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Indo Count Industries Ltd (ICIL) -BSE
68.95 -2.10 (-2.96%) 10-Aug-2020 |00:00
PREV.CLOSE OPEN PRICE HIGH(Rs) LOW(Rs) VOLUME(Rs) 52AVG.RANGE MARKET CAP(Rs.Cr) P/E Div Yield (%) Eps (Rs)
71.05 71.05 71.05 67.7 17560 77.3 - 21.85 1361.07 9.59 0.87 7.19
Directors Report

Dear Members

On behalf of the Board of Directors ("the Board”), it gives me immense pleasure to present the Thirty First Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31,2020.

FINANCIAL RESULTS

(' In crore, except EPS)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue from operations 1,965.07 1,812.54 2,080.13 1,934.21
Other Income 54.32 10.39 54.63 10.49
Total Revenue 2,019.39 1,822.93 2134.76 1,944.70
EBIDTA 232.27 160.94 237.85 166.23
Less: Finance Cost 36.93 33.71 39.25 35.60
Less: Depreciation 40.65 32.58 43.46 35.27
Less: Exceptional Items 98.46 - 98.46 -
Profit before Tax 56.23 94.65 56.68 95.36
Tax Expenses / (Credit) (17.53) 35.43 (16.42) 35.52
Net Profit 73.76 59.22 73.10 59.84
Other comprehensive Income (net of tax) (47.11) (28.58) (48.59) (32.60)
Total Comprehensive Income 26.65 30.64 24.51 27.24
Basic & Diluted EPS (in ') 3.74 3.00 3.74 3.05

OPERATIONAL AND FINANCIAL PERFORMANCE

At a consolidated level, the revenue from operations increased by 7.54% to ' 2,080.13 crore for FY 2019-20 as against ' 1,934.21 crore in the previous year. The EBIDTA of your Company registered growth of 43.08% to ' 237.85 crore for FY 2019-20 as against ' 166.23 crore in the previous year. However, due to the exceptional item, net profit increased by 22.16% from ' 59.84 crore to ' 73.10 crore for the year ended March 31, 2020.

On a standalone basis, revenue from operations increased by 8.41% to ' 1,965.07 crore for the year ended March 31,2020 as against ' 1,812.54 crore in the previous year. Further, your Company achieved EBIDTA and Net Profit of ' 232.27 crore and ' 73.76 crore respectively for the year ended March 31, 2020 as compared to EBIDTA and Net profit of '160.94 crore and ' 59.22 crore respectively.

The financial and operational performance overview and outlook is provided in detail in the Management Discussion and Analysis forming part of this Annual Report.

COVID-19 PANDEMIC

In the month of March, 2020, the outbreak of Novel Coronavirus (COVID-19) pandemic developed rapidly into a global crisis. This led to declaration of the lockdowns by the

governments in the countries all over the world. Your Company immediately shifted its focus on ensuring the health, safety and well-being of all employees. The manufacturing plants of the Company at Kolhapur were temporarily closed from March, 23, 2020 to contain the spread of COVID-19 as per Central/State Government directions. The partial manufacturing operations at the Company's Home Textile and Spinning Plant were resumed w.e.f. April 26, 2020 and April 27, 2020 respectively with limited workforce subject to the conditions prescribed by the Government/Local Authorities. Although there are uncertainties due to the pandemic, healthy capital adequacy, stable liquidity position, good customer base, wider geographical distribution and innovative product mix will help your Company to navigate through the challenges in future. The impact of COVID-19 is discussed in the Management Discussion and Analysis forming part of this Annual Report.

DIVIDEND

Continuing the past trend of declaring dividend, your Directors are pleased to recommend a Final Dividend @ 30% i.e. ' 0.60/- per equity share of face value of ' 2/- each amounting to ' 11.84 crore subject to the approval of members of the Company at the ensuing Annual General Meeting. The aforesaid dividend is in line with the Dividend Distribution Policy adopted by the Company.

