Your Board of Directors have pleasure in presenting their 49th AnnualReport on the business and operations of the Company and the accounts for the FinancialYear ended March 312020.
The following table brings out the financial performance of the Companyduring the F.Y. 2019-20:
(Rs in '000)
|particulars ||31-Mar-2020 ||31-Mar-2019 |
|Income from Operations ||19358 ||27858 |
|Other Income ||16426 ||7211 |
|Total Income ||35784 ||35069 |
|Less: Operating Expenses ||22879 ||19968 |
|Less: Fair value loss on Investments ||13392 ||31761 |
|Less:Interest ||566 ||306 |
|Profit/(loss) before Depreciation ||(1053) ||(16966) |
|Less: Depreciation ||3300 ||1265 |
|Profit/(loss) after Depreciation before Tax ||(4353) ||(18231) |
|Less: Provision for Income Tax ||660 ||143 |
|Profit/(loss) after Tax ||(5013) ||(18374) |
|Opening balance of retained earnings ||33163 ||51904 |
|Profit / (loss) for the year [a] ||(5013) ||(18374) |
|Other comprehensive income/(loss) [b] ||(445) ||(367) |
|Total comprehensive income/(loss) [a+b] ||(5458) ||(18741) |
|Closing balance of retained earnings ||27705 ||33163 |
COMPANIES STATE OF AFFAIRS:
During the year under review the Company has earned Income of '35784thousand as against '35069 thousand in the corresponding previous year. The Income forthe year basically consists of recovery of dues commission from Insurance relatedactivities Dividend and Interest. The operating expense for the year is '22879thousand as against '19968 thousand in the previous year. The increase in operationalexpenses is mainly on account of legal expenses incurred in connection with the Income TaxBlock Assessment Case wherein the company had to defend its case by engaging eminentLawyers. The provision for the fair value of investments (reduction in the value ofinvestments is '13392 thousand as against '31761 thousand in the previous year. Theprofit/(loss) after tax for the year after adjusting the provision stands at ^5013)thousand as against C18374) thousand in the Previous year. There is marginal erosion inthe Net Worth of the company due to the losses incurred. The Net worth of the company asat March 31 2020 stands at '191306 thousand as against '196764 thousand as at March312019.
FUTURE BUSINESS PLANS:
The Company had stopped NBFC business after the filing of scheme ofarrangement with the Hon'ble High Court of Karnataka Bangalore. As the Company hadrepaid the entire public liabilities (subject to Note No. 23(a) of the financials) hasapplied for fresh Certificate of Registration (COR) with Reserve Bank of India asNon-deposit taking NBFC. Reserve Bank of India has made certain suggestions most of whichthe Company has complied with and requested Reserve Bank of India to issue the COR with anassurance that the other suggestions will be implemented post issuance of COR. ReserveBank of India vide its letter dated 26th December 2018 informed the company that thecompany's request for the COR has been rejected and advised the company to approachthe Appellate Authority for redressal of grievances if any. The company accordingly hasfiled an application before the Appellate Authority and presented its case. The company isawaiting the Order from the Appellate Authority. LISTING OF COMPANY'S SHARES IN NSE& BSE:
The Company shares were listed in BSE and NSE. The trading in shareswere suspended by BSE in the year 1999 and by NSE in 2002. The Company started pursuingremoval of suspension of trading in both the Stock Exchanges for the last few years byvisiting the Stock Exchanges in person and through consultants. The Company has beenputting in its best efforts to get the suspension revoked at the earliest and we arehopeful of getting suspension revoked shortly.
FEE BASED ACTIVITIES:
In order to generate some income to partly meet the establishmentexpenses your Company is engaged as Corporate Agent for Life and General InsuranceCompanies. The company is also focusing on collecting over dues from HP/Lease/Loans/Billsdiscounted portfolios.
TRANSFER TO RESERVES:
The Company has not transferred any amount to reserves during thefinancial year.
In view of the losses incurred during the year and in order to conservethe resources for future business your directors expressed their inability to recommenddividend during the year under report.
The paid-up Share Capital as on 31st March 2020 was '130267000.During the year under review the Company has not issued any shares and also 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/ shareholdersduring the year under review as per Section 73 of the Companies Act 2013.
