To The Members
M/s Neo Corp International Limited
Your Directors are delighted to present the 31 Annual Report of your Company along withthe audited statements for the year ended on 31st March 2016.
The financial results for the year ended on 31.03.2016 are as under:
|PARTICULARS ||2015-16 ||2014-15 |
|Gross Income ||66888.74 ||74391.06 |
|Profit before Interest Depreciaon and Tax ||(3714.26) ||8598.69 |
|Less : || || |
|1) Interest ||5035.95 ||4298.73 |
|2) Depreciaon ||2028.74 ||807.93 |
|3) Provision for Tax || || |
|- Current Tax ||-- ||990.00 |
|- Income Tax (earlier years) ||235.45 ||(605.42) |
|- Deferred Tax ||(784.10) ||86.48 |
|4) Prior Period adjustments || || |
|Profit a er Tax ||(10230.30) ||3020.98 |
|Appropriaon || || |
|Transfer to General Reserve ||-- ||25.00 |
|Proposed dividend and tax on prop. Dividend ||-- ||-- |
|Earning per equity share ||-- ||7.95 |
RESULT OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
During the year under review your Company has recorded a turnover of Rs. 668.88 Croresas against Rs. 743.92 Crores in the previous year registering an decrease of 10.08%. TheNet loss (a er tax and extra ordinary items) for the financial year ended 31st March 2016recorded to Rs. 102.30 Crores against Profit of Rs. 30.20 Crores in the previous year.
The year under review was highly volale for the Company and it witnessed extremepressure both on top as well as bo om lines. The company had strategically planned toreduce and nally move out from the low margin products. The down trend and extremevolality in the polymer prices had also put pressure on the margins. The bo om line wasalso a ected on account of devaluaon in the inventory to the extent of nearly 20%. It hasput pressure on the pro tability of your company too during the year under review.
MATERIAL CHANGES & COMMITMENTS AFTER THE END OF FY 15-16 IF ANY AFFECTING THEFINANCIAL POSITION OF THE COMPANY:
The loan account of the Company has been classi ed under substandard category by thelead bank State Bank of India Overseas Branch Mumbai whereas other consorum banksconnue with present status of account.
The technical texles sector being one of the most innovav e branches of the industry inthe world is ranking as one the ve high tech sectors with the greatest potenal fordevelopment. India is now emerging as a powerhouse of both producon as well as end-useconsumpon of technical texles. The demand for technical texles will be boosted by thechanging economic scenario. The success of technical texles is primarily due to thecreavity innova on and versa lity in bres yarns and woven/knie d/ nonwoven fabrics withapplicaons spanning an enormous range of uses. The ability of technical texles to combinewith each other and with others to create a new funconal products o er unlimitedopportunity to growth. The producon of di erent items of technical texle industry has beenslowly but steadily increasing in the country which is further contribung in the growth ofthe industry as a whole.
Technical Texle is the sunrise segment of the global Texle industry. With increasingcompe on and diminishing margins in the produc on of conven onal tex les tex lemanufacturers in industrialized countries have switched over to producon of value-addedtechnical texles. As the use of technical texles is dictated by need its pricing normallyo ers good margins. The Technical Texle industry is esma ted to account for over 50% ofthe total texle acvity in certain industrialized countries. While the US connues to be themain manufacturers and consumers of funconal texles China has emerged as a largemanufacturer of the same. India and Russia are the other important markets for technicaltexles where consumpon is increasing at a fast pace.
The Indian Scenario:
India is emerging as a significant player in technical texles. The fast-paced economicgrowth leading to infrastructure creaon as well as higher disposable income has made Indiaa key market for the technical texle products. Moreover the country has developed afoothold in the producon of technical texles. Considering its highly skilled and scien c/technical manpower and abundant availability of raw materials India can emerge as a keyplayer in the technical texles industry. India Texle Industry involves around 35 millionworkers directly and accounts for 21% of the total employment generated in the economythe second largest provider of employment a er agriculture. Thus Technical texles holdssignificant potenal in India and the government has already taken steps to promote thisindustry. Indian technical texle market is nascent and is quite honestly depending ongovernment's push and mandatory regulaons to penetrate into di erent sectors. The stronginterest in the segment is driven by be er Profit margins and less compeon.
In view of the losses your Directors express their inability to recommend any dividendfor the year 2015-16.
AMOUNT TRASNFERED TO RESERVE: In view of the losses your Directors express theirinability to propose transfer of any amount to reserves.
