CIN : L32101AP1990PLC011311
Your Directors have pleasure in presenting the Twenty Seventh Annual Report on thebusiness and operation of the company and the Audited Financial Accounts for the yearended 31st March 2017 together with Auditors Report thereon.
1. FINANCIAL RESULTS :
The financial results for the year ended 31st March 2017 are summarizedbelow:
| ||(Rs. In Lakhs) || |
|PARTICULARS ||2016-2017 ||2015-2016 |
|Revenue from Operations ||2857.04 ||3006.35 |
|Other Income ||38.29 ||35.34 |
|Total Income ||2895.33 ||3041.69 |
|Total Expenditure ||2468.99 ||2713.42 |
|Profit before Interest Depn. & Tax ||426.34 ||328.27 |
|Interest ||41.44 ||51.58 |
|Profit before Depn. & Tax ||384.90 ||276.69 |
|Depreciation ||29.74 ||37.78 |
|Goodwill written off ||- ||- |
|Profit before Tax ||355.16 ||238.91 |
|Add : Deferred Tax Liability (Net ) ||-7.47 ||-5.97 |
|Provision for Tax ||111.98 ||91.42 |
|Profit after Tax ||235.71 ||153.46 |
|Add : Brought forward from previous year ||357.14 ||265.46 |
| ||592.85 ||418.92 |
|Appropriations || || |
|Provision for Dividend ||51.33 ||51.33 |
|Tax on Dividend ||10.45 ||10.45 |
|Surplus carried to Balance Sheet ||531.07 ||357.14 |
2. STATE OF COMPANY AFFAIRS :
During the year 2016-2017 your company achieved a turnover or Rs.2857.04 Lakhs againstRs.3006.35 Lakhs for the year 2015-2016 your company made a net profit of Rs.235.71 Lakhsduring the year.
3. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS :
There are no material changes and commitments affecting financial position of thecompany between 31st March 2017 and the date of Board s Report.
4. EXTRACT OF ANNUAL RETURN :
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 inMGT-9 is enclosed as Annexure A to this report.
5. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES / JV :
The company does not have any subsidiary joint venture or associates company.
6. DIVIDEND :
The Board of Directors recommended for your consideration a dividend on equity share at10% (Re.1.00 per equity share) for the year ended 31st March 2017. The totalamounts of outgo on account of these will Rs.51.33 Lakhs towards dividend and Rs.10.45Lakhs towards tax on dividend.
7. DIRECTORS :
Sri C.Bhagavantha Rao (DIN : 00218713) and Ms.Neelima Challagulla (DIN : 02737481)were re-appointed as Managing Director and Whole Time Director of the Company respectivelyon 31st January 2017 for a period of 3 years and detail information refer explanatoryItem No.5 and 6.
Smt. P.Himabindu having (DIN : 0006605646) retires by rotation at the ensuring AnnualGeneral Meeting and being eligible offers himself for re-appointment.
Attention of the members is invited to the relevant items in the Notice of the AnnualGeneral meeting and the Explanatory statement thereto.
8. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS :
The company has not appointed Independent Directors and receiving declaration fromIndependent Directors won t arise. The company is taking necessary steps to appointIndependent Directors.
9. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION :
For the purpose of selection of any Director the Nomination & RemunerationCommittee identifies persons of integrity who possess relevant expertise experience andleadership qualities required for the position and also taken into considerationrecommendation if any received from any member of the Board. The committee also ensuresthat the incumbent fulfills such other criteria with regard to age and otherqualifications as laid down under the Companies Act 2013 or other applicable laws. TheBoard has on the recommendation of the Nomination & Remuneration committee framed apolicy for selection appointment and remuneration of Directors & Senior Management.
10. EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIVIDUAL
The Board of Directors have carried out an annual evaluation of its own performanceits various committees and individual directors pursuant to the provisions of the Act andthe Corporate Governance requirements as prescribed under the Securities and ExchangeBoard of India (Listing Obligations and Disclosure requirements) Regulations 2015(Listing Regulations).
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of various criteria such as Board composition processdynamics quality of deliberations strategic discussions and effective reviewscommittee participation governance reviews etc.
The Board and the Nomination and Remuneration committee reviewed the performance of theindividual directors on the basis of the criteria such as Transparency AnalyticalCapabilities Performance Leadership Ethics and ability to take balanced decisionsregarding stakeholders.
11. TRANSFER TO RESERVES :
No amount was transferred to the reserves during the financial year ended 31stMarch 2017.
