Ellenbarrie Industrial Gases Ltd

TO THE MEMBERS

All financial figures are stated in Rs. Lacs

Your Directors have pleasure in presenting the 46^th Annual Report of your Company together with the Audited Financial Statement for the year ended 31^st March 2021.

FINANCIAL RESULTS

Highlights of the financial results of the Company for the year ended 31st March 2021 are as under:

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

Revenue from operations recorded a growth of 0.5% despite complete curtailment of operation during April and May 2020 because of first wave of COVID-19 pandemic.

Even though total EBITDA dropped by 65% due to one-time receipts/write-offs during the previous FY, normalized EITDA (after removing one-time compensation) recorded a growth of 19%. Following table explains the growth of normalized EBITDA:

While the industrial growth remained subdued during the whole year due to onset of COVID-19 pandemic the company showed remarkable resilience in terms of continuing its growth programs undertaken during the past few years.

Your company has preferred to continue to opt for new tax regime laid out under Section 115BAA of Income Tax Act, 1961 which was first opted during FY 2019-20.

Eventually, your company consolidated its profitability with a reported Profit After Taxes of Rs. 2404 lacs (previous year 8942).

CHANGE IN NATURE OF BUSINESS

Operations of the company experienced negligible performance during the whole of April 2020 and part of May 2020 in view of COVID-19 related nationwide lockdowns.

Your company actively pursued medical gas pipeline installation business during the year as a natural extension of its existing business.

As such, there was no change in the nature of business as being carried by the Company. DIVIDEND

The Board decided to not declare any dividend to the equity shareholders or the preference shareholders.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR AND EDUCATION PROTECTION FUND

The shares against which dividends have been lying unclaimed and unpaid for consecutive 7 years need to be transferred to the IEPF account. The company has made necessary transfers to IEPF authority.

TRANSFER TO RESERVES

The Board did not transfer any amount to the reserves.

SHARE CAPITAL

The paid-up equity capital as on March 31, 2021 was Rs. 655 lacs and preference capital were Rs. 1,050 lacs. During the year under review, the Company has not issued any shares in the Company. The company also has not issued shares with differential voting rights nor granted stock options nor sweat equity nor bonus shares during the year.

FINANCE

During the financial year your company repaid a total of Rs. 2228 Lacs against long term borrowings, whereas Long term borrowings decreased by 44 lacs because of exchange variation. However, short term borrowings were borrowed to the extent of Rs. 2475 Lacs.

At the year end funds deployed as Investments and Cash & Cash Equivalents stood as below:

DEPOSITS

Your company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Hence, no details to report pursuant to Rules 8(5)(v) and 8(5)(vi) of the Companies Accounts Rules, 2014.

CONSOLIDATION OF FINANCIAL STATEMENTS

Your company does not have any subsidiary company or associate companies. Pursuant to section 129(3) and other applicable provisions of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 as amended and the Accounting Standards issued by the Institute of Chartered Accountants of India including amendments made thereto, the Company is not required to prepare consolidated financial statements for the financial year 2020-21.

REVISION IN FINANCIAL STATEMENTS

There has been no revision in the financial statements of the company during the financial year 2020-21.

SUBSIDIARY AND ASSOCIATE COMPANIES

Your Company does not have any subsidiary company. Further, pursuant to rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, it is reported that no company has ceased to become an associate of the company during the financial year 2020-21.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function has been entrusted to an internal auditor duly appointed by the Board with the recommendation of the Audit committee. The Internal Auditor reports to the Chairman of the Audit Committee and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

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

Particulars relating to Conservation of Energy, Technology absorption and foreign exchange earnings as required by the Companies (Accounts) Rules, 2014 is given in the prescribed form in Annexure "A" to the Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the Company consist of 6 directors on the date of this report comprising of 3 Whole Time Directors, 3 Independent Directors. Mr. Manas Kumar Dutta, Ms. Aastha Shah and Mr. Swapan Kumar Bhowmik continue as Independent Director in the Company. All the independent directors have given declarations that they meet the criteria of independence laid down under section 149(6) of the Companies Act, 2013. Three Directors representing the interests of erstwhile holding company M/s Air Water Inc. of Japan, viz., Mr. Norio Shibuya (DIN: 07099850), Director, Mr. Hideo Tsutsumi (DIN: 07828529), Director and Mr. Shigehiko Tanaka(DIN: 06917650) resigned from the Board of the company with effect from July 9^th, 2021.

Information relating to these Directors is provided as Annexure "A" to the Notice calling AGM.

No commission is paid to Managing Director or Whole Time Directors.

Re-appointment of Director

Mr. Varun Agarwal, Whole time Director retire by rotation and being eligible, offer himself for re-appointment. None of the directors are related or interested in the appointment except as directors themselves.

The Board recommends the appointment of above-mentioned director with a view to avail his valuable advice and wise counsel.