The paid up Equity Share Capital of the Company as at March 31 2016 stood at Rs.380221980. During the year under review the Company has not issued any shares with dierenal vong rights nor has granted any stock opons or sweat equity and not issued anywarrants/GDR/ADR. As on March 31 2016 none of the Directors of the Company holdsinstruments converble into equity shares of the Company.
The consolidated financial statements of your Company for the financial year 2015-16are prepared in compliance with applicable provisions of the Companies Act 2013 AccounngStandards and SEBI(LODR) Regulaons 2015. The consolidated financial statements have beenprepared on the basis of audited financial statements of the Company its subsidiary asapproved by their respective Board of Directors.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANY
The consolidated financial results reffect the operaons of the following subsidiaries:Europlast Limited Sacos Indigo Private limited Neo ex Infracon Limited Poly LogicInternational Private Limited Prism Flexible Soluons Private Limited and Polybase (H.K.)Limited. All these subsidiaries connue to work closely with the customers and grow theirbusiness with product o erings relevant to their respective markets. During the year theoperang subsidiaries were Europlast Limited Neo ex Infracon Limited Sacos Indigo Privatelimited and Poly Logic International Priv ate Limited. The subsidiary Polybase (H.K.)Limited and M/s Prism Flexible Soluons Private Limited has not commenced commercial ac vies since incorporaon and currently is not operaonal. The annual accounts of thesubsidiaries and the related detailed informaon will be kept open for inspecon at theRegistered Office of the Company and that of the respective subsidiary companies. Thecompany will furnish a hard copy of details of accounts of subsidiaries to any shareholderon demand.
A statement containing the salient features of the performance and financial posion ofthe each of the subsidiary companies is set out in the prescribed Form AOC.1 aached to the financial statements. There is no associate companies/Joint Venture withinthe meaning of secon 2(6) of the Companies Act 2013. There has been no material change inthe nature of the business of the subsidiary company.
During the year under review your Company did not accept any deposits within theearning of provisions of Chapter V Acceptance of Deposits by Companies of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
At the ensuing Annual General Meeting Mr. Utkarsh Trivedi Director of the Companyrer es by rotaon and being eligible o ers himself for re-appointment. The IndependentDirectors of the Company have declared that they meet the criteria of Independence interms of Secon 149(6) of the Companies Act 2013 and that there is no change in theirstatus of Independence. None of the Independent Directors are due for reappointment.
During the year under review Mr. Pradhuman Sharma resigned
from the post of Whole Time Director in the Board meeting held on 15 December 2015.Mrs. Shobha Dubey Independent Director resigned from the post of director and Mrs.Bhadrabala Trivedi was appointed as addional director her place in the Board Meeting heldon 15 March 2016.
Mrs. Kiran Phulpagar has been appointed as an addional director
(non-Executive independent) and Mrs. Bhadrabala Trivedi has resigned from the post ofdirector in the Board meeting held on 13 August 2016.
In the Board meeting held on 30th May 2015 Ms. Jyo Dubey resigned from the post ofChief financial Officer (CFO) of the Company and Mr. Utkarsh Trivedi Executive Directorof the Company was appointed and CFO w.e.f. 1st June 2016. Further Ms. Swa Gangraderesigned from the post of Company Secretary and Ms. Ankita Gupta was appointed as CompanySecretary and Compliance Officer in the Board Meeting held on 15th March 2016. Mr.Utkarash Trivedi and Ms. Ankita Gupta were designated as "Key ManagerialPersonnel" of the Company pursuant to Secons 2(51) and 203 of the Companies Act 2013read with the Companies (Appointment and Remunera on of Managerial Personnel) Rules 2014.
DISQUALIFICATIONS OF DIRECTORS
During the year under review declaration s received from all the Directors of theCompany pursuant to Secon 164 of the Companies Act 2013. The Board appraised the same andfound that none of the director is disquali ed for holding Office as director as per theprovisions of the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of secon 134(3) (C) of the Companies Act 2013 your Directors state that: a)in the preparaon of the annual accounts for the year ended March 31 2016 the applicableaccounng standards read with requirements set out under Schedule III to the Act have beenfollowed and there are no material departures from the same; b) the Directors haveselected such accounng policies and applied them consistently and made judgements andestimates that are reasonable and prudent so as to give a true and fair view of the stateof a airs of the Company as at March 31 2016 and of the Profit of the Company for theyear ended on that date; c) the Directors have taken proper and su cient care for themaintenance of adequate accounng records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for prevenng and detecng fraud and otherirregularies; d) the Directors have prepared the annual accounts on a going concern'basis; e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operang effetively; and f ) the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operangeffetively .
