DIRECTOR REPORT DEAR MEMBERS, Your Directors are delighted in presenting the I 8th Annual Report and the Audited Accounts for the financial year ended March 3I, 20I5. 2. Review of Performance During the year under review, the Net Turnover of the Company rose to Rs.964I9.I5 Lacs as against Rs.86408.I6 Lacs reported last year, registering a growth of I2%. The Company has earned Net Profit Rs.5484.39 Lacs, as against the net profit of Rs.3994.27 Lacs reported last year registering a growth of 37%. The improvement in performance of your Company could mainly be attributed to better capacity utilization, ongoing emphasis on productivity and efficiency improvement in all areas of operation. 3. Extract of Annual Return In accordance with Section I34 (3) (a) of the Companies Act, 20I3, an extract of Annual Return of the Company is annexed herewith as Annexure VII to this Report. 4. Dividend Your Directors are pleased to recommend for your consideration and approval payment of dividend @ 25% amounting to Rs.2.50 per equity share of Rs.I0/- each for the financial year 2014-15. Total amount of dividend outgo for the financial year Rs.572.43 Lacs (including Corporate Dividend Tax amounting to Rs.96.82 Lacs). The total amount of Rs. 62I.87 Lacs (including Corporate DividendTax) amounting to H I05.I8 Lacs shall be distributed to the shareholders because the paid up share capital of the Company has increased after allotment of equity shares to QIBs on August 17,2015. The dividend will be paid to members whose names appear in the Register of Members as on September I4, 20I5 5. Fixed Deposits During the financial year; the Company has not accepted any fixed deposits from the public under Section 73 and 74 of the Companies Act, 20I3 along with the rules made there under during the year under review. 6. Transfer to Reserve During the year amount of Rs.64I.69 Lacs has transferred to General Reserve. 7. Pollution Control The Company has taken various initiatives to keep the environment free from pollution. It has already installed various devices in the factories to control the pollution. 8. Subsidiary Company, Associate Company and Joint Venture Company There is no subsidiary company (ies) of the Company during the year under review. The Company has "OAT & IIL India Laboratories Private Limited" as its joint venture company within the meaning of Section 2(6) of the Companies Act, 20I3, as on March 3I, 20I5. Also, the Company has "Isec Organics Limited" as its associate company A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 20I3 is provided as Annexure III and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: <http://www.insecticidesindia.com/Policy/> RELATED%20PARTY%20TRANSACTION%20FINAL.pdf 9. Directors The Board comprises of Eight Directors. In compliance of the Companies Act, 20I3 and in pursuant of Clause 49 of the Listing Agreement with Stock Exchanges, the Company had appointed, Mr. Virjesh Kumar Gupta, Mr Navneet Goel, Mr Gopal Chandra Agarwal, Mr Navin Shah and Mr. Anil Kumar Singh as Independent Directors. In accordance with the provisions of Section I49 of the Companies Act, 20I3, these Directors were appointed as Independent Directors to hold office as per their tenure of appointment decided in the last Annual General Meeting of the Company. The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section I49 of the Companies Act, 20I3 and under revised Clause 49 of the Listing Agreement with Stock Exchanges. Further, Mrs. Nikunj Aggarwal, retires at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. We seek your support in confirming her re-appointment as Director 10. Number of Board Meetings During the financial year the Board of Directors met 8 (Eight) times, the details of which are given in the Corporate Governance Report that forms the part of Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 20I3 and Listing Agreement entered with Stock Exchanges. Note: Upto May 3I, 20I4 Mr. Navneet Goel acted as Chairman and Mr Gopal Chandra Agarwal & Mr Anil Kumar Singh were members of such committee. Also, a detailed note on the Board and its committees is provided in the Report on Corporate Governance which forms the part of Annual Report. The composition of the committees and compliances, are as per the applicable provisions of the Companies Act, 20I3 and Rules made there under and revised Clause 49 of the Listing Agreement l2.Vigil Mechanism The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting unethical behaviour, fraud, violations, or bribery. The Company has Vigil Mechanism (Whistle Blower) Policy under which the employees are free to report violations of applicable Laws and Regulations and the Code of Conduct, the same can be accessed through the Chairman of the Audit Commitee. The reportable matters may be disclosed to the Ethics and Compliance Task Force which operates under the supervision of the Audit Committee. Employees may also report to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee. 13. Directors Responsibility Statement Pursuant to Section I34(5) of the Companies Act, 20I3, the Board of Directors, to the best of their knowledge and ability confirms that: i) in the preparation of the annual accounts for the year ended March 3I, 20I5, 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 at the end of the financial year and of the profit of the Company for the year; iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 20I3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) the directors have prepared the annual accounts 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 controls are adequate and were operating effectively; vi) 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. In terms of the requirement of Accounting Standards, Segment-wise Results are shown in the Notes to Accounts. 