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Indian Card Clothing Company Ltd.

BSE: 509692 Sector: Industrials
NSE: INDIANCARD ISIN Code: INE061A01014
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VOLUME 432
52-Week high 268.90
52-Week low 175.10
P/E
Mkt Cap.(Rs cr) 83
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Indian Card Clothing Company Ltd. (INDIANCARD) - Director Report

Company director report

To

The Members

The Indian Card Clothing Company Limited

Your Directors take pleasure in presenting their 62nd Annual Report on thebusiness and operations of the Company together with Audited Financial Statements for theyear ended 31st March 2016.

01. FINANCIAL RESULTS: (Rs. Lac)

Particulars

Financial Year

2015-16 2014-15
Sales and Servicing 5760.93 5854.08
Other Income 2849.99 1251.58
Total Income 8610.92 7105.66
Profit before Interest Depreciation and Tax 2494.52 658.35
Finance Cost (80.73) (111.92)
Depreciation (740.21) (1011.68)
Exceptional items - -
Profit / (Loss) before Tax 1673.58 (465.25)
Provision for Tax (313.36) 82.45
Profit / (Loss) after Tax 1360.21 (382.80)
Sales Analysis
Metallic card clothing 4144.47 3990.86
Woollen card clothing 613.21 922.41
Exports 1456.74 1433.02

02. PERFORMANCE REVIEW

During the year under review the Company earned a total revenue of Rs.8610.92 Lacs asagainst Rs.7105.66

Lacs in the Previous Year. The net profit after tax earned by the Company for thefinancial year 2015-16 has been

Rs. 1360.21 Lacs against the loss after tax of Rs.382.80 Lacs for the financial year2014-15.

Operations Highlights:

A) Manufacturing:

• During the year under review the entire range of Metallic Card Clothing wasmanufactured only at the Nalagarh plant.

• Sale of Metallic Card Clothing from Nalagarh plant increased from Rs. 2609.26Lacs to Rs. 3217.17 Lacs during the financial year 2015-16.

• Development of setting and grinding operations for Tops was commenced at theNalagarh plant during the year under review. Sale of Tops in the year under review fromNalagarh plant was Rs. 82.53 Lacs.

• In order to strengthen the operational efficiency and reduce cost of operationsexisting policies and procedures of the Company were reviewed and modified and newprocesses were implemented during the financial year 2015-16.

• Tops Height Measuring Device (THM) a new innovation by the Company during thefinancial year 2015-16 was introduced in the domestic and overseas market for which apatent application has made.

B) Realty:

• During the year under review your Company successfully completed saletransaction of 1st floor of the ICC Devi Gaurav Technology Park Pimpri Pune.

• Entire commercial building at Powai Mumbai and the remaining floor of the ITpark at Pimpri Pune were fully occupied during the financial year 2015-16.

03. SHARE CAPITAL:

The paid up share capital of the Company as on March 312016 was Rs. 455.11 Lacs.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock option or sweat equity. As on March 312016 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.

04. STATE OF COMPANY'S AFFAIRS :

Though the card clothing segment has incurred losses for the financial year ended March31 2016 efforts have been made by the Management Team to improve operational efficiencyand reduce costs. The card clothing segment incurred certain non-recurring costs in theperiod under review which masked the improvements in the cost of operation of the segment.

Your directors are positive and confident that the same drive to reduce costs andimproving operational efficiency would continue in the coming years. Your directors arealso optimistic about better performance in improving sales of the Company in the comingyears through improvements in processes and the deployment of appropriate resources whichwill substantially contribute to the profitability of the Company.

The detailed information about the Company's Affairs is provided under the ManagementDiscussion and Analysis Report in accordance with the requirements under Regulation 34 (2)(e) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 (the"Listing Regulations")

05. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a) Meetings of the Board of Directors held during the financial year 2015-16:

During the year under review six (6) meetings of the Board of Directors took placedetails of which have been provided in the Corporate Governance Report that forms part ofthis Annual Report. The intervening gap between the two meetings did not exceed 120 daysin accordance with the provisions of the Companies Act 2013.

b) Declaration by Independent Directors:

The Company has received necessary declaration from all the Independent Directors underSection 149(7) of the Companies Act 2013 that they meet the criteria of Independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 and Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

All Independent Directors are not liable to retire by rotation as per Section 152 ofthe Companies Act 2013.

c) Changes in the Board of Directors during the financial year 2015-16:

The following changes have taken place in the Board of Directors of the Company duringthe financial year 2015-16:

i) At the 61st Annual General Meeting held on August 6 2015 Mrs. SangeetaPandit who was appointed as an additional director of the Company on November 12 2014was appointed as an Independent Director of the Company to hold the office upto 11thNovember 2019.

ii) No Director of the Company resigned during the year.

iii) Approval of members was obtained at the 61st Annual General of theCompany held on August 6 2015 for re-appointment of Mr. Mehul Trivedi as a ManagingDirector for the period of three years with effect from 1st October 2014.

