FUTURE INDO COUNT Directors Report

Dear Members,


On behalf of the Board of Directors (“the Board”), it gives me immense pleasure to present the Twenty Eighth Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2017.


FINANCIAL RESULTS


(Rs, In Crores, except EPS)







































































































Stand



alone



Conso



idated



2016-17



2015-161



2016-17


2,257.80



2015-16*



Total Revenue



2,084.74



2,048.63



2,110.60



EBIDTA



418.71



443.80



428.45



464.52



Less: Finance Cost



39.43



51.70



42.13



55.08



Less: Depreciation



31.18



28.84



33.13



30.14



Profit before Tax



348.10



363.26



353.19



379.30



Tax Expenses



120.07



125.58



121.14



127.99



Net Profit



228.03



237.68



232.05



251.31



Other comprehensive income (net of tax)



(1.11)



0.91



2.22



(10.00)



Total Comprehensive income



226.92



238.59



234.27



241.31



Basic & Diluted EPS (in '''')



11.55



12.04



11.76



12.73



Cash Profit



312.38



308.10



322.55



311.56



Retained Earnings



787.07



574.40



806.70



590.93



*Figures of FY 2015-16 are restated as per IND AS


OPERATIONAL AND FINANCIAL PERFORMANCE OVERVIEW


The year 2016-17 was a year of consolidation for your Company. During the year under review, your Company showcased its operational excellence along with consistent financial performance on the top line.


At a consolidated level, your Company scaled new heights by achieving total revenue of Rs, 2257.80 Crores as against Rs, 2110.60 Crores in the previous year, thereby registering top-line growth of 7%. Your Company reported EBIDTA and net profit of Rs, 428.45 Crores and Rs, 232.05 Crores respectively. The long term debt equity ratio has reduced from 0.09 to 0.03 and EPS stood at Rs, 11.76 for the year ended 31st March, 2017.


On a standalone basis, total revenue stood at Rs, 2,084.74 Crores for the year ended 31st March, 2017 as against Rs, 2,048.63 Crores in the previous year. Further, your Company achieved EBIDTA and net profit of Rs, 418.71 Crores and Rs, 228.03 Crores respectively.


Against the backdrop of challenging market environment, your Company''''s business continues to track ahead satisfactorily on the back of dynamic response to market trends, enduring customer relationships, “Customer First approach” and strong product portfolio.


Your Company exports to more than 54 countries and has a successful track record in global market as a key supplier of bed linen to major retail, hospitality and fashion brands. Continuing focus on export markets, your Company efficiently retained existing business and at the same time diligently worked towards expanding into newer geographies and acquiring new customers.


During the year under review, your Company launched three licensed brands namely “Harlequin”, “Scion” and “Sanderson” in North America within the fashion bedding segment.


In FY 2016-17, your Company ventured in domestic home market through its subsidiary viz. Indo Count Retail Ventures Private Limited (ICRVPL). ICRVPL introduced brand “Boutique Living”, an asp rational brand, in India which has already been successful in the USA. Boutique Living is sold through Multi brand outlets, large format stores and E-commerce across 57 cities in India.


Apart from showrooms in UK, USA and Australia, during the year under review, your Company has set up a 9,200 sq. ft. experiential showroom at New York with a capacity to display 32 beds so that customers can touch and feel array of product on offer. Further, in order to reach out to different customers, your Company has been showcasing its collections at various international exhibitions and trade fairs.


The business operations, overview and outlook are provided in detail in the Management Discussion and Analysis.


DIVIDEND


During the year under review, pursuant to the approval of the Board, your Company paid interim dividend @20% i.e. '''' 0.40 per equity share of face value of '''' 2/- each.


Your Directors are pleased to recommend a Final Dividend @ 20% i.e. '''' 0.40 per equity share of face value of Rs, 2/- each subject to the approval of members of the Company at the ensuing Annual General Meeting. If approved by the members, the total dividend payout for FY 2016-17 will be 40% i.e. Rs, 0.80 per equity share of face value of Rs, 2/- each aggregating to Rs, 19.02 Crores (including dividend distribution tax) (previous year Rs, 9.50 Crores).


The aforesaid dividends are in line with the Dividend Distribution Policy adopted by the Company.