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the Final Dividend after deduction of tax at source. For further details on TDS of Dividend, members are requested to refer Annexure III of the Notice of Annual General Meeting.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("Listing Regulations”), the Board of Directors of your Company had approved 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 https://www.indocount.com/images/investor/ Dividend-Distribution-Policy1.pdf

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to the Retained Earnings.

AWARDS AND RECOGNITIONS

We are happy to inform you that during the year under review, your Company was honoured with 3 Awards for the year 201819 from TEXPROCIL viz. Gold Trophy for the highest export performance in made-ups bed linen/ bed sheets/quilts under category III, Gold Trophy for the special achievement award in made-ups and Silver Plaque for the second highest exports performance in yarn-counts 50s and below in category I. These awards are testament to our consistent growth story in Home Textiles over the last decade and development of innovative products addressing the demanding preferences of consumers.

SHARE CAPITAL

As on March 31, 2020, the Authorised Share Capital of your Company was ' 60 crore comprising of 27,50,00,000 equity shares of ' 2/- each and 50,00,000 preference shares of ' 10/- each. Further, 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 ' 2/- each. During the year under review, there has been no change in the Authorised, Issued, Subscribed and Paid-up Share Capital of your Company.

Your Company has not issued any equity shares with differential voting rights, convertible securities, warrants or sweat equity shares. Further, your Company does not have any employee stock option scheme or employee stock purchase scheme.

CREDIT RATING

As on March 31, 2020, for long term bank facilities of your Company, Credit Rating assigned by CARE and ICRA is "A+” (A plus) with Stable outlook. The said credit rating signifies adequate degree of safety regarding timely servicing of financial obligations. Such facilities carry low credit risk.

Further, for the Company's short term bank facilities, ICRA and CARE have assigned the rating as "A1” (A One) which signifies very strong degree of safety regarding timely servicing of financial obligations. Such facilities carry lowest credit risk.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The Audited Consolidated Financial Statements of the Company for the year ended March 31,2020 along with the Auditors' Report forms part of this Annual Report.

The Audited Financial Statements of the Company and subsidiaries are available on the website of the Company at www.indocount.com. Further, 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 date of 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.

SUBSIDIARIES

As on March 31,2020, your Company has 6 direct subsidiaries viz. Pranavaditya Spinning Mills Limited, Indo Count Retail Ventures Private Limited, Indo Count Global Inc., Indo Count UK Limited, Indo Count Australia Pty Ltd. and Indo Count Global DMCC. During the year under review, your Company has acquired remaining 17.5% stake i.e. 1750 equity shares of Indo Count Retail Ventures Private Limited (ICRVPL) at par value of ' 10/- each. Pursuant to the said acquisition, ICRVPL became a wholly owned subsidiary of your Company w.e.f. March 9, 2020. Further, your Company has also acquired the business of ICRVPL as a going concern by way of slump sale by ICRVPL with effect from April 1,2020 through a Business Transfer Agreement.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with rules made thereunder, 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. As required under Section 134 of the Companies Act, 2013, the said form also highlights performance of the subsidiaries.

Your Company does not have any Associate Company as defined under the Companies Act, 2013 and has not entered into any joint venture agreement during the year under review. Though your Company does not have any material subsidiary, pursuant to Regulation 16 of the Listing Regulations, it has adopted a policy for determining material subsidiaries, which can be accessed at https://www.indocount.com/images/ investor/Policy-on-Material-Subsidiaries.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Pradyumna Natvarlal Shah (DIN: 00096793) and Mr. Anand Ramanna (DIN: 00040325) were associated with the Company as Independent Directors for more than 25 years. Their first term of appointment as Independent Directors was upto August 15, 2019. Due to advanced age, they did not seek re-appointment for a second term. Hence, they ceased to be the Directors of the Company w.e.f. August 16, 2019 due to expiry of their first term. The Board places on record its appreciation for the immense contributions and valuable guidance given by Mr. P N. Shah and Mr. R. Anand during their long association as Directors of the Company.

