Indo Cotspin Ltd Directors Report.

Dear Members

Your Directors have pleasure in presenting the 24rd Annual Report of your Company together with the Audited financial Statements for the financial year ended 31st March, 2018.

1. Financial Highlights

The financial performance of your Company for the year ended 31st March, 2018 is summarized below:

Particulars

Amount (Rs. in lakhs)

FY 2017-18 FY 2016-17
Net Sales 1102.47 728.43
Other Income 17.31 9.83
Total Revenue 1119.78 738.26
Total Expenditure 1112.29 731.86
Profit before tax 7.50 6.40
Provision for tax 1.45 6.14
Deferred Tax -3.01 -3.62
Profit after tax 9.05 3.88
EPS (Rs.) 0.14 0.12
Proposed Dividend Nil Nil
Transfer to Reserve Nil Nil
Paid-up Share Capital 420.05 420.05
Reserves and Surplus (excluding revaluation reserve) 189.69 180.64

2. Year in Retrospect

During the year under review, total income of the Company was Rs. 1119.78 lakhs as against Rs. 738.26 lakhs in the previous year. The Company was able to earn a profit after tax of Rs. 9.05 lakhs in the current financial year as against a profit of Rs. 3.88 lakhs in the financial year 2016-17. Your Directors are putting in their best efforts to improve the performance of the Company.

3. Reserves & Surplus

The net movement in the major reserves of the Company for FY 2017-18 and the previous year are as follows:

(Rs. In lakhs)
Particulars FY 2017-18 FY 2016-17
Securities Premium Account 49.95 49.95
Capital Reserves 77.28 77.28
Profit & Loss A/c (Cr.) 62.46 53.41
Total 189.69 180.64

4. Public deposits

During the financial year 2017-18, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

5. Material Changes after the close of the financial year

Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company has occurred between the end of the financial year of the Company-31st March, 2018 till the date of this report.

6. Dividend

The Board of Directors of your Company has decided to retain and plough back the profits into the business of the Company, thus no dividend is being recommended for this year.

7. Subsidiaries/ Joint Ventures/ Associates

As on 31st March 2018, the Company had no Subsidiaries, Joint Ventures (JVs) or Associate Companies. Accordingly statement containing the salient feature of the financial statement of a companys subsidiary or subsidiaries, associate company or companies and joint venture or ventures in Form AOC-1 is not applicable.

The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year: Nil

Policy for determining material subsidiaries of the Company has been provided on the website www.incocotspin.com at the link http://indocotspin.com/reports Policy%20for%20Determing%20Material%20Subsidiary.pdf

8. Change in the nature of business

There has been no major change in the nature of business of your Company. Further since there is no subsidiary, joint venture and associate company, there is no question for mentioning of change in nature of business of such companies.

9. Directors and Key Managerial Personnel

In terms of Section 149 of the Companies Act, 2013, the Company has appointed the following as Independent Directors of the Company at the Annual General Meeting of your Company held on 30th September, 2014 to hold office up to 5 (five) consecutive years up to 31st March, 2019.:

• Mr. Anil Aggarwal

• Mr. Ankush Aggarwal

• Mr. Vinod Kumar Garg

• Mrs. Saroj Garg

• Mr. Pawas Aggarwal

In accordance with the provisions of section 149 of the Companies Act, 2013 all the independent directors are non rotational. The details of the familiarization programmes for Independent Directors are disclosed on the Companys website www.indocotspin.com at link http://indocotspin.com/reports/ Independent%20Director%20-%20Familarisation%20Programme.pdf

In terms of Section 203 of the Act, the following were designated as Key Managerial Personnel of your Company by the Board:

• Mr. Bal Kishan Aggarwal, Managing Director

• Mr. Raj Pal Aggarwal, Whole Time Director

• Mr. Sahil Aggarwal, Whole Time Director

• Mr. Arpan Aggarwal, Whole Time Director

• Mr. Sanil Aggarwal, Whole Time Director

• Mr. Vijay Pal, Chief Financial Officer

• Mr. Sonu Gupta, Company Secretary*

*Mr. Sonu Gupta has resigned from the company w.e.f April 28,2018.