12. NUMBER OF MEETINGS OF THE BOARD :
The Board of Directors met 4 (Four) times on 25th May 2016 30thJuly 2016 29th October 2016 and 31st January 2017 dates duringthe financial year.
| ||Number of meetings attended / total meeting held |
|Name of the Director || |
| ||during the Financial Year 2016-2017 |
|Sri C.Bhagavantha Rao ||4 / 4 |
|Sri P.Ram Rao ||1 / 4 |
|Smt. C.Neelima ||4 / 4 |
|Smt. P.Himabindu ||3 / 4 |
13. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your company strongly believes in providing a safe and harassment free workplace foreach and every individual working for the company through various interventions andpractices. It is the continuous endeavor of the management of the company to create andprovide an environment to all its employees that is free from discrimination andharassment including sexual harassment. During the year ended 31st March 2017no complaints pertaining to sexual harassment was received by the Company.
14. STATUTORY AUDITORS :
Under Section 139 of the Indian companies Act 2013 and the rules made thereunder itis mandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. The audit committee of the company has proposed and on 29th July2017 the Board of Directors of the company has recommended the appointment ofM/s.K.V.V.Prasad & Co. Chartered Accountants (FRN : 002758S) as the statutoryauditors of the Company who will hold the office for a period of 3 consecutive years fromthe conclusion of 27th Annual General
Meeting until the conclusion of 30th Annual General Meeting subject to theratification at every annual general meeting.
The Report given by the Auditors on the financial statements of the company is enclosedAnnexure "B" to this report. There has been no qualification reservationadverse 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 andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointed M/s. A.N.Sarma & Co. Company Secretaries for conducting secretarial audit of theCompany for the financial year 2016-2017. The Secretarial Audit Report (Form MR-3) isenclosed Annexure C to this report. The remarks qualification and reservation ofSecretarial Auditor have been mentioned in the report and the reasons for not appointingIndependent Directors and Company Secretary of the company is explained as follows.
a. Company is engaged in a business where it finds difficult to find IndependentDirectors who can understand and provide value addition to the Company. And also thecompany s registered office and factory is located in a rural area of new capital ofAndhra Pradesh and it is finding difficult not only to appoint Independent directors andCompany Secretary but also other resources.
b. Company undertakes to appoint Independent Directors and Company Secretary of theCompany 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 theyear under review under the provisions of the Companies Act 2013 as the rules framedthereunder.
17. RELATED PARTY TRANSACTIONS :
There are no related party transactions made by the company with its promotersdirectors or the management their relative conflicting with company s interest during theyear under review under the provision of the Companies Act 2013 and the rules framedthereunder.
18. COMPOSITION OF AUDIT COMMITTEE :
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms a part of this report.
19. RISK MANAGEMENT POLICY :
The company has developed and implemented a risk management policy which identifiesmajor risks which may threaten the existence of the company. The same has also beenadopted 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 andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal
Audit Manual. To maintain its objectivity and independence the Internal Audit functionreports to the Chairman of the Audit Committee of the Board & to the ManagingDirector.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.
Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.
21. CORPORATE SOCIAL RESPONSIBILITY :
The provisions of Corporate Social Responsibility are not applicable to the Companyunder the provisions of the Companies Act 2013
22. PUBLIC DEPOSITS :
The Company has not accepted any deposit from the Public during the year under reviewunder the provisions of the Companies Act 2013 and the rules framed thereunder.
23. VIGIL MECHANISM :
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 andas per Securities and Exchange Board of India (Listing Obligations and Disclosurerequirements) Regulations 2015 (Listing Regulations) the Company has vigilance Mechanismcomprising 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 inthe Listing Regulations. Report on Corporate Governance is enclosed as Annexure D tothis Report. Certificate from the Statutory Auditors of the company confirming thecompliance with the conditions of Corporate Governance as stipulated under the Securitiesand Exchange Board of Inida (Listing Obligations and Disclosure requirements) Regulations2015 (Listing Regulations) is enclosed as Annexure E to this report.
25. MANAGEMENT DISCUSSIONS ANALYSIS :
The management discussion and analysis on the operation of the Company as prescribedunder Securities and Exchange Board of Inida (Listing Obligations and Disclosurerequirements) Regulations 2015 (Listing Regulations) is enclosed as Annexure F tothis report.
26. DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to section 134 of the Act the Directors based on the representation receivedfrom the Directory hereby confirm that:-
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
b) They have in the selection of the accounting policies consulted the statutoryauditors and have applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany 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 andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the company and for preventing anddetecting 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) The directors had devised proper systems to ensure compliance with the provision ofall applicable laws and that such systems were adequate and operating effectively.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO :
a. Conversation of Energy :
|(i) The steps taken or impact on conservation of energy ||The Company does not belong to the category of power intensive industries and hence consumption of power is not significant. However the management is aware of importance of conservation of energy and also reviews from time to time the measures taken/ to be taken for reduction of consumption of energy. Your company continues its efforts to conserve energy wherever practicable by economizing on the use of power through better utilization of equipment and proper production planning. |
|(ii) The steps taken by the company for utilizing alternate sources of energy ||NIL |
|(iii) The capital investment on energy conservation equipment s || |
| ||NIL |
|b. Technology Absorption : || |
|(i) The efforts made towards technology absorption ||Company is not based on any technology hence technological absorption don t arise. |
|(ii) The benefits derived like product improvement cost reduction product development or import subsitution ||NIL |
|(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) ||Company has not imported Foreign Technology. |
|(a) The details of technology imported ||NIL |
|(b) The year of import ||NIL |
|(c) whether the technology been fully absorbed ||NIL |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof ||NIL |
|(iv) The expenditure incurred on research and development ||NIL |
c. Foreign exchange earnings and outgo :
|Particulars ||Current Year ||Previous Year |
|a) Foreign exchange earnings on Exports ||NIL ||NIL |
|b) Foreign exchange used on account of value of imports || || |
|i) Raw Materials & Stores ||1302.45 ||1377.44 |
|ii) Capital Goods ||24.88 ||38.00 |
|iii) Foreign Travel ||14.36 ||7.70 |
28. SIGINIFICANT & MATERIAL ORDERS PASSED BY THE REGULATIONS :
No significant and material orders passed by the regulators or Courts or Tribunalsimpacting the going concern status and the company s operations in future.
29. RATIOS OF REMUNERATION TO EACH DIRECTOR :
Details / Disclosures of Ratio of Remuneration to each Director to the median employees remuneration to this Annual Report ( Rs. in Lakhs )
| || ||Remuneration Paid || || |
|Name ||Designation ||2016-17 ||2015-16 ||Increase in Remuneration from previous year ||Ratio/Times per Median of Emp. Remuneration |
| || ||14.00 ||12.00 ||Nil ||13 times |
|Sri C.Bhagavantha Rao ||Managing Director || || || || |
| || ||9.60 ||9.60 ||Nil ||9 times |
|Smt C.Neelima ||Whole time Director || || || || |
30. QUALITY SYSTEM :
Your company s certificate for quality systems under ISO 9001:2008 from ODC StandardsCertification (India) Pvt. Ltd. Hyderabad continues to be valid.
31. DISCLOSURE AS PER LISTING AGREEMENT : Clause 32 :
The cash flow statement in accordance with Accounting Standard and Cash Flow Statement(AS3) issued by ICAI is appended to this Annual Report.
Clause 43A :
The company s shares are listed on Bombay Stock Exchange Limited Floor 25 P.J.Towers Dalal Street Mumbai 400001. The annual listing fee to BSE Limited for the year2016-2017 has been paid.
32. PARTICULARS OF EMPLOYEES :
Information as per section 197 (12) of the companies Act 2013 read with rule 5 of thecompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided inseparate annexure forming part of this report. Further pursuant to the provision tosection 136 (1) of the companies Act 2013 the report and the accounts are being sent tothe members excluding the aforesaid annexure. In terms of section 136 of the Act the saidannexure is open for inspection at the Registered Office of the company. Any shareholderinterested in obtaining a copy of the same may write to the registered office address ofthe company.
There are no employees drawing remuneration as prescribed in companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
33. ACKNOWLEDGEMENTS :
Your Directors wish to express their grateful appreciation for the assistance andcooperation received from State Bank of India Customers and Suppliers. Cordial relationsprevailed during the year with all the employees. Your Directors wish to place on recordtheir deep sense of appreciation of the valuable work done and cooperation extended bythem at all levels.
Yours directors also wish to express their gratitude to investors for the continuedfaith reposed by them in the company.
| ||By Order of the Board |
| ||For INCAP LIMITED |
|VIJAYAWADA || |
| ||C.BHAGAVANTHA RAO |
|29th July 2017 || |
| ||MANAGING DIRECTOR |
| ||DIN : 00218713 |