORDINARY BUSINESS :

1. To consider and adopt the Audited Balance Sheetas at March 31, 2012, and the statement of Profitand Loss for the year ended on that date and theReport of the Board of Directors with its annexureand Auditors Report thereon.

2. To appoint Director in place of Mr. V. P. Rane, whoretires by rotation, and being eligible offers himselffor re-appointment.

3. To appoint Director in place of Dr. N.A. Ramaiah,who retires by rotation, and being eligible offershimself for re-appointment.

4. To appoint Auditors and to fix their remunerationand in this regard to consider and if thought fit, topass, with or without modification(s) the followingresolution as an Ordinary Resolution :

“RESOVLED THAT pursuant to Section 224 andother applicable provisions, if any, of the CompaniesAct, 1956, M/s Chaturvedi SK & Fellows, CharteredAccountants, Mumbai, (Firm Regn. No. 112627W)be and are hereby appointed as Auditors of theCompany, to hold office from the conclusion of thisAnnual General Meeting until the conclusion of thenext Annual General Meeting of the Company onsuch remuneration as shall be fixed by the Board ofDirectors.”

B. SPECIAL BUSINESS

5. To appoint Mr. Praveen Kumar Raju Gottumukkalaas Whole Time director on designation as aExecutive Director and in this regard to considerand if thought fit, to pass, with or withoutmodification(s), the following resolution as anordinary Resolution:

“RESOLVED THAT pursuant to Sections 198, 269,309,310, and other applicable provisions, if any, ofCompanies Act, 1956 (The Act) read with scheduleXIII as amended up to date and all other applicableprovisions, if any, of the Act, or any modification(s)or re-enactment thereof, approval of the membersbe and is hereby accorded to the appointment ofMr. Praveen Kumar Raju Gottumukkala as Whole-time Director designated as Executive Director ofthe Company for a period of 5 years with effect from

1st April, 2012 on the terms and conditions given inabstract u/s 302, forming part of this resolution andon the remuneration, with powers to the Board ofDirectors to alter or vary the said terms andconditions and the remuneration payable toMr. Praveen Kumar Raju Gottumukkala in suchmanner as the Board may deem fit and is acceptableto Mr. Praveen Kumar Raju Gottumukkala.”

“RESOLVED FURTHER THAT in the event of therebeing a loss or inadequacy of profits in any financialyear, the aforesaid remuneration payable toMr. Praveen Kumar Raju Gottumukkala shall be theminimum remuneration subject to the limits set outin schedule XIII of the Companies Act 1956.”

“RESOLVED FURTHER THAT the Board ofDirectors of the Company be and are herebyauthorised to take such steps as may be necessaryand expedient to give effect to this resolution.”

Abstract pursuant to section 302 of theCompanies Act, 1956

Remuneration payable to Mr. Praveen Kumar RajuGottumukkala as Whole time Director shall be asfollows :

Terms of appointment: 5 years from 1st April, 2012

1. Salary : Rs. 1,00,000/- p. m. in the scale of1,00,000- 10,000-1,50,000

2. Commission : @ 1% of Net profits of theCompany in any financial year, subject to themaximum as may be laid down by the Boardof Directors from time to time.

3. Perquisites : In addition to the aforesaid salaryand commission, the Director shall also beeligible for the following perquisites, viz;

a. House Rent Allowance / Rent freeAccommodation as per rules of theCompany;

b. Medical Expenses reimbursement for self& family at actuals;

c. Leave Travel Concession: Return 1stclass passage by Air, Sea, Rail and/orRoad for a period not exceeding 30 days,once a year, anywhere in the world andreimbursement of lodging and boardingand other incidental expenses during thatperiod for self and family;

d. Entertainment Expenses at actuals;

e. Club fees at actuals (excluding admissionfees);

f. Expenses of domestic servants,personal gardener and personal driver


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– reimbursement at actuals;

g. Expenses for books, periodicals andnewspapers – reimbursement at actuals;

h. Medical Insurance;

i. Personal Accident Insurance,

j. Company car with driver for officialpurposes;

k. Telephone at residence;

l. Casual, sick and annual Earned Leaveshall be as per the rules of the Company.Perquisites shall be evaluated as perIncome-Tax Rules, wherever applicableand in absence of any such rules, thesame shall be evaluated at actual cost.

4. Minimum Remuneration :

Notwithstanding anything containedhereinabove, where in any financial year duringthe currency of tenure of Mr. Praveen KumarRaju Gottumukkala as Whole time Director, theCompany has no profits or its profits areinadequate, the remuneration payable to Mr.Praveen Kumar Raju Gottumukkala by way ofsalary, perquisites and other allowances shallbe limited to the limits laid down in ScheduleXIII of the Companies Act 1956.

5. Additional Perquisites :

In addition to the salary, commission andperquisites referred above, Mr. Praveen Kumar

Raju Gottumukkala shall also be eligible for thefollowing perquisites which shall not beincluded in the computation of ceiling onremuneration, as prescribed under scheduleXIII of the Act, viz.

a. Contribution to provident fund, super-annuation fund or annuity fund to theextent these either singly or put togetherare not taxable under the Income Tax Act,1961;

b. Gratuity payable at a rate not exceedinghalf a month’s salary for each completedyear of service; and

c. Encashment of leave at the end of thetenure.

Such resolution may be passed as an ordinaryresolution.

By Order of the Board of Directors,For Ecoboard Industries Ltd

Place : Pune. V.S. RajuDate : 14th August 2012 Chairman

NOTES

1. A member entitled to attend and vote at the AnnualGeneral Meeting (the Meeting) is entitled to appointa proxy to attend and vote on a poll instead of himselfand the proxy need not be a member of the Company.The instrument appointing the proxy should however,be deposited at the Registered Office of the Companynot less than forty-eight hours before thecommencement of the Meeting. Proxy forms aremade available in this Annual Report elsewhere.

2. Explanatory statements pursuant to Section 173(2) ofthe Companies Act, 1956 which set out details relatingto the special businesses under item no. 5 is annexedhereto.

3. Members are requested to bring their Attendance Slipalong with their copy of Annual Report to the Meeting.

4. The Register of Members and Share Transfer Register

will remain closed from Saturday 22nd September, 2012to Tuesday 25th September, 2012 (both days inclusive)for the purpose of Annual General Meeting.

5. Members who hold shares in dematerialized form arerequested to write their Client ID and DP ID and thosewho hold shares in physical form are requested to writetheir Folio Number in the attendance slip for attendingthe Meeting.

6. In case of joint holders attending the Meeting, only suchjoint holder who is higher in the order of names will beentitled to vote.

7. The Company distributed Dividend for the F.Y. 2007-08and 2008-09. Dividend remaining unclaimed for thoserespective years will be transferred to Investor Educationand Protection Fund after completion of 7 (seven) yearsfrom the respective declaration of Dividend.


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IMPORTANT COMMUNICATION TO MEMBERS

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliancesby the Companies and has issued circulars stating that service of notice / documents including Annual Report can be sent bye-mail to its members. To support this green initiative of the Government, including beneficial owners are requested to registertheir e-mail addresses with Company’s Registrars & Share Transfer Agents, Link Intime India Pvt. Ltd. at the address:

M/s Link Intime India Private Limited PuneBlock NO. 202, 2nd Floor Akshay Complex,Off Dhole Patil Road Pune – 411 001Tel: (020) 26161629Telefax: (020) 2616350Email: [email protected]

Also report any change in the e-mail ID that you register with us or your decision to receive the annual report by post instead.

Any member receiving such report through e-mail may insist for physical copies of the annual report and the same would besent to him free of cost.

EXPLANATORY STATEMENT PURSUANT TO SECTION173 OF THE COMPANIES ACT, 1956ITEM NO. 5 in the Notice

Mr. Praveen Kumar Raju Gottumukkala was appointed asadditional director w.e.f. 12th November, 2011 and Board ofdirectors in its meeting held on Tuesday, 14th August, 2012decided to appoint him as Whole Time Director designatedas Executive Director of the Company with remuneration fora period of 5 (Five) years with effect from 01st April, 2012subject to the approval of the members in the forthcomingAnnual General Meeting of the Company.

Hence the resolution at item No. 5 of the notice

Mr. Praveen Kumar Raju Gottumukkala got Masters degreein Electronics Engineering from Southern Illinois University,

USA and MBA (Corporate Finance) from Bentley UniversityUSA. He is son of Mr. G.R.K. Raju Managing Director of theCompany and Grand Son of Mr. V.S. Raju, ExecutiveChairman. Mr. G.R.K. Raju and Mr. V.S. Raju are said to beinterested in the said resolution.

Your Board recommends his appointment.


Place : Pune. V.S. RajuDate : 14th August, 2012 Chairman

ANNEXURE TO THE NOTICE


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DIRECTORS’ REPORT

Dear Shareholders,

Your Directors have pleasure in presenting to you 21st AnnualReport on the business and operations of the Companytogether with the audited statements of accounts for the yearended 31st March 2012.