At the Annual General Meeting (AGM) held on August 13, 2019, Mr. Dilip J. Thakkar (DIN: 00007339), Mr. Prem Malik (DIN: 00023051) and Dr. (Mrs.) Vaijayanti Pandit

(DIN: 06742237), were re-appointed as Non-Executive Independent Directors of the Company, for a second term of five consecutive years w.e.f. August 16, 2019. Further, Mr. Anil Kumar Jain (DIN: 00086106), Executive Chairman was re-appointed for a period of 3 years w.e.f. October 1, 2019 and Mr. Kamal Mitra (DIN: 01839261) was re-appointed as a Whole-time Director designated as "Director (Works)” for a period of 3 years w.e.f. October 1, 2019. The aforesaid re-appointment of Directors approved by the members of the Company at AGM held on August 13, 2019 were duly recommended by the Nomination and Remuneration Committee (NRC) and approved by the Board.

Pursuant to the recommendation of Nomination and Remuneration Committee (NRC), the Board approved change in designation of Mr. Mohit Jain (DIN: 01473966) to Wholetime Director designated as "Executive Vice Chairman” of the Company, for a period of 3 years w.e.f. July 1,2019. The same was duly approved by the members of the Company at the AGM held on August 13, 2019.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Kailash R. Lalpuria (DIN: 00059758), 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. As per Secretarial Standard - 2 and Listing Regulations, brief profile and other related information of Mr. Kailash Lalpuria, Executive Director retiring by rotation is provided in the Notice of ensuing AGM. 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 Listing Regulations and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge duties with an objective independent judgment and without any external influence. In the opinion of the Board, all Independent Directors are independent of the management.

Pursuant to Rule 6 of Companies (Appointment and qualification of Directors) Rules, 2014 as amended w.e.f. December 1,2019, all Independent Directors of the Company viz. Mr. Dilip J. Thakkar, Mr. Prem Malik, Mr. Sushil Kumar Jiwarajka, Dr. (Mrs.) Vaijayanti Pandit, Dr. Sanjay Kumar Panda and Mr. Siddharth Mehta have registered themselves in the Independent Directors databank maintained with the Indian Institute of Corporate Affairs (IICA). Further, in the opinion of the Board of Directors of the Company, all Independent Directors possess high integrity, expertise and experience including the proficiency required to discharge the duties and responsibilities as Directors of the Company.

As on March 31, 2020, Mr. Kailash R. Lalpuria, Executive Director & CEO, Mr. K. Muralidharan, Chief Financial Officer and Mrs. Amruta Avasare, Company Secretary are the Key Managerial Personnel of the Company in terms of Section 203 of the Companies Act, 2013.

NUMBER OF BOARD MEETINGS

During the year under review, Four (4) Board Meetings were held on May 22, 2019, August 8, 2019, November 11, 2019 and February 11, 2020. The maximum interval between any two consecutive Board Meetings did not exceed 120 days.

COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

Pursuant to Section 178 of the Companies Act, 2013, NRC has formulated "Nomination and Remuneration Policy” which deals inter-alia with appointment and remuneration of Directors, Key Managerial Personnel, Senior Management and other employees. The said policy is uploaded on the website of the Company and web-link thereto is https:// www.indocount.com/images/investor/Nomination-and- Remuneration-Policy 200427 075719.pdf

The salient features of the policy are as under:

I) Criteria for Directors

a) Appointment:

i. NRC shall identify, ascertain and consider the integrity, qualification, expertise and experience of the person for the appointment as a Director of the Company and recommend to the Board his / her appointment. The Directors shall uphold ethical standards of integrity and probity and shall exercise their duties and responsibilities in the interest of the Company.

ii. A person proposed to be appointed as Director should possess adequate qualification, expertise and experience for the position he / she is considered for appointment.

