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International Combustion (India) Ltd.

BSE: 505737 Sector: Engineering
NSE: N.A. ISIN Code: INE403C01014
BSE 12:51 | 18 Jul 312.00 0.90






NSE 05:30 | 01 Jan International Combustion (India) Ltd
OPEN 312.00
52-Week high 950.00
52-Week low 281.00
Mkt Cap.(Rs cr) 75
Buy Price 312.00
Buy Qty 2.00
Sell Price 317.95
Sell Qty 11.00
OPEN 312.00
CLOSE 311.10
52-Week high 950.00
52-Week low 281.00
Mkt Cap.(Rs cr) 75
Buy Price 312.00
Buy Qty 2.00
Sell Price 317.95
Sell Qty 11.00

International Combustion (India) Ltd. (INTLCOMBUSTION) - Director Report

Company director report

To the Members

Your Directors take pleasure in presenting the Eighty First Annual Report together withthe Audited Annual Financial Statements of the Company for the Financial Year ended 31stMarch 2017.


(Rs in lac)
2016-17 2015-16
Profit before depreciation interest 994.29 298.94
& tax
Less: Interest 380.94 88.70
Depreciation 506.90 388.34
887.84 477.04
Profit / (Loss) before Tax 106.45 (178.10)
Less: Provision for Income Tax –
Current Tax 1.06
Deferred Tax (reversal)/charge 25.60 (127.91)
25.60 (126.85)
Profit / (Loss) after Tax 80.85 (51.25)
Profit brought forward from last year 145.39 196.64
Profit available for appropriations 226.24 145.39
Appropriations :
General Reserve
Proposed Dividend
Tax on Proposed Dividend
Balance carried over to Balance Sheet 226.24 145.39
226.24 145.39


The Board does not recommend any dividend for the year.


For the year under review the market had remained generally static and did not grow asinitially expected. Despite such depressed market the Heavy Engineering Division togetherwith Geared Motors/ Gear Boxes Division achieved a growth of 6% and the revenue fromoperations (excluding other operating revenue) for the year increased to Rs 97.16 crorefrom Rs 91.64 crore of the previous year.

For the year under review the Company has made a profit ofRs 106.45 lac as against aloss of Rs 178.10 lac in the previous year.

The products of Building Material Division introduced in the market during the yearreceived excellent response from a number of large builders and construction houses. Thisbeing the first year of market exposure of the products of this Division and on account ofsevere slowdown of the construction industry segment in the last two quarters of the yearthe business of Building Material Division did not grow as expected.


The capital goods market in steel mining sugar and various other industries whereyour Company is active has started improving and this trend is expected to continue. YourCompany expects the business in these segments to grow favourably in the coming years.

We had reported last year about the launch of the Flip Flop Screening Machinemanufactured in collaboration with FLEXIMAT Ges.m.b.H. Austria. This product has beenwell received in the market and in the year under review your Company has successfullyexecuted a number of contracts for this machine. The performance of this Screening

Machine has been excellent and the Company expects strong growth in demand for thisproduct in the current and subsequent years.

Your Company has also started exporting direct force exciters to the Chinese market andhas entered into a long-term agreement with a leading screen manufacturing company fromChina. Under this agreement your Company shall supply these exciters for screeningmachines manufactured by the Chinese company. The Company also expects significantbusiness growth from this association.

The business in the construction industry has started improving and as a result ofthis the business for Building Material Division is also expected to grow in the currentyear.

The Government of India's focus and major investment plans for infrastructure andurbanisation programmes is expected to accelerate the growth of this sector. This willhave a positive impact on this business segment of your Company.


We had informed earlier of the commencement of commercial operations of Mozer ProcessTechnology Pvt. Ltd. (MPTPL) a Joint Venture Company with Allgaier Werke GmbH Germany.The Company offers Mozer Dryers which is a highly specialized product with sophisticatedtechnology.

For the year under review the turnover of MPTPL was Rs 223 lac and the Company hassupplied these products to some highly reputed companies in India. This was a majorbreakthrough and will create excellent references for future business.

MPTPL suffered a Loss Before Tax of Rs 4.75 lac during the Financial Year ended 31stMarch 2017 as compared to a Loss Before Tax of Rs 10.87 lac during the previous FinancialYear ended 31st March 2016.

The Company has no subsidiaries.

