To the Members
The Directors have pleasure in presenting before you the Forty Seventh Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended 31stMarch 2017.
1. FINANCIAL RESULTS:
The performance during the period ended 31st March 2017 has been as under: (Rupees inlakhs)
|Particulars ||Year ended ||Year ended |
| ||2016 -17 ||2015 -16 |
|Sales/ Income from operations ||17.82 ||51.25 |
|Other Income ||9.98 ||9.03 |
|Manufacturing Expenses ||31.39 ||45.40 |
|Other Expenses ||20.58 ||26.21 |
|Interest ||0.02 ||0.04 |
|Gross Profit (+)/(Loss)(-) after Interest before Depreciation and Tax ||(24.19) ||(11.37) |
|Depreciation ||2.94 ||4.65 |
|Net Profit (+)/(Loss) before (27.13) || || |
|Tax for the year || || |
|Net Profit(+ )/(Loss) for the year ||(27.13) ||(16.02) |
2. PERFORMANCE: Operations:
The operations of the company showed a decline in sales for the year ended 31-03-2017.The Sales reduced from Rs. 51.25 lakhs to 17.82 lakhs of the previous year. The Companymade a net loss of Rs. 24.19 lakhs before providing for depreciation of Rs. 2.94 lakhs.
The Company has not accepted any deposits from public in terms of Section 73 of theCompanies Act 2013 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.
4. PARTICULARS IN RESPECT OF
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO :
The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in the
Annexure-I forming part of this Report.
5. DIRECTORS RESPONSIBILITY
Pursuant to the requirement under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms: (a) That the preparation of the annual accounts for the financial year ended31st March 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) That the directors have 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 31st March 2017 and of the profit and lossof the company for that period; (c) That the directors have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) That the directors have prepared the annual accountsfor the financial year 31st March 2017 on a going concern basis; and (e) That thedirectors have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
(f) That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
5. INTERNAL CONTROL SYSTEMS AND
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Significant audit observations andcorrective actions thereon are presented to the Audit Committee of the Board.
6. SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURT:
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
7. RELATED PARTY TRANSACTIONS:
All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business. There are no materially significantrelated party transactions made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. All Related Party Transactions are placed before theAudit Committee as also the Board for approval where ever required. Prior omnibusapproval of the Audit Committee is obtained for the transactions which are of aforeseeable and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval so granted are placed beforethe Audit Committee and the Board of Directors on a quarterly basis. The Company hasdeveloped a Policy on Related Party Transactions for the purpose of identification andmonitoring of such transactions.
The particulars of contracts or arrangements with related parties referred to insub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of theCompanies (Accounts) Rules 2014 and the same is annexed herewith as
Annexure-II to this Report.
8. EXTRACT OF ANNUAL RETURN:
The Extracts of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9are enclosed as Annexure-III to this Report.
9. STATEMENT ON DECLARATION GIVEN
BY INDEPENDENT DIRECTORS:
The independent directors have submitted the declaration of independence as requiredpursuant to sub-section (7)of section 149 of the Companies Act 2013 stating that theymeet the criteria of independence as provided in sub-section(6) of Section 149.
10. NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy which laysdown a framework in relation to selection appointment andremuneration to Directors Key Managerial Personnel and Senior Management of the Company.The details of Nomination and Remuneration Committee and Policy are stated in theCorporate Governance Report.
Your Company does not have Subsidiaries.
12. INTERNAL AUDITORS:
M/s G P Associates. Chartered Accountants Hyderabad are the Internal Auditors of theCompany.
13. SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Sharad Gupta & Co Practicing Company Secretaries to conduct Secretarialaudit of the company for the financial year ended March 31 2017.
The Secretarial Audit Report issued by M/s. Sharad Gupta & Co Practicing CompanySecretaries in Form MR-3 is enclosed as Annexure-IV to this Annual Report.