Financial Results(Rs. In Lakhs)

Particulars Current Year Previous Year

2011-12 2010-11

Profit before interest, 322.74 161.44depreciation, exceptionalitems and tax

Less:Interest 364.66 355.41Depreciation 418.55 416.08

Profit/(Loss) for the year (460.47) (610.05)from ordinary activities

Add: Exceptional income 251.90 210.48

Less: Provision for tax

Current tax 0 0

Deferred Tax 0 0

Net Profit/(Loss) after Tax (208.57) (399.57)

Less: Appropriations

Dividend 0 0

Tax on Dividend 0 0

Surplus for the year (208.57) (399.57)

Add – Balance brought (3523.14) (3123.57)forward from the previousyear

Balance carried to (3731.71) (3523.14)Balance Sheet

Dividend

In view of paucity of funds in the current year, the Board ofDirectors does not recommend any dividend for theF.Y. 2011-12.

Business

The business environment for company’s products remainedchallenging during the year. Company tried to pass on theincrease in input costs to the customers. This faced resistancefrom the customers leading to fall in sales of particle boardsas well as biogas systems. It was only during later part of theyear that the customers accepted increase in prices.Management’s persistence with the increased selling pricefor its products helped in bringing down the losses from

ordinary business activities. Management hopes to regain itssales volumes during the next year which should bring downthe loss even further. Company had orders in hand of thevalue of more than Rs. 6 Crore for bio-gas systems.

Corporate Governance

As a listed Company necessary measures are taken to complywith provisions of the listing agreement entered with BombayStock Exchange. A report on Corporate Governance alongwith a certificate of compliance from the Auditors, forms partof this Annual Report. The Managing Director’s declarationregarding compliance with code of conduct for BoardMembers and Senior Management is attached to theCorporate Governance Report.

Board of Directors

Mr. V. P. Rane and Dr. N.A. Ramaiah, Directors, would retireby rotation at the ensuing Annual General Meeting of theCompany and being eligible, offer themselves forreappointment. In accordance with clause 49 of the listingagreement, particulars relating to the Directors seeking re-election/ reappointment at the ensuing Annual GeneralMeeting are furnished in the Corporate Governance Report.

During the financial year Company appointed Mr. NarasimhanKrishnan and Mr. Praveen Kumar Raju Gottumukkala asdirectors.

Industrial Relation

Industrial relations during the year continued to be peacefuland there were no man-days lost due to any kind of unrest.

Directors’ Responsibility Statement

In accordance with the requirements of section 217 (2AA) ofthe Companies Act, 1956, the Directors declare that :

1) In the preparation of the annual accounts, the applicableaccounting standards had been followed along withproper explanation relating to material departure if any.

2) The Directors had selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Companyas at 31st March, 2012 and of the profit or loss of theCompany for the year ended on that date;

3) The Directors had taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956, for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;and

4) The Directors had prepared the annual accounts on a‘going concern’ basis.

Conservation of Energy, Technology Absorption &Foreign Exchange Earnings & Outgo

The particulars as prescribed under sub-section (1) (e) ofsection 217of the Companies Act, 1956, read with the


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Companies (Disclosure of particulars in the report of the Boardof directors) Rules, 1988, are set out in ‘Annexure I’ to thisreport.

Eco Friendly Compliance

The Company complies with all requirements regardingmanagement of pollutants of manufacturing units. The plantsdo not cause any type of water, air or noise pollution. TheCompany has properly and timely applied for clearances fromthe State pollution control board for its plants.

Management Discussion & Analysis and CorporateGovernance

A Report on the Management Discussion & Analysis andCorporate Governance forms part of this Report. TheCertificate of the Statutory Auditors confirming compliancewith Clause 49 of the Listing Agreement relating to CorporateGovernance is also annexed as ‘Annexure II’ to this report.

Particulars of employees

The relations with the employees continue to remain cordial.The Directors express their appreciation for the support givenand the contribution made by the employees at all levels.

There is no employee whose particulars are required to begiven under section 217(2A) (a) of the Companies Act 1956read with the (Particulars of Employees) Rules 1975.

Auditors

The Auditors of the Company, M/s Chaturvedi SK & Fellows,Chartered Accountants, Mumbai would retire at the ensuing

Annual General Meeting and have confirmed their eligibilityand willingness to accept office, if re-appointed.

Auditors’ Report

The Board has duly reviewed the Statutory Auditors’ Reportissued for the financial year 2011-12.

Acknowledgements

The Directors place on record their appreciation and expresstheir gratitude for the continued support extended to theCompany by the Shareholders, Financial Institutions & Banks,Suppliers and the Customers. We thank the Government ofIndia, State Government, Reserve Bank of India, BombayStock Exchange both depositories and other GovernmentAgencies for their support, and look forward to their continuedsupport in the future.



ANNEXURE I to the Directors’ Report

Following are the particulars of Conservation of Energy,research and Developments, Foreign exchange earnings andoutgo as per Companies (Disclosure of Particulars in theReport of the Board of Directors) Rules, 1988.

Information required under the Companies (Disclosure ofparticulars in the report of the Board of Directors) rule 1988.

A. Conservation of Energy:

a. Energy Conservation Measures taken.

Energy conservation has been a priority area for theCompany. The business strategies of the company, asalways, have continued to focus on improving energyusage efficiencies, in line with the Company’s goal ofsustainable growth. Better controls are planned toachieve further reduction in energy consumption.

B. a. Research & Development (R&D)

The Company has always given great importanceto continued research and development. Ecoboardhas also developed new technology to improve theefficiency of co-generation. While the conventional

cogeneration process produces only 35 per cent ofenergy from burning bagasse in a boiler, Ecoboard’sgasification and pyrolisation technology enables torecover over 64 per cent of the energy. Thetechnology in underdevelopment stage awaits pilotplant studies and investment thereof.

Company is constantly working on developing newtechnology that can be commercially viable and, atthe same time, serve the cause of environment.

b. Technology Absorption, Adaptation andInnovation:

The Company continues to use latest technologiesfor improving the productivity and quality of itsproducts. The Company is on the look out for waysand means to improve quality and productivityfurther by adopting new technology and constantlyimproving the existing methods of manufacturing.

c. Foreign Exchange Earnings & Outgo

Foreign Exchange Earned : NIL

Foreign Exchange used : 59.48 Lakh


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ANNEXURE II to the Directors’ Report

A. MANAGEMENT DISCUSSION AND ANALYSIS

1. Overview

Company has made financial statements as requiredby Companies Act, 1956, and other applicable laws.Financial statements have been made on prudent andreasonable basis. Sales were recorded at Rs. 3275Lakh as compared to Rs. 4294 Lakh of the previousyear.

2. Industry Outlook

The Government has taken some positive measuresto re-charge the industry. The Central Governmenthas exempted boards manufactured from Bagassefrom the Excise Duty. Moreover, the MaharashtraGovernment has also reduced Value-Added Tax onparticle board made from bagasse/other Agri cropresidue from 12.5 to 5 per cent. The tax relief doesprovide some succor to the beleaguered industry.However, there is more that the government can do.It should provide more fiscal and other inventives toencourage particle-board products and takemeasures to discourage use of plywood and woodboards. Every year, the country burns over 150 milliontonnes (mt) of agricultural waste across farms. Thispollutes the environment with high carbon emission.This agricultural waste can be a raw material tomanufacture wood-free particle boards as well as afuel to generate renewable energy. But that canhappen if there is a mechanism to collect this hugeagricultural waste from across farms and transportthem to Companies like Ecoboard. It is neither viablefor farmers nor particle board manufacturers to collectthe farm residue. The Government must includeresidue collection in its MNREGS programme. Thiswill help particle board industry, involve farmers inagro-based industries and also prevent burning ofagro-waste, which is one of the biggest sources ofpollution.

3. Risks and concern

To ensure long term corporate success it is essentialthat risks are identified effectively, analyzed and thenmitigated by means of appropriate control measures.We have an appropriate risk management system inplace, which enables us to recognize and analyzerisks early and to take the appropriate action, thissystem is implemented as an integral part of ourbusiness processes across the entire Company’soperations and includes recording monitoring andcontrolling internal enterprise business risks andaddressing them through informed and objectivestrategies. To tackle this problem the Company hasset up efficient risk management policy whichaddresses to all potential risks including raw materialrisks, regulatory risk, consumer risks, asset risks and

human resources risks. The company has systemsin place for identifying potential risks and takingmeasures to mitigate those risks.

4. Company Outlooks

Company has close down the Islampur plant due tonon-availability of bagasse around the Islampur andshifted its production to the larger Velapur plant. Plansare afoot to sell off the Islampur plant, which has1,00,000 sq.ft. of built-up area, and the surrounding31 -acre plot, which can fetch good returns. TheVelapur plant, situated on a 90 -acre with a built-uparea of 1,50,000 sq.ft. has a higher productioncapacity. Besides, the raw material is available therein plenty and at a lower price comparatively making itviable for us to increase production without raisingthe overheads.

5. Future Outlook and Challenges

Company faces host of problems. A major challengeis the spiraling price of the main raw material bagasse.It takes about 4 tonnes of bagasse to make 1 tonneof particle board. The price of bagasse is quoting atabout Rs. 2,000 per tonne. It is ironical that the waste(bagasse) today costs more than the sugarcane andis severely eating into margins. The exponential risein the bagasses price is mainly owing to its hugedemand for cogeneration, with State Governmentbuying power so produced at high prices. Besides,dumping of particle boards by China, Malaysia, NewZealand and Thailand has severely affected the Indianindustry. Then there is a flood of imported wood andplywood boards from Malaysia, Indonesia, Thailandand some European countries, further aggravatingthe existing woes.