Mr. Prashant Trivedi (DIN: 00167782) is liable to retire by rotation at the ensuingAnnual General Meeting.

The brief profile of Mr. Prashant Trivedi seeking re-appointment at the ensuing AnnualGeneral Meeting as a Director liable to retire by rotation has been included in thenotice convening the ensuing Annual General Meeting.

d) Detail of Key Managerial Personnel other than Managing Director:

There has been no change in Key Managerial Personnel during the financial year 2015-16.

06. DIVIDEND

The Board of Directors in its meeting held on May 19 2016 declared Special Dividend ofRs. 12/- per equity share of face value of Rs. 10/- each which was paid as InterimDividend for the financial year 2015-16.

Further to the Special Dividend your Directors have recommended subject to approvalof the members of the Company a fnal dividend of Rs. 2.50/- per equity share of facevalue of Rs.10/- each for the Financial year ended March 312016 to be paid out of theprofts of the Company.

No amount was transferred to Reserves for the year under review.

07. SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITION:

In accordance with Section 129 (3) of the Companies Act 2013 and Accounting Standard (AS)21 the Company has prepared the Consolidated Financial Statements of the Company and allits subsidiaries which forms part of this Annual Report.

The Company does not have any material subsidiary whose net worth exceeds 20 percent ofthe consolidated net worth of the holding company in the immediately preceding accountingyear or has generated 20 percent of the consolidated income of the Company and itssubsidiaries during the previous fnancial year. However the Company has prepared a policyfor determining material subsidiaries which is uploaded on the Company's website and canbe accessed vide weblink :

http://www.cardindia.com/content/pdf/Policy_on_Material_Subsidiaries.pdf

The Statement in form AOC-1 containing salient features of the fnancial statements ofCompany's Subsidiaries is attached to the fnancial statements of the Company. The briefdetails about the performance and fnancial position of the subsidiaries of the Company aregiven below:

a) ICC International Agencies Ltd.:

ICC International Agencies Ltd (ICCIAL) recorded a decrease of 36.25 percent in revenuefrom Rs. 555.89 Lacs in the previous year to Rs. 354.36 Lacs in the fnancial year 2015-16.The reduced revenue was due to the termination of an agency agreement with one principalwhose business was taken over by its competitor and the global economic slowdown in thetextile industry. The Subsidiary Company recorded loss after tax of Rs. 26.16 Lacs in thecurrent year against previous year's proft after tax of Rs. 103.13 Lacs.

b) Garnett Wire Ltd. UK:

Garnett Wire Ltd a U.K. Company in which your Company holds 60 percent of the issuedshare capital recorded reduction of 1.13 percent in its revenue from 1269333(equivalent to Rs. 1224.84 Lacs) to 1255011 (equivalent to Rs. 1180 Lacs). The proftafter tax was 884739 (equivalent to Rs. 831.57 Lacs) as against a proft of 31957(equivalent to Rs. 30.84 Lacs) in the previous year. The improvement in the subsidiary'sperformance was primarily due to the sale of its premises. Garnett Wire Ltd. proposes tomove its operations to a more modern rented facility. The subsidiary has paid dividend of2.42857 per equity shares for the fnancial year ended March 312016.

c) Shivraj Sugar and Allied Products Pvt. Ltd.:

Shivraj Sugar and Allied Products Pvt. Ltd. is yet to commence the operations.

08. AUDIT COMMITTEE

Pursuant to the provisions of Sections 177 (8) of the Companies Act 2013 read withRule 6 and 7 of the Companies (Meetings of Board and its Powers) Rules 2014 the AuditCommittee consists of the following Members:

Sr. No. Name Designation
1) Mr. J. M. Kothary Chairman (Independent Director)
2) Mr. H. C. Asher Member (Independent Director)
3) Mr. Sudhir Merchant Member (Independent Director)

The above composition of the Audit Committee consists of Independent Directors only.

All the recommendations of the Audit Committee during the year were accepted by theBoard of Directors of the Company.