The Secretarial Audit Report says that company has not complied with the compliancerequirements of Calcutta Stock Exchange. We hereby state that company applied fordelisting of shares from the Calcutta Stock Exchange on 22-11-2005. The Company follow upthe same Despite several reminders the Calcutta Stock Exchange has not responded. Weunderstand Calcutta Stock Exchange is a defunct organization and there is no communicationfrom them. Company is examining various options to close the matter so that the de-listingapplication is processed and completed.
14. STATUTORY AUDITORS:
M/s .Brahmayya & Co.Chartered Accountants have been auditors of the company since2007-2008 and have completed a term of 10 years. Their term as auditors is upto theconclusion of the forth coming AGM.
In accordance with the provisions of Section 139 of the Companies act 2013 M/s.K.S.Raoand Co. Chartered Accountants Reg no. 330109S are proposed to be appointed as auditorsfor a period of 5 years commencing form the conclusion of this Annual General Meeting tillthe conclusion of 52nd Annual General Meeting of the Company to held in 2022
13 subject to ratification of their appointment at every Annual General Meeting if sorequired under the act.
M/s.K.S Rao have consented to their appointment as statutory auditors and haveconfirmed that their appointment if made will be in accordance with section 139 read with141 of the act.
Member are requested to approve the appointment of K.S.Rao & Co CharteredAccountants and authorize the Board to fix their remuneration
15. AUDITORS' REPORT:
There are no qualifications reservations or adverse remarks made by M/s Brahmayya&Co. Chartered Accountants and Statutory Auditors in their report for the Financial Yearended 31st March 2017.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR) :
Corporate Social Responsibility required to be disclosed under Section 135 of theCompanies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules2014 is not applicable to the company. Hence composition of committee is not required.
17. PARTICULARS OF LOANS GUARANTEES OR SECURITIES OR INVESTMENTS:
The details of Loans Guarantees Securities and Investments made during the financialyear ended 31st March 2017 are given in the notes to the Financial Statements incompliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014.
18. RATIO TO REMUNERATION TO EACH DIRECTORS AND PARTICULARS OF EMPLOYEES:
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies (Appointment & Remuneration) Rules 2014 ratio of remuneration to medianemployees for Mr.Sreedhar Chowdhury is Nil
The Company has not employed any individual whose remuneration falls within the purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
19. SHARE CAPITAL:
The Authorised share capital of the Company is Rs 84000000 (Rupees Eight Crores FortyLakhs only)) divided into 8400000 equity shares of Rs 10/- each. The paid up capital ofthe Company is Rs 43271000(Four Crores Thirty Two Lakhs Seventy One Thousand only)divided into 4327100 equity shares of Rs 10/-each.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Company's policies have always been in accordance with the Code of CorporateGovernance and hence the mandatory regulations now placed are being complied with. TheCompany's continued endeavor is to maintain a high level of accountability andtransparency to its stakeholders.
Management Discussion and Analysis Report is presented in a separate section forms partof the Annual Report as Annexure-V.
21. BOARD EVALUATION:
Evaluation of all Board members is done on an annual basis. The evaluation is done bythe Board Nomination and Remuneration Committee and Independent Directors with specificfocus on the performance and effective functioning of the Board and Individual Directors.The criteria covered various aspects for evaluation of Independent Directors such asParticipation at the Board / Committee meetings Commitment (including guidance providedto senior management outside of Board/ Committee meetings) Effective deployment ofknowledge and expertise Integrity and maintaining of confidentiality Independence ofbehavior and judgment exercise of objective independent judgment in the best interest ofthe
Company Ability to contribute to and monitor corporate governance practice andAdherence to the code of conduct for independent directors for Evaluation of the BoardImplementation of robust policies and procedures and Size structure and expertise of theBoard were considered for Evaluation of the Managing Director and Non-ExecutiveDirectors Participation at the Board / Committee meetings Effective deployment ofknowledge and expertise Discharge of its functions and duties as per its terms ofreference Process and procedures followed for discharging its functions Effectiveness ofsuggestions and recommendations received were considered for evaluation of Chairman ofthe Board aspects such as Managing relationship with the members of the Board andmanagement and effective decision making at the board were considered.