DIVIDEND DISTRIBUTION POLICY


Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“Listing Regulations”) top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Accordingly, the Board of your Company has approved and adopted Dividend Distribution Policy which is given separately and forms part of this Annual Report. The Dividend Distribution Policy is also uploaded on the website of the Company and web-link for the same is www.indocount.com/images/investor/Dividend-Distribution-Policy1.pdf


AWARDS AND RECOGNITIONS


Your Company continues to deliver unmatched performance amongst its peers and has been conferred with awards every year. During the year under review, your Company was awarded Silver Trophy from TEXPROCIL for the 2nd highest exports of made - ups in “Bed Linen/Bedsheets/Quilts” under the Category - III for the year 2015-16; for the second consecutive year.


Some of the other accolades and recognitions received by your Company are:


- AI 2017 Business Excellence Award by AI Global Media Company;


- One of the India''''s Fasted Growing Companies -Rated by Business World - Edition April, 2017.


SHARE CAPITAL AND SUB-DIVISION OF EQUITY SHARES


In order to improve the liquidity of your Company''''s shares and with a view to encourage the participation of small investors by making Equity Shares of the Company affordable, your Company sub-divided the Equity Shares of the Face Value of '''' 10/- each to Face Value of '''' 2/- each w.e.f. 15th November, 2016 (“Record Date”). Accordingly, 39,479,934 Equity Shares of '''' 10/each were sub-divided into 197,399,670 Equity Shares of '''' 2/- each. There was no change in the total issued, subscribed and paid up share capital of the Company.


As on 31st March, 2017, the total issued, subscribed and paid up share capital of your Company stood at '''' 394,799,340/- comprising of 197,399,670 Equity Shares of Rs, 2/- each.


In view of sub-division of equity shares, the Authorized Share Capital of the Company was also altered and as on 31st March, 2017, the Authorized share Capital of your Company was Rs, 60 Crores comprising of 27,50,00,000 equity shares of Rs, 2/- each and 50,00,000 preference shares of Rs, 10/- each.


During the year under review, your Company has not issued any equity shares with differential voting rights or sweat equity shares. Further, your Company does not have any employee stock option scheme or employee stock purchase scheme.


CREDIT RATING


Your Directors are glad to inform that during the year under review, ICRA and CARE upgraded the credit rating from “ICRA A” to “ICRA AA-” (Double A minus) with outlook as Stable and from “CARE A” to “CARE AA -” for Company''''s Long Term Bank Facilities (Term Loans/ Fund Based Facilities) signifying high degree of safety regarding timely servicing of financial obligations. Such facilities carry very low credit risk.


Further, for the Company''''s short term bank facilities, ICRA and CARE upgraded the rating from “ICRA A1” to “ ICRA A1 (A One plus)” and from “CARE A1” to “CARE A1 ” which is the highest rating indicating very strong degree of safety regarding timely payment of financial obligations. Such facilities carry lowest credit risk.


The up gradation of said ratings by ICRA and CARE demonstrates your Company''''s strengthened leading position in the niche Home Textiles segment coupled with sustained cash accruals generated in the business which has led to a consistent strong operational and financial performance.


ADOPTION OF INDIAN ACCOUNTING STANDARDS


In accordance with the notification issued by the Ministry of Corporate Affairs (MCA), your Company is required to prepare financial statements under Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards Rules, 2015) and Companies (Indian Accounting Standards) Amendment Rules, 2016 with effect from 1st April, 2016. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.


Accordingly, your Company has adopted Indian Accounting Standard (“Ind AS”) with effect from 1st April, 2016 with the transition date of 1st April, 2015 and the Financial Statements for the year ended 31st March, 2017 have been prepared in accordance with Ind AS. The financial statements for the year ended 31st March, 2016 have been restated to comply with Ind AS to make them comparable.


The MCA notification also mandates that Ind AS shall be applicable to Indian Subsidiary Companies, Joint Venture or Associates of the Company. Hence, your Company and its Indian Subsidiaries have prepared and reported financial statements under Ind AS w.e.f. 1st April, 2016, including restatement of the opening balance sheet as at 1st April, 2015.


The effect of the transition from IGAAP to Ind AS has been explained by way of reconciliation in the Standalone and Consolidated Financial Statements.


CONSOLIDATED FINANCIAL STATEMENTS


The Consolidated Financial Statements of the Company are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 and forms part of this Annual Report.