09. VIGIL MECHANISM:

The Company has adopted Vigil Mechanism details of which have been provided in theCorporate Governance Report and also posted on the website of the Company at:

http://www.cardindia.com/content/fr_investors.htm

10. STATUTORY AUDITORS

At the 61st Annual General Meeting M/s. B.K. Khare & Co. CharteredAccountants Pune (Firm Reg. No. 105102W) were re-appointed as the Statutory Auditors forthe financial year 2015-16 and subject to ratification by the members at the ensuingAnnual General Meeting for the financial year 2016-17.

The Company has received written consent and a certificate stating that they satisfythe criteria provided under Section 141 of the Companies Act 2013 read with the Companies(Audit and Auditors) Rules 2014 and that the appointment if ratified shall be inaccordance with the applicable provisions of the Companies Act 2013 and rules issuedthereunder. As required under Regulation 33(1)(d) of the SEBI (LODR) Regulations 2015M/s. B.K. Khare & Co. Chartered Accountants Pune have also confirmed that they holda valid certificate issued by the Peer Review Board of ICAI.

Your Directors propose that their appointment as Statutory Auditors of the Company forthe financial year 2016-17 be ratified by the members at the ensuing Annual GeneralMeeting.

11. AUDITORS' REPORT:

There are no adverse remarks nor any disclaimer qualifications or reservations in theAuditors' Report.

The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment for the time being in force).

12. SECRETARIAL AUDIT REPORT

Mr. S. Anantha Rama Subramanian Proprietor of M/s. S. Anantha & Co. PractisingCompany Secretaries Mumbai was appointed as the Secretarial Auditor to conduct theSecretarial Audit of the Company for the financial year 2015-16 as required under Section204 of the Companies Act 2013 and rules made thereunder.

The Secretarial Audit report for the financial year 2015-16 is enclosed as Annexure- A to the Board's Report.

There are no adverse remarks nor any disclaimer qualifications or reservations in theSecretarial Audit Report.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of section 134 (3) (c) and section 134 (5) of the Companies Act 2013 theDirectors Confirm that:

a) In the preparation of the annual accounts for the financial year ended March312016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

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 of the company for the year;

c) the directors have taken proper and suffcient 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;

e) the Directors have laid down internal fnancial controls which are to be followed bythe Company and that such internal fnancial controls are adequate and were operatingeffectively; and

f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.

14. CORPORATE GOVERNANCE:

As per Regulation 34 (3) read with Schedule V of the Listing Regulations a separatesection on Corporate Governance practices followed by the Company together with acertifcate from the Company's Auditors confrming compliance is set out separately underCorporate Governance Report.

15. POLICY FOR SELECTION APPOINTMENT AND REMUNERATION OF DIRECTORS INCLUDING CRITERIAFOR THEIR PERFORMANCE EVALUATION

The Company has adopted a policy titled as "Nomination & RemunerationPolicy" which interalia includes Company's policy on Board Diversityselection appointment and remuneration of directors criteria for determiningqualifcations positive attributes independence of a director and criteria forperformance evaluation of the Directors.

The Nomination & Remuneration Policy as approved by the Board is uploaded oncompany's website at: http://cardindia.com/content/pdf/nomination_Remuneration_Policy.pdf.

16. PERFORMANCE EVALUATION:

Regulation 4 (2) (f) (ii) (9) read with Regulation 17 (10) of the Listing Regulationsmandates that the Board shall monitor and review the Board evaluation framework and shallcarry out performance evaluation of the Independent Directors. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated.

The Performance Evaluation of the Directors the Board and its Committees was carriedout based on the criteria/manner approved by the Nomination & Remuneration Committeeand approved by the Board of Directors. Further details in respect of the criteria ofevaluation has been provided in the Corporate Governance Report.

The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors who also reviewed the performance of theSecretarial Department. Your directors express their satisfaction with the evaluationprocess.

17. PARTICULARS OF EMPLOYEES AS REQUIRED UNDER RULE 5 (2) OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:

None of the employees has drawn remuneration more than the limit prescribed under Rule5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and none of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the Equity Shares of the Company. Hence therequirement of disclosure under Section 197 (12) of the Companies Act 2013 is notapplicable.