Pursuant to the Regulation 34(3) read with Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Corporate GovernanceReport and Auditor's Certificate regarding Compliance of conditions of Governance aremade a part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Change in Directors
Mr. T Sachin Pai [DIN: 00795780] Non-Executive Director retire byrotation at the forthcoming Annual General Meeting and being eligible offer himself forreappointment.
Details of remuneration paid to the Directors and Key ManagerialPersonnel are given in the Form MGT-9 which is available in the Company's websiteunder link https://icdslimited.com/wp-content/uploads/2020/08/ICDS_MGT-9-Extract-of-Annual- Return-2020-1.pdf. A briefprofile of the Directors seeking confirmation/appointment nature of expertise in specificfunctional area name of other public companies in which he/ she holds directorship andmembership/chairmanship of the committees of the Board of Directors and the particulars ofthe shareholding as stipulated under Regulation 36(3) of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 and Secretarial Standards 2 (SS 2 on GeneralMeetings) is appended to the Notice.
declaration by independent directors:
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under the Companies Act 2013 and Regulations of SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015.
A calendar of Meetings is prepared and circulated in advance to theDirectors. During the year four Board Meetings were convened and held on 28.05.201908.08.2019 13.11.2019 and 11.02.2020. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
The Audit Committee comprises independent directors namely Mr. SujirPrabhakar (Chairman) Mr. A. Giridhar Pai and Mr. U. Harish P. Shenoy as other members.All the recommendations made by the Audit Committee were accepted by the Board. Details ofAudit Committee meetings are enumerated in the Corporate Governance Report.
The role and terms of reference of Audit Committee cover the areasmentioned in Regulation 72 of the SEBI (Listing Obligation & Disclosure Requirements)Regulations 2015 and Section 179 of the Companies Act 2013 besides other terms referredto by the Board of Directors from time to time. During the year the Committee met on28.05.2019 08.08.2019 13.11.2019 and 11.02.2020.
REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES OF THECOMPANY:
The Company has not developed and implemented any Corporate SocialResponsibility initiatives as per the provisions of Section 135(1) of the Companies Act2013 as the said provisions are not applicable to the Company for the time being.
PARTICULARS OF EMPLOYEES:
During the year under review the Company had no employees whoseremuneration exceeded the limit prescribed under Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and subsequent amendments thereto. Particulars of top ten employeesof the Company in terms of remuneration drawn during the year 2019-20 presented as anannexure to the Board Report during the Board Meeting is preserved separately and the samewill be made available to any shareholders on request made to the company in writing.
Your Company recognizes that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner.
Your Company through its risk management process strives to containimpact and likelihood of the risks from time to time.
The Consolidated Financial Statements of the Company and its subsidiaryManipal Properties Limited prepared in accordance with Indian Accounting Standard issuedby the Institute of Chartered Accountants of India form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
The Annual Accounts of the subsidiary company and related detailedinformation will be kept at the Registered Office of the Company as also at theregistered offices of the subsidiary company and will be available to investors seekinginformation at any time.
Salient features of financial statements of subsidiary company pursuantto Section 129(3) of the Companies Act 2013 have been covered in the Financial Statementsin Form AOC-1.
RELATED PARTY TRANSACTION:
All related party transactions that were entered into were on anarm's length basis in the ordinary course of business and were in compliance withthe applicable provisions of Companies Act 2013 (the Act). There were nomaterially significant related party transactions made by the Company during the year thatwould have required shareholders' approval under the provisions of the Act. Detailsof the transactions with related parties are provided in the Note No.38 of accompanyingstandalone financial statements. Form AOC-2 pursuant to clause (h) of sub-section (3) ofSection 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 is annexedherewith marked as Annexure I.
Pursuant to the provisions of Companies Act 2013 and SEBI (LODR)Regulations 2015 Board has carried out an annual performance evaluation of its ownperformance and the Directors individually. The manner in which the evaluation has beencarried out are detailed below:
The performance evaluation of Chairman and Non-Independent Directorswas carried out by the Independent Directors. The Independent Directors evaluated theparameters viz. level of engagement duties responsibilities performance obligationsand governance safeguarding the interest of the Company. The performance evaluation ofIndependent directors was carried out by the entire Board.
