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ICDS Ltd. (ICDSLTD) - Director Report

Company director report

- 2015-16


The Members

Your Board of Directors have pleasure in presenting their 45th Annual Reporton the business and operations of the Company and the accounts for the Financial Yearended March 31 2016.


The following table brings out the financial performance of the Company during the F.Y.2015-16:

(Rs. in ‘000)
31 March 2016 31 March 2015
Income from Operations 39931 45402
Other Income 5112 6720
Write back of provisions 742 8068
Total Income 45785 60190
Less: Operating Expenses 40362 42667
5483 17523
Less: Interest 1386 3324
Profit/(Loss) before Depreciation 4097 14199
Less: Depreciation 1240 1392
Profit/(Loss) after Depreciation before Tax 2857 12807
Less: Provision for Income Tax/ (write back) 200 830
ProfiV(Loss) after Tax 2657 11977
Add: (Loss) brought forward (64717) (76694)
(Loss) carried forward (62060) (64717)


During the year under review the Company has earned income of Rs.4.58 crores (includingsale of telephone handsets and accessories of Rs. 2.04 crores) as against Rs.6.02 croresin the corresponding period of the previous year- (which also included income from sale oftelephone handsets and accessories of Rs.2.75 crores) from recovery of overdues fromHP/Lease/ Bills Discounting/Loan Parties Commission from insurance related activitiesservice charges earned from telephone bill recovery services dividend and interest. Theoperating expense incurred during the reporting period was Rs.4.03 crores as againstRs.4.27 crores in the previous year. The accumulated losses which was at Rs.6.47 crores ason 31st March 2015 has been reduced to Rs.6.21 crores on 31stMarch 2016. The net worth of the Company as on 31st March 2016 went up toRs.10.15 crores (Rs.9.89 crores in the corresponding period of previous year).

Scheme of Arrangement -

The details of unclaimed public liabilities with the Company as per the Scheme ofArrangement sanctioned by the Hon’ble High Court of Karnataka have been covered inthe Corporate Governance Report. However the total liability unpaid as on 31stMarch 2016 was Rs.1.98 crores which does not include cheques issued to the investors butnot presented amounting Rs.2.93 crores.

Future Business Plans

As reported in the earlier years the company stopped NBFC business as per theundertaking given to H'ble High Court of Karnataka while considering the company'sapplication for scheme of arrangement. Since then company was focusing its activities onrecovery of overdues. The company's net owned funds has become positive and meets theminimum required NOF stipulated by Reserve Bank of India for Non-Banking Finance Business.The Company has applied RBI for registering it as a Non-Deposit taking NBFC for pursuingbusiness of Hire Purchase/Lease finance.

Fee based Activities

In order to generate some income to partly meet the establishment expenses yourCompany is engaged as Corporate Agent for Life and General Insurance Companies and alsoacting as address verification agents for Fullerton India Credit Company Limited and TataTeleservices Limited at Coimbatore. Besides your company has taken up distributorship ofMTS Mobile Phones & accessories of SistemaShyam Teleservices Ltd. Videocon and Intexbrand handsets at Coimbatore and Salem areas in Tamil Nadu. The company is also focusingon collecting overdues from HP/Lease/Loans/Bills discounted parties.


Since the Company has carried forward losses in the current year the Directors expresstheir inability to recommend Dividend.


The paid up Share Capital as on 31st March 2016 was Rs.130267000/-.During the year under review the Company has not issued any shares. The Company has notissued shares with differential voting rights. It has neither issued employee stockoptions nor sweat equity shares and does not have any scheme to fund its employees topurchase the shares of the Company.


The Company has not accepted any deposits from the public/ shareholders during the yearunder review as per Section 73 of the Companies Act 2013.


Pursuant to Clause 49 of the Listing Agreement with the

Stock Exchange Corporate Governance Report and Auditor’s Certificate regardingCompliance of conditions of Governance are made part of this Report.


Mrs. Vimal C. Kamath [DIN 07182821] Director retire by rotation at the forthcomingAnnual General Meeting and being eligible offer herself for reappointment.

Details of remuneration paid to the Directors and Key Managerial Personnel are given inthe Annexure I forming part of the Boards' Report.

A brief profile of the Directors seeking confirmation/appointment nature of expertisein specific functional area name of other public companies in which he/she holdsdirectorship and membership/chairmanship of the committees of the Board of Directors andthe particulars of the shareholding as stipulated under Regulation 36(3) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 and Secretarial Standards 2(SS 2 on General Meetings) is appended to the Notice.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and Regulations of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.


A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings were convened and held on 19.05.2015 07.08.2015 06.11.201525.01.2016 and 18.03.2016. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013.

The role and terms of reference of Audit Committee cover the areas mentioned underClause 49 of the Listing Agreement and Section 179 of the Companies Act 2013 besidesother terms referred to by the Board of Directors from time to time. During the year theCommittee met on 19.05.2015 07.08.2015 06.11.2015 and 25.01.2016.


The Audit Committee comprises independent directors namely Mr. Bharath K. Nayak(Chairman) Mr. K. M. Udupa Mr. A. Giridhar Pai and Mr. U. Harish P. Shenoy as othermembers. All the recommendations made by the Audit Committee were accepted by the Board.Details of Audit Committee meetings are enumerated in the Corporate Governance Report.


Since the company is still carrying over the losses Corporate

Social Responsibility Committee pursuant to provisions of Section 135(1) of theCompanies Act 2013 has not been formed for the time being.


During the year under review the Company had no employees whose remuneration exceededthe limit prescribed pursuant to the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.


Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner.

Your Company through its risk management process strives to contain impact andlikelihood of the risks from time to time.