** Mr. Rahul Khurana has been appointed as Company secretary w.e.f April 28,2018.

There is no change in the Board of Directors and the Key Managerial Personnel, during the year under review. Mr. Sanil Aggarwal is liable to retire by rotation in the ensuing Annual general Meeting and being eligible offer himself for re-appointment. Directors recommend his re-appointment.

10. Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013.

11. Disclosure of commission paid to managing or Whole Time Directors

There is no commission paid or payable by your company to the managing director or the whole time director.

12. Meetings of the Board of Directors

The details of the number of Board of Directors of your Company are as below:

Meeting No. of Meeting Dates of Meeting
Board of Directors Four (4) 12.05.2017, 31.07.2017, 31.10.2017 & 31.01.2018

All the ten directors of the Company were present in all the Board Meetings of the Company held during previous year.

13. Annual Evaluation of Board performance and performance of its committees and individual directors

Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees. Feedback was sought from Directors about their views on the performance of the Board covering various criteria. Feedback was also taken from directors on his assessment of the performance of the other Directors. The Nomination and Remuneration Committee (NRC) then discussed the above feedback received from all the Directors. Based on the inputs received, the Chairman of the NRC also made a presentation to the Independent Directors at their meeting, summarizing the inputs received from the Directors as regards Board performance as a whole, and of the Chairman. Post the meeting of the Independent Directors, their collective feedback on the performance of the Board (as a whole) was discussed by the Chairman of the NRC with the Chairman of the Board.

Every statutorily mandated committee of the Board conducted a self-assessment of its performance and these assessments were presented to the Board for consideration. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. Feedback was provided to the Directors, as appropriate. Significant highlights, learning and action points arising out of the evaluation were presented to the Board.

14. Remuneration Policy for the Directors, Key Managerial Personnel and other employees

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder the Board of Directors of the Company has formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee.

The Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters is set-out in Annexure-I to this Report.

15. Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following Committees constituted by the Board function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

Composition of the Committee of the Board of Directors of the Company is as below:

Audit Committee:

1. Mr. Anil Aggarwal Chairman (Independent Director)

2. Mr. Ankush Aggarwal Member (Independent Director)

3. Mr. Raj Pal Aggarwal Member (Executive Director)

There were four meetings of the Audit Committee held during the previous year on 12.05.2017, 31.07.2017, 31.10.2017 & 31.01.2018, where all the committee members were present.

Stakeholders Relationship Committee:

1. Mr. Anil Aggarwal Chairman (Independent Director)

2. Mr. Ankush Aggarwal Member (Independent Director)

3. Mr. Raj Pal Aggarwal Member (Executive Director)

There was one meeting of the Stakeholders Relationship Committee held during the previous year on 12.05.2017, where all the committee members were present.

Nomination and Remuneration Committee:

1. Mr. Anil Aggarwal Chairman (Independent Director)

2. Mr. Ankush Aggarwal Member (Independent Director)

3. Mr. Pawas Aggarwal Member (Independent Director)

There were two meetings of the Nomination & Remuneration Committee held during the previous year on 12.05.2017 & 31.07.2017, where all the committee members were present.

16. Audit Committee Recommendations

During the year all the recommendations of the Audit Committee were accepted by the Board.

17. Conservation of Energy, Technology Absorption

The information on conservation of energy and technology absorption stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as

Annexure-II.

18. Particulars of Employees and Remuneration

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure-III to this Report.

19. Related Party Transactions

In line with the requirements of the Companies Act, 2013 and the Listing Agreement, the Company has formulated a Policy on Related Party Transactions and the same is uploaded on the Companys website: www.indocotspin.com at the link http://indocotspin.com/reports/RPT%20Policy.pdf. Details of Related Party Transactions as per AOC-2 are provided in Annexure-IV.

20. Loans and investments

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

A. Details of investments made by the Company as on 31st March, 2018: As disclosed in the the Audited financial statement for the financial year ended 31st March, 2018.

B. Details of loans given by the Company as on 31st March, 2018: Nil

C. Details of guarantees issued by your Company in accordance with Section 186 of the Compa nies Act, 2013 read with the Rules issued thereunder: Nil

21. Extract of Annual Return

Pursuant to Section 92 of the Act and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is provided in Annexure-V.

