DIRECTORS REPORT Your Directors take pleasure in presenting the Forty Second Annual Report of the Company with Audited Accounts for the year ended March 31, 2015. 2. DIVIDEND Your Directors are pleased to recommend dividend of Rs.0.25 per share on Equity Share of each or 25% on paid up capital (Previous year Rs. 0.25 per share on Equity Share of each), the consequent outflow will be Rs.203.10 lacs including dividend tax (Previous year Rs.197.43 lacs including dividend tax). 3. TRANSFER TO RESERVES The Company proposes to transfer Rs.500.00 lacs to the general reserve out of the amount available for appropriation and an amount of Rs.852.98 lacs are proposed to be retained in the profit and loss account. 4. RESULT OF OPERATIONS Your Company's operation during the year was satisfactory, given the tough business environment. The turnover of the Company including the excise duty for the year amounted to Rs.10,044 lacs (Previous year Rs.13,860 lacs). 5. SUBSIDIARY The Company has 4 subsidiaries as on March 31, 2015. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013("Act"). There has been no material change in the nature of the business of the subsidiaries. The Company has a policy on determining the material subsidiaries and the same has been displayed on the Company's Website at <http://www.iclbelting.com/resources/reports/gnrl/Material%20Subsidiaries.pdf> . In view of growing business needs and to explore opportunities to promote, sell and secure orders from existing and prospective customers in the United States and Canada, the Company has acquired 100% shares of International Conveyors America Limited, INC ("ICAL") on November 1, 2014, a newly incorporated entity under the laws of the state of Delaware. During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. 6. DIRECTORS & KMP Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 read with the Articles of Association of the Company Mr. Colin William Benjamin (DIN: 07093277) was appointed as an Additional Director w.e.f. February 12, 2015 and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Mr. Colin William Benjamin for appointment as a Director of the Company. In terms of the Articles of Association of the Company read with Section 150, 152 of the Companies Act, 2013, Mr. Sunit Om Prakash Mehra (DIN: 00359482) retires by rotation and being eligible, offers himself for re-appointment, is proposed to be reappointed as Director of the Company from the date of this AGM. Pursuant to the provision of Sec 196 of the Companies Act, 2013 and subject to the approval of the members in the General Meeting, the Board of Directors, on the recommendation of Nomination and Remuneration Committee, re-appointed Mr. Rajendra Kumar Dabriwala (DIN: 00086658) as Managing Director effective from October 1, 2015 for a period of 1 year as per the terms specified in the draft agreement to be placed before the ensuing AGM. Pursuant to the provisions of sections 149,152 and all other applicable provisions, if any, of the Companies Act, 2013 Ms. Nandini Khaitan (DIN: 06941351) was appointed as a Director of the Company w.e.f September 26, 2014. During the year under review, Mr. Ashok Kumar Gulgulia was appointed as the Chief Financial Officer of the Company with effect from August 8, 2014 under Section 203 of the Companies Act, 2013. Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014 , Mr. Jinesh Suryakant Vanzara (DIN: 00239574), Mr. Kunchala Thirupal Reddy (DIN: 03330182), Mr. Lakshmikant Tibrawalla (DIN: 00423521) and Mr. Mahadeo Prasad Jhunjhunwala (DIN: 00567070) were appointed as independent directors at the annual general meeting of the company held on September 26, 2014. The terms and conditions of appointment of independent are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. 7. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: i) In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii) The Directors had 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 as at March 31, 2015 and of the Profit of the Company for that period; iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other iv) The Directors have prepared the annual accounts of the Company on a 'going concern' basis. v) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial control is adequate and operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 8. NUMBER OF BOARD MEETINGS Five meetings of the board were held during the year, for details of the meetings please refer to the corporate governance report, which forms part of this report. 9. BOARD EVALUATION In compliance with the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee. Performance evaluation of the Board was carried out during the period under review. The details are given in the Corporate Governance Report. 10. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015, the Board consists of 8 members, one of whom is executive and rest are independent directors. The Board periodically evaluates the need for change in its composition and size. The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report. 11. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. 12. AUDIT COMMITTEE The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 13. STATUTORY AUDITORS M/s. Lodha & Co., Chartered Accountants, Statutory Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed there under, it is proposed to appoint M/s. Lodha and Co., Chartered Accountants as Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the forty-fourth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. They have furnished to the Company a Certificate regarding eligibility for their re-appointment. 