6. Internal Control Systems

Adequate internal control systems are in place in allareas of operation to ensure safeguarding of assetsagainst loss from unauthorized use or disposition andthe same are being continually reviewed andstrengthened wherever necessary. Such systemshave also been developed to ensure adherence topolicies and systems and mitigation of the operationalrisks covering each area under review. Theorganization is well structured and the policyguidelines are well documented with pre definedauthorities. The company has also implementedsuitable controls to ensure that all resources areutilized optimally, financial transactions are reportedwith the accuracy and there is a strict compliance withall applicable laws and regulations.

7. Corporate Social Responsibility

As a matter of fact there is no formulated written CSRPolicy in place. The Board invariably has developeda strategy to provide a roadmap for its CSR activities


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over the period which has become an integral part ofour business strategy over a decade or so. As a goodcorporate citizen all around the globe, we recognizeand perform the obligations towards our employees,investors, customers, suppliers, competitors and thecommunity as a whole. We believe our reputation,together with the trust and confidence of those withwhom we deal, to be one of our most valuable assets.We strongly believe that integrity in dealings withstakeholders is a prerequisite for a successful andsustained business relationship.

8. Environment

The products of the Company are Truly eco-friendlyand fired by a passion for protecting the environment.All our operations have the goal of supporting theenvironment. In the course of our operations we seekto identify opportunities to reduce consumption ofenergy, water and other non-renewable resources.We also strive to re-use and recycle where possibleand dispose of non-recyclable items responsibly,thereby minimizing impact on the environment.

9. Human Resources / Industrial Relations

Company has a fully functional human resourcedepartment taking care of human force in theCompany. Company has taken effort for humanresource development. Company has arrangedvarious training programs during the year. Companyhas a proper team for recruitment of employees and

keeps compensation structure in line with the marketdevelopments.

10. Cautionary Statements

Statements made in the Management discussion andanalysis report describing the Company’s objectives,expectations or predictions may be forward lookingwithin the meaning of applicable laws and regulations.Actual results may differ materially from thoseexpressed in the statement. Important factors thatcould influence the Company’s operations mayinclude :

1) Global/domestic supply and demand conditionsaffecting selling prices, input availability.

2) Company’s ability to successfully implementCompany’s strategy, growth and expansion plansand technological initiatives.

3) Changes in government policies, changes inpolitical conditions.

4) Changes in laws and regulations including taxlaws.

5) General economic developments and businessconditions in India and other countries.

6) Other factors such as litigation and industrialrelations.


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B. CORPORATE GOVERNANCE REPORT

Company philosophy on code of governance:

Corporate Governance safeguards and adds value to theinterest of its stakeholders viz. investors, creditors,customers, employees and Government etc. Thecompany pursues the process of Corporate Governancein compliance with Clause 49 of the Listing Agreemententered into with the Bombay Stock Exchange whereCompany’s shares are listed and submits a report on thematters mentioned in the said clause and followed inpractice by the Company. The Company remainscommitted to the core aspects of Corporate Governance,viz. fairness, transparency, accountability andresponsibility.

I Board of Directors

As on 31st March 2012 the Board comprises of 10(Ten) Directors, of which 8 (Eight) are non-executiveDirectors. The Chairman is the Executive Director.The Board comprises of 5 ( Five) independentDirectors i.e. Directors, who, apart from receivingsitting fees, do not have any other material pecuniaryrelationship or transactions with the Company, itspromoters or its management, which may affectindependence of judgment of the Directors.

Composition of the Board and directorship heldduring the year 2011-2012

Name of Category Attendance of * No. ofDirector meeting during Other

2011-2012 Directorships

Board LastAGM

Mr. V.S. Raju Chairman 4 Yes 0

Mr.G.R.K. Raju Managing 4 Yes 0Director

Mr.P Non-Exe. 3 No 0Satyanarayana DirectorRaju

Mr. Srinivas Non-Exe. 3 No 1Raju P Director

Mr. Praveen Non-Exe. 1 Yes 0Kumar Raju DirectorGottumukkala

Mr.U.S.Kadam Non-Exe. & 2 No 0Independent

Dr. N.A. Ramaiah Non-Exe. & 1 No 0Independent

Mr. Ramchandra Non-Exe. & 2 No 0Raju P S Independent

Mr. V.P. Rane Non-Exe. & 2 No 0Independent

Mr. Narasimhan Non-Exe. &Krishnan Independent 0 No 0

* In accordance with Clause 49, Membership /Chairmanship of only the Audit Committees and theShare Transfer & Shareholders / Investors Grievance

Committees of all Public Limited Companies havebeen considered. None of the Directors serve asmembers of more than 10 committees or are chairmanof more than 5 committees across all the Companiesin which they are Directors.

The Board met four times during the financial yearunder review on the following dates :

1) 05th May 2011 2) 09th August 20113) 12th November 2011 4) 06th February 2012

The maximum time gap between any two meetingswas not more than four months.

Code of Conduct

i) Code of Conduct for Director and Senior Managementof the Company : The Company has adopted theCode of Conduct for the Directors and SeniorManagement of the Company. All Board Membersand Senior Management Personnel have affirmedcompliance with the code as on March, 2012.

ii) Code of Conduct for prevention of Insider Trading :The Company has its own Code of Conduct forPrevention of Insider Trading.

Risk Mitigation Plan

The Company has laid down the procedure for riskassessment and minimization which has been reviewedby the Board of Directors and the Board of Directors shallcontinue to periodically review this procedure.

Remuneration of Directors

Details of remuneration paid to Directors during the year2011-2012 :

(Figure in Rs.)Name of Director Salaries Sitting Total Share

and Fees holding ofPerquisites Non Exe.

Director

Mr. V.S. Raju 1326000 - 1326000 -

Mr. G.R.K. Raju 1854000 - 1854000 -

Mr. P S. Raju - 15000 15000 -

Mr. Srinivas Raju P - 15000 15000 16,800

Mr. Praveen Kumar - 5000 5000 858000Raju Gottumukkala

Mr. U.S. Kadam - 10000 10000 800

Dr. N.A. Ramaiah - 5000 5000 400

Mr. Ramchandra - 10000 10000 -Raju P S

Mr. V.P. Rane - 15000 15000 500

Mr. Narasimhan - 10000 10000 -Krishnan

Notes :The Company does not pay any remuneration to the Non-Executive Directors except sitting fees which were paid


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within the limit prescribed under section 310 of CompaniesAct, 1956.

Disclosure regarding Directors retired by rotation andseeking re-appointment at the ensuing AnnualGeneral Meeting.

Name Mr. V.P. Rane Dr. N.A. Ramaiah(I.A.S. Retired)

Address 1076/24, Giriraj 14, Ocean ViewHousing Society, Old Layout, Beach Road,Chatturshringi Road, Visakhapatnam-Opp. New Symboisys 530003.Bhavan,Pune- 411 026.

Date of Birth 20th December, 1936 26th August, 1923

Date of 29th June, 2007 20th November, 1991Appointment

Qualification B.A., B.Com., L.L.B., MSC, PHD, FRICC.S., FinancialManagement fromUniversity ofGlasgow, U.K. as aColombo PlansScholar (Deputed byGovernment of India)IAS (Retd.)

Experience Experience in Worked as aAdministration and Technical Expert inManagement as Sugar Industry for aSenior Level as – period of over 32Director/ years.Commissioner ofSugar, MaharashtraState. DistrictMagistrate Director ofAnimal HusbandryRegistrar, Co-operation. Presentlyworking as DirectorGeneral ofVasantdada SugarIndustries.

List of other Prerana Agro Director: NationalCompanies Technologies Private Sugar Institutein which Limited Pune. Kanpur andDirectorship Vasantdada Sugarheld Institute, Pune,

Secretary: SugarEnquiry Commission,U.K.

Shareholding 500 Equity Shares 400 Equity Shares

II Audit Committee

Composition of Audit Committee

The Audit Committee comprises of four directors, Viz.Mr. U.S. Kadam, Mr. V.S. Raju, Mr. V.P. Rane and

Mr. Narasimhan Krishnan. Except Mr. V.S. Raju, allother Directors are non-executive independentdirectors. The Committee is headed by Mr. U.S.Kadam who is an eminent Chartered Accountant. TheAudit Committee is guided by a Charter and conductsits business accordingly. The minutes of the AuditCommittee Meetings and their recommendations arenoted and discussed by the Board of Directors of theCompany at the subsequent Board Meetings.

Meetings and the attendance during the year.

Name of Member Attendance of Meetings

Mr. U.S. Kadam 3

Mr. V.S. Raju 3

Mr. V.P. Rane 4

Mr. Narasimhan 3Krishnan

As per the provisions of section 292A of theCompanies Act, 1956 and clause 49 of ListingAgreement the Board has constituted AuditCommittee. The Audit Committee acts as a linkbetween the statutory and internal auditors and theBoard of Directors. It addresses itself to matterspertaining to adequacy of internal controls, reliabilityof financial statements/others managementinformation.