Pursuant to the provisions of the Companies Act 2013 the Company atits 46th AGM held on 25th September 2017 had appointed M/s Pathak H D & AssociatesChartered Accountants Mumbai (FRN: 107783W) as the Statutory Auditors of the Company forperiod of five years till the conclusion of the 51st annual general meeting to be held inthe year 2022.
Auditors report does not contain any qualifications reservations oradverse remarks.
SECRETARIAL AUDIT REPORT:
In terms of Section 204 of the Act and Rules made there under CS.Shrinivas M. Devadiga Practicing Company Secretary (Membership No. 22381 CoP No.10372)from Bangalore has been appointed as Secretarial Auditor of the Company. The report of theSecretarial Auditor is enclosed as Annexure II to this report. Secretarial Auditors'Report does not contain any qualifications reservations or adverse remarks. The Commentsmade by the Secretarial Auditors are corresponding explanations given by the Board are asunder:
|Comment by Secretarial Auditor ||Board's Reply |
|1 Company was received show cause notice in the previous year by ROC for violation of Section 203(1) R/W Section 203(4) of the Companies Act 2013 for non-appointment of Company Secretary from 01.04.2014 to 08.08.2016. ||Company has made an application for Adjudication of penalties with Registrar of Companies Karnataka and the matter pending with Registrar of Companies Karnataka. |
|2 SEBI amended the clause relating to board of directors' in the Listing Regulations and inserted regulation 17(1A) of SEBI (LODR) 2015 as amended from time to time w.e.f. 01.04.2019: No listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy five years unless a special resolution is passed to that effect in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such a person. ||Company has appointed Mr. Tonse Pai Mohandas DIN-00104336 as Director (Category - Non-Executive NonIndependent) and Chairman of the Company and ratified his earlier appointment dated 26.09.2019 on 21.03.2020 through Postal Ballot. |
|3 Company was received Notice from NSE with Ref: NSE/LIST/16008 dated 30th March 2020 reference to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 regarding submission of annual report by listed entities 1. Certificate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies. 2. Detail of fees paid to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part. ||The management of the Company replied to the Stock Exchange they will incorporate necessary disclosures in the financial year ended 31.03.2020 with comparative figures for the previous financial year ended 31.03.2019. Due to the outbreak of pandemic COVID-19 Company express its difficulties to comply which was cause to shutdown of office as the whole country was under lockdown. |
INTERNAL FINANCIAL CONTROL:
The Company has implemented and evaluated the Internal FinancialControls which provide a reasonable assurance in respect of providing financial andoperational information complying with applicable statutes and policies safeguarding ofassets prevention and detection of frauds accuracy and completeness of accountingrecords. The Company has appointed Internal Auditor with dedicated internal audit team.The internal audit reports were reviewed by the Audit Committee. Further the AuditCommittee annually reviews the effectiveness of the Company's internal controlsystem. The Directors and Management confirm that the Internal Financial Controls (IFC) isadequate with respect to the operations of the Company. A report of Auditors pursuant toSection 143(3)(i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditors Report.
EXTRACT OF ANNUAL RETURN:
As required pursuant to Section 92(3) of the Companies Act 2013 andrule 12(1) of the Companies (Management and Administration) Rules 2014 an extract ofannual return in MGT 9 is available on the Company's website www.icdslimited. com(link: https://icdslimited.com/wp-content/uploads/2020/08/ICDS_MGT-9-Extract-of-Annual-Return-2020-1.pdf). As per provisions of Section 134(3)(a) ofthe Companies Act 2013 the Annual return for financial year 2018-19 is placed on websiteof the company i.e. www.icdslimited.com/annual return.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THECOMPANY TO WHICH THE 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 ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE:
Your Directors wish to state that there have been no significant ormaterial orders that were passed by the Regulators or Courts or Tribunals which may impactthe going concern status and operations of the Company in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Details of Loans: Nil
Details of Guarantee/Security Provided: Company has not provided anyguarantee/Security during the financial year. Investments made are of the naturequoted/unquoted equity shares and investment in property. Particulars of such investmentsare provided in the financial statements vide Note No.11.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
In order to prevent sexual harassment of Women at work place a new Actcalled The Sexual Harassment of Women at Work Place (Prevention Prohibition &Redressal) Act 2013 has been notified on 9th December 2013. In terms of the said ActYour Company has constituted an Internal Complaints Committee to look into complaints ofsexual harassment at work place of any women employee. The company has adopted a policyfor prevention of sexual harassment of women at work place and has set up internalcommittee for implementation of the said policy. During the year your Company has notreceived any complaint of sexual harassment of any women employee.