14. AUDITORS' REPORT The auditors' report does not contain any reservations, qualifications or adverse remarks. The Auditors' report is attached to the Balance Sheet as at 31st March 2015. 15. SECRETARIAL AUDITORS' REPORT Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. V. Gulgulia & Co., Company Secretaries for conducting secretarial audit of the Company for the financial year 2014-2015. The Secretarial auditors' report does not contain any reservations, qualifications or adverse remarks and the Secretarial Audit Report (in form MR-3) forms part of the Board's Report. 16. RISK MANAGEMENT The Risk Management framework of the Company ensures, among others, compliance with the requirements of the Listing Agreement. The framework establishes risk management across all service areas and functions of the Company, and has in place procedures to inform the Board Members about the risk assessment and minimization process. The objective of risk management is to have a dynamic and an optimum balance between risk and return and ensure regulatory compliance and conformity with the Board approved policies. It entails the identification; measurement and management of risks across the various businesses of the Company. Risks are evaluated based on the probability and impact of each risk. In the normal course of business, the Company is exposed to certain financial risks, principal payment risk, competitor risk, foreign exchange risk, risk associated with compliance, environment risk, industry risk, industrial relation risk, etc. These risks are managed through various plans and procedures so as to minimize the potential adverse effects of these risks on financial performance. 17. LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements. 18. EXTRACT OF ANNUAL RETURN An extract of the Annual Return as of March 31, 2015 pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 is forming part of the report and is attached separately. Percentage increase in remuneration of each Managing Director, Chief Financial Officer (CFO), Company Secretary in the financial year 2014-15: Mr. Rajendra Kumar Dabriwala (Managing Director) : 28.57 Mr. Ashok Kumar Gulgulia (Chief Financial Officer) : NA Mrs. Arpita Daga (Company Secretary) : NA Percentage increase in median remuneration of employees in the financial year 2014-2015 - 8.35% Explanation of the relationship between average increase in remuneration & Company performance: 20. CORPORATE GOVERNANCE The Company is fully compliant with the Corporate Governance guidelines, as laid out in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management) have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The Managing Director has given a certificate of compliance with the Code of Conduct, which forms part of Corporate Governance Report, as required under Clause 49 of the Listing Agreement. The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance, as required under Clause 49 of the Listing Agreement. 21. DECLARATION GIVEN BY INDEPENDENT DIRECTORS All the Independent Directors have given the necessary declarations to the Company as required under sub-section (6) of Section 149 of the Companies Act, 2013. 22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report. 23. POLICY ON RELATED PARTY TRANSACTION Policy on dealing with Related Party Transaction is available on the Company's website at <http://www.iclbelting.com/resources/> reports/gnrl/Related%20Party%20Policy.pdf . 24. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. The details of familiarisation programme have been posted in the website of the Company under the web link <http://www.iclbelting.com/resources/reports/gnrl/> Familarisation%20Programme%20for%20Independent%20Director.pdf . 25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) rules, 2014 are annexed to the Board's Report. 26. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made there under, Company provides for diversity and equal opportunities to all employees across the Company, based on merit and ability. The cultures of the Company ensure the aspects of work-life balance for employees, especially for women and are suitably addressed. During the year, no complaints of sexual harassment were received. ICL demands, demonstrates and promotes professional behaviour and treats all employees with equal respect. 27. CORPORATE SOCIAL RESPONSIBILITY (CSR) The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year forms part of this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The policy is available on the Company's Website at <http://www.iclbelting.com/resources/reports/> cgr/CorporateSocialResponsibilityPolicy.pdf . 28. ESTABLISHMENT OF VIGIL MECHANISM The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairman of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. The Company has in place a Vigil Mechanism and the same has been displayed on the Company's Website at <http://www.iclbelting>. com/resources/reports/gnrl/Vigil%20Mechanism.pdf. 29. ACKNOWLEDGEMENTS The Directors express their sincere thanks and place on record their deep appreciation for the patronage extended by the shareholders, valued customers, bankers, government authorities and the investors for their continued support and confidence in the company. The Directors also wish to place on record their deep sense of appreciation to all employees for the diligence and contribution to the growth of the Company For and on behalf of the Board of Directors R. K. Dabriwala Managing Director M. P. Jhunjhunwala Director Place : Kolkata Date : May 30, 2015 |