A copy of the Audited Financial Statements of the Subsidiaries shall be made available for inspection at the Registered Office of the Company during business hours on any working day upto the Annual General Meeting. Any shareholder interested in obtaining a copy of separate Financial Statements of the subsidiaries shall make specific request in writing to the Company Secretary. The Audited Financial Statements of the subsidiaries are also available on the website of the Company at www.indocount.com.


SUBSIDIARIES


During the year under review, your Company has acquired 82.5% stake in Indo Count Retail Ventures Private Limited (ICRVPL) thereby ICRVPL become subsidiary of your Company, w.e.f. 24th August, 2016.


As on 31st March, 2017, your Company has 5 subsidiaries namely Pranavaditya Spinning Mills Limited, Indo Count Global Inc, USA, Indo Count UK Limited, Indo Count Australia Pty Ltd. and Indo Count Retail Ventures Private Limited. Your Company does not have any Associate Company pursuant to the provisions of the Companies Act, 2013 and has not entered into any joint venture agreement.


Pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 read with rules made there under, a statement containing salient features of the financial position of subsidiaries is given in Form AOC-1 attached as “Annexure 1” forming integral part of this Report.


There is no material subsidiary in terms of Regulation 16 of the Listing Regulations. However, your Company has adopted a policy for determining material subsidiaries, which can be accessed at http://www.indocount.com/ images/investor/ICIL-Policy-on-Material-Subsidiaries.pdf.


Performance of Subsidiaries Pranavaditya Spinning Mills Limited


Pranavaditya Spinning Mills Limited (PSML) is a Listed Indian subsidiary of your Company. Indo Count Industries Limited (“ICIL”) has 74.53% of Equity shareholding of PSML. The Company is mainly engaged in spinning of cotton and manufacturing of yarn. The plant of the Company is situated at Kolhapur, Maharashtra.


For the year ended 31st March, 2017, turnover of the Company stood at Rs, 5856.21 Lakhs (Previous Year -Rs, 6081.25 Lakhs). The Company incurred loss of Rs, 56.77 Lakhs for the year ended 31st March, 2017 (Previous Year loss - Rs, 33.48 Lakhs). This was mainly due to high volatility in cotton price.


Indo Count Global Inc


Indo Count Global Inc (ICGI) is a wholly owned foreign subsidiary of your Company. ICGI was incorporated in the state of Delaware, USA in the year 2011. The main activity of the Company is wholesaling of linens. Turnover of the Company for the year ended 31st March, 2017 stood at Rs, 32,480.29 Lakhs (Previous Year Rs, 39,789.85 Lakhs). The profit after tax for the year ended 31st March, 2017 stood at Rs, 276.85 Lakhs as compared to Rs, 521.04 Lakhs in the previous year.


Indo Count UK Ltd


Indo Count UK Ltd (ICUKL) is a wholly owned foreign subsidiary of your Company. ICUKL is incorporated in London. The Company is engaged in trading of products of ICIL. Being the first year of commencement of the business, total turnover of the Company as on 31st March, 2017 stood at Rs, 159.32 Lakhs. The Company incurred loss of Rs, 4.35 Lakhs for the year ended 31st March, 2017.


Indo Count Retail Ventures Private Limited


Indo Count Retail Ventures Private Limited (ICRVPL) is a subsidiary of your Company.


Being first year of operations, as on 31st March, 2017, turnover stood at Rs, 387.21 Lakhs and the Company incurred a loss of Rs, 24.43 Lakhs.


DIRECTORS AND KEY MANAGERIAL PERSONNEL


During the year under review, there were changes at the Board level as given below:


Executive Chairman of the Company w.e.f. 9th May, 2016.


- Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors of your Company appointed Mr. Mohit Anilkumar Jain as an Additional Director and Managing Director of the Company for a period of 5 years w.e.f. 9th May, 2016, as part of a long term succession plan. The said appointment of Mr. Mohit Jain was approved by the members at the Annual General Meeting held on 26th July, 2016.


- Mr. R. N. Gupta, Joint Managing Director was associated with the Company from the year 1996 and had played a vital role in the growth of the Company. However, owing to his advanced age, he expressed to the Board that he shall not be in a position to devote his full time to manage the affairs of the Company and hence resigned from the position of Director designated as “Joint Managing Director” of the Company w.e.f. 9th May, 2016. The Board placed on record its appreciation for contributions made by him during his tenure as Joint Managing Director of the Company.