The terms of reference of the Audit Committee includethe following :

a. Reviewing the Company’s financial policies andresults

b. Overseeing the Company’s financial reportingprocess and the disclosure of financial information toensure that the financial statements are correct,sufficient and credible.

c. Reviewing the adequacy of Internal Audit function anddiscussing the findings of the Internal Auditors.

d. Management Discussions and analysis of financialcondition & result of operations.

e. Review of related party transactions

f. Interaction with Statutory Auditors.

Remuneration Committee

Composition of Remuneration Committee :- TheRemuneration Committee of the Board comprises ofMr. U.S. Kadam, V.P. Rane & Narasimhan Krishnanall Directors are non-executive independent directors

Terms of Reference:–The Remuneration Committeehas been constituted to recommend/reviewremuneration of the Managing Director and Whole


13

time Directors, based on their performance anddefined assessment criteria.

Meeting:–During the financial year one meeting washeld on 02/08/2011 for Reviewing remunerationPolicies of the Company, and the remuneration fornew appointees.

Remuneration policy, details of remuneration andother terms of appointment of Directors:- Theremuneration policy of the company is directedtowards rewarding performance, based on review ofachievement. The terms of appointment of directorsare disclosed to members through reports; approvalsof members are sought whenever necessary afterdisclosing full information.

III. Subsidiary Company

The Company does not have a material unlistedIndian subsidiary whose turnover or net-worthexceeds 20% of the consolidated turnover or networth respectively of the listed holding Company andits subsidiary in the immediately preceding accountingyear.

IV. Share Transfer & Shareholders’ GrievanceCommittee

In compliance with the requirement of the CorporateGovernance under the Listing Agreement entered intowith the Bombay Stock Exchange where the sharesof companies are listed, the Company has constituteda Transfer and Shareholders/Investors GrievanceCommittee to look into issues relating to shareholdersincluding share transfer.

The Shares Transfer & Grievance Committee consistsof Mr. V.S. Raju, Mr. P Satyanarayana Raju andheaded by Mr. U.S. Kadam. The Minutes of Transferand shareholders/investors Grievance Committee arenoted and acted upon by the Board of Directors ofthe Company at the subsequent Board Meetings.

Mr. Pramod Patil, Company Secretary is theCompliance Officer of the Company.

The terms of reference of the above Committee areas follows :

a. To consider and approve transfer / transmission ofshares, consolidation / split of share certificates andissuance of duplicate share certificates; etc.

b. Redressal of shareholders’/investors’ complaintsrelating to transfer, transmission, transposition,splitting, consolidation, dematerialization of shares,non receipt of annual reports etc. As on 31st March,2012, there were no pending requests for transfer ofshares as per company’s records.

V. General Body Meetings :

1) Particulars of AGM/EGM for the last three years:-

AGM Date Time Venue Number of/ specialEGM resolutions

passed.

18th 29/09/2009 11.00 a.m. Hotel Shangrila NilGardens, OffKarve Road,Near Nal Stop,Pune – 411 004



VI. Disclosure

1) There are no materially significant related partytransactions with its promoters, directors or themanagement and their relatives.

2) The Company has complied with the requirementsof Regulatory Authorities, capital markets includingthe requirements under the SEBI (Prohibition ofInsider Trading) Regulations, 1992, as amended andno penalties or strictures has been imposed on theCompany by the Stock Exchange, SEBI or any otherStatutory authorities on any matter relating to theCapital Markets during the last 3 years.

3) Whistle Blower Policy is the non-mandatoryrequirement as per Corporate Governance norms.Though Company has not framed any strict WhistleBlower Policy as recommended by the CorporateGovernance norms, however access to the AuditCommittee has not been denied to anybody.

VII. Means of Communication

The Board of Directors of the Company approves andtakes on record the quarterly unaudited financialresults and announces the said results to the StockExchange Mumbai where the shares of the Companyare listed. These quarterly unaudited results were alsopublished in Free Press (English Edition) andNavshakti (Marathi Edition) news papers in theprescribed format as required by amended clause 41of Listing Agreement. Management discussion andanalysis report is published in annual report. TheNotices of Board Meetings are published in abovesaid news papers. The Company followed statutory


14

norms for dissemination of information in given period.

VIII.Status of Compliance with MandatoryRequirements

The Company has complied with mandatoryrequirements of Clause 49 of the Listing Agreementwith the Stock Exchanges as applicable and in forcetill on March 31, 2012.

IX. Shareholder General Information :

a) Forthcoming Annual General Meeting :

Date & Time : Tuesday 25th September 2012 at11.00 a.m.

Venue : Hotel Shangrila Gardens, Off KarveRoad, Near Nal Stop,Pune – 411 004.

b) Dates of Book Closure: from Saturday 22nd

September, 2012 to Tuesday, 25th September, 2012(both days inclusive)

c) Financial Calendar of the Company relating tofuture immediate reporting :

The Financial year covers the period from 1st April2012 to 31st March 2013.

Financial Reporting for : - Quarter ending 30th June, 12 By 15th August, 2012

- Half Year ending By 15th November, 201230th September, 12

- Quarter ending By 15th February, 201331st December, 12

- Year ending 31st March, 13 By May, 2013 /If opted unaudited resultsfor last quarter then asand when Boardapproves.

- Annual General Meeting for August/September 2013/the year ended March 31, any extended period.2013

d) Face Value of the equity Share Rs. 10 per share.

e) Dividend Payment Details : NA

f) Listing on Stock Exchange & Stock Code :Stock Exchange Stock Code

Bombay Stock Exchange Ltd. 523732Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai – 400 001.

Listing fees were paid for the year to the BombayStock Exchange. The ISIN Number of company onboth NSDL & CDSL is INE 866A01016.

g) Market Price Data :

i) High/Low in each of month of the Financial Year April2011 to March 2012 on Bombay Stock Exchange,Mumbai

Month High Low Month High Low

(Rs.) (Rs.) (Rs.) (Rs.)

April 2011 8.50 7.32 October 2011 5.75 4.50

May 2011 9.57 6.57 November2011 5.94 4.33

June 2011 7.70 5.25 December2011 5.75 4.61

July 2011 7.63 6.25 January 2012 6.57 4.81

August 2011 7.10 4.65 February 2012 6.71 5.06

Sept. 2011 6.42 4.68 March 2012 5.90 4.35

II) Performance in comparison with BSE Index:-

h) Share Transfer System

The applications for transfer of shares and otherrequests from shareholders holding shares in physicalform are processed by M/s Link Intime India PrivateLimited, Pune. Share Transfers are registered andreturned in the normal course within an averageperiod of 15 days from the date of receipt if thedocuments are clear in all respects. Requests fordematerialization of shares are processed andconfirmation is given to the respective depositoriesi.e. National Securities Depository Ltd. (NSDL) andCentral Depository Services India Ltd. (CDSL) within15 days. Connectivity with NSDL & CDSL ismaintained through M/s. Link Intime India PrivateLimited, Pune. The Board has delegated the powerto approve transfers to the Share Transfer, Financeand Investors Grievance Committee.

i) Registrar and Share Transfer Agents :M/s Link Intime India Private Limited Pune(Formerly ‘Intime Spectrum Registry Limited)Block NO. 202, 2nd Floor Akshay Complex,Off Dhole Patil Road Pune – 411 001Tel. : (020) 26161629Telefax : (020) 26163503Web site : www.linkintime.co.inEmail : [email protected]

SHARE PRICE MOVEMENT-BSE

BS

E

SE

NS

EX


15

j) Address for the Correspondence

Registered Office of the Company :36/1, Preet Chambers, 2nd Floor,Pune-Mumbai Road,Wakdewadi, Pune – 411 003Ph. (020) 4108 0800E-mail : [email protected] : www.ecoboard.inCompliance Officer – Mr. Pramod Patil

Corporate Office :65/1A, ECOHOUSE“Akarshak Building” Opp Nal StopKarve Road Pune-411004.Tel:020-25432345/ Fax(020)25465328

k) Plant locations :Bio System Division65/1A, ECOHOUSE“Akarshak Building” Opp Nal StopKarve Road Pune-411004.

Factory (Particle board division) :

a) Village Velapur, Taluka Malshiras,Dist-Solapur, Maharashtra

b) Village Jambhulwadi, Taluka- Walwa,Dist: Sangli, Maharashtra.(Production suspended since April 2010)

l) Shareholding Pattern as on 31st March 2012Shareholders No. of % Share

shares held holding

CLEARING MEMBER 213427 1.1969

OTHER BODIES 1504021 8.4344CORPORATE

FOREIGN FINANCIAL 7800 0.0437INSTITUTIONS

HINDU UNDIVIDED FAMILY 75747 0.4248

MARKET MAKER 6753 0.0379

NATIONALISED BANKS 1600 0.0090

NON NATIONALISED BANKS 300 0.0017

NON RESIDENT INDIANS 40608 0.2277

NON RESIDENT 7701 0.0432(NON REPATRIABLE)

OVERSEAS CORPORATE 250000 1.4020BODIES

PERSONS ACTING 100400 0.5630IN CONCERT

PUBLIC 5786130 32.4480

PROMOTERS 9837513 55.1677

TOTAL: 17832000 100.00

m) Distribution of Shareholding as on 31st March 2012Shareholding No. of % No. of %of Nominal share to Shares to

holders Total Held CapitalShare

Holders

1 - 5000 12680 98.7231 4223783 23.6865

5001 - 10000 88 0.6851 689767 3.8681

10001 - 20000 34 0.2647 463337 2.5983

20001 - 30000 10 0.0779 234349 1.3142

30001 - 40000 3 0.0234 97209 0.5451

40001 - 50000 4 0.0311 179431 1.0062

50001 - 100000 8 0.0623 570192 3.1976

100001 - Above 17 0.1324 11373932 63.7838

TOTAL: 12844 100.00 178320000 100.00

n) Dematerialization of Shares

The Company has signed agreements with bothNational Securities Depository Limited (NSDL) andwith Central Depository Services Limited (CDSL) byvirtue of which, 15738399 equity shares of theCompany forming 88.26% of total share capital of theCompany, have been dematerialized as on 31stMarch 2012.




