To The Members
The Directors of your Company have pleasure in presenting
the 30 Annual Report of the Company together with Audited
Accounts for the financial year ending 31 March 2017.
1. FINANCIAL HIGHLIGHTS
| || || || |
| ||Consolidated ||Standalone |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Domestic Sales ||30471 ||32026 ||30471 ||32026 |
|(Net of Excise) || || || || |
|Export Sales ||17142 ||21993 ||17167 ||21993 |
|Total Sales ||47613 ||54019 ||47638 ||54019 |
|Other operating ||451 ||395 ||451 ||395 |
|Income || || || || |
|Total Income ||48064 ||54414 ||48090 ||54414 |
|Profit before interest & depreciation ||5039 ||4837 ||5040 ||4837 |
|Interest & other financial charges ||1561 ||1759 ||1561 ||1759 |
|Profit/ (Loss) before depreciation ||3478 ||3078 ||3479 ||3078 |
|Depreciation ||1265 ||1015 ||1265 ||1015 |
|Net Profit/(Loss) prior to Tax & Extra Ordinary Items ||2213 ||2063 ||2214 ||2063 |
|Prior period adjustment ||- ||- ||- ||- |
|Extra Ordinary Item ||(16) ||(1) ||(16) ||(1) |
|Net Profit/ (Loss) available for appropriation ||2197 ||2062 ||2198 ||2062 |
Production & Sales Review:
The Company had achieved production of 39439 MT (Acrylic Fibre-33840 MT Yarn-5599 MT)and sale of 33542 MT (Acrylic Fibre -27028 MT Yarn- 6514MT) during the year under reviewas against 40805 MT (Acrylic Fibre-39216 MT Yarn-1589 MT) and 40598 MT (AcrylicFibre-38063 MT Yarn-2535 MT) respectively during the previous year. The Sale and otherincomes during the year were `48090 lakhs as against `54414 lakhs.
The Company earned profit before depreciation interest and tax of ` 5040 lakhs asagainst `4837 lakhs in the previous year. After providing for depreciation of `1265 lakhs(Previous Year `1015 lakhs) interest of `1561 lakhs (Previous Year `1759 lakhs) the netprofit from operations works out to ` 2198 lakhs as compared to net profit of ` 2062 lakhsin the previous year.
Segment-wise/Product wise Performance:
Over the last few years your company has been successful in its goal of diversifyingrevenues to tap new opportunities and reduce any risks of an overly concentratedportfolio. Company is manufacturing both acrylic fiber and yarn. During 2016-17 salerevenue from yarn segment is more than 10% of the total revenue of the company and yarnsegment assets are also more than 10% of the total assets of the company. The saidtreatment is enunciated in the accounting standard on segment reporting (AS- 17) and isexplained under Para no. 7 of the Note No.23 on Notes on Accounts forming part of AnnualReport.
As Company does not have any distributable profits computed under provisions ofCompanies Act 2013 no dividend is being recommended.
There is no change in Capital Reserves Securities Premium Reserves and GeneralReserves during the year which stands at `1764.44 lakhs `39.23 lakhs and
` 80.00 lakhs respectively.
4. RESEARCH AND DEVELOPMENT
The Company has an In-House R & D centre registered with the Ministry of Science& Technology Govt. of India. During the year the Company has focused on newvarieties on dyed yarns. This will help in growth of sales in the current year. TheCompany is also working for energy conservation and reduction in the fuel cost with thehelp of in-house R&D.
5. DETAILS OF SUBSIDIARY JOINT VENTURES OR ASSOCIATE COMPANY
The Company made an investment of Euro Three Thousand only in 3000 shares of face valueof Euro 1 each in Wholly Owned Subsidiary Company Carlit
Trading Europe S.L.U (Spain) on 25 November 2016. A separate statement containing thesalient features of financial statements of the subsidiary
Company forms part of the Annual report in the prescribed Form AOC-1 as Annexure-7in compliance with Section 129 and other applicable provisions if any of the CompaniesAct 2013. Further in line with the SEBI (Listing Obligations and DisclosuresRequirements)
Regulations 2015 and in accordance with Accounting Standard 21 Consolidated FinancialStatements including financial information of its Subsidiary forms part of this AnnualReport. The Company is not having any Joint Venture or Associate Company.
6. CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE Vision & core areas ofCSR:
Your Company is committed to and is fully aware of its Corporate Social Responsibility(CSR) the guidelines in respect of which were more clearly laid down in the recentlyoverhauled Companies Act 2013. Corporate Social Responsibility and Governance Committee(CSR&G Committee) comprises of Shri Rajinder Kumar Garg as its Chairman Shri DheerajGarg and Shri A S Chatha as members. This Committee has framed the CSR Policy for theCompany which is approved by the Board and may be accessed on the website of the Companyat http:/www.indianacrylics.com Since the Company does not have net profits in accordancewith Section 198 of the Companies Act 2013 the Company is not required to undertake anyactivity under CSR Rules.
7. CORPORATE GOVERNANCE
Your Company is continuously taking steps to attain higher levels of transparencyaccountability and equity in order to enhance customer satisfaction and stakeholders'value. The Company not only complies with the regulatory requirements but is alsoresponsive to the stakeholders' as well as customers' needs. The Company already has anAudit Committee a Stakeholder Relationship Committee and Nomination and RemunerationCommittee duly constituted by the Board to look after various activities. The CorporateGovernance practices followed by the Company are enclosed as Annexure to this report. Acertificate from the Statutory Auditors of the Company regarding compliance of governancenorms stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is also annexed to the Corporate Governance report. Annexure-6
8. EXTRACT OF THE ANNUAL RETURN
The extract of the annual return as provided under Section 92(3) of the Act in FormMGT-9 forms part of the Board's report as Annexure-4.
9. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that: a.in the preparation of the annual accounts for the year
ending 31 March 2017 the applicable accounting standards had been followed along withproper explanation relating to material departures; b. the Directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit and loss of the Company forthat period; c. the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;d. the Directors had prepared the annual accounts on a going concern basis; and e. theDirectors had laid down internal financial control to be followed by the Company and thatsuch internal financial controls were adequate and were operating effectively. f. theDirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
A) Changes in Directors and Key Managerial Personnel
Since the last Annual General Meeting following changes have taken place in the Boardof Directors: PNB nominated Shri Sanjeev Kumar Bajaj as a Director of the Company inplace of Shri Satish Kumar Dua effective from 30/05/2017.
Smt. Indu Malhotra IAS was appointed as Director on 27/05/2016 and vacated the officeof Director w.e.f. 30/05/2017 pursuant to Section 167(b) of the Companies Act 2013.
Your Directors place on record appreciation of the valuable guidance rendered by ShriSatish Kumar Dua and Smt. Indu Malhotra during their association with the Company.
As per the provisions of Companies Act 2013 Shri Dheeraj Garg (DIN-00034926)Director retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment.
Familiarisation programmes for Board Members:
The Board members are from time to time provided with necessarydocuments/policies/internal procedures to get them familiar with the practices of theCompany. Directors get an opportunity to visit Company's plant which helps them tounderstand business operations & working of the Company. The business strategiesperformance global developments legal & other updates compliance reports and otherrelevant information/reports etc are being periodically provided to the Board ofDirectors.
B) Declaration by an Independent Director(s) and re- appointment if any
A declaration by Independent Directors stating that he/ they meet the criteria ofindependence as provided in sub-section (6) of Section 149 of the Companies Act 2013 hasbeen taken at the time of their appointment.
C) Formal Annual Evaluation of Board
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India("SEBI") under Regulation 4(f)(ii) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issue to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspects ofhis role.
In a separate meeting of Independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors The same was discussed in the Board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review 4 Board Meetings were
held one each on 27 May 2016 12 August 2016 12
November 2016 and 13 February 2017.
12. POLICY ON DIRECTORS' APPOINTMENT AND
REMUNERATON AND OTHER DETAILS
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the Directors' Report.