Changes in Key Managerial Personnel

Mr. Padam Kumar Agarwala continues as Managing Director.

Mr. Norio Shibuya vacated his office as Jt. Managing Director with effect from 9^th July 2021 following his resignation from the Board of the company effective that date.

Ms. Priyanka Jaiswal resigned as Company Secretary of the company with effect from 14^th May 2021. The company is in the process of hiring for the position of company secretary.

Independent Directors

Mr. Manas Kumar Dutta, Ms. Aastha Shah and Mr. Swapan Kumar Bhowmik continues as Independent Directors on the Board of the Company. Pursuant to Section 149(7) of the Act, all the independent directors have given declarations for the F.Y 2021-22 that they meet the criteria of independence as laid down under section 149(6) of the Act.

Training and familiarization programme for directors

The Board members are provided with necessary documentations/brochures, reports and internal policies to enable them to familiarize themselves with the Company's procedure and practices. The company has adopted familiarization programme for independent directors with an aim to provide to the independent directors insight in their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc.

Policy on director's appointment and remuneration

The Nomination & Remuneration Committee of the company is governed by terms of reference. The company's nomination and remuneration policy include director's appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details.

Annual Evaluation by the Board of its own performance and that of its committee and individual directors

The Board has comprehensive system for making a formal evaluation of the performance of the Board, committee of the Board and Individual directors. The Board has fixed parameters against which performance of the directors is to be measured and those parameters are conveyed to directors in advance. Periodically the Board reviews the parameters and assess the performance of the directors against such parameter. There also exists a feedback system so that directors can become aware of the evaluation of their performance and improve their skill and knowledge.

Committees of directors and key managerial persons

The details of the committee of directors and key managerial persons pursuant to companies Act, 2013 and are annexed to the Board report.

REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration of directors and key managerial personnel are as furnished in Annexure "B".

DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

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 31^st March, 2021 and of the profit or loss of the Company for the year under review.

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.

e) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

f) The directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MATERIAL CHANGES & COMMITMENT

(The Financial Position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report)

1. The outbreak of novel Coronavirus (COVID-19) and its rapid spread across the world has had its impact on the business operations of the Company, beginning with the latter part of March 2020 and continued into the 1st quarter of FY 2020-21. Immediately after imposition of the lockdown in the last week of March 2020 and continuing through midMay 2020, keeping in mind the practical constraints of continuing operations and dispatches and the safety & health of our employees & other stakeholders, the Company suspended its production at some of its plant in the later part of March '20 and continuing through April 2020 and part of May 2020. However, considering your company's social commitment as a LMO (Liquid Medical Oxygen) producer and in line with exemption given to continuous process industries the company continued to operate most of its plants despite experiencing lack of economic demand during the 1^st half of the FY 2020-21.

The country faced the devastating effects of 2^nd wave of during the first Quarter of 2021-22. Your company continued to discharge its responsibility as a LMO producer diligently and supported the efforts towards making available LMO supplies to different parts of the country including deployment of gas distribution assets towards efforts for movement of LMO under administration's efforts.

The Company closely monitored the situation and took appropriate actions as per the directions issued by the regulatory authorities from time to time, keeping in view the interests of the Company, health and safety of employees and other stakeholders. Your Company focused on conserving cash and ensuring adequate liquidity. Your Company will continue to monitor any material changes to future economic conditions.

2. The promoters of the company viz. Mr. Padam Kumar Agarwala, Mr. Shanti Prasad Agarwala and Mr. Varun Agarwal ("Promoters' Group") and your company arrived at a settlement agreement on July 9^th, 2021 with the erstwhile holding company M/s Air Water Inc., Osaka, Japan("AWI").

As part of the settlement agreement, as of 30^th July 2021, your company has received a one-time settlement amount from AWI and has decided to use the proceeds to prepay all the long-term and short term borrowings which were earlier secured by guarantees from AWI; redeemed the outstanding to the preference shareholders in full earlier than their agreed redemption dates. Accordingly, the financial position of your company has improved following the execution of the settlement agreement.

As part of the settlement agreement, as of 28^th July 2021, the Promoter's group have purchased AWI's entire holding of in your Company, and the nominee directors of AWI have resigned from the Board of your company.

3. Your company convened an extra ordinary general meeting of the equity shareholders on the 26^th of July 2021 in order to modify the Article of Association of the Company.

MEETING OF THE BOARDS

During the year under review, four meetings of the Board of Directors were held.