16

ToThe Members ofEcoboard Industries Limited

We have examined the compliance of conditions of Corporate Governance by Ecoboard Industries Limited for the year endedon 31st March 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Bombay stock exchange.The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limitedto procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of theCorporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In ouropinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement. We state thatsuch compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with whichthe management has conducted the affairs of the Company.

For Chaturvedi SK & Fellows,Chartered Accountants,

Srikant ChaturvediPartner

Place : Pune (Firm Regn No. 112627W.Date : 14th August, 2012 Partners Membership No. 70019)

Auditors’ Certificate on Compliance of Conditions of Corporate Governance


17

ToThe Board of DirectorsECOBOARD INDUSTRIES LIMITED.

I, the undersigned, in my capacity as the Managing Directorof ECOBOARD INDUSTRIES LIMITED (The Company), tothe best of my knowledge and brief certify that :

a) I have reviewed the financial statements and the cashflow statement for the year ended on 31st March 2012and based on my knowledge and belief, I state that:

i. These statements do not contain any materiallyuntrue statement or omit any material fact orcontain any statement that might be misleading;

ii. These statements together present a true and fairview of the Company’s affairs and are incompliance with existing accounting standards,applicable laws and regulations.

b) I further state to the best of my knowledge and belief,there are no transactions entered into by theCompany during the year, which are fraudulent, illegalor violative of the Company’s code of conduct.

c) I am responsible for establishing and maintaininginternal controls and for evaluating the effectivenessof the same over the financial reporting of theCompany and have disclosed to the Auditors and the

CERTIFICATION BY THE MANAGING DIRECTOR

DECLARATION – COMPLIANCE WITH THE CODE OF CONDUCT

In accordance with Clause 49 of Listing Agreement with the Stock Exchanges, I, G.R.K. Raju, Managing Director of theCompany, hereby, declare that the Board Members and Senior Management Personnel have affirmed compliance with thesaid Code of Conduct for the year ended March 31, 2012.

For and On Behalf of the Board of Directors

Place : Pune G.R.K. RajuDate : 14th August, 2012 Managing Director

Audit Committee, deficiencies in the design oroperation of internal controls, if any, of which I amaware and the steps I have taken or propose to taketo rectify these deficiencies.

d) I have indicated, based on my recent evaluation,wherever, applicable, to the Auditors and the AuditCommittee:

i. Significant changes, if any, in the internal controlover financial reporting during the year;

ii. Significant changes, if any, in the accountingpolicies made during the year and that the samehas been disclosed in the notes to the financialstatements;

iii. Instances of significant fraud of which I havebecome aware and the involvement therein, ifany, of the management or any employee havingsignificant role in the Company’s internal controlsystem over the financial reporting.

For and On Behalf of the Board of Directors

Place : Pune G.R.K. RajuDate : 14th August, 2012 Managing Director


18

AUDITORS REPORT

To the Members of Ecoboard Industries Ltd.

We have audited the attached Balance Sheet of ECOBOARDINDUSTRIES LTD. as at 31st March 2012 and also theStatement of Profit and Loss and the Cash Flow Statementof the Company for the year ended on that date annexedthereto. These financial statements are the responsibility ofthe Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that weplan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from materialmisstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing theaccounting principles used and significant estimates madeby the management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

As required by the Companies (Auditors’ Report) Order 2003,issued by the Central Government of India in terms of section227 (4A) of the Companies Act, 1956, we give in the Annexurea statement on the matters specified in paragraph 4 of thesaid Order.

Further to our comments in the Annexure referred to above,we report that :

a) We have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purposes of our audit;

b) In our opinion, proper books of accounts as required bylaw have been kept by the Company so far as appears

from our examination of the books;

c) The Balance Sheet, Profit and Loss Account and CashFlow Statement dealt with by this report are in agreementwith the books of account and in our opinion, comply withthe accounting standards referred to in sub-section (3C)of section 211 of the Companies Act, 1956.

d) On the basis of written representations received from thedirectors and taken on record by the Board of Directors,we report that none of the directors is disqualified as on31st March 2012 from being appointed as a director interms of clause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

e) In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts read with the notes to accounts give theinformation required by the Companies Act, 1956, in themanner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India:

i) in the case of the Balance Sheet, of the state of affairsof the Company as at 31st March 2012;

ii) in the case of Statement of Profit and Loss, of theloss for the year ended on that date.

iii) in the case of the Cash Flow Statement, of the cashflows for the year ended on that date.

For Chaturvedi SK & FellowsChartered Accountants


Place :Pune (Firm Regn No.112627W.Dated :August 14, 2012 Partner’s Membership No. 70019)

ANNEXURE TO THE AUDITORS’ REPORTReferred to in our report of even date on the accounts ofECOBOARD INDUSTRIES LIMITED for the year ended 31stMarch 2012.1. (a) The Company has maintained proper records

showing full particulars including quantitative detailsand situation of fixed assets.

(b) According to the information and explanations givento us, the fixed assets were physically verified duringthe period by the management. No materialdiscrepancies were noticed on such verification.

(c) The company has not disposed off substantial partof its fixed assets during the year.

2. (a) According to the information given to us, physicalverification of inventory was conducted by themanagement during the year at reasonable intervals.

(b) In our opinion, the procedures of physical verificationof inventory followed by the management arereasonable and adequate in relation to the size ofthe company and the nature of its business.

(c) The company is maintaining proper records ofinventory. According to the information and

explanations given to us, no material discrepancieswere noticed on physical verification of inventories.

3. (a) The company has not granted any loans, secured andunsecured, to companies, firms or other parties listedin the register maintained under section 301 of theCompanies Act, 1956. Accordingly, paragraphs4(iii)(b),(c) and (d) of the Order are not applicable.

(b) The company has taken unsecured loans ofRs.264.61lacs from 3 parties listed in the registermaintained under section 301 of the Companies Act,1956.

(c) In our opinion, the rate of interest and other termsand conditions of above loans taken by the companyare not prima facie prejudicial to the interest of thecompany.

(d) According to information and explanations given tous, the company is regular in payment of principalamount and interest on these loans.

4. In our opinion and according to the information andexplanations given to us, there is adequate internal controlsystem commensurate with the size of the company andthe nature of its business with regards to the purchase ofinventory and fixed assets and for the sale of goods and


19

services. Further, on the basis of our examination of thebooks and records of the Company, and according to theinformation and the explanations given to us, we haveneither come across nor have been informed of anycontinuing failure to correct major weaknesses in theaforesaid internal control system.

5. (a) According to the information and explanations givento us, we are of the opinion that the particulars ofcontracts or arrangements that need to be entered inthe register maintained under section 301 of theCompanies Act 1956 have been entered.

(b) In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of such contracts or arrangements enteredin the register maintained under section 301 of theCompanies Act 1956 and exceeding the value ofrupees five lacs in respect of any party during theyear, have been made at prices which are reasonablehaving regard to the prevailing market prices at therelevant time.

6. In our opinion and according to the information andexplanations given to us, the company has not acceptedany deposits from the public. The provisions of section58A and 58AA of the Companies Act. 1956 and the rulesframed there under are not applicable.

7. In our opinion, the Company has an internal audit systemcommensurate with its size and the nature of its business.

8. We are informed that the Central Government has notprescribed maintenance of cost records under section209(1)(d) of the Companies Act 1956 for the Company’sproducts.

9. (a) According to the records of the company, thecompany is generally regular in depositing undisputedstatutory dues including Provident Fund, InvestorEducation and Protection Fund, Employees’ StateInsurance, Income-tax, Sales-tax, Custom duty,Excise duty and other statutory dues applicable to it,although in some cases, payments were made afterthe due dates. According to information andexplanations given to us, except service tax of Rs.28.85lacs,no outstanding statutory dues were inarrears as at 31/03/2012 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations givento us, following amount of tax, duty or cess was underdispute hence not paid:

Nature of Period Amount Forum where thedues Rs. In lacs dispute is pendingCentral 2003-04 28.45 Custom, Excise &Excise duty Service Tax

Appellate Tribunal.Central 2003-04 13.50 Custom, Excise &Excise duty Service Tax


Appellate Tribunal.Central 2004-05/ 3.14 Custom, Excise &Excise duty 2005-06 Service Tax

Appellate Tribunal.

Central 2006-07 2.25 Custom, Excise &Excise duty Service Tax



Appellate Tribunal.10. The company is registered for a period of more than five

years. Its accumulated losses at the end of the financialyear were less than fifty per cent of its net worth. Thecompany has not incurred cash losses in this orimmediately preceding financial year.