The consolidated financial statements of the Company for the Financial Year ended 31stMarch 2017 prepared after taking into consideration the financial statements of itsaforementioned Joint Venture Company also forms part of the Annual Report for the FY2016-17. The said consolidated financial statements have been prepared in accordance withthe relevant accounting standards and based on a line-by-line proportionate consolidationaccounting for the Company's interest in the Joint Venture Company by adding together thebook value of like items of assets and liabilities revenues and expenses as per therespective financial statements and eliminating intra group balances intra grouptransactions and the unrealized profits on stocks arising out of intra group transactions.The consolidated revenue from operations and consolidated profit before tax thus arrivedat for the Financial Year ended 31st March 2017 are Rs 9816 lac and Rs 139.50 lacrespectively as compared to a consolidated revenue from operations and consolidated lossbefore tax for the previous Financial Year ended 31st March 2016 of Rs 9079 lac and Rs219 lac respectively.

A Statement in Form AOC-1 relating to the Associate/Joint Venture Company as requiredpursuant to Section 129 (3) of the Companies Act 2013 read with rule 5 of Companies(Accounts) Rules 2014 is also attached to the Financial Statements.


The new Building Material Division of the Company located at Ajmer Rajasthan formanufacture of high quality Dry Mix Mortar/ Dry Mix Products and related buildingmaterials had commenced commercial production with effect from 31st March 2016. TheCompany is manufacturing Dry Mix Mortar/Dry Mix products under the brand names ‘ICPreciplast' ‘IC PreciJoint' ‘IC Precigrout' ‘IC Preciseal' &‘IC Precifix'.

Currently the Company is marketing these products in Delhi-NCR area Uttar PradeshRajasthan and Madhya Pradesh. The sales turnover of the Division during the Financial Yearended 31st March 2017 being its first year of operations was Rs 97 lac.


The total capital expenditure incurred for the Financial Year under review was Rs1694.05 lac (including

Rs 1439.51 lac incurred for the Building Material Division at Ajmer).


An extract of the Annual Return as on the Financial Year ended on 31st March 2017 asrequired under Section 134(3) of the Companies Act 2013 read with Section 92(3) of thesaid Act and Rule 12(1) of the Companies (Management and Administration) Rules 2014 areset out in Annexure-I forming part of this Report.


As required under Section 134(3)(m) of the Companies Act 2013 read with the Rule 8(3)of Companies (Accounts) Rules 2014 particulars regarding Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings & Outgo are set out inAnnexure-II forming part of this Report.


Your Board has framed a Related Party Transactions Policy which is available on theCompany's website. During the year the Company had not entered into any contract/arrangement/ transaction with any related party which could be considered material inaccordance with the Related Party Transactions Policy of the Company. Details of relatedparty transactions (which are not considered material) entered into on an arm's lengthbasis during the Financial Year ended 31st March 2017 are set out in Annexure-IIIforming part of this Report pursuant to Section 134(3)(h) of the Companies Act 2013 readwith Section 188 of the said Act and Rule 8(2) of the Companies (Accounts) Rules 2014.


A statement as required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 relating to details of remuneration of Directors and employees drawn during theFinancial Year ended on 31st March 2017 are set out in Annexure-IV forming part of thisReport.


6 (Six) Board meetings of the Company were held during the Financial Year ended 31stMarch 2017. For further details please refer to the Report on Corporate Governanceforming part of this Annual Report.


Pursuant to Section 134(3)(c) of the Companies Act 2013 read with Section 134(5) ofthe said Act the Directors to the best of their knowledge and belief confirm that: a)in the preparation of the annual accounts the applicable accounting standards have beenfollowed by the Company along with proper explanation relating to material departures ifany; b) appropriate accounting policies have been selected and applied consistently andsuch judgments and estimates have been made that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit of the Company for the year ended on that date; c) proper and sufficient carehas been taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d) the Annual Accounts have beenprepared on a going concern basis ; e) the Board had laid down internal financial controlsto be followed by the Company and that such internal financial controls were adequate andwere operating effectively; and f) proper systems to ensure compliance with the provisionsof all applicable laws have been devised and such systems were adequate and operatingeffectively.


There was no change in the composition of the Board of Directors of the Company duringthe Financial Year under review.

Mrs. (Prof.) Bharati Ray (DIN 06965340) Mr. Ravi Ranjan Prasad (DIN 00030458) &Mr. Ratan Lal Gaggar (DIN 00322904) all Independent Directors on the Board are notliable to retire by rotation in terms of the provisions of Section 149(13) of theCompanies Act 2013.

Mr. Sanjay Bagaria (DIN 00233455) retires by rotation at the ensuing 81st AnnualGeneral Meeting and being eligible offers himself for re-appointment.