18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES :

a) The ratio of the remuneration of each director to the median employee'sremuneration for the financial year and such other details as prescribed is as givenbelow:

Name of the Director Ratio
Mehul K. Trivedi (Managing Director) 11.52 : 1

Being Managing Director no sitting fees were paid to him.

b) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Name % Increase
Mr. Mehul K. Trivedi (Managing Director) 10.30%
Mr. K.N. Suvarna (Chief Financial Officer) Nil
Mr. Amogh Barve (Company Secretary) Nil

c) The percentage increase in the median remuneration of employees in the financialyear: 10.03 percent.

d) The number of permanent employees on the rolls of company as on 31s'March 2016 : 317

e) average percentile increase already made in the salaries of employees other than themanagerial personnel in the last fnancial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;

The average annual increase in the salaries of employees other than the managerialpersonnel was 3.70 percent. Managerial remuneration increased by 10.30 percent during theyear. There was no exceptional increase in the managerial remuneration.

f) The remuneration has been paid to all the employees of the Company as per theNomination & Remuneration Policy of the Company.

19. PARTICULARS OF CONTRACTS OF ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013:

All the transactions with related parties are in the ordinary course of business and onarm's length basis; and therefore disclosure in from AOC-2 is not required.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at http://www.cardindia.com/content/fr_abus.htm

20. DEPOSITS:

During the year 2015-16 the Company did not accept any deposit from public within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.

21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013:

During the year under review no loans or guarantees were given or investments weremade pursuant to provisions of Section 186 of the Companies Act 2013.

22. SIGNIFICANT AND MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

23. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is giving due consideration to the conservation of energy and all effortsare being made to properly utilize the energy resources.

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure - B tothe Board's Report.

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company operates in ERP environment and has implemented the Oracle System for thepurpose of "Internal Financial Controls" within the meaning of the explanationto Section 134 (5) (e) of the Companies Act 2013. read with Rule 8(5)(viii) of theCompanies (Accounts) Rules 2014. The Company has laid down internal financial controlswhich are adequate and were operating effectively and the Board of Directors has adoptednecessary internal control policies and procedure for ensuring the orderly and efficientconduct of its business including adherence to Company's policies safeguarding itsassets prevention and detection of frauds and errors the accuracy and completeness ofthe accounting records and timely preparation of reliable financial information.

The Board of Directors is of the opinion that for the year ended March 312016 theCompany has sound internal financial controls commensurate with the nature and size of thebusiness operations of the Company.

25. RISK MANAGEMENT:

Pursuant to the provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the constitution of Risk Management Committee ismandatory for only top 100 listed Companies. The Company had however voluntarily formedRisk Management Committee to ensure that adequate systems and processes for RiskManagement are implemented in the Company. The Company has a two tier structure consistingof Risk Steering Committee and Risk Council to monitor and mitigate the risks of theCompany. After satisfying itself about the adequacy of systems and processes implementedin the Company for Risk Management the Board of Directors of the Company dissolved theRisk Management Committee in its meeting held on February 12 2016.

The Company has in place Risk Management System which takes care of riskidentification assessment and mitigation. There are no risks which in the opinion of theBoard threaten the existence of the Company. Risk factors and its mitigation are coveredextensively in the Management Discussion and Analysis Report forming part of this Board'sReport

26. EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return pursuant to the sub-section (3) of Section 92 of theCompanies Act 2013 prepared in form MGT 9 is annexed herewith as Annexure - C tothe Board's Report.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has constituted CSR Committee considering the requirements of theCompanies Act 2013. Details regarding constitution of the Committee and its meetings havebeen provided in the Corporate Governance Report.

Considering the threshold requirements specified under section 135 (1) of the CompaniesAct 2013 the Company was not eligible for CSR spend as specified under section 135 (5)of the Companies Act 2013 for the financial year 2015-16 and has not spent any amount onCSR activities during the financial year 2015-16.

28. POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company has in place Anti Sexual Harassment Policy in line with the requirements ofThe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.

During the year 2015-16 no complaints were received regarding sexual harassment.

29. DISCLOSURE UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT 2013

The Company has sold 2nd floor of the ICC Devi Gaurav Technology Park Pimpri Puneadmeasuring 47867 Sq. Ft. on April 30 2016 for a consideration of Rs. 21 Crores. Exceptas stated above and disclosed elsewhere in this report no material changes andcommitments have occurred between the end of the financial year of the Company and date ofthis report which can affect the financial position of the Company.

30. APPRECIATION:

Your Directors place on record their sincere thanks and appreciation for the confidencereposed and continued support extended by Central and State Governments BankersCustomers Suppliers and Shareholders. Your Board would like to place on record itssincere appreciation to the employees for the dedicated efforts and contribution inplaying a very significant part in the Company's operations.

For and on behalf of the Board of Directors
Prashant K. Trivedi
Place : United Kingdom Chairman
Date : July 12016 (DIN : 00167782)