BOARD MEETINGS AND ANNUAL GENERAL MEETING
During the financial year meeting of the Board of the Directors of the Company wereheld thirteen mes. The gap between two meeting s did not exceed one hundred and twentydays. Further Annual General Meeting was held on 30th September 2015. Detailed informaonon the meeting s of the Board its Commitee and the AGM is included in the Report onCorporate Governance which forms part of this Annual Report.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has various Commities which have been constut ed as a part of the goodcorporate governance pracces and the same are in compliance with the requirements of therelevant provisions of applicable laws and statutes. The Commities of the Board are: (i)Audit Commitee (ii) Nominaon and Remuneraon Commitee (iii) Stakeholders' Relation shipCommitee (iv) CSR Commitee (v) Management Commitee The details with respect to thecomposion powers roles terms of reference meeting s held and Attendance of theDirectors at such Meeting s of the relevant Commities are given in detail in the Report onCorporate Governance of the Company which forms part of this Annual Report.
EVALUATION OF BOARD EFFECTIVENESS
Pursuant to the provisions of the Companies Act 2013 and Regulaon 17 of the SEBI(LODR)Regulaons 2015 the Board has carried out an annual performance evalua on of its ownperformance and of the directors individually as well as the evaluaon of the working ofits Audit Nominaon & Remuneraon and Compliance Commities . The result of the evaluaon is sa sfactory and adequate and meets the requirement of the Company.
RELATED PARTIES TRANSACTIONS
All transactions entered by the Company during the financial year with related pares were in the ordinary course of business and on an arm's length basis and that theprovisions of secon 188 of Companies Act 2013 are not ar acted. During the year underreview there are no material related party transactions . All related party transactionsare placed before the Audit Commitee as also to the Board for approval. The policy onRelated Party Transactions has been approved by the Board of Directors. Details ofcontracts / arrangements / transactions with related pares are given in the Note 29 to theStandalone financial Statements.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Amount outstanding as at 31 March 2016
| ||Rs. In Lacs |
|Particulars ||Amount |
|Loans given ||Nil |
|Guarantee given ||22616.00 |
|Investment made ||8776.51 |
|Name of Enty ||Relation ||Amount ||Loan/guarantee/ investment ||Purpose |
|Poly Logic International Private Limited ||Subsidiary ||600.00 ||Guarantee given ||For availing credit facilities from Canbank Factors Ltd. |
EXTRACT OF ANNUAL RETURN
In accordance with Secon 134(3)(a) and Secon 92(3) of the Companies Act 2013 Anextract of Annual Return in Form MGT-9 as on March 31 2016 is a ached as Annexure-1 tothis Report.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. The details of the Vigil Mechanism Policy is explained in the CorporateGovernance Report' which and forms part of this Report and also displayed on the websiteof the Company (www.neocorp.co.in).
REMUNERATION POLICY OF THE COMPANY
The Board has on the recommenda on of the Nomination & Remunera on Commitee frameda policy for selec on and appointment of Directors Key Managerial Personnel and SeniorExecu ves of the Company including criteria for determining quali ca ons posi ve aributes independence of a Director remuneraon and other related ma ers. Details ofpolicy covering these requirement has disclosed in Corporate Governance Report.
PARTICULARS OF EMPLOYEES
None of the employee of the company is drawing more than Rs. 10200000/- per annum orRs. 850000/- per month for the part of the year during the year under review thereforeParticulars of the employees as required under Secon 197 of Companies Act 2013 read withrule 5 (2) & rule 5 (3) of Companies (appointment and remuneraon of ManagerialPersonnel) Amendment Rules 2016 are not applicable during the year under review.
Statement pursuant to Secon 197(12) of the Companies Act 2013 and rule 5(1) and 5(2) ofthe Companies (Appointment and Remuneraon of Managerial Personnel) Amendment Rules 2016forms part of this report as Annexure 4. However pursuant to rst proviso to Secon136(1) of the Act this Report is being sent to the Shareholders excluding the aforesaidinforma on. Any shareholder interested in obtaining said informaon may write to theCompany Secretary at the Registered Office / Corporate Office of the Company and the saidinformaon is available for inspecon at the Registered Office of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Pursuant to Secon 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors have approved a Policyon CSR and the Policy is hosted on the website of the Company www.neocorp.co.in.