The Company has received at the first meeting of the Board of Directors held duringthe Financial Year 2017-18 the declarations pursuant to Section 149(7) of the CompaniesAct 2013 from Mr. Ratan Lal Gaggar Mr. Ravi Ranjan Prasad & Mrs. (Prof.) BharatiRay Independent Directors of the Company to the effect that they meet the criteria ofindependence as specified in Section 149(6) of the said Act.


The Nomination & Remuneration Committee of the Board has devised and the Board hasduly adopted a Board Diversity Policy dealing with Board composition and appointmentswhich is available on the Company's website. The Nomination & Remuneration Committeenominates new appointees to the Board and the appointments are made by the Board.

The Nomination & Remuneration Committee of the Board has also formulated thecriteria for determining the qualifications positive attributes and independence ofIndependent Directors to be appointed on the Board of the Company.


The Nomination & Remuneration Committee of the Board has devised and the Board hasduly adopted a Remuneration Policy relating to the remuneration for the Directors KeyManagerial Personnel and other employees of the Company.

The Remuneration Policy of the Company ensures that the level and composition ofremuneration is reasonable and sufficient to attract retain and motivate the employees inorder to run the Company successfully. The Policy sets out the guiding principles fordetermining the remuneration payable to the Directors Key Managerial Personnel and otheremployees of the Company.

The remuneration payable to the Executive Directors is recommended by the Nomination& Remuneration Committee based on the guiding principles as set out in theRemuneration Policy and subject to the approval of the Board and the shareholders.

As regards the Non-Executive Directors the Board from time to time determines thesitting fee payable for attending each meeting of the Board or Committee thereof withinthe overall limits fixed under the Companies Act 2013 and rules made thereunder. TheNon-Executive Chairman is proposed to be paid a Commission at the rate of upto 2% of thenet profits of the Company subject to the approval of the Board shareholders and CentralGovernment The employees of the Company are assigned grades according to theirqualifications and work experience competencies as well as their roles andresponsibilities in the Company. Individual remuneration is determined within theappropriate grade and is based on various factors such as job profile skill setsseniority experience and prevailing remuneration levels for equivalent jobs.


The Nomination & Remuneration Committee of the Board has formulated the criteriafor evaluating the performance of the Board and the individual Directors and the same hasbeen adopted by the Board. The Independent Directors in their separate meeting evaluatethe non-independent Directors and the Board as a whole once a year. The IndependentDirectors are evaluated individually once a year by the entire Board sans the IndependentDirector being evaluated. The various Committees of the Board are evaluated by the Board.


Mr. Suhas Chandra Saha is the Company Secretary of the Company and Mr. Asish KumarNeogi is the Chief Financial Officer of the Company.


There are no reservations qualifications or adverse remarks in the Auditors' Report onthe Annual Financial Statements for the Financial Year ended 31st March 2017.


In accordance with Section 139 of the Companies Act 2013 M/s. Lodha & Co.Chartered Accountants were appointed as the Statutory Auditors of the Company at the 78thAnnual General Meeting (AGM) of the shareholders of the Company held on 12th September2014 for a period of three years with effect from the conclusion of the said 78th AGMtill the conclusion of the 81st AGM. The term of the present auditors having expired andas they are ineligible for re-appointment in terms of Section 139(2) of the Companies Act2013 and M/s. Ray & Ray (Firm Registration No. 301072E) Chartered Accountants ofWebel Bhawan Ground Floor Block EP & GP Bidhan Nagar Sector V Salt Lake Kolkata– 700 091 having expressed their willingness to act as the Statutory Auditors of theCompany if appointed and having further confirmed that their appointment if made shallbe within the limits specified in Section 141(3)(g) of the Companies Act 2013 and theirappointment having been recommended by the Audit Committee of the Board of Directors theBoard recommends to the shareholders the appointment of the said M/s. Ray & Ray asthe Statutory Auditors of the Company at the ensuing 81st AGM of the shareholders of theCompany for the period commencing with the conclusion of the said AGM till the conclusionof the 86th AGM of the shareholders of the Company subject to ratification by theshareholders at each AGM in between.


In terms of the Companies Act 2013 and the rules made thereunder audit of the costaccounting records maintained by the Company relating to the products manufactured by theCompany is not applicable for the Financial Year 2016-17.


The Audit Committee of the Board as on date consists of Mr. Ravi Ranjan PrasadChairman of the Committee & Independent Director Mr. Ratan Lal Gaggar IndependentDirector and Mr. Indrajit Sen Managing Director. For further details please refer to theReport on Corporate Governance forming part of this Annual Report.


The Secretarial Audit Report for the Financial Year ended 31st March 2017 issued byMr. Arup Kumar Roy Company Secretary in Practice Secretarial Auditor of the Company isannexed to this Report and marked as Annexure VI as required under Section 204 of theCompanies Act 2013.