At the Annual General Meeting of the Company held on 26th July, 2016, Mr. Anil Kumar Jain, Executive Chairman, Mr. Kailash R. Lalpuria, Executive Director and Mr. Kamal Mitra, Director (Works) were re-appointed for a period of three years w.e.f. 1st October, 2016.


Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Kailash R. Lalpuria, Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for the re-appointment. The Board recommends his re-appointment for consideration of the members at the ensuing Annual General Meeting. Members are requested to refer the Notice of the ensuing Annual General Meeting for brief profile and other related information of Mr. Kailash R. Lalpuria, Director retiring by rotation.


All the Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations.


During the year under review, the Board noted with deep regret sad demise of Mr. R. Sundaram, Chief Financial Officer of the Company on 28th July, 2016 and recorded its appreciation for the contribution made by Mr. R. Sundaram during his tenure with the Company.


Pursuant to the recommendation of Nomination and Remuneration Committee and Audit Committee, Mr. Dilip Kumar Ghorawat was appointed as the Chief Financial Officer of the Company w.e.f. 12th September, 2016.


In terms of Section 203 of the Companies Act, 2013, as on 31st March, 2017, Mr. Anil Kumar Jain, Executive Chairman, Mr. Mohit Jain, Managing Director, Mr. Kailash R. Lalpuria, Executive Director, Mr. Kamal Mitra, Director (Works), Mr. Dilip Kumar Ghorawat, Chief Financial Officer and Mrs. Amruta Avasare, Company Secretary are Key Managerial Personnel (KMP) of the Company.


NUMBER OF BOARD MEETINGS


During the year under review, Five (5) Board Meetings were held on 7th May, 2016, 8th June, 2016, 23rd August,


2016, 25th November, 2016 and 11th February, 2017. The maximum interval between any two consecutive Board Meetings did not exceed 120 days.


COMPANY’S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS


Your Company has adopted Nomination and Remuneration Policy for the appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Nomination and Remuneration Policy is given in the Corporate Governance Report.


ANNUAL EVALUATION OF BOARD PERFORMANCE AND ITS COMMITTEE AND DIRECTORS


Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by the Nomination and Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out performance evaluation of its own, evaluation of working of the committees and performance of all Directors based on the parameters specified in the Corporate Governance Report. A structured questionnaire containing the parameters of performance evaluation was circulated to all the Directors. A separate meeting of Independent Directors of the Company was held on 21st April, 2016 in which Independent Directors inter-alia reviewed performance of Executive Chairman and other Non-Independent Directors. The Board expressed their satisfaction with the evaluation process.


DIRECTORS’ RESPONSIBILITY STATEMENT


Pursuant to the provisions of Section 134 (3) (c) and 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state and confirm that:


1. in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;


2. such accounting policies as mentioned in the notes to the Financial Statements for the year ended 31st March, 2017 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;


3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;


4. the annual financial statements for the year ended 31st March, 2017 have been prepared on a going concern basis;


5. internal financial controls to be followed by the Company have been laid down and that the said financial controls were adequate and were operating effectively;


6. proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.


CORPORATE SOCIAL RESPONSIBILITY


Your Company recognizes the vital role played by society at large in its growth and development and strives to discharge its social responsibility as a corporate citizen. The key philosophy of all our Corporate Social Responsibility (CSR) initiatives is guided by our belief “Every Smile Counts ...”. Our CSR projects focus on participatory and collaborative approach with the community. Over a period of last two years, your Company has emphasized CSR projects in the areas of Education, Healthcare, Women empowerment and Water and Sanitation.


Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Board has constituted a CSR Committee headed by Dr. (Mrs.) Vaijayanti Pandit as the Chairperson of the Committee. Mr. Anil Kumar Jain and Mr. Kailash R. Lalpuria are members of the CSR Committee. Your Company has adopted a Corporate Social Responsibility (CSR) policy in compliance with the provisions of the Act and is available on web-link http://www.indocount.com/images/investor/ICIL-CSR-Policy.pdf.


Your Company implements the CSR projects through ''''Indo Count Foundation'''' and has also collaborated up with other trusts for carrying out CSR Activities. The Report on CSR activities implemented by your Company during the year under review is provided as “Annexure 2” to this Report.


AUDIT COMMITTEE


During the year under review, Mr. Kailash R. Lalpuria, Executive Director was appointed as Member of the Audit Committee w.e.f. 9th May, 2016 in place of Mr. R. N. Gupta. As on 31st March, 2017, the Audit Committee comprises of Mr. P. N. Shah as Chairman, Mr. R. Anand, Mr. Prem Malik and Mr. Kailash R. Lalpuria. More details about the Audit Committee are given in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.