22. Auditors and auditors report:

At the last Annual General Meeting of the Company, M/s. Manish Jain & Associates, Chartered Accountants, Panipat were appointed as the Auditors of the Company. Your Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued thereunder. The Audit Committee and the Board of Directors recommend the appointment of M/s. Manish Jain & Associates, Chartered Accountants as the Auditors of your Company.

The Auditors Report for the financial year 2017-18, does not contain any qualification, observation or adverse remarks and accordingly no comments required by your Board of Directors on the same.

23. Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014; the Secretarial Audit Report provided by the Secretarial Auditors is annexed as Annexure-VI.

The Secretarial Auditors Report for the financial year 2017-18, does not contain any qualification, observation or adverse remarks and accordingly no comments required by your Board of Directors on the same.

24. Internal Control Systems and adequacy of Internal Financial Controls

The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

In terms of section 138 of the Companies Act, 2013, M/s R.S. Gahlyan & Associates, Chartered Accountants has been appointed as the Internal Auditors of your Company. The Company also has an Audit Committee, who interacts with the Statutory Auditors, Internal Auditors and Management in dealing with matters within its terms of reference.

25. Risk management

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment. Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as decided by the management.

There are no risks which in the opinion of the Board threaten the existence of your Company.

26. Cost Records and Cost Audit Report

In terms with the provisions of section 148 of the Companies act, 2013 read with the Companies (Cost records and audit) Rules 2014, maintenance of cost records and appointment of Cost Auditors are not applicable on your Company.

27. Vigil mechanism

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour.

Pursuant to Section 177(9) of the Companies Act, 2013 a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. The copy of vigil mechanism policy is uploaded on the website of your company.

28. Management Discussion & Analysis Report

The Management Discussion & Analysis Report is annexed as Annexure-VII. 29. Code of Conduct for Prevention of Insider Trading

Your Companys Code of Conduct for Prevention of Insider Trading covers all the Directors, senior management personnel, persons forming part of promoter(s)/promoter group(s) and such other designated employees of the Company, who are expected to have access to unpublished price sensitive information relating to the Company. The Directors, their relatives, senior management personnel, persons forming part of promoter(s)/promoter group(s), designated employees etc. are restricted in purchasing, selling and dealing in the shares of the Company while in possession of unpublished price sensitive information about the Company as well as during the closure of trading window.

The Board of Directors has approved and adopted the Code of Conduct to Regulate, Monitor and Report Trading by Insiders in line with SEBI (Prohibition of Insider Trading) Regulation, 2015 and the same can be accessed through the following link: http://indocotspin.com/reports/New%20Insider-Trading-Code-2015.pdf

Your Board of Directors has also approved the Code for Fair Disclosure and the same can be accessed through the following link: http://indocotspin.com/reports/Code%20of%20Fair%20Disclosure.pdf

30. Corporate Social Responsibility

Provisions of the Corporate Social Responsibility as mentioned under the Companies Act, 2013 is not applicable on the Company.

31. Significant/material orders passed by the regulators

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

32. General

Your Board of Directors confirms that (a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; (b) Your Company does not have any ESOP scheme for its employees/ Directors; and, (c) there is no scheme in your Company to finance any employee to purchase shares of your Company.

33. Directors Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Directors confirm that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2018 and of the profit and loss of the Company for the financial year ended 31st March, 2018;

c. 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;

d. the annual accounts have been prepared on a ‘going concern basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

34. Stock Exchange Listing

The shares of the Company are listed on BSE Limited (BSE). The listing fee for the financial year 2018-19 has been paid to BSE.

35. Disclosure under the sexual harassment of women at workplace (Prevention, Prohibition And Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has in place proper policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is Internal Complaint Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. During the year ended 31st March, 2018, the ICC has not received any complaints pertaining to sexual harassment.

36. Acknowledgement

Your Directors take this opportunity to place on record their sincere appreciation for the co-operation and assistance the Company has received from Banks and various Government Departments. The Board also places on record its appreciation of the devoted services of the employees, support and co-operation extended by the valued business associates and the continuous patronage of the customers of the Company.

For and on Behalf of the Board
For Indo Cotspin Limited
Place: Panipat Bal Kishan Aggarwal Raj Pal Aggarwal
Date: 12th May, 2017 Chairman & Managing Director Whole Time Director
DIN: 00456219 DIN: 00456189