11. In our opinion and according to the information andexplanation given to us by the management, the companyhas not defaulted in repayment of dues to the financialinstitutions or banks or the debenture-holders during theyear.

12. The company has not granted loans and advances onthe basis of security of shares, debentures and othersecurities.

13. The company is not engaged in the business of chit funds,nidhi, mutual benefit fund or mutual benefit society.

14. The company is not dealing or trading in shares,securities, debentures or other investments.

15. According to the information and explanations given tous, the company has not given any guarantee for loanstaken by others.

16. According to the information and explanations given tous, the company has not availed any term loans duringthe year.

17. According to the information and explanations given tous and on an overview of the balance sheet and the cashflow statement of the company, we report that no fundsraised on short term basis have been used for long terminvestment.

18. The Company has not made any preferential allotmentof shares during the year.

19. The company did not have any outstanding secureddebentures as on the date of the balance sheet.

20. The company has not raised any money by public issueof securities during the year.

21. During the course of our examination of the books andrecords of the Company, carried out in accordance withthe generally accepted auditing practices in India, andaccording to the information and explanations given tous, we have neither come across any instances of materialfraud on or by the company, noticed or reported duringthe year, nor have we been informed of such case by themanagement.

For Chaturvedi SK & FellowsChartered Accountants


Place :Pune (Firm Regn No.112627W.Dated :August 14, 2012 Partner’s Membership No. 70019)


20

BALANCE SHEET AS AT 31ST MARCH, 2012Rs. in Lakhs

Note No. As at 31.03.2012 As at 31.03.2011

EQUITY AND LIABILITIES1 Shareholders’ Funds :

a. Capital 2 1,783.20 1,783.20b. Reserves and surplus 3 2,371.37 4,154.57 2,579.94 4,363.14

2 Non-current Liabilitiesa. Long-term borrowings 4 223.89 1.40b. Other long term liabilities 5 59.10 65.55c. Long term provisions 6 74.65 357.64 84.57 151.52

3 Current Liabilitiesa. Short-term borrowings 7 2,197.07 1,855.13b. Trade payables 8 734.50 657.58c. Other current liabilities 9 314.09 3,245.66 536.27 3,048.98

7,757.87 7,563.64

ASSETS

I NON-CURRENT ASSETS1 Fixed assets

a. Tangible assets 10 3,355.97 3,753.25b. Intangible assets 10 0.00 0.00c. Capital work in progress 7.69 7.69

3,363.66 3,760.942 Deferred tax assets 28 0.00 0.003 Long-term loans and advances 11 42.17 45.724 Other non-current assets 0.00 3,405.83 0.00 3,806.66

II CURRENT ASSETS1 Inventories 12 2,927.42 2,284.422 Trade receivables 13 519.01 697.173 Cash and bank balance 14 148.70 195.354 Short-term loans and advances 15 513.62 580.045 Other current assets 16 243.29 4,352.04 0.00 3,756.98

7,757.87 7,563.64

Significant Accounting Policies 1

Other Notes on Financial Statements 2 to 39

As per our report of even date For and on behalf of the Board of Directors

For CHATURVEDI SK & FELLOWS V. S. Raju G. R. K. RajuChartered Accountants Chairman Managing Director

Srikant Chaturvedi Narasimhan Krishnan Pramod PatilPartner Director Company Secretary(Firm Regn. No. 112627W. Partner’s Membership No. 70019)

Place : PuneDate: 14th August, 2012


21

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2012Rs. in Lakhs

Note No. Mar-12 Mar-11

INCOME :

Revenue from operations 17 3,275.50 4,294.54

Other income 18 31.34 42.09

Total revenue 3,306.84 4,336.63

EXPENDITURE:

Cost of materials consumed 19 1,844.69 1,957.51

Purchases of stock-in-trade 0.00 2.04

Changes in inventories of finished goods, work-in-progress 20 -410.67 290.04

Employee benefits expense 21 281.40 335.93

Finance costs 22 364.66 355.41

Depreciation 418.55 416.08

Other expenses

Manufacturing and other operating expenses 23 755.12 868.86

Administration and other charges 24 305.71 343.41

Selling and distribution expenses 25 207.85 377.40

3,767.31 4,946.68

Profit / (Loss) before exceptional and -460.47 -610.05extra-ordinary items and tax

Add/(Less): Exeptional items 30 251.90 210.48

Profit / (Loss) before extra-ordinary items and tax -208.57 -399.57

Add/(Less): Extra-ordinary items 0.00 0.00

Profit / (Loss) before tax -208.57 -399.57

Less: Tax expenses

Current tax 0.00 0.00

Deferred tax 0.00 0.00

Profit / (Loss) after tax -208.57 -399.57

Earnings / (Loss) per Share (Rs.) - Basic 26 -1.17 -2.24

Earnings / (Loss) per Share (Rs.) - Diluted 26 -1.17 -2.24

Significant Accounting Policies 1

Other Notes on Financial Statements 2 to 39






22

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012(Rs. in Lakhs)

Year ended Year ended31.03.2012 31.03.2011

A. Cash flow from operating activities:Net profit before tax and extra-ordinary items -208.57 -399.57Adjustments for non cash expenses :-Depreciation 418.55 - 416.08Loss on sale of assets 418.55 0.00 416.08Adustment for non operating incomes:-Profit on sale of fixed assets -253.49 -253.49 -210.41 -210.41

Adjustment for expenses considered seperately:-Interest expenses 343.09 343.09 339.93 339.93

Operating profit before working capital changes 299.58 146.03

Adjustment for changes in working capital:-Change in inventories -643.00 489.68Change in debtors 178.16 122.81Change in other receivables -173.32 -33.88Change in trade payables and other liabilities -25.13 61.81Change in customers deposits -6.45 -669.74 -3.50 636.92

Cash generated from operation -370.16 782.95Direct taxes 0.00 0.00

0.00 0.00

Net cash from operating activities... A -370.16 782.95

B. Cash flow from investing activitiesSale of assets 264.79 225.87Purchase of fixed assets (including capital work in progress) -32.57 -4.43Net cash used in investing activities...B 232.22 221.44

C. Cash flow from financing activities:Preference shares redemption 0.00 -13.00Bank borrowings for working capital 341.94 -412.52Loan from directors 214.61 -343.31Intercorporate deposits 0.00 0.00Settlement amounts paid 0.00 0.00Changes in margin deposit -3.26 -12.70Term loans repaid -123.57 -4.11Dividend paid -0.08 7.24Tax on dividend paid 0.00 0.00Interest paid -341.61 -337.16

Net cash from financing activities...C 88.03 -1,115.56

D. Net increase/(decrease) in cash & cash equivalents (A+B+C) -49.91 -111.17

Cash & cash equivalents -Opening balance 62.83 174.00

Cash & cash equivalents -Closing balance 12.92 62.83

Note: (1) Figures in (-) represent cash outflow .






23

Notes Forming part of the Financial Statements for the year ended 31st March 2012

1. SIGNIFICANT ACCOUNTING POLICIES

I) Basis of preparation of financial statements : The financial statements are prepared under the historical costconvention on the accrual basis of accounting, unless otherwise stated, in accordance with the generally acceptedaccounting principles in India, the provisions of the Companies Act 1956 and the applicable accounting standards.During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956 becameapplicable to the company for preparation and presentation of the Financial Statements. The revised Schedule VIdoes not impact recognition and measurement principles followed in the preparation of the Financial Statements.However, it prescribes significant changes in presentation and disclosures of information in the Financial Statements.Previous year figures have been reclassified accordingly.

II) Use of Estimates : The preparation of financial statements requires estimates and assumptions. Differences betweenthe estimates and actual results are recognized in the period in which the same are known.

III) Fixed Assets : Fixed assets are capitalised inclusive of legal and/or installation expenses. Preoperative expenses(including interest charges) upto the date of start of commercial production are capitalised over the items of fixedassets.

IV) Depreciation : Depreciation on fixed assets is provided on straight line basis at the rates and in the manner prescribedin Schedule XIV to the Companies Act, 1956. Depreciation on additions is provided on pro-rata basis for the periodfor which the assets are put to use. Assets costing less than Rs. 5000/- are fully depreciated in the year of purchase.Lease-hold land is not amortised.

V) Impairment of Assets : An impairment loss is recognized whenever the carrying amount of an asset exceeds itsrecoverable amount. The recoverable amount is the greater of the net selling price and value in use.

VI) Inventory valuation:

a) Stocks of raw-materials, packing materials, stores & spares are valued at cost.

b) Stock of work-in progress is valued at cost.

c) Finished goods are valued at lower of cost and net realisable value.

VII) Foreign exchange transactions : Foreign exchange transactions are recorded at the exchange rate prevailing onthe date of transaction. All exchange differences in respect of foreign currency transactions are dealt with in the profit& loss account. All foreign currency assets & liabilities, if any, as at the Balance Sheet date are restated at theapplicable exchange rates prevailing on that date.

VIII) Sales & contract receipt :

a) Revenue from contracts for supply/commissioning of Bio-gas plants and equipments is recognized by adding theaggregate cost and proportionate margin using the percentage completion method. Percentage of completion isdetermined as a proportion of cost incurred-to-date to the total estimated contract cost.

b) Sales include products consumed internally for manufacture of capital assets, adjusted on cost basis, but excludeinter-unit transfers on revenue account.