STATUTORY AUDITORS


M/s. B. K. Shroff & Co., Chartered Accountants (Firm Registration No. 302166E) were appointed as the Statutory Auditors of the Company to hold office for a transition period of 3 years i.e. from the conclusion of the 25th Annual General Meeting (AGM) of the Company held on 23rd August, 2014 till the conclusion of the 28th AGM of the Company. The term of M/s. B. K. Shroff & Co., Chartered Accountants as the Statutory Auditors is till the conclusion of ensuing Annual General Meeting of the Company.


The Board of Directors of the Company place on record its appreciation to the services rendered by M/s. B. K. Shroff & Co., Chartered Accountants as the Statutory Auditors of the Company.


In accordance with the provisions of Section 139 of the Companies Act, 2013, M/s. Suresh Kumar Mittal & Co., Chartered Accountants (Firm Registration No. 500063N) are proposed to be appointed as the Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the ensuing 28th AGM till the conclusion of 33rd AGM subject to the ratification by the members at every AGM.


M/s. Suresh Kumar Mittal & Co, Chartered Accountants, have consented to the said appointment, and have confirmed that their appointment, if made, will be in accordance with the provisions of Section 139 read with Section 141 of the Companies Act, 2013.


Accordingly, the Board of Directors of the Company recommends the resolution in relation to the appointment of M/s. Suresh Kumar Mittal & Co., Chartered Accountants, as Statutory Auditors of the Company and fixation of their remuneration for approval of the members of the Company.


AUDITORS’ REPORT


The Auditors'''' Report on standalone and consolidated financial statements forms integral part of this Annual Report. The Auditors'''' Report does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter. Notes to the Financial Statements are self-explanatory and do not call for any further comments.


The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or reenactment for the time being in force).


SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT


Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules there under, the Board has appointed M/s. Kothari H. & Associates, a firm of Company Secretaries in Practice to conduct Secretarial Audit of the Company for the year ended 31st March, 2017. The Secretarial Audit Report issued by them in Form No. MR-3 is provided as “Annexure 3” to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remark.


SEGMENT


The Company operates only in a single segment i.e. Textile Segment.


PUBLIC DEPOSITS


During the year under review, your Company has not accepted any deposits from public, under Chapter V of the Companies Act, 2013.


CAPACITY EXPANSION


The Board of Directors of the Company at its meeting held on 24th October, 2015 approved CAPEX of '''' 175 Crores for Phase I towards:


i) Increasing processing capacity from current 68 million meters to 90 million meters


ii) Setting up a water effluent treatment / RO plant


iii) Automation of cut and sew and warehousing


Your Directors are pleased to inform that the capacity expansion under Phase I from 68 million meters to 90 million meters has been completed.


At the Board Meeting held on 7th May, 2016, the Board had approved CAPEX under Phase II for approximately Rs, 300 Crores. This Capital expenditure will be for upgrading the existing Spinning Facilities, Investments in additional Weaving (with specialized looms) and value added equipments for delivery of fashion and utility bedding. This expansion under Phase 2 is in progress.


CORPORATE GOVERNANCE REPORT


As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of corporate governance. A Corporate Governance Report along with Statutory Auditors'''' Certificate confirming its compliance for the year ended 31st March, 2017 is provided separately and forms integral part of this Annual Report.


MANAGEMENT DISCUSSION AND ANALYSIS


Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis containing information inter-alia on industry trends, your company''''s performance, future outlook, opportunities and threats for the year ended 31st March, 2017, is provided in a separate section forming integral part of this Annual Report.


EXTRACT OF ANNUAL RETURN


Pursuant to the provisions of Section 92 (3) of the Companies Act, 2013, the Extract of the Annual Return as on 31st March, 2017 in Form No. MGT-9 is provided as “Annexure 4” to this Report.


BUSINESS RESPONSIBILITY REPORT


Pursuant to the Regulation 34 of the Listing Regulations, Business Responsibility Report is mandatory to be published for top 500 companies based on market capitalization as on 31st March, 2017. Your Company is amongst top 500 Listed Companies in India based on market capitalization as on 31st March, 2017. Accordingly, Business Responsibility Report (BRR) for the year ended 31st March 2017 is given separately and forms part of this Annual Report.