They shall possess appropriate core skills/ expertise/competencies/knowledge in one or more fields of finance, law, management, sales and marketing, administration, CSR, research and in the context of business and/ or the sector in which the Company operates. The NRC has the discretion to decide whether qualifications, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

iii. Independent Director shall satisfy criteria of Independence specified under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the Listing Regulations and shall give declaration that he/she is not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his ability to discharge his / her duties with an objective independent judgment and without any external influence. The NRC and the Board shall assess veracity of the said declaration and determine whether the directors are independent of the management.

iv. The Company shall comply with the provisions of the Act and Listing Regulations and any other laws if applicable for appointment of Director of the Company. The Company shall ensure that provisions relating to limit of maximum directorships, age, term, etc. are complied with.

b) Remuneration of the Whole-time /Executive

Director(s) / Managing Director:

i. The remuneration including commission payable to the Whole Time /Executive Director(s) / Managing Director shall be determined and recommended by the NRC to the Board for approval.

ii. While determining the remuneration of the Executive Directors, following factors shall be considered by the NRC/Board:

• Role played by the individual in managing the Company including responding to the challenges faced by the Company

• Individual performance and Company performance so that remuneration meets appropriate performance benchmarks

• Reflective of size of the Company, complexity of the sector/ industry/ company's operations and the Company's financial position

• Consistent with recognised best industry practices.

• Peer remuneration

• Remuneration involves balance between fixed and incentive pay reflecting performance objectives appropriate to the working of the Company and its goals

• Remuneration is reasonable and sufficient to retain and motivate directors to run the Company successfully

c) Remuneration to Non-Executive / Independent

Directors:

i. Sitting Fees: Non-Executive Independent Directors ("NEIDs”) shall be entitled to receive fees for attending meetings of the Board or Committee of the Board or for any other purposes as may be decided by the Board, of such sum as may be approved by the Board of Directors of the Company within the overall limits prescribed under the Companies Act, 2013 and the rules made thereunder, SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 ("Listing Regulations”) or other applicable law.

ii. Commission: Section 197 of the Companies Act, 2013, allows a Company to pay remuneration (excluding sitting fees) to its NEDs at a specified percentage of net profits of the Company (commission). Such commission may be paid to Non-Executive Independent Directors as may be decided by the Board of Directors on the recommendation of Nomination & Remuneration Committee (NRC), within the limits approved by the shareholders of the Company. The basis of payment of commission is Net profits of the Company.

iii. Remuneration to NENIDs: The Non-Executive Non-Independent Director(s) of the Company may be entitled to receive remuneration by way of sitting fees or commission or reimbursement of expenses as may be recommended by NRC and approved by the Board of Directors of the Company within the overall limits approved by the shareholders of the Company. The said remuneration will be within the limits specified in the Companies Act, 2013 and rules made thereunder and Listing Regulations.

Criteria for Key Managerial Personnel, Senior

Management and other Employees

This section applies to the KMP (other than Managing

Director, Whole-time Directors/Executive Directors)

a) Appointment:

i. The NRC shall ascertain and consider the integrity, qualification, background and experience of the person for appointment as a KMP and at senior management position of the Company and recommend to the Board his / her appointment. The NRC has the discretion to decide whether qualifications, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

b) Remuneration of Key Managerial Personnel and

Senior Management and other employees

i. The NRC shall decide and recommend to the Board, remuneration of KMP & Senior Management Personnel to ensure that it is competitive, reasonable and sufficient to motivate and retain the employee.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND ITS COMMITTEES AND DIRECTORS

Criteria of performance evaluation of the Board and Directors are laid down by Nomination and Remuneration Committee (NRC) of the Company. Pursuant to the provisions of Companies (Amendment) Act, 2017, NRC decided to continue existing method of performance evaluation through circulation of performance evaluation sheets based on SEBI Guidance Note dated January 5, 2017 and that only Board should carry out performance evaluation of Board, Committees and Individual Directors.

An assessment sheet based on SEBI Guidance Note, containing the parameters of performance evaluation and rating scale was circulated to all the Directors. The Directors rated the performance against each criteria. Thereafter, consolidated score was arrived. Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out performance evaluation of its own, evaluation of working of the Committees and performance evaluation of all Directors in aforesaid manner. The performance of the Board, committees and individual directors was found satisfactory.

A meeting of Independent Directors of the Company was held on February 11, 2020 in which Independent Directors inter-alia evaluated performance of Executive Chairman, Executive Vice Chairman, other Whole-time Directors and the Board and Committees as a whole through performance evaluation sheets.