IX) Insurance claims : Insurance claims for loss of assets or goods are accounted at the time of lodging of the claim withthe insurer at the cost of assets/ goods lost. Any shortfall in the claim recovery is accounted for at the time of finalsettlement of the claim.

X) Excise duty and Cenvat credits : Sales and purchases (including those of capital goods) are stated inclusive ofexcise duty.

XI) Value Added Tax (VAT) and input credits : Sales are stated exclusive of VAT. Purchases (including those of capitalgoods) are stated inclusive of VAT except to the extent such input tax is eligible for set-off. Reduction in set-off, if any,under the provisions of VAT laws is debited to VAT paid account.

XII) Expenditures are shown net of recoveries.

XIII) Retirement benefits:

(a) Contributions to provident fund, family pension fund are made to Government Provident fund authorities and arerecognized as expense in the year they are incurred.

(b) Provision for leave encashment is made on the basis of actuarial valuation made at the end of each year/period.

(c) Provision for gratuity liability is made on the basis of actuarial valuation made at the end of each year/period.

(d) For superannuation benefit, the Company makes defined contributions as per company’s policy and recognizessuch contributions as expense in the year they are incurred.


24


2. SHARE CAPITAL

As at As at31.03.2012 31.03.2011

No. of Shares Rs. in Lakhs No. of Shares Rs. in Lakhs

Authorised:

Equity Shares of Rs. 10 each 2,30,00,000 2,300.00 2,30,00,000 2,300.00

Preference Shares of Rs. 100 each 2,00,000 200.00 2,00,000 200.00

2,500.00 2,500.00

Issued:

Equity Shares of Rs. 10 each 1,78,32,000 1,783.20 1,78,32,000 1,783.20

1,783.20 1,783.20

Subscribed and paid up:

Equity Shares of Rs. 10 each, fully paid 1,78,32,000 1,783.20 1,78,32,000 1,783.20

Total 1,783.20 1,783.20

Reconciliation of number of shares

Preference shares :

Balance at the beginning of the year 0 0.00 13,000 13.00

Less:-Redeemed during the year 0 0.00 13,000 13.00

Balance at the end of the year 0 0.00 0 0.00

Rights, preferences and restrictions attached to shares

The Company has only one class of Equity shares. Each Share has a paid up value of Rs.10/-. Every shareholder isentitled to one vote per share. Each share is entitled to dividend at the rate as may be declared by the Board and approvedby the shareholders at the Annual General Meeting.

Details of shareholders holding more than 5% equity shares in the Company :

As at 31.03.2012 As at 31.03.2011

No. of Percentage No. of PercentageShares of holding Shares of holding

1 Jayalakshmi Gottumukkala 2765637 15.51% 2665637 14.95%

2 Ramakrishna Raju Gottumukkala 2476225 13.88% 2426225 13.61%

3 Satyavathi Vegesna 1094147 6.14% 859645 4.82%

4 P. Satyanarayana Raju 905900 5.08% 905900 5.08%


25


Rs. in Lakhs

Mar-12 Mar-11

3. Reserves and Surplus

Capital reserve 21.31 21.31

Amalgamation reserve 0.30 0.30

Securities premium 2,618.78 2,618.78

General Reserve 3,462.70 3,462.70

Profit and Loss account:

Opening balance -3,523.15 -3,123.58

Loss for the year -208.57 -399.57

Closing Balance -3,731.72 -3,523.15

Total Reserves and Surplus 2,371.37 2,579.94

4. Long Term Borrowings

Secured:

Vehicle loans from bank 9.28 1.40

Unsecured loans:

From directors 214.61 0.00

223.89 1.40

Vehicle loan from bank is repayable by way of 36 equated monthlyinstalments ending July 2014. No repayment date is stipulated forDirectors’ deposits. However it is agreed by the Directors that thedeposits shall not be repayable before 1st April 2013.

5. Other Long Term Liabilities

Trade deposits 59.10 65.55

59.10 65.55

6. Long Term Provisions

Provision for employee benefits 74.65 84.57

74.65 84.57

7. Short Term Borrowings

Loans repayable on demand (Secured):

Cash credit facilities from banks 2,197.07 1,855.13

2,197.07 1,855.13


26

Mar-12 Mar-11

8. Trade Payables

Creditors for goods 600.01 477.44

Bills payable 26.97 31.09

Customers’ credit balances 107.52 149.05

734.50 657.58

9. Other Current Liabilities

Current maturities of long-term debt -Secured 7.71 4.30

Current maturities of unsecured deposits from directors 50.14 185.00

Interest accrued and due on borrowings 6.51 4.99

Income received in advance 31.50 52.99

Unpaid dividend 19.37 19.45

Other payables 52.67 126.33

Employees related payables and contributions 49.13 64.61

Other liabilties 97.06 78.60

314.09 536.27

10 : FIXED ASSETS(Rs. in Lakhs)

GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As at Additions Deduc- As at Upto Written For the Upto As at As at31.03.11 tions 31.03.12 31.03.11 back Year 31.03.12 31.03.12 31.03.11

Tangible Assets

Freehold land 100.16 0.00 9.68 90.48 0.00 0.00 0.00 0.00 90.48 100.16

Leasehold land 0.23 0.00 0.00 0.23 0.00 0.00 0.00 0.00 0.23 0.23

Building 1,571.92 0.00 0.00 1,571.92 669.86 0.00 50.51 720.37 851.55 902.06

Plant & machinery 7,910.27 0.00 0.00 7,910.27 5,522.11 0.00 318.74 5,840.85 2,069.42 2,388.16

Electrical installations 538.76 4.16 0.00 542.92 341.98 0.00 25.59 367.57 175.35 196.78

Furniture & fixtures 142.28 0.06 0.00 142.34 95.23 0.00 7.54 102.77 39.57 47.05

Equipments 206.79 1.35 0.00 208.14 138.45 0.00 7.83 146.28 61.86 68.34

Vehicles 97.07 27.00 12.84 111.23 50.25 11.22 8.08 47.11 64.12 46.82

Tools & patterns 36.87 0.00 0.00 36.87 33.22 0.00 0.26 33.48 3.39 3.65

10,604.35 32.57 22.52 10,614.40 6,851.10 11.22 418.55 7,258.43 3,355.97 3,753.25

Intangible Assets

Computer Software 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

GRAND TOTAL 10,604.35 32.57 22.52 10,614.40 6,851.10 11.22 418.55 7,258.43 3,355.97 3,753.25

Previous Year 10,615.16 4.90 15.71 10,604.35 6,435.27 0.25 416.08 6,851.10 3,753.25 4,179.89

Note : Conveyance for office building valued Rs. 7.03 lakh is pending execution.


Rs. in Lakhs


27

Mar-12 Mar-11

11. Long Term Loans and Advances(Unsecured considered good)

Security deposits 42.17 45.72

42.17 45.72

12. Inventories

Stores, spares and consumables 218.78 164.22

Packing material 5.57 4.82

Raw materials 745.88 568.86

Work-in-progress 361.23 288.93

Finished goods 1,595.96 1,257.59

2,927.42 2,284.42

Note : Stocks of finished goods and work-in-progress belong toparticle board segment.

13. Trade Receivables

Due for more than six months:

Considered good 205.86 287.16

Considered doubtful 298.08 338.54

503.94 625.70

Others :



313.15 410.01

817.09 1,035.71

Less: Provision for doubtful debts 298.08 338.54

519.01 697.17

14. Cash and Bank Balance

Cash and cash equivalents -

Cash on hand 5.50 8.39

Balances with banks 7.41 54.44

12.92 62.83

Other bank balances -

Balances in dividend and refund accounts 24.01 24.00

Fixed deposits with banks 111.78 108.52

148.70 195.35

Note : Fixed deposits with banks are given as margin money for issueof bank guarantees and LCs.


Rs. in Lakhs


28

Mar-12 Mar-11

15. Short-term Loans and Advances(Unsecured considered good unless otherwise stated)

Advance for goods 139.57 199.90

Prepaid expenses 2.35 2.43

Advance income tax 10.31 6.74

Deposits 3.23 4.14

Other Advances:



426.76 435.43

Less: Provision for doubtful loans and advances 68.60 68.60

358.16 366.83

513.62 580.04

16. Other Current Assets

Amount receivable for sale of land 243.29 0.00

243.29 0.00

17. Revenue from Operations

Sale of goods 3,208.90 4,112.38

Income from services 67.50 200.25

Other operating revenue 0.00 0.00

3,276.40 4,312.63

Less Excise duty 0.90 18.09

3,275.50 4,294.54

Out of above :

Revenue from Particle Board business 2,945.30 3,275.42

Revenue from Biogas Systems business 330.20 1,019.12

18. Other Income- (Non operating)

Rent received 1.04 1.04

Profit on sale of assets 1.59 -0.07

Foreign exchange translation difference 0.21 2.23

Interest received 8.73 7.24

Miscellaneous Income 5.66 22.54

Excess provision written back 13.52 10.98

Sundry balances written back 0.59 -1.87

31.34 42.09


Rs. in Lakhs


29


Rs. in Lakhs

Mar-12 Mar-11

19. Cost of Materials

Opening stock 568.86 735.02

Add:-Purchases 2,021.71 1,791.35

Less:-Closing stock 745.88 568.86

1,844.69 1,957.51

Out of above :