The Consolidated Financial Statements of the Company and its subsidiaries andassociates prepared in accordance with Accounting Standard 21 issued by the Institute ofChartered Accountants of India form part of the Annual Report and are reflected in theConsolidated Financial Statements of the Company.

The Annual Accounts of the subsidiaries / associates and related detailed informationwill be kept at the Registered Office of the Company as also at the registered offices ofthe respective subsidiary / associate companies and will be available to investors seekinginformation at any time.

Salient features of financial statements of subsidiary/ associate companies pursuant toSection 129(3) of the Companies Act 2013 have been covered in the Financial Statements inForm AOC-1 .


All related party transactions that were entered into were on an arm’s lengthbasis in the ordinary course of business and were in compliance with the applicableprovisions of Companies Act . 2013 ("the Act’’). There were no materiallysignificant related party transactions made by the Company during the year that would haverequired shareholders approval under the provisions of the Act. Details of thetransactions with related parties are provided in the Note No.2.30 of accompanyingfinancial statements. Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 is annexed herewithMar.ked as Annexure II.


Pursuant to the provisions of Companies Act 2013 and Clause 49 of the ListingAgreement Board has carried out an annual performance evaluation of its own performanceand the Directors individually. The manner in which the evaluation has been carried outare detailed below:

The performance evaluation of Chairman and Non-Independent Directors was carried out bythe Independent Directors. The Independent Directors evaluated the parameters viz. levelof engagement duties responsibilities performance obligations and governancesafeguarding the interest of the Company. The performance evaluation of Independentdirectors was carried out by the entire Board.


The Auditors Chaturvedi & Shah Chartered Accountants Mumbai (Firm RegistrationNo. 101720W) retire at the ensuing Annual General Meeting and being eligible offerthemselves for reappointment to hold office till the conclusion of the 46hAGMto be held in the Calendar year 2017.


In respect of the comments made by the auditors in their independent auditors report onconsolidated financial statement in the Para "Basis for Qualified Opinion"relevant explanation given by the Company vide Note No.2.14(b) to the Financial Statementsis self explanatory.


In terms of Section 204 of the Act and Rules made thereunder Sri Shrinivas DevadigaPracticing Company Secretary (Membership No.22381 CoP No. 10372) from Bangalore has beenappointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor isenclosed as Annexure IV to this report. As per Section 134 (3f) of the Companies Act 2013Company is required to make comments on the adverse remarks / comments on the SecretarialAuditors Report.

1. As per the Secretarial Auditor's Report placed before the Board the Secretarialauditor have opined that the Company has not appointed Company Secretary:

The Directors reiterate that the Company in search of a suitable candidate for the postof Company Secretary which may be completed in the next quarter.

2. As per the Secretarial Auditor's Report placed before the Board the Secretarialauditor have opined that the Company has not registered the lease agreement which areentered by Company having tenure more than 11 months.

Your Directors reiterate that they will review all such agreements and noted theobservations for compliance.


The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The Company hasappointed Internal Auditor with dedicated internal audit team. The Internal Audit Reportswere reviewed periodically by the Audit Committee. Further the Audit Committee annuallyreviews the effectiveness of the Company’s internal control system. The Directors andManagement confirm that the Internal Financial Controls (IFC) and adequate with respect tothe operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of theCompanies Act 2013 certifying the adequacy of Internal Financial Controls is annexed withthe Auditors Report.


As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 is attached as a part of this Annual Report as ANNEXUREI .

Material changes and commitments if any affecting the financial position of thecompany which has occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report:

There are no such material changes to be reported in this regard.

Change in nature of Business:

There is no change in nature of business.

Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future:

Your Directors wish to state that there have been no significant or material ordersthat were passed by the Regulators or Courts or Tribunals which may impact the goingconcern status and operations of the Company in future.


Details of Loans: Nil

Details of Guarantee / Security Provided: Company has not provided any guarantee /Security during the financial year. Investments made are of the nature quoted/unquotedequity shares and investment in property. Particulars of such investments are provided inthe financial statements vide Note Nos.2.08.


In order to prevent sexual harassment of Women at work place a new Act The SexualHarassment of Women at Work Place (Prevention Prohibition & Redressal) Act 2013 hasbeen notified on 9th December 2013. In terms of the said Act Your Company hasconstituted an Internal Complaints Committee to look into complaints of sexual harassmentat work place of any women employee. The company has adopted a policy for prevention ofsexual harassment of women at work place and has set up internal committee forimplementation of the said policy. During the year your Company has not received anycomplaint of sexual harassment of any women employee.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2015-16:

a. No. of complaints received : Nil
b. No. of complaints disposed off : Nil


The company did not have any activity in relation to conservation of energy ortechnology absorption. The company had no foreign exchange earnings or outgoings duringthe year under report.


Your Directors hereby report in terms of clause (c) of sub-section

(3) of Section 134 of the Companies Act 2013 that —

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and

(e) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM (i.e. 28.9.2015)with the Ministry of Corporate Affairs.


The Company has a Whistle Blower Policy for Directors and employees and adopted theWhistle Blower Policy in terms of Section 177 (9) and (10) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 to report genuineconcerns if any about unethical behavior wrongful conduct and violation of Company'scode of conduct or ethics. The Whistle Blower Policy is available on the Company’


Your Directors wish to place on record their appreciation of the services andco-operation extended by our Bankers Investors and Members of Staff of the Companyduring the year under report. Your directors also wish to thank the shareholders for theirsupport.

Your directors also wish to place on record their deep sense of appreciation of theservices rendered by the staff members at all levels.

For and on behalf of the Board of Directors

Place : Manipal (T. Mohandas Pat)
Date : 18.05.2016 Chairman & Whole-time Director