RELATED PARTY TRANSACTIONS


All Related Party Transactions entered during FY 201617 were on an arm''''s length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material related party transactions during the year under review that would require approval of shareholders under Listing Regulations.


The prior omnibus approval of Audit Committee is obtained for all Related Party Transactions. A statement of all Related Party Transactions is reviewed by the Audit Committee on a quarterly basis. Your Company has adopted a policy on Related Party Transactions. The policy as approved by the Board has been uploaded on the Company''''s website and can be accessed at http://www.indocount.com/images/investor/ICIL-


Policy-on-Related-Party-Transactions.pdf


Notes to the Financial Statements contains details of Related Party Transactions. Pursuant to Section 134 of the Companies Act, 2013, particulars of contracts / arrangements with Related Parties are provided in Form AOC-2 is provided as “Annexure 5” to this Report.


PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES, SECURITIES UNDER SECTION 186 OF THE COMPANIES ACT, 2013


During the year under review, your Company has not given any loan or provided any security. Your Company has invested in 8,250 Equity Shares of Rs, 10/- each of Indo Count Retail Ventures Private Limited and in 86,000 Shares of £ 1 each of Indo Count UK Limited. Particulars of investment and corporate guarantee on behalf of Indo Count Global Inc, USA are provided in Notes to the Standalone Financial Statements.


RISK MANAGEMENT


Your Company has adopted Risk Management Policy for risk identification, assessment and mitigation. Major risks identified by the Company are systematically addressed through mitigating actions on a continuous basis. Some of the risks that the Company is exposed to are financial risks, commodity price risk, regulatory risks and economy risks. Risk factors and its mitigation are covered extensively in the Management Discussion and Analysis. The Internal Audit Report and Risk Management Framework is reviewed by the Audit Committee.


VIGIL MECHANISM / WHISTLE BLOWER POLICY


Pursuant to the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, your Company has established a vigil mechanism for the Directors and employees of the Company to report concerns about unethical behavior, actual or suspected incidents of fraud or violation of Code of Conduct. The details of Vigil Mechanism/ Whistle Blower Policy are provided in the Corporate Governance Report. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company''''s website at www.indocount.com.


POLICY ON PREVENTION,


PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE


In order to prevent sexual harassment of women at workplace, your Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to look into complaints relating to sexual harassment at workplace of any woman employee. During the year under review, no complaints pertaining to sexual harassment were received and no complaint was pending as on 31st March, 2017.


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO


Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 134(3) (m) of the Companies Act, 2013 read with rules there under is given as “Annexure 6” forming part of this Report.


PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES


The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding remuneration of Directors, Key Managerial Personnel and other related disclosure is given as “Annexure 7” to this Report.


Information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 viz. Details of top ten employees of the Company in terms of remuneration drawn during 2016-17 and particulars of employees drawing remuneration in excess of the limits specified in Rule 5(2) of said rules is provided in Annexure forming part of this report. As per the provisions of Section 136 of the Companies Act, 2013, the Annual Report and Accounts are being sent to the members of the Company excluding the said Annexure. Any member interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company. The said annexure will be available for inspection by the members at the Registered Office of the Company twenty one days before and up to the date of ensuing Annual General Meeting during the business hours on working day.


INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY


Your Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.


The internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well structured budgeting process with regular monitoring of expenses and Internal audit. The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements are undertaken, if required.


SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS


During the year under review, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''''s operations in future.


MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY


There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2016-17 and the date of this report.


GENERAL


Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review or said items are not applicable to the Company:


1. Cost Audit


2. Mr. Anil Kumar Jain and Mr. Kamal Mitra who are Non- Executive Directors on the Board of Pranavaditya Spinning Mills Ltd., subsidiary of the Company, receive sitting fees for attending Board / Committee Meeting. Apart from the sitting fees, as aforesaid, none of the Whole-Time Directors of the Company receive any remuneration or commission from any subsidiaries of the Company.


ACKNOWLEDGEMENTS AND APPRECIATION


Your Directors wish to place on record their appreciation for dedicated service and contribution made by the employees of the Company at all levels.


Your Directors would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from its customers, suppliers, investors, bankers, financial institutions, business partners and other stakeholders.


On behalf of the Board of Directors


ANIL KUMAR JAIN


Date: 15th May, 2017 Executive Chairman


Place: Mumbai DIN: 00086106

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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