There are no reservations qualifications or adverse remarks in the said SecretarialAudit Report.


The Company has not granted any loans to other bodies corporate nor has the Companygiven any guarantees or provided any security for loans by other bodies corporate underSection 186 of the Companies Act 2013. The Company invests its surplus fund in FixedDeposits with banks or in Fixed Maturity Plans with Mutual Fund Houses which are fixedincome bearing debt funds. The Company has investedRs 50 lac in the equity shares of itsJoint Venture Company Mozer Process Technology Pvt. Ltd.


The Company has a Risk Management Plan in place approved by the Board of Directors. TheRisk Management Committee is responsible for the implementation of the plan and reportingthereon to the Board.


In the opinion of the Board the internal financial controls with reference to theFinancial Statements established by the Board are adequate. During the year such controlswere tested and no material weakness in the design operation or implementation thereofwas observed.


In compliance with the provisions of the Securities & Exchange Board of India(Listing Obligations & Disclosure Requirements) Regulations 2015 relating toCorporate Governance the following Reports/Certificates are attached which form part ofthis Annual Report : i) Management Discussions and Analysis Report. ii) Report onCorporate Governance. iii) Compliance Certificate by CEO/CFO. iv) Declaration from theManaging Director on compliance of Code of Conduct by the Directors and Senior ManagementPersonnel. v) Certificate by a Practicing Company Secretary regarding compliance ofconditions of Corporate Governance.


In accordance with Section 135 of the Companies Act 2013 a Corporate SocialResponsibility (CSR) Committee of the Board of Directors of the Company has beenconstituted which as on date consists of Mr. Sanjay Bagaria Chairman of the CommitteeMrs. (Prof.) Bharati Ray Independent Director & Mr. Ratan Lal Gaggar IndependentDirector. The CSR Committee has developed a CSR Policy which has been duly approved by theBoard and is available on the website of the Company. The CSR Committee is responsible forimplementing the CSR Policy of the Company and reporting thereon to the Board.

An Annual Report on CSR Activities including the Responsibility Statement of the CSRCommittee for the Financial Year ended 31st March 2017 as required under Section 135 ofthe Companies Act 2013 read with Rule 8 of the Companies (Corporate SocialResponsibility) Rules 2014 are set out in Annexure-V forming part of this Report.


Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the Securities &Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 the Board of Directors of the Company have established a Vigil Mechanism (WhistleBlower Policy) of the Company for the purpose of enabling the Directors and Employees toreport unethical behaviour actual or suspected fraud and violation of the Company's Codeof Conduct or ethics policy and the same has been posted on the website of the Company.The Audit Committee of the Board is responsible for overseeing/ monitoring the functioningand implementation of the Vigil Mechanism.


The human resource development programmes in various areas are undertaken on an ongoingbasis.


Industrial relations during the year under review at all units remained cordial.


The Company did not have any outstanding fixed deposits as on 31st March 2017 or as on31st March 2016. The Company did not accept any fixed deposits during the year.


In July 2016 credit rating agency ICRA Limited had revised the long-term scale ratingon the working capital credit facilities enjoyed by the Company from its bankers onconsortium basis to [ICRA]BBB+ (pronounced as ICRA triple B plus) [signifying a moderatedegree of safety regarding timely servicing of financial obligations and carrying moderatecredit risk]. The outlook on the long term scale rating is Stable. ICRA had also revisedthe short-term scale rating on the aforementioned facilities to [ICRA]A2+ (pronounced asICRA A two plus) [signifying a strong degree of safety regarding timely payment offinancial obligations and carrying low credit risk]. However the credit ratings are duefor a review in July 2017.


The Quality Management Systems of the Company with respect to its plants at BaidyabatiNagpur & Aurangabad and also its Corporate Office at Kolkata have been certified bythe Indian Register Quality Systems (Accreditation by RvA the Netherlands) to conform tothe requirements of the Standard ISO 9001:2008.


No significant or material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the Company or the Company's operations infuture.

An Internal Complaints Committee as required under the recently enacted The SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013 hasbeen formed. No complaints of sexual harassment were received by the Committee during theyear under review.


Your Directors take this opportunity to thank all government authorities bankscustomers suppliers and shareholders for the continuous support extended by them to theCompany. Your Directors place on record their appreciation for the dedication andcommitments of the employees at all levels in achieving and sustaining excellence in allareas of the operation of the Company.

For & on behalf of the Board
Kolkata Sanjay Bagaria
4th July 2017 Chairman