The Members of
The Indian Card Clothing Company Limited
Your directors' present their Sixty Seventh Annual Report on the business andoperations of the Company together with the Audited Financial Statements for the yearended March 31 2021.
Directors have tried to maintain coherence in disclosures and flow of the informationby clubbing required information topic-wise and thus certain information which is requiredin Directors' Report is clubbed elsewhere and has to be read as a part of Directors'Report.
1) FINANCIAL RESULTS:
(Rs. in Lakh)
| ||Financial year || |
|Particulars ||2020-21 ||2019-20 |
|Revenue from operations ||4530.85 ||5128.04 |
|Other Income ||306.46 ||157.46 |
|Total income ||4837.31 ||5285.50 |
|Finance cost ||171.03 ||278.26 |
|Depreciation ||387.06 ||395.34 |
|Profit / (Loss) before exceptional items ||(41.15) ||(640.58) |
|Exceptional items ||22.62 ||324.28 |
| ||(18.53) ||(316.30) |
|Profit / (Loss) Before Tax || || |
|Provision for Tax (including deferred tax) ||70.31 ||101.41 |
|Profit / (Loss) After Tax ||(88.84) ||(417.71) |
|Other Comprehensive Income ||7.51 ||(11.23) |
|Total Comprehensive Income for the year ||(81.33) ||(428.94) |
2) PERFORMANCE REVIEW:
During the year under review the Company earned a total revenue of Rs. 4837.31Lakh as against Rs. 5285.50 Lakh in the previous year. The loss incurred by the Companyfor the financial year 2020-21 has been Rs. 81.33 Lakh against loss of Rs. 428.94Lakh for the financial year 2019-20.
? Issue and allotment of Equity Shares on Preferential basis to the promotersincreasing their stake from 57.35% to 67.33%.
? Adoption of New set of Articles of Association.
? Invested in the Equity Share Capital of ICC International Agencies Limited (ICCIAL)Wholly Owned Subsidiary of the Company by participating in its Rights Issue.
? Developed new range wires for different Nonwoven applications.
? New service station started at Panipat for providing prompt service to the Non-wovensector
? Acquisition of a commercial building ICC Chambers - I situated at Saki Vihar RoadPowai Mumbai - 400072.
3) SHARE CAPITAL:
During the year under review following changes took place in the equity share capitalof the Company:
a. Increase in the Authorised Share Capital:
The members of the Company at their 66 Annual General Meeting held on ThursdaySeptember 24 2020 accorded their consent to increase the authorized share capital of theCompany.
Accordingly authorised share capital of the Company has been increased fromexisting.Rs. 50000000 (rupees five crores only) divided into 5000000 (fifty lakhs)equity shares of face value of Rs. 10/- (rupees ten only) each to Rs. 100000000 (rupeesten crore only) divided into 10000000 (one crore) equity shares of Rs. 10/- (rupees tenonly) each by creation of additional 5000000 (fifty lakhs) equity shares of Rs.10/- eachranking pari-passu in all respect with the existing equity shares and by substituting theexisting Clause 5 thereof with the following new Clause 5 in the Memorandum of Association:
5. The Authorised Share Capital of the Company is Rs. 100000000 (rupees ten croreonly) divided into 10000000 (one crore) Equity Shares of Rs. 10/- (rupees ten only)each.
b. Issue of Equity Shares on preferential & private placement basis:
Considering the impact of COVID-19 global pandemic and the resultant lockdown on theoperations of the Company and its subsidiaries in India and abroad the Company reviewedits requirements for long-term permanent sources of capital to fund the capitalexpenditure proposals of the Realty Division and Card Clothing Division for improving thequality and operating efficiency as also to make strategic investments in subsidiaries andfor expansion of Company's market share in International markets given its new productrange. The Company therefore raised equity capital by way of a preferential allotment of1390000 fully paid-up equity shares of face value of Rs. 10/- at an issue price of Rs.105/- [including a premium of Rs. 95/-] per equity share to Multi-Act IndustrialEnterprises Limited ("MAIEL") Mauritius the holding Company belonging topromoter category of the Company.
Accordingly paid up Share capital of the Company has been increased from existing Rs.45511200 (rupees four crores fifty-five lakh eleven thousand two hundred only) to Rs.59411200 (rupees five crores ninety-four lakh eleven thousand two hundred only).