13. EMPLOYEE STOCK OPTION SCHEME
Your Company had introduced Employee Stock Option Scheme framed in accordance withSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014titled "Indian Acrylics Limited -Employees Stock Option Scheme 2016 ("IAL- ESOS2016") during the financial year 2015-16 which was approved by the Board ofDirectors of the Company and subsequently by the shareholders of the Company
in their Annual General Meeting held on 29 September 2016.
No options under the said scheme have been granted to the employees of the Companyduring the year under review.
14. AUDIT COMMITTEE
The Audit & Compliance Committee comprises of three non-executive Directors viz.Rear Admiral M. M. Chopra AVSM (Retd.) Prof.(Dr.) B B Tandon Smt. Tejinder Kaur and oneExecutive Director Shri H K Singhal. During the year the committee held four meetings.Other details of the Audit Committee are included in the Corporate Governance Report whichforms part of this report. The Board had accepted all recommendation of the AuditCommittee.
15. DETAILS OF ESTABLISHMENT OF VIGIL
MECHANISM/WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES
Pursuant to provisions of Section 177 (9) of the Companies Act 2013 the Company hasestablished a "Vigil Mechanism" incorporating Whistle Blower policy in terms ofRegulation 22 of SEBI (LODR) Regulations 2015 for employees and directors of the Companyfor expressing the genuine concerns of unethical behaviour frauds or violation of thecodes of conduct by way of direct access to the Chairman/Chairman of the Audit Committee.The Company has also provided adequate safeguards against victimization of employees andDirectors who express their concerns. The policy on "Vigil Mechanism and WhistleBlower" may be accessed on the Company's website at http//www.indianacrylcs.com Thereare no cases reported during the year.
16. NOMINATION AND REMUNERATION COMMITTEE
The committee has been constituted to review and recommend compensation payable to thewhole-time directors including Managing Director and senior management of the Company. Thecommittee reviews the overall compensation structure and policies of the Company with aview to attract retain and motivate employees reviewing compensation levels of theCompany vis-a-vis other Companies and industry in general.
17.PARTICULARS OF LOANS GUARANTEES OR
INVESTMENTS UNDER SECTION 186
There were no Loans/ Guarantee given or Investments made by the Company during the yearexceeding the limits prescribed under Section 186 of the Companies Act 2013.
18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All contracts/ arrangements/ transactions entered by the Company during the FinancialYear with related parties were in the ordinary course of business and on an arm's lengthbasis during the year the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. A statement insummary form of transactions with related parties in ordinary course of business andarm's length basis is periodically placed before the audit committee for review.
The policy on materiality of related party transactions and dealing with related partytransactions as approved by the board is uploaded on the website of the Company.Disclosures as required under accounting standards (AS-18) have been made in the financialstatements of the Company enclosed with this report.
19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of the Board's report as Annexure-5.
20. BUSINESS RISK MANAGEMENT
The risk management includes identifying types of risks and its assessment riskhandling and monitoring and reporting which in the opinion of the Board may threaten theexistence of the Company. The Risk Management Committee constituted by the Board comprisesof Shri R
K Garg Shri Dheeraj Garg and Shri Surinder Kansal as members. The Committee hasformulated the Risk Management Policy which was subsequently approved by the Board ofDirectors. The Risk Management Policy may be accessed on the website of the Company athttp://www.indianacrylics.com
21. AUDITORS: a. Statutory Auditors:
M/s S.C. Dewan & Co. Chartered Accountants were appointed as Statutory Auditorsof the Company to hold office till the conclusion of Annual General Meeting to be held inthe calendar year 2017 (subject to ratification of their appointment at every AGM).Pursuant to provisions of Section 139 of the Companies Act 2013 M/s S.C. Dewan &Co. Chartered Accountants Auditors of the Company retire at the conclusion of theforthcoming Annual General Meeting of the Company. Board in their meeting held on30.05.2017 proposed the appointment of M/s AKR & Associates Chartered Accountants asStatutory Auditors of the Company to hold the office from the conclusion of forthcomingAnnual General Meeting till the conclusion of Annual General Meeting to be held in thecalendar year 2022 subject to the approval of members. b. Secretarial Auditor:
M/s S.K. Sikka & Associates practicing Company Secretaries Chandigarh wasappointed as Secretarial Auditor & his report in Form No. MR 3 under Section 204 ofthe Companies Act for the Financial Year 2016-17 is attached & forms part of thisReport as Annexure 2.