As a part of CSR inia v es Your Company during the financial year 2015-16 has amongstother acvies undertaken projects in areas of promo ng educa on preven ve health careempowering women and measures for welfare of other backward class. These projects are inaccordance with Schedule VII of the Companies Act 2013. The Company has undertaken CSR acvi es through registered trust or registered society and other permissible enes by givingdona ons and contribu ons to various permi ed entities . The Company has also undertakenCSR ini a ves on its own and has started with the play-group and nurseryShishuVihar" nearby factory premises at Pithampur for pfloor children educa onat free of cost.
The Company formed a Corporate Social Responsibility Commitee to implement and monitorthe CSR policy. A lot of acvies were taken up and implemented during the year Particularsof which are given in this report. However some of the projects envisaged could not takeduring the year. Hence there is a shor all in CSR amount spent compared to the amountprescribed to be spent.
The report on CSR acvies is a ached as Annexure-2 to this Report.
RISK AND AREAS OF CONCERN
The Company has laid down a well-defined risk management mechanism covering the riskmapping and trend analysis risk exposure potenal impact and risk mig aon process. TheBoard periodically reviews the risks and suggests steps to be taken to control and mi gatethe same through a properly defined framework. Details on the risk elements which theCompany is exposed to are covered in the Management Discussion and Analysis Report whichforms part of this Report. In line with the new regulatory requirements the Company hasformally framed a Risk Management Policy to idenfy and assess the key risk areas monitorand report compliance and e ec veness of the policy and procedure.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS
The company has an e ecv e internal control and risk mig aon system which areconstantly assessed and strengthened with new or revised standard operang procedures. Thecompany's internal control system is commensurate with its size scale and complexies ofits operaons. The details are menoned in the Management Discussion and Analysis Reportwhich forms part of this Report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has been employing women employees in various cadres within its Office andfactory premises. The Company has in place a policy against Sexual Harassment in line withthe requirements of the Sexual Harassment of Women at Workplace (Preven on Prohibi on andRedressal) Act 2013. It ensures prevention and deterrence towards the commissioning ofacts of sexual harassment and communicates procedures for their resoluon and selemen t.
Internal Complaint Commities are set up at shop floor level to redress any complaintsreceived and are monitored by women line supervisors. All employees are covered under thepolicy. There was no complaint received from any employee during the financial year2015-16 and hence no complaint is outstanding as on 31.03.2016 for redressal.
A re broke out in TECHTEXTIL the EOU division of NCIL situated at Pithampur on 27thFebruary at midnight 2010 bringing a loss to plant machinery stock in process andnished stock. The inferno which caused damaged was insured under various policies takenfrom United India Insurance Company Limited and Oriental Insurance Company Limited. Thetotal claim launched was to the tune of INR 52.05 crores. The company has received theclaim of INR 39.43 Crores during the earlier years. The company has led arbitraon againstthe assessment of claim of Rs. 4.88 Crores. The Company is hopeful to receive the saidamount.
Pursuant to the provisions of secon 139 of the Companies Act 2013 M/s. A.P. Garg &Co. Chartered Accountants (Firm Registraon No. 002143C) statutory auditors of the companywere appointed as auditor to hold Office up to the conclusion of 30th Annual GeneralMeeting of the company and are recommended for re-appointment to audit the accounts of thecompany up to the conclusion of 34th AGM of the Company to be held in year 2019 subjectto ra c aon of their appointment by members at every AGM held therea er. A resoluon for rac aon for appointment of M/s. A.P. Garg & Co. Chartered Accountants as auditors llthe conclusion of the 34th AGM and for xaon of their remuneraon for the year 2016 17 isbeing proposed in the noce of the ensuing AGM for the approval of the members. The Companyhas received from M/s. A.P. Garg & Co. Chartered Accountant a wri en consent for ra caon of their appointment from the conclusion of the 31st AGM ll the conclusion of the 34thAGM and a cer cate to the effect that their appointment shall be in accordance with theprescribed condions and that the rm is not disquali ed under the Companies Act 2013.
Pursuant to Secon 204 of the Companies Act 2013 the Board of Directors had appointedM/s. Ashish Karodia & Co. Praccing Company Secretary (C. P. No. 6375) as SecretarialAuditor to undertake the Secretarial Audit of the Company for the FY 2015-16. The reportof the Secretarial Auditor is annexed herewith as Annexure 3 and forms part of thisReport.