22. DIRECTORS AND KMP:
Sri Sreedhar Chowdhury
Managing Director of the Company Sri S Manohar Raju Non Executive Independent DirectorSri A Subba Rao Non Executive Independent Director Dr.B.NeetaKumari Non ExecutiveDirector Mr.D Ramchandra Reddy
Chief Financial Officer has resigned w.e.f 29-05-2017 and Mrs. D. Manoranjani has beenappointed as CFO on 29-05-2017
During the financial year under review 4 (Four) Board Meetings 27th May 2016 3rdAugust 2016 10th November 2016 13th February 2017and 4 (Four) Audit CommitteeMeetings were convened and held. The details of which are given in the CorporateGovernance Report. The intervening gap between the meetings was within the period of 120days as prescribed under the Companies Act 2013 and Regulation 17 of SEBI ListingRegulations 2015.
24. CORPORATE GOVERNANCE:
The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance as per the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. A separate report on corporate governancepractices followed by the Company together with a Certificate from the Company's Auditorsconfirming compliances forms an integral part of this Report.
25. VIGIL MECHANISM:
The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and provides direct access to the Chairperson of the Audit Committee inexceptional cases. It is affirmed that no personnel of the Company has been denied accessto the Audit Committee. The Whistle Blower Policy aims for conducting the affairs in afair and transparent manner by adopting highest standards of professionalism honestyintegrity and ethical behavior.
26. CHANGE IN NATURE OF BUSINESS:
There is no change in nature of business of the Company.
27. MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year 31st March 2017 to which thefinancial statements relate and the date of signing of this report.
28. HUMAN RESOURCES:
The industrial relations of the Company continued to be harmonious during the yearunder review.
29. POLICY ON SEXUAL HARRASSEMENT:
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
During the financial year ended 31st March 2017 the Company has not received anyComplaints pertaining to Sexual Harassment.
30. DEMATERIALISATION OF SHARES:
88.33% of the company's Paid-up Equity Share Capital is in dematerialized form as on31st March 2017 and balance 11.67% is in physical form. The Company's Registrars are M/sVenture capital and Corporate Investments Pvt.Ltd. having their registered office at12-10-167 Bharath Nagar Hyderabad - 500 018.
31. TRANSFER TO RESERVES:
Directors have decided not to transfer any amount to reserves for the year.
32. Non Executive Directors Compersation and Disclosers
Non Executive Directors or receiving for meeting held.
33. CEO/CFO CERTIFICATION:
In line with the requirements of Schedule-V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 Sri SreedharChowdhury Managing Director Mr.D Ramachandra Reddy Chief Financial Officer (CFO) havesubmitted a certificate to the Board certifying inter-alia that the Financial Statementsand the Cash Flow Statement for the year ended March 31 2017 were reviewed to the best oftheir knowledge and belief that they do not contain any material untrue statement do notomit any material facts are not misleading statements together present a true and fairview and are in compliance with the applicable laws and regulations. The certificatefurther confirms that the transactions entered into by the Company for establishinginternal control financial reporting evaluation of the internal control systems andmaking of necessary disclosures to the Auditors and the Audit Committee have been compliedwith.
The Board of Directors would like to thank Business Partners Bankers Investors andAuditors for their continued support and association. Your Directors wish to place onrecord their appreciation to employees at all levels for their hard work dedication andcommitment.
| || ||For and on behalf of the Board of Directors |
| || ||For Incon Engineers Limited |
| ||Sd/- ||Sd/- |
| ||Sreedhar Chowdhury ||D Rama Chandra Reddy |
|Place : Hyderabad ||Managing Director ||CFO |
|Date : 29.05.2017 ||(DIN : 00188924) || |