14. Nomination and Remuneration Policy Formulation of policy on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters has been provided by the Company in its Corporate Governance Report. 15. Particulars of Loans Given, Investment Made, Guarantees Given and Securities Provided During the year under review, the Company has not made any loan, given any guarantee or provided security in connection with the loan to any other body corporate or person. However, the Company has invested in equity shares of OAT & IIL India Laboratories Private Limited, the said company is the joint venture of your company w.e.f March 6, 20I3. 16. Particulars of Contracts or Arrangements With Related Parties All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of the business and on an arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions, Details of such particulars of contracts or arrangements with related parties referred to in sub-section (I) of Section I88 in the prescribed form AOC-2 as attached as an Annexure IV. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link <http://www.insecticidesindia>. com/Policy/RELATED%20PARTY%20TRANSACTION%20FINAL. pdf 17. Material Changes and Commitments There have been no material changes and commitments affecting 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. However, the Company has set up a new formulation plant at Chopanki with effect from August 8, 20I4. l8.Corporate Governance Your Company has complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A report on the Corporate Governance practices followed by the Company the Auditors' Certificate on compliance of mandatory requirements thereof forms the part of this Annual Report. 19. Auditors Statutory Auditors The Statutory Auditors M/s Mohit Parekh & Co., Chartered Accountants having firm registration no.002067N hold office until the conclusion of the ensuing Annual General Meeting, is eligible for re-appointment. They have furnished the certificate of their eligibility for re-appointment, if made, as required under the Companies Act, 20I3 and they are not disqualified for re-appointment. Further the Board of Directors of the Company recommend to the shareholders for their approval, re-appointment till the conclusion of next Annual General Meeting. Cost Auditors In terms of the requirement of Section I48 of the Companies Act, 2013, your Board of Directors has appointed M/s A.G.S. & Associates, Cost Accountants were re-appointed as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for the year 2015-16. Further the Board of Directors of the Company recommend to the shareholders for their approval, remuneration to be paid to the Cost Auditors Rs.300000.00 (exclusive of service tax & out of pocket expenses) Secretarial Auditor The Board has appointed M/s Akash Gupta & Associates, Company Secretaries (M No.30099) to conduct the Secretarial Audit for the financial year 20I4-I5. The Secretarial Audit report for the financial year ended March 3I, 20I5 is annexed herewith as Annexure VI to this report. 20. Auditors' Report There are no qualifications of Auditors on the Accounts of the Company for the financial year ended March 3I, 20I5 requiring further comment from the Board of Directors. There no qualifications in the Secretarial Audit Report for the financial year ended March 3I, 20I5 and does not require further comment from the Board of Directors. 21. Corporate Social Responsibility In compliance with Section I35 of the Companies Act, 20I3 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee during the financial year 20I4-20I5. The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. During the period under review, the Company has not contributed towards CSR activities, as the Company thought of undertaking the projects or programs of CSR on its own, therefore on February II, 2015, the Company has incorporated 'IIL Foundation' for undertaking the CSR projects and programs. The Company shall contribute to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the education, health, safety and environment aspects. The statutory disclosures with respect to the CSR Committee and policy in terms of Section I35 of the Companies Act, 20I3 read with the Companies (Corporate Social Responsibility Policy) Rules, 20I4, in the form of the annual report on CSR Activities is laid down in Annexure V which forms part of this Report. 