c. Cost Auditor:
As per provisions of Section 148 of the Companies Act 2013 the Board of Directors ofyour Company has recommended M/s Aggarwal Vimal & Associates Cost Auditor to bere-appointed as a Cost Auditor for the Financial Year 2016-17 subject to ratification ofhis appointment and remuneration by the Shareholders in the forthcoming Annual GeneralMeeting. d. Internal Auditor: Pursuant to provisions of Section 138 of theCompanies Act 2013 the Company has appointed Mr. Manoj Kumar (ICWA) to conduct internalaudit of the functions and activities of the Company and maintain internal control systemsof the Company.
22. AUDITORS' REPORT
The Statutory and Secretarial Auditors' Reports are self explanatory and require nocomments.
23. LISTING OF SHARES
Equity shares of the Company are listed on BSE Limited and Listing fee has already beenpaid in pursuance to Regulation 14 of SEBI (LODR) Regulations 2015.
Effective from 25 September 2000 the equity shares of your Company are beingcompulsorily traded in
dematerialized form. As on 31 March 2017 a total of 1257 Lakhs equity sharesrepresenting 92.86% of equity share capital have been dematerialized and 29084shareholders are holding shares in dematerialized form.
All the assets of the Company have been adequately insured.
26. PARTICULARS OF EMPLOYEES
Relations with the employees continued to be peaceful and harmonious during the periodunder review.
27. PERSONNEL & RELATED DISCLOSURES
Your Company continues to lay emphasis on continued qualitative growth of its humanresources by providing a congenial and conducive work environment in consonance with itsbelief that the real strength of its organization lies in its employees. The particularsrequired under Section 197 read with Rule 5 (1) 5 (2) & 5 (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 including statement ofemployees receiving salary of `102 lakh. per annum or
`8.50 lakh per month or more during the Financial Year 2016-17 are annexed hereto andforms part of this report as Annexure 3.
28. INDUSTRIAL RELATIONS
Industrial relations continued to be cordial during the year under review.
29.HEALTH SAFETY AND ENVIRONMENT PROTECTION
Our Company has complied with all the applicable health & Safety standardsenvironment laws and labour laws and has been taking all necessary measures to protect theenvironment and provide workers a safe work environment. Our Company is committed forcontinual improvement in Health & Safety as well as Environmental performance byinvolving all the employees to provide a Safe & healthy work environment to all itsemployees.
30. DISCLOSURE AS PER SEXUAL HARASSMENT OF
WOMEN AT WORK PLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.
During the financial year 2015-16 the Company has not received any complaint on sexualharassment and hence no complaints remain pending as of 31 March 2017.
31. CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The optimal utilization of energy remained a major focus area and a number of stepswere taken in this direction. The information required under Section 134 (3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 areattached hereto and forms part of this report as Annexure 1.
32. GENERAL DISCLOSURE:
Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:1. Issue of equity shares with differential rights to dividend voting or otherwise. 2.Details relating to deposits covered under Chapter V of the Act. 3. No material changesand commitments affecting the financial position of the Company occurred between the endof the Financial Year to which this financial statements relate and the date of thisreport. 4. No significant/material orders have been passed by any Regulator/Court/Tribunal which could impact the going concern status & future operations of theCompany. 5. No change in nature of Business of the Company. 6. No unclaimed Dividend isrequired to be transferred to Investor Education and Protection fund.
Your Directors are pleased to place on record their sincere gratitude to the GovernmentAuthorities Financial Institutions & Bankers and Investors for their continued andvaluable co-operation and support to the Company. Your Directors express their deepappreciation for the devoted and sincere efforts put in by the emplyees at all levels ofoperations in the Company during the year. The Company feels confident of continuedcooperation and efforts from them in future also.
| || |
On Behalf of the Board of Directors
| ||H. K. SINGHAL ||R. K. GARG |
|Place: Chandigarh ||FINANCE ||MANAGING |
|Dated: 30th May 2017 ||DIRECTOR ||DIRECTOR |