The following is a summary of sexual harassment complaints received anddisposed off during the year 2019-20:
a. No. of complaints received : Nil
b. No. of complaints disposed off : Nil
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
The company did not have any activity in relation to conservation ofenergy or technology absorption. The company had no foreign exchange earnings or outgoingsduring the year under report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHERDETAILS:
The Company's policy on directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosed inthe Corporate Governance Report which is a part of this report and is also available onwebsite www.icdslimited.com
directors' responsibility statement:
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 Indianaccounting standards have been followed along with proper explanation relating to materialdepartures;
(b) the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) the directors have prepared the annual accounts on a going concernbasis; and
(e) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
transfer of amounts to investor education and PROTECTION FUND:
Pursuant to the provisions of the Investor Education Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 the Company has alreadyfiled the necessary form and uploaded the details of unpaid and unclaimed amounts lyingwith the Company as on the date of last AGM (i.e. 26.09.2019) with the Ministry ofCorporate Affairs.The Company has since transferred the unclaimed amounts under the Schemeof Arrangement to IEPF subject to Note No. 24 (a) of the Balance Sheet.
details OF FRAUD REPORT BY AUDITOR:
As per auditors' report no fraud u/s 143(12) reported by theauditor.
The Company has a Whistle Blower Policy for Directors and employees andadopted the Whistle Blower Policy in terms of Section 177 (9) and (10) of the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 toreport genuine concerns if any about unethical behavior wrongful conduct and violationof Company's code of conduct or ethics. The Whistle Blower Policy is available on theCompany's websitewww.icdslimited.com.
The Company has complied with all the provisions of applicableSecretarial Standards issued by Institute of Company Secretaries of India and notified bythe Ministry of Corporate Affairs.
IMPACT OF COVID-19 ON ECONOMY:
The outbreak of Coronavirus (COVID-19) pandemic globally and in Indiahas caused significant disturbance and slowdown of economic activities in the country. TheCompany however believes strongly that its offerings to the customer would notsignificantly impact its revenues.
The impact on future revenue streams could come from lower rentalincomes on account of waivers / concessions in rent sought by the tenants and cancellationof lease agreement which is the major source of income for the Company. The Companyexpects the rental income to be back to the existing levels post the pandemic. Howeverthe impact assessment of COVID-19 is a continuing process given the uncertaintiesassociated with its nature and duration.
The Company has analysed its liquidity position and the recoverabilityand carrying value of its assets comprising property plant and equipment investmentproperties intangible assets right of use assets investments advances tradereceivables deferred taxes other financial and non-financial assets etc. Based oncurrent indicators of future economic conditions the Company expects to recover thecarrying amount of these assets. The situation is changing rapidly giving rise to inherentuncertainty around the extent and timing of the potential future impact of the COVID-19pandemic which may be different from that estimated as at the date of approval of thesestandalone financial results.
Due to the nature of the pandemic and non-availability of necessaryvaccine/treatment for its eradication the Company will continue to be vigilant on variousdevelopments / impacts in the future so as to insulate itself from any material adverseimpact.
Your Directors wish to place on record their appreciation of theservices and co-operation extended by our Bankers Investors and Members of Staff of theCompany during the year under report. Your directors also wish to thank the shareholdersfor their support.
The Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto fight this pandemic. Your directors also wish to place on record their deep sense ofappreciation of the services rendered by the staff members at all levels.
| ||For and on behalf of the Board of Directors |
| || |
| ||(T. Mohandas Pai) |
|Place : Manipal || |
|Date : 29.06.2020 ||(DIN: 00104336) |