22.Insurance The Company has taken the required insurance coverage for its assets against the possible risks like fire, flood, public liability, marine, etc. 23. Nature of Business There is no change in the nature of business during the period under review. 24. Details of Significant & Material Orders No significant and material order has been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and Company's operations in future, details of which needs to be disclosed in the Board's Report as Section I34 (3)(q) read with Rule 8 of Companies (Accounts) Rules, 20I4. 25. Details in Respect of Adequacy of Internal Financial Controls The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of 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 timely preparation of reliable financial disclosures. 26. Disclosure of Remuneration The information as required in accordance with Section I97(I2) of the Act read with Rule 5(I) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4, the details regarding the remuneration and other requisite details are mentioned in the Annexure II attached hereto. No Employee, other than Mr Hari Chand Aggarwal, Chairman cum Whole-time Director and Mr Rajesh Aggarwal, Managing Director of the Company draw remuneration in excess of limit prescribed under Section I97 of the Companies Act, 20I3 read with Rule 5(2) of the Companies (Appointment and Managerial Personnel ) Rules, 20I4. Requisite details of remuneration paid to Mr. Hari Chand Aggarwal and Mr. Rajesh Aggarwal (From April I, 20I4 to March 3I, 20I5) pursuant to the said provisions is as details herein No director of the Company who is receiving commission from the Company is in receipt of any remuneration or commission from any holding company or subsidiary company of the Company Total remuneration includes Salary, Bonus, Allowances, Company's contribution to Provident Fund, Gratuity and Other Perquisites and benefits valued as per the Income Tax Act, I96I. 27. Risk Management The Company has formulated the Risk Management Policy through which the Company has identified various risks like, strategy risk, industry and competition risk, operation risk, liability risks, resource risk, technological risk, financial risk. The Company faces constant pressure from the evolving marketplace that impacts important issues in risk management and threatens profit margins. The Company emphasizes on those risks that threaten the achievement of business objectives of the Group over the short to medium term. Your Company has adopted the mechanism for periodic assessment to identify, analyze, and mitigation of the risk. The appropriate risk identification method will depend on the application area (i.e. nature of activities and the hazard groups), the nature of the project, the project phase, resources available, regulatory requirements and client requirements as to objectives, desired outcome and the required level of detail. The trend line assessment of risks, analysis of exposure and potential impact shall be carried out. Mitigation plans shall be finalized, owners identified, and progress of mitigation actions shall be regularly and periodically monitored and reviewed. Treatment options which are not necessarily mutually exclusive or appropriate in all circumstances shall be driven by outcomes that include: • Avoiding the risk, • Reducing (mitigating) the risk, • Transferring (sharing) the risk, and • Retaining (accepting) the risk. 28. Performance Evaluation Report In terms of Companies Act, 20I3 and Listing Agreement entered into with Stock Exchanges, there is requirement of formal evaluation by the Board of its own performance and that of its committees and individual directors. The evaluation of individual directors and the Board as a whole was conducted based on criteria and framework adopted by the Board. The evaluation criteria has been explained in the Nomination and Remuneration Policy adopted by the Board and forms part of this Annual Report. 29. Management Discussion And Analysis Separate report on Management Discussion & Analysis is appended herewith 30. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo In terms of requirement of clause (m) of sub-section (3) of Section I34 of the Companies Act, 20I3 read with the Companies Account(s) Rules, 20I4, the particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure I to this report. 31. Disclosure under the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place an Anti-Sexual Harassment Policy ('Policy') in line with the requirements of The Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 20I3. Your Directors state that during the year under review, no cases of sexual harassment have been reported. 32. Appreciation The Directors wish to thank Creditors, Investors, Banks and Government Authorities for their continued support. The Directors also wish to place on record their deep sense of gratitude for the committed services of the Executives Staff and Workers of the Company. We would also like to express sincere thanks to our Shareholders for their confidence and understanding. For and on behalf of the Board Insecticides (India) Limited (Hari Chand Aggarwal) Chairman DIN-005770I5 Place: Delhi Dated: August 25, 20I5 |