Further during the year under review the Company has not issued shares withdifferential voting rights nor has granted any stock option or sweat equity. As on March31 2021 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
4) STATE OF THE COMPANY'S AFFAIRS:
The Covid-19 Pandemic and the resultant lockdown considerably impacted the growth ofthe Company. During the first quarter of the financial year 2020-21 almost all thedomestic and export customers were closed on account of the lockdown. After the lockdownin the first quarter the customers restarted their operations with a very low operatingcapacity. The recovery in the textile sector picked-up pace from the second quarter of thefinancial year 2020-21. As a result of this together with the continuous efforts of theSales & Marketing team the Card Clothing Division of the Company was able tomore-or-less maintain the pre-covid levels by achieving a turnover of approx. Rs. 41crores during the year under review.
The detailed information about the Company's affairs is provided under the ManagementDiscussion and Analysis Report in accordance with the requirements under Regulation34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter called and referred to as "the ListingRegulations") which forms a part of this Report.
5) DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a) Meetings of the Board of Directors held during the year 2020-21:
During the year under review seven (7) 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 (2) meetings did not exceed 120days in 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 Regulation16(1)(b) of the Listing Regulations.
The 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 year 2020-21:
During the year under review there has been no change in the constitution of the Boardof Directors of the Company.
Further Mr. Mehul Trivedi (DIN: 00030481) Director of the Company is liable to retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment. The brief profile of Mr. Mehul Trivedi seeking re-appointment at theensuing Annual General Meeting as a Director liable to retire by rotation has beenincluded in the Notice convening the AGM.
d) Changes in Key Managerial Personnel during the year 2020-21:
Mr. Chandrakant Patil was appointed as CFO of the Company with effect from September28 2020.
Your Directors do not recommend any dividend for the year under review. No amount wastransferred to reserves for the year under review.
7) SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITION:
In accordance with Section 129(3) of the Companies Act 2013 and Indian AccountingStandard (Ind-AS) 110 the Company has prepared the Consolidated Financial Statements ofthe Company and all its subsidiaries which forms part of this Annual Report.
The Company does not have any material subsidiary whose net worth exceeds 10% of theconsolidated net worth of the holding company in the immediately preceding accounting yearor has generated 10% of the consolidated income of the Company and its subsidiaries duringthe previous financial year. However the Company has prepared a policy for determiningmaterial subsidiaries which is uploaded on the Company's website and can be accessed videweblink:http://cardindia.com/wp-content/uploads/2018/01/ICC-Policy-on-Material-Subsidiaries.pdf
The Statement in Form AOC-I containing salient features of the financial statements ofCompany's Subsidiaries is attached to the financial statements of the Company.
The brief details about the performance and financial position of the subsidiaries ofthe Company are given below:
a) ICC International Agencies Limited:
ICC International Agencies Limited (ICCIAL) recorded a sharp decrease of approximately54% in its revenue from Rs. 120.45 Lakh in the previous year to Rs. 63.76 Lakh in thefinancial year 2020-21. Further ICCIAL recorded loss after tax of Rs. 106.67 Lakh in thecurrent year against previous year's loss after tax of Rs. 81.98 Lakh. The reduced revenueand the after-tax loss incurred was mainly due to the impact of Covid-19 pandemic and theresultant lockdowns imposed in India and across the world forcing the textilemanufacturers to defer their capital expenditures.
b) Garnett Wire Limited U.K.:
Garnett Wire Limited a U.K. Company in which your Company holds 60% of the issuedshare capital recorded marginal decrease of approximately 1% in its revenue from1016754 (equivalent to Rs. 938.21 Lakh) to 1008172 (equivalent to Rs. 979.05Lakh). The after-tax loss is 35875 (equivalent to Rs. 34.85 Lakh) as against previousyear's after tax loss of 10842 (equivalent to Rs. 10.00 Lakh).
c) Shivraj Sugar and Allied Products Private Limited:
Shivraj Sugar and Allied Products Private Limited is yet to commence operations.
8) AUDIT COMMITTEE:
The Company has constituted an Audit Committee pursuant to the provisions of Section177(8) of the Companies Act 2013 read with Rules 6 and 7 of the Companies (Meetings ofBoard and its Powers) Rules 2014 and Regulation 18 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended from time to time. The AuditCommittee consists of the following members:
|Sr. No. Name ||Designation |
|1) Mr. Jyoteendra Kothary ||Chairman (Independent Director) |
|2) Mr. Sudhir Merchant ||Member (Independent Director) |
|3) Dr. Sangeeta Pandit ||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.