AUDITORS' REPORT/SECRETARIAL AUDIT REPORT:
Report of the auditors and their observaons and notes to the accounts of the companyfor the year under review are a ached herewith which are self-explanatory and do notrequire further explanaon.
Further there was no fraud in the Company which was required to report by statutoryauditors of the Company under sub-secon (12) of secon 143 of Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The informaon on conservaon of energy technology absorpon and foreign exchangeearnings and outgo spula ted under Secon 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules is given below:
A. CONSERVATION OF ENERGY
(i) the steps taken for conservaon of energy:
Energy conservaon dictates how e ciently a company can conduct its operaons. TheCompany connued its conscious e orts to minimize energy consumpon and more and more innovaons and improvements were introduced to further reduce the energy consumpon. We haveinstalled following equipments in factory premises for controlling the power conservaon:(a) MD Controller which controls the contract demand and
(b) Power Factor Controller which is used for maximum uliz aon of power.
(ii) the capital investment on energy conserva on equipments during the year: Nil
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
Government Recognized R & D Centers
NCIL has set its own R & D Centre which is recognized by Department of Science andIndustrial Research under Ministry of Science and Technology. R & D Centre is equippedwith all necessary tesng equipments and competent sciens ts to conduct R&D acvies. Tohelp Neo Corp International Limited in its pursuit to excel in the field of TechnicalTexles and broaden the product range R&D center has developed many new products invarious segments of Technical Texles. In past years R&D Center of NCIL has recruitedcompetent sciens ts also the thrust was on enhancing the competencies of scien sts forwhich many training sessions were organized by internal and external facules on varioustechnical topics.
Conforming to the vision of NCIL; the R&D center envisions assisng NCIL its stakeholders technical texles community and society at large to live happier and healthierlives and raise NCIL pro le to the zenith of top most manufactures of technical tex lethrough relentless R&D acvies.
The mission of R&D center is
To discover new materials processes and technologies to deliver productsservices and soluons to the complete sas facon of end users.
To establish a tesng laboratory with state of the all tesng facilies fortechnical texles.
To develop R&D center as a knowledge hub facilitang shirring of technicalknowledge in the field of technical texles in the country.
To develop a team of technically pro cient sciens ts.
Expenditure on R & D during FY 2015-16: NIL
C. FOREIGN EXCHANGE EARNING AND OUTGO
The company has earned foreign exchange of Rs. 12964.32 lacs during the year.
The details of foreign exchange outgo are as follflows :
|Material import ||Rs. 1308.76 lacs |
|Stores & spares ||Rs. Nil |
|Capital goods ||Rs. Nil |
|Expenditure in foreign currency ||: Rs. 15.71 lacs |
Your Company has complied with the Corporate Governance requirements as per theSchedule V of the SEBI (Lisng Obligaon and Disclosure Requirements) Regulaons 2015. Aseparate report on Corporate Governance along with a Certificate of Compliance fromPraccing Company Secretary forms a part of this Annual Report.
LISTING OF THE SHARES
The shares of the Company are listed on the Bombay Stock Exchange Limited andLuxembourg Stock Exchange.
CODE OF CONDUCT
The Company has laid down a code of conduct for all Board members and senior managementand independent directors of the Company. All the Board members including independentdirectors and senior management personnel have a rmed compliance with the code of conduct.The policy on Code of Conduct has been uploaded on the Company's website at thewww.neocorp.co.in
REPORT ON MANAGEMENT AND DISCUSSION ANALYSIS
A detailed analysis of the Company's performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Annual Report.
Your Directors provide their gratude to the various Government Agencies Banks andfinancial instuons investors Company`s business associates customers dealerssuppliers and other service providers for their connued support. Your Directors place onrecord their sincere apprecia on of the contribu ons made by the employees of the Companyand its subsidiaries at all level through their hard work dedicaon and support inensuring an e xcellent all around operaonal performance. The Board is also deeply gratefulto the shareholders for the con dence and faith that has been reposed in them. Driven byvalues and powered by internal vitality the enrich "NCIL Group" stands commitedto create an even brighter future for all the stakeholders.
|Date: 3 rd September 2016 ||For and on behalf of the Board of Directors |
|Place: Indore || |
| ||SUNIL K. TRIVEDI |
| ||CHAIRMAN & MANAGING DIRECTOR |
| ||DIN 00053000 |