Bagasse 854.46 746.30

Chemicals 503.65 478.71

Paper 304.96 298.14

Mild Steel 107.46 262.83

Others 74.16 171.53

20. Change in Inventories of finished goods and work-in-progress

Opening Stock:



1,546.52 1,836.56

Closing Stock:



1,957.19 1,546.52

Increase/(decrease) in stock 410.67 -290.04

21. Employee Benefit Expenses

Salaries, Wages and Bonus 248.42 283.97

Contribution to Provident Fund 8.87 9.78

Gratuity 2.32 22.57

Super-annuation 3.33 2.79

Employees’ PF administration charges 1.06 1.13

Workmen & staff welfare expenses 12.30 18.01

Unavailed leave / leave encashment 5.10 -2.32

281.40 335.93

22. Financial Costs

Interest on term loans from banks 1.71 0.80

Interest on working capital finance 321.17 278.76

Others 20.21 60.37

Bank charges 21.57 15.48

364.66 355.41


30


Rs. in Lakhs

Mar-12 Mar-11

23. Manufacturing Expenses

Consumption of stores and spares parts 183.20 198.37

Power and fuel 347.80 329.00

Site and job work expenses 205.15 308.40

Excise duty on change in stock of finished goods -0.49 0.41

Repairs to buildings 0.63 12.10

Repairs to machinery 18.83 20.58

755.12 868.86

24. Administration and Other Charges

Directors remuneration 31.80 35.67

Directors sitting fees 0.85 0.55

Insurance 7.62 12.43

Rates and taxes 16.57 15.27

Rent paid 24.25 30.59

Printing and stationery 3.93 5.39

Postage & telephones 18.75 17.99

Travelling and conveyance expenses 67.47 74.85

Sundry expenses 65.58 78.68

Donations 0.84 0.54

Professional charges 19.21 34.24

Payment to Auditors (including service-tax):

Audit Fees 6.18 6.07

Tax Audit fee 1.12 1.10

Certifications/Others 1.65 1.65

8.95 8.82

Bad debts written off 80.35 0.00

Less: Amount written back from provision for doubtful debts -80.35 0.00

Provision made during the year for doubtful debts 39.89 28.39

305.71 343.41


31


Rs. in Lakhs

Mar-12 Mar-11

25. Sales and Distribution Expenses

Packing and forwarding expenses 168.10 334.44

Sales expenses 22.13 16.15

Discount and commission 17.62 26.81

207.85 377.40

26. Computation of Earnings per Share (EPS)

Profit / (Loss) after tax (Rs. in lakhs) -208.57 -399.57

No. of Equity Shares-Weighted average (in lakhs) 178.32 178.32

Earnings per share- (Face value- Rs. 10 per share):-

Basic (Rs.) (1.17) (2.24)

Diluted (Rs.) (1.17) (2.24)

27. Security Clause :

Working capital loans from consortium of bankers are secured by first charge on the Company’s current assets, presentand future, including stocks, goods in process, goods in transit, receivables and book debts.

These loans are further secured by pari passu charge by joint equitable mortgage of immovable properties of the Companysituated at village Jambhulwadi in district Sangli and at village Velapur in district Solapur in Maharashtra.

The above loans are further secured by personal guarantees of some of the Directors of the Company.

Vehicle loans are secured by hypothecation of respective vehicle.

28. Deferred Tax :

In view of the losses incurred by the Company during last few years, the Company has accumulated net deferred tax assetof Rs. 567.00 lakh as on 31/03/2012 (Previous year- Rs. 575 lakh) in terms of provisions of Accounting Standard 22“Accounting for Taxes on Income”.

Following prudent accounting policy and the guidelines contained in the Accounting Standard, the management has decidednot to make adjustment in the books of accounts for the value of the said deferred tax asset until such time that there isreasonable certainty of realisation thereof against sufficient future taxable income.

Current Year Previous YearRs. in lakhs Rs. in lakhs

29. Contingent liabilities :

a) Claims against the Company not acknowledged as debtExcise duty claims disputed in appeals 141.62 50.32

b) Letters of credit and bank guarantees outstanding 231.09 142.59(net of margin deposits)


32


30. Exceptional income :

Exceptional income during the current and the previous year comprised of profit on sale of surplus land at non plantlocation.

31. Related party disclosures :(in terms of Accounting Standard 18 issued by the Institute of Chartered Accountants of India)

(i) List of related parties :

Key management persons. Mr. V.S. Raju, Mr. G.R.K. Raju.

Relatives of key management persons. Mrs. V. Satyawati, Mrs. G. Jayalakshmi, Mrs. P. Anuradha,Mrs. P.L. Rajeshwari, Mr. P. Satyanarayana Raju,Mr. P. Srinivas Raju, Mrs. I.V. Sujani, Mr. Pravin Kumar.

Associates- Companies/ firms in which Vesar Furnitek Pvt. Ltd.key management persons are havingcontrol/ substantial interest.

Related party relationships are as identified by the Company and are relied upon by the auditors.

(ii) Related party transactions :

Nature of transaction Current Year Previous YearRs. in lakhs Rs. in lakhs

Transactions with key management persons-

Deposits taken 214.61 0.00

Remuneration paid 31.80 35.67

Interest paid 1.16 41.80

Transactions with relatives of key management persons-

Deposits taken 50.14 185.00

Rent paid 7.92 13.46

Rent deposits given 4.89 7.64

Remuneration paid 3.70 4.53

Interest paid 19.05 18.56


33


32. Segment Results :

The Company has two reportable segments, namely, Particle Boards and Bio Systems. Select financial information relatingto these segments is given below.


Revenue:

Particle Boards 2,945.30 3,275.42

Bio Systems 330.20 1,019.12

Total 3,275.50 4,294.54

Profit before interest and tax :

Particle Boards (122.02) (455.06)

Bio Systems 26.21 200.42

Others 251.90 210.48

Total 156.09 (44.16)

Less:-Interest 364.66 355.41

Profit before tax (208.57) (399.57)

Less:- Income tax - -

Profit after tax (208.57) (399.57)

Capital employed :

Segment assets less segment liabilities

Particle Boards 3,926.24 4,039.13

Bio Systems 228.33 324.04

Total 4,154.57 4,363.17

33. Consumption of imported/ indigenous items:

Current Year Previous YearRs. in lakhs % to total Rs. in lakhs % to total

Materials-

Indigenous materials consumed 1814.05 98.34% 1907.43 97.44%

Imported materials consumed 30.64 1.66% 50.08 2.56%

1844.69 1957.51

Stores & spares-

Indigenous items consumed 148.19 80.89% 169.05 85.22%

Imported items consumed 35.01 19.11% 29.32 14.78%

183.20 198.37


34


34. CIF Value of Imports :

Materials 24.47 69.48

Stores and spares 35.01 9.95

Total 59.48 79.43

35. Expenditure in Foreign Currency :

Membership & subscriptions 0 0.14

Total 0 0.14

36. Earnings in Foreign Currency :

There were no exports or earnings in foreign currency during the current or the previous year.

37. There were no outstanding dues payable to micro, small and medium enterprises as on the balance sheet date. Classificationof suppliers as micro, small and medium enterprises is done as per information provided by the supplier. No interest ispaid/ payable during the year to such enterprises.

38. Balances of debtors, advances and creditors are subject to confirmation.

39. Previous year figures are reclassified/ regrouped, where required, to conform with current year presentation.







35

ECOBOARD INDUSTRIES LIMITEDRegistered Office: 36/1, Preet Chambers, 2nd Floor, Pune-Mumbai Road, Wakdewadi, Pune – 411 003.

ATTENDANCE SLIP

Please bring this Attendance Slip and hand it over at the entrance ofHotel Shangrila Gardens, Off Karve Road, Near Nal Stop, Pune – 411 004.

Name & Address of the shareholder :

Folio No. :

*DP ID :

*Client ID :

I hereby record my presence at the Twenty First Annual General Meeting of “Ecoboard Industries Limited” 36/1, Preet Chambers,2nd Floor, Pune-Mumbai Road, Wakdewadi, Pune – 411 003 on Tuesday, 25th September, 2012 at 11.00 a.m.

Signature of the Member or Proxy Shares held

*Applicable to investors holding shares in electronic form.

ECOBOARD INDUSTRIES LIMITEDRegistered Office: 36/1, Preet Chambers, 2nd Floor, Pune-Mumbai Road, Wakdewadi, Pune – 411 003.

PROXY FORM

I/We of

in the district of being a Member (s) of the above

named Company hereby appoint of

in the District of or failing him

of in the District of

as my / our proxy to vote for me / us on my / our behalf at the Twenty First Annual General Meeting of the Company to be heldon Tuesday, 25th September, 2012 at 11.00 a.m. and at any adjournment thereof.

Signed this ___________________________ day of ________________2012.

Folio No. : _____________________

DP. ID : ______________________

Client ID : _____________________

Notes:

1. The Proxy in order to be valid should be deposited at the Principal / Registered Office of the Company not later thanSunday, 23rd September, 2012 at 11.00 a.m.

2. The Proxy should be executed on One Rupee Revenue Stamp.3. The shareholder may choose to vote differently for his entire holding and may vote against or for the resolutions in the

notice.

Affix aOne Rupee

RevenueStamp


36

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