9) VIGIL MECHANISM:
The Company has established a "Vigil Mechanism Policy" as per Regulation 22of the Listing Regulations. The Company has also amended this policy from time to time asper the amendments made to the Listing Regulations and SEBI (Prohibition of InsiderTrading) Regulations 2015..The details of this Vigil Mechanism have been provided in theCorporate Governance Report and also posted on the website of the Company at:http://cardindia.com/wp-content/uploads/2019/03/Policy-on-Vigil-Mechanism-Revised-w.e.f.01.04.2019.pdf
10) STATUTORY AUDITORS:
M/s. P. G. Bhagwat Chartered Accountants (Firm Registration No. 101118W) have beenacting as auditors of the Company since conclusion of the 63 Annual General Meeting (AGM)of the Company held on August 11 2017. They were appointed for a period of five (5)consecutive years commencing from the conclusion of 63 AGM till the conclusion of the 68AGM of the Company.
M/s P. G. Bhagwat Chartered Accountants a partnership firm was converted into LimitedLiability Partnership with effect 28 September 2020 now known as P. G. Bhagwat LLPChartered Accountants.
11) AUDITOR'S 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. Devendra V. Deshpande (Membership No. F6099 / CP. No. 6515) Proprietor of DVD& Associates Company Secretaries Pune was appointed as the Secretarial Auditor toconduct the Secretarial Audit of the Company for the financial year 2020-21 as requiredunder Section 204 of the Companies Act 2013 and the rules made thereunder.
The Secretarial Audit Report for the financial year 2020-21 is annexed as Annexure -A to this Report.
There are no adverse remarks nor any disclaimer qualifications or reservations in theSecretarial Audit Report.
13) DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Sections 134(3)(c) and 134(5) of the Companies Act 2013 the Directorsconfirm that:
a) in the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards have been followed along with proper explanationrelating 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 loss of the Company for the year ended March 31 2021;
c) the Directors have taken proper and sufficient 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 financial controls which are to be followedby the Company and that such internal financial 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 acertificate from DVD & Associates Pune confirming compliance is set out separatelyunder Corporate Governance Report.
15) POLICY FOR SELECTION APPOINTMENT AND REMUNERATION OF DIRECTORS INCLUDING CRITERIAFOR THEIR PERFORMANCE EVALUATION:
The Company has prepared and adopted a policy titled as "Nomination &Remuneration Policy" pursuant to the requirements of Listing Regulations whichinteralia includes the Company's policy on Board diversity selection appointment andremuneration of Directors criteria for determining qualifications positive attributesindependence of a Director and criteria for performance evaluation of the Directors. TheCompany has also amended this policy from time to time as per the amendments made to theListing Regulations..The Nomination & Remuneration Policy as approved by the Board isannexed to this Report as Annexure - B and is also uploaded on the Company'swebsite at:http://cardindia.com/wp-content/uploads/2019/05/Nomination-Remuneration-Policy-Revised.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 done 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 wasaccordingly carried out based on the criteria laid down under the SEBI Circular datedJanuary 5 2017 for Performance Evaluation in the Nomination & Remuneration Policyand 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 assessed the quality quantity andtimelines of flow of information between the Company management and the Board. YourDirectors express their satisfaction with the evaluation process.
17) PARTICULARS OF EMPLOYEES AS REQUIRED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENTAND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
During the year under review none of the employees have drawn remuneration more thanthe limit prescribed under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and none of the employees hold (by himself or along withhis spouse and dependent children) more than 2% of the equity shares of the Company.Hence the requirement of disclosure under Section 197(12) of the Companies Act 2013 isnot applicable.
The details of Top 10 employees together with the remuneration drawn by them is annexedas Annexure C to this Report.
18) PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES:
a) The ratio of the remuneration of each Director to the median employee's remunerationfor the financial year and such other details as prescribed is as given below:
The Company did not have any Executive Director on its roll during the financial year2020-21. Therefore the ratio required above is not applicable.
b) The percentage increase in remuneration of each Director Manager Chief ExecutiveOfficer Chief Financial Officer or Company Secretary if any in the financial year:
|Name ||% increase |
|Mr. Alok Misra Manager under the Companies Act 2013 designated as Chief Executive Officer ||The percentage increase of approx. 22% in the remuneration paid to Mr. Misra during the year was on account of performance linked payment paid to Mr. Misra as per the terms of his remuneration approved by the shareholders by way of special resolution in the Annual General Meeting held on July 29 2019. |
|Mr. Chandrakant Dattatray Patil (appointment as CFO with effect from September 28 2020) ||Nil |
|Mr. Amogh Barve Company Secretary ||Nil |
c) The percentage increase in the median remuneration of employees in the financialyear:
There was no increase in the median remuneration of employees in the financial year dueto reduction in headcounts.
d) The number of permanent employees on the rolls of the Company as on March 31 2021:221
e) Average percentile increase already made in the salaries of employees' other thanthe managerial personnel in the last financial 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:
There was no increase in the average percentile in the salaries of employees other thanmanagerial personnel due to reduction in headcount from 242 to 221.
Therefore increase in the managerial remuneration cannot be compared with the salariesof employees other than managerial personnel.
f) The remuneration has been paid to all the employees of the Company in accordancewith the Nomination & Remuneration Policy of the Company.
19) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSECTION 188(1) OF THE COMPANIES ACT 2013:
All the transactions with related parties are in the ordinary course of business and atarm's length basis; and therefore disclosure in Form AOC-2 is not required.
Pursuant to the Amendment Regulations the Company revised its "Policy on RelatedParty Transactions" wherein the threshold limit on Related Party Transactions wasamended to 10% during a financial year.
The revised Policy on Related Party Transactions as approved by the Board is uploadedon the Company's website at:http://cardindia.com/wp-content/uploads/2018/01/ICC-Policy-on-Related-Party-Transactions.pdf
During the year 2020-21 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 the Company has invested in the Equity Share Capital ofICC International Agencies Limited (ICCIAL) Wholly Owned Subsidiary of the Company a sumof Rs. 5000000/- (Rupees Fifty Lakhs Only) by subscribing 500000 equity shares of Rs.10/- each by participating under Rights Issue of ICCIAL.
The Company also provided short-term loan from time to time to ICC InternationalAgencies Limited (ICCIAL) Wholly Owned Subsidiary of the Company @ 7.50% per annum whichwas exempted under section 185(3)(c) of the Companies Act 2013 and the total outstandingbalance as on March 31 2021 is Rs. 28 lakhs.
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 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure - D tothis Report.
24) MAINTENANCE OF COST RECORDS AND APPLICABILITY OF COST AUDIT:
The Company has a costing system to help control costs and to take decisions onpricing. Pursuant to Notification No. G.S.R. 725 (E) dated July 31 2018 whereby theCompanies (Accounts) Amendment Rules 2018 were notified the Company is maintaining theCost Records under sub-section (1) of Section 148 of the Companies Act 2013.
25) 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 the 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 31 2021 theCompany has sound internal financial controls commensurate with the nature and size of thebusiness operations of the Company.
26) REPORTING OF FRAUDS:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of the Act and the rules made thereunder.
27) RISK MANAGEMENT:
The Company has in place a 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 Report.
28) EXTRACT OF ANNUAL RETURN:
The extract of the Annual Return pursuant to Section 92(3) of the Companies Act 2013prepared in Form MGT9 is annexed as Annexure - E to this Report.
29) 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 liable for CSR spending as specified under Section 135(5)of the Companies Act 2013 for the financial year 2020-21 and hence has not spent anyamount on CSR activities during the financial year 2020-21.
30) 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 has been set up to redress complaints receivedregarding sexual harassment and to conduct regular awareness programs. All employees(permanent contractual temporary trainees) are covered under this policy.
During the financial year 2020-21 no complaints were received regarding sexualharassment.
31) DISCLOSURE UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
Except as 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.
32) SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA(ICSI):
The Company complies with the Secretarial Standards issued by ICSI one of the premierprofessional bodies in India.
33) CHANGES IN THE NATURE OF BUSINESS:
There were no changes in the nature of business during the financial year under review.
Your Directors place on record their sincere thanks and appreciation for the continuedsupport extended by Central and State Governments bankers customers suppliers andmembers. Your Board would like to record its sincere appreciation to the employees for thededicated efforts and contribution in playing a significant part in the Company'soperations.
| ||For and on behalf of the Board of Directors |
| ||Prashant Trivedi |
|Place : Pune ||Chairman |
|Date : June 24 2021 ||(DIN : 00167782) |