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 March 31, 2020, 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 March 31, 2020 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 March 31,2020 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 March 31,2020 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

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 5 years, your Company has carried out CSR activities in the areas of Education, Healthcare, Women empowerment and Water and Sanitation.

In compliance with the provisions of Section 135 of the Act and the rules made thereunder, your Company has adopted a Corporate Social Responsibility (CSR) policy which is available on web-link https://www.indocount.com/images/ investor/ICIL-CSR-Policyl.pdf

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

AUDIT COMMITTEE

During the year under review, Mr. P N. Shah and Mr. R. Anand ceased to be the Chairman and member respectively of the Audit Committee w.e.f. August 9, 2019. Mr. Dilip J. Thakkar, Independent Director of the Company and member of the Audit Committee was appointed as a Chairman of the Audit Committee w.e.f. August 9, 2019.

As on March 31, 2020, the Audit Committee comprises of 4 Directors/ Members viz. Mr. Dilip J. Thakkar, Mr. Prem Malik, Mr. Siddharth Mehta, Independent Directors and Mr. Kailash R. Lalpuria, Executive Director. The said Composition is as per the provisions of Section 177 of the Companies Act, 2013

and Regulation 18 of the Listing Regulations. More details on Audit Committee are given in Corporate Governance Report. All the recommendations made by the Audit Committee during the year under review were accepted by the Board.

STATUTORY AUDITORS

In accordance with the provisions of Section 139 of the Companies Act, 2013, at the Annual General Meeting held on August 21,2017, M/s. Suresh Kumar Mittal & Co., Chartered Accountants (Firm Registration No. 500063N) were appointed as the Statutory Auditors of the Company for a period of 5 years till the conclusion of 33rd AGM subject to the ratification by the members at every AGM.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting was omitted vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of Auditors in ensuing AGM of the Company.

The Company has received a letter from M/s. Suresh Kumar Mittal & Co., Chartered Accountants confirming that they are eligible for continuing as Statutory Auditors of the Company.

AUDITORS' REPORT

The Auditors' Report on standalone and consolidated financial statements for the year ended March 31,2020 forms integral part of this Annual Report. The Auditors' Report does not contain any qualifications, reservations, adverse remarks and disclaimer. Notes to the Financial Statements are selfexplanatory and do not call for any further comments. The Statutory Auditors of the Company have not reported any fraud under Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment 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 thereunder, the Board had appointed M/s. Kothari H. & Associates, Practicing Company Secretaries as Secretarial Auditors to conduct Secretarial Audit of the Company for the year ended March 31,2020. The Secretarial Audit Report issued by Secretarial Auditors 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.

CORPORATE GOVERNANCE REPORT

Your Company has adopted best practices of Corporate Governance and complied with all the requirement of Corporate Governance laid down by SEBI. As per Regulation 34(3) read with Schedule V of the Listing Regulations, a Corporate Governance Report along with Statutory Auditors' Certificate confirming compliance of corporate governance for the year ended March 31, 2020 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 March 31, 2020 is provided in a separate section forming integral part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to the Regulation 34 of the Listing Regulations, Business Responsibility Report (BRR) for the year ended March 31,2020 is provided separately and forms integral part of this Annual Report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of the Annual Return in Form No. MGT-9 for the year ended March 31,2020 is annexed as an "Annexure 4” to this Report and is also available on the website of the Company at https://www.indocount.com/investors/financial-reporting/ annual-reports

In accordance with the provisions of Section 134(3)(a) of the Act, copy of Annual Return for FY 2018-19 was hosted on the website of the Company and web-link to access the same is https://www.indocount.com/images/investor/ Annual-Return-Form-MGT-7-FY-7018-19.pdf. Further, pursuant to Section 134(3)(a) of the Act, a copy of Annual Return for the year ended March 31, 2020 will be hosted on the website of the Company www.indocount.com.