AUDIT COMMITTEE

The details pertaining to the composition of the Audit committee required to be given pursuant to Section 177(8) of the Companies Act, 2013 are as follows:

Chairman: Mr. Manas Kumar Dutta, Independent Director Members: Ms. Aastha Shah, Independent Director; Mr. Varun Agarwal, Executive Director

There are no instances of the Board not accepting the recommendation of the Audit committee during the financial year 2020-21.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

The composition of the committee is following the provisions of Section 178 of the Companies Act, 2013. The role of the committee inter-alia includes:

• Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;

• Formulation of criteria for evaluation of performance of Independent directors and the Board of Directors;

• Devising a policy on diversity of Board of Directors;

• Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal;

• To consider and evaluate whether extend or continue the terms of appointment of the Independent directors on basis of the report of performance evaluation of Independent directors.

The Composition of NRC as required under Section 178 of the Act are as follows:

Chairman: Mr. Shanti Prasad Agarwala, Whole time Director

Members: Ms. Aastha Shah & Mr. Manas Kumar Dutta, Independent Directors; Mr. Padam Kumar Agarwala, Managing Director

CSR COMMITTEE

The details pertaining to the composition of the Corporate Social Responsibility committee required to be given as per the Companies Act, 2013 are as follows:

Chairman: Mr. Shanti Prasad Agarwala, Whole time Director

Members: Mr. Padam Kumar Agarwala, Managing Director and Ms. Aastha Shah, Independent Director.

RELATED PARTY TRANSACTIONS

Pursuant to Section 134(3)(a) read with rule 8(2) of the Companies (Accounts) Rules, 2014 particulars of contracts or arrangement with related parties as referred to in Section 188(1) read with rule 8(2) of the corresponding rules are furnished in prescribed format as per Annexure "C".

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

The Company has Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. The policy is posted on the website of the company at www.ellenbarrie.com.

STATUTORY AUDITORS

M/s Abhishek Kumar, Chartered Accountant, Statutory Auditors of the Company holds office for a five-year term up to conclusion of the 48^th Annual General Meeting.

The Board recommends the replacement of the Statutory Auditors by M/s A K Kumar & Co., (Reg. no. 308013E) for a period of five years ending with conclusion of the 53^rd Annual General Meeting . The board has received a letter from M/s A K Kumar & Co. expressing their consent and qualification to take up this assignment.

There is no observation made by Statutory Auditors in Audit Report for the year 2020-21, that requires Board's specific explanation.

COST AUDITOR

The Board at its meeting held on 6^th September 2021 has appointed M/s. Datta, Ghosh, Bhattacharya & Associate as cost auditors for carrying out audit of cost accounting records of the company for the financial year ending 31^st March 2022. The ratification of the members is necessary for the payment of remuneration to cost auditors. Your directors recommend the same.

SECRETARIAL AUDIT

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Ms. Twinkle Pandey, practicing company Secretary to undertake Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure "D". The Board assures that the pending forms shall be filed in time.

PARTICULARS OF EMPLOYEES

Details pursuant to Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement relating thereto is given in Annexure F.

DETAILS OF SIGNIFICANT & MATERIAL ORDER PASSED BY REGULATORS, COURTS OR TRIBUNALS

An application was moved by the promoter shareholders before the National Company Law Tribunal, Kolkata Bench (NCLT) under Sections 241 and 242 of the Companies Act, 2013 seeking relief against alleged oppression and mismanagement arising out of alleged violation of the noncompete clause of Shareholders Agreement agreed between promoter shareholders and certain other memorandum of understanding between the said parties. On 17 August 2020, the honorable NCLT issued an interim order vide C.P. No. 770/KB/2020 directing a respondent appropriately. In the meanwhile, the parties preferred mediation route ARB-MED-ARB protocol of the Singapore International Arbitration Council (SIAC). Following the mediation proceedings, the parties arrived at a settlement agreement dated 9^th July 2021 and have acted upon the same in good faith. The proceedings before the NCLT and SIAC are in abeyance till September 30, 2021. The Board is of the opinion that the parties have amicably settled all disputes following the settlement agreement and execution thereof and as such no financial impact on this Balance sheet date except as already accounted. Holding company and promoter directors are interested in this suit as shareholders.

SEXUAL HARASSMENT POLICY

As required under the provisions of Sexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Act, 2013 read with Sexual Harassment of Women at Workplace(Prevention, Prohibition and Redressal) Rule, 2013, and Internal Complaint Committee (ICC) with requisite number of representative has been set up to redress complaints of sexual harassment, if any. The following is a summary of sexual harassment complaints received and disposed of during the year ended 31^st March 2021:

No. of Complaints received: NIL

No. of complaints disposed of: NIL

TRADE RELATIONS

The Board desires to place on record its appreciation for the support and co-operation that the Company has received from suppliers, brokers, customers and others associated with the Company as its enterprise partners. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Company's endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other.

APPRECIATION & ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels but for whose hard work, solidarity, and support, your Company's achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, joint venture partners, investors and bankers for their continued support and faith reposed in the Company.

The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players.

Your Directors take this opportunity to thank all investors, customers, vendors, bankers (previous and existing), regulatory and government authorities, for their continued support and faith reposed in the Company.

For & on behalf of the Board