DIRECTORS'REPORT TO THE MEMBERS, INCAP LIMITED Your Directors have pleasure in presenting the Twenty Fifth Annual Report on the business and operations of the Company and the Audited Accounts for the year ended 31st March, 2015 together with Auditors' Report thereon 2. STATE OF COMPANY AFFAIRS: During the year 2014-2015 you company achieved a turnover or Rs.4599.98 Lakhs against Rs.4015.32Lakhs for the year 2013-2014 your company made a net profit of Rs. 197.56 Lakhs during the year. 3. EVENTS SUBSEQUENTTOTHE DATE OF FINANCIAL STATEMENTS: There are no material changes and commitments affecting financial position of the company between31st March, 2015 and the date of Board's Report. 4. EXTRACT OF ANNUAL RETURN: As required pursuant to section 92(3) of the Companies Act, 2073and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is enclosed as Annexure "A" to this report. 5. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/JV: The Company does not have any subsidiary, joint venture or associate company. 6. DIVIDEND: The Board of Directors recommended for your consideration a dividend on equity share at 10% (Re. 1.00per equity share) for the year ended 31st March, 2015. The total amounts of outgo on account of these will Rs.51.33 Lakhs towards dividend and Rs. 10.45 Lakhs towards tax on dividend. 7. DIRECTORS Smt. P.Himabindu having DIN: 06605646, retires by rotation at the ensuing Annual General Meeting,and being eligible offers herself for re-appointment. Attention of the members is invited to the relevant items in the Notice of the Annual General Meetingand the Explanatory statement thereto. 8. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS The Company has not appointed Independent Directors and receiving declaration from Independent Directors won't arise. The Company is taking necessary step to appoint Independent Directors before the closure of the current financial year. 9. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION For the purpose of selection of any Director, the Nomination & Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and also takes into consideration recommendation, if any, received from any member of the Board. The Committee also ensures that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection, appointment and remuneration of Directors & Senior Management, 10. EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS: The Board of Directors have carried out an annual evaluation of its own performance, its various committees and individual directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed under clause 49 of the Listing Agreement. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of various criteria such as Board Composition, process, dynamics, quality of deliberations, strategic discussions, effective reviews, committee participation, governance reviews etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as Committee composition, process, dynamics, deliberation, strategic discussions, effective reviews etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as Transparency, Analytical Capabilities, Performance, Leadership, Ethics and ability to take balanced decisions regarding stakeholders. 11 .TRANSFER TO RESERVES No amount was transferred to the reserves during the financial year ended 31 st March, 2015. 13. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company strongly believesHn providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavor of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. During the year ended 31 March 2015, no complaints pertaining to sexual harassment was received by the Company. 14. STATUTORY AUDITORS: The Company's Auditors, M/s. Purnachandra Rao & Co. was appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 27th September, 2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. The Report given by the Auditors on the financial statements of the Company is enclosed as Annexure "B" to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. 15. SECRETARIAL AUDITORS: 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.A.N.Sarma & Co., Company Secretaries for conducting secretarial audit of the Company for the financial year 2014 2015. The Secretarial Audit Report (Form MR-3) is enclosed as Annexure "C" to this Report. The Remarks, Qualification and Reservation of Secretarial Auditor have been mentioned in the Report and the reasons for not appointing Independent Directors and Company Secretary of the Company is explained as follows. a. Company is engaged in a business where it finds difficult to find Independent Directors who can understand and provide value addition to the Company. And also, the company's registered office and factory is located in a rural area to a building new capita! of Andhra Pradesh and it is finding difficult not only to appoint independent directors and Company Secretary but also other resources. b. Company undertakes to appoint Independent Directors and Company Secretary of the Company in the current financial year and to comply with all provisions of the Companies Act, 2013 and Listing Agreement. 16. LOANS, GUARANTEES & INVESTMENTS The Company has not given loans, guarantees, securities and made investments during the year under review, under the provisions of the Companies Act, 2013 and the rules framed there under. 17. RELATED PARTYTRANSACTIONS: There are no related party transactions made by the company with its promoters, directors or the management, their relative conflicting with company's interest during the year under review, under the provisions of the Companies Act, 2013 and the rules framed there under. 18. COMPOSITION OF AUDIT COMMITTEE The details pertaining to composition of Audit Committee are included in the Corporate GovernanceReport which forms a part of this Report. 19. RISK MANAGEMENT POLICY: The Company has developed and implemented a risk management policy which identifies major risks which may threaten the existence of the Company. The same has also been adopted by your Board and is also subject to its review from time to time. 20. INTERNAL FINANCIAL CONTROLS: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Managing Director. The Internal Audit Department monitors 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. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board 21. CORPORATE SOCIAL RESPONSIBILTY: The Provisions of Corporate Social Responsibility are not applicable to the Company under the provisions of the Companies Act, 2013. 22. PUBLIC DEPOSITS The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 2013 and the rules framed there under. 23. VIGIL MECHANISM: Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49of the Listing Agreement, the Company has Vigilance Mechanism comprising of Executive and Non Executive Promoter Directors. 24. CORPORATE GOVERNANCE REPORT: Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. Report on Corporate Governance is enclosed as Annexure "D" to this Report. Certificate from the Statutory Auditors of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is enclosed as Annexure "E" to this Report. 25. MANAGEMENT DISCUSSION ANALYSIS The management discussion and analysis on the operations of the Company as prescribed under clause 49 of the listing agreement is enclosed as Annexure "F" to this Report. 26. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavor of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. During the year ended 31 March 2015, no complaints pertaining to sexual harassment was received by the Company. 27. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to section 134 of the Act, the Directors, based on the representation received from the Directory hereby confirm that:- a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; b) They have, in the selection of the accounting policies, consulted the statutory auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the company for that period; c) They have taken proper and sufficient care, to the best of their knowledge and ability, 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 regulations d) They have prepared the annual accounts on a going concern basis. e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively 29. SIGNIFICANT & MATERIAL ORDERS PASSED BYTHE REGULATORS: No significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the company's operations in future. 31. QUALITY SYSTEM: Your Company's certificate for quality systems under ISO 9001:2008 from ODC Standards Certification (India) Pvt. Ltd., Hyderabad continues to be valid. 32. DISCLOSURE AS PER LISTING AGREEMENT: Clause 2: The Cash flow statement in accordance with Accounting Standard and Cash Flow Statement (ASS) issued by ICAI is appended to this Annual Report. Clause 43 A: The Company's shares are listed on Bombay Stock Exchange Limited, Floor 25, P.J.Towers, Dalai Street, Mumbai - 400001. The annual listing fee to BSE Limited for the year 2014-2015 has been paid. 33. PARTICULARS OF EMPLOYEES: Information as per Section 197 (12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in a separate annexure forming part of this report. Further, pursuant to the proviso to section 136 (1) of the Companies Act, 2013, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the registered office address of the Company. There are no employees drawing remuneration as prescribed in Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, 34. ACKNOWLEDGEMENTS: Your Directors wish to express their grateful appreciation for the assistance and cooperation received from State Bank of India, State Bank of Hyderabad, Customers and Suppliers. Cordial relations prevailed during the year with all the employees. Your Directors wish to place on record their deep sense of appreciation of the valuable work done and co-operation extended by them at all levels. Your Directors also wish to express their gratitude to investors for the continued faith reposed by them in the Company. By Order of the Board For INCAP LIMITED C.BHAGAVANTHA RAO MANAGING DIRECTOR DIN: 00218713 VIJAYAWADA Date : 25th July, 2015 |