SECRETARIAL STANDARDS

During the year under review, your Company has complied with all the applicable secretarial standards issued by the Institute of Company Secretaries of India. The same has also been confirmed by the Secretarial Auditors of the Company in the Secretarial Audit Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions (RPT) entered during FY 2019-20 were on arm's length basis and in the ordinary course of business and in compliance with the applicable provisions of the Act and the Listing Regulations. During the year under review, your Company did not enter into any material RPT under the provisions of Section 188 of the Act and Listing Regulations, accordingly, the disclosure of related party transactions, as required under the provisions of Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The prior omnibus approval of the 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 which has been uploaded on the Company's website and can be accessed at https://www.indocount.com/images/ investor/ICIL-Policy-on-Related-Party-Transactions-Revis ed-11-02-2020 200507 081044.pdf

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

During the year under review, your Company has neither given loan to any bodies corporates or any other persons nor provided any corporate guarantee or security under Section 186 of the Companies Act, 2013. As regards investments, during the year under review, your Company has acquired remaining 17.5% stake in Indo Count Retail Ventures Private Limited (ICRVPL) thereby making ICRVPL a wholly owned subsidiary of the Company. The said investment was within the limits specified under Section 186 of the Companies Act, 2013. Particulars of investments and disclosure required under Section 186(4) of the Companies Act, 2013 are provided in the notes to the standalone financial statements.

RISK MANAGEMENT

Your Company recognises that risk is an integral part of the business and is committed to manage the risks in a proactive and efficient manner. 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, raw material price risk, regulatory risks, forex risks and economy risks. Risk factors and its mitigation are covered extensively in the Management Discussion and Analysis. The Internal Audit Reports and Risk Management Framework are reviewed by the Audit Committee. Further, the Company also has in place Risk Management Committee to assess risks and to review risk management plans of the Company.

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 behaviour, 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 https://www.indocount.com/images/investor/Whistle- Blower-Policy-Vigil-Mechanism.pdf

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your company always endeavours and provide conducive work environment that is free from discrimination and harassment including sexual harassment. Your Company has zero tolerance towards sexual harassment at workplace and has adopted a policy for prevention of Sexual Harassment of Women at workplace. The Company 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 March 31, 2020.

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 thereunder is given as "Annexure 5” 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 6” 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 FY 2019-20 and particulars of employees drawing remuneration in excess of the limits specified in Rule 5(2) of the 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 upto the date of ensuing Annual General Meeting during the business hours on working day.

INTERNAL CONTROL 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 authorisation 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 FY 2019-20 and the date of this Board's report. The global outbreak of COVID-19 pandemic has significantly impacted the economy. The management of your Company has considered internal and certain external sources of information and has used the principles of prudence in applying judgments, estimates and assumptions regarding the probable impact of the pandemic. The eventual outcome or impact of the pandemic may be different from

those estimated as on date of approval of these financial statements.

GENERAL

Your Directors state that:

1. During the year under review, there was no change in the general nature of business of your Company.

2. Cost audit was not applicable to the Company during the year under review, however, pursuant to the Order made by the Central Government for the maintenance of cost records under section 148(1) of the Act, the prescribed accounts and records have been made and maintained.

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, bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors
Anil Kumar Jain
Place: Mumbai Executive Chairman
Date: June 12, 2020 DIN: 00086106

   

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Equity SEBI Registration No INZ000177137, Exchange Registration Nos : NSE TM Code - 06637, Clearing No.- M50302|BSE Clearing No: 3179|MSEI TM Code - 1004 ,Clearing No.- 4| MCX TM No: 8091,Clearing No: 8090 | NCDEX TM No:1287, Clearing No: -M51085|ICEX TM ID-2084 | SEBI Registration for DP : IN-DP-NSDL-97-99, NSDL- DP ID: IN300966, CDSL DP ID: 12020600 | SEBI Research Analysts Registration No :INH100001187 | SEBI PMS Registration No:INP000002361 CMBPID NCL CM :- IN555502
* Through subsidiary Globe Commodities Ltd. --> Commodity SEBI Regn. No. - INZ000024939, Exchange Regn. Nos. - MCX CM ID: 8550 TM ID: 10735, NCDEX CM ID: M50011 TM ID: 00012, NMCE ID: CL0111, ICEX ID: 1009, NCDXSPOT-CR-07-10011,
** Through step in subsidiary Globe Comex International DMCC --> DGCX **TM Id.1064, CM Id.3064*
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