To

The Members

The Indian Card Clothing Company Limited

The Directors presents their Sixty Fourth Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31, 2018.

1) FINANCIAL RESULTS:

(Rs. in Lakh)

2) PERFORMANCE REVIEW:

During the year under review, the Company earned a total revenue of Rs. 6,578.44 Lakh as against Rs. 8,539.12 Lakh in the previous year. The loss incurred by the Company for the financial year 2017-18 has been Rs. (1,781.14) Lakh against the profit after tax of Rs. 1,452.53 Lakh for the financial year 2016-17.

Operations Highlights:

- The revenue of the Card Clothing segment for the financial year 2017-18 has increased by approximately 12%.

- The commercial building at Powai, Mumbai, has been substantially occupied during the financial year 2017-18, barring some exceptions during the year.

- The Company has experienced continued operational losses for the last 5 years. In view of this and as a strategic move, it was decided to permanently discontinue the operations of its factory at Pimpri, Pune and shift the Pimpri plant operations to the state of the art manufacturing facility at Nalagarh. Consequent to such a decision, an amicable wage settlement was concluded with the unionized employees of Pimpri plant vide a Memorandum of Settlement (MoS) on April 18, 2018. The unionized employees have been paid their full and final settlement of Rs. 1,302.30 Lakh. This has resulted in an increase in the total loss incurred by the Company during the financial year under review. However, this move to Nalagarh will facilitate an improvement in the operational results over a period as the Company intends to hereafter focus on producing card clothing primarily for high speed cards.

3) SHARE CAPITAL:

The paid-up share capital of the Company as on March 31, 2018, was Rs. 455.11 Lakh. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity. As on March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

4) STATE OF THE COMPANY’S AFFAIRS:

Though the Card Clothing segment has incurred losses for the financial year ended March 31, 2018, efforts have been made by the Management Team to improve operational efficiency and reduce costs.

With the Company’s manufacturing operations now entirely based at Nalagarh, your Directors are cautiously optimistic that the performance of the card clothing division will improve with an improved cost structure and deployment of appropriate resources in key functional areas of the Company.

The detailed information about the Company’s affairs is provided under the Management Discussion and Analysis Report in accordance with the requirements under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter called and referred to as “the Listing Regulations”), which forms a part of this Report.

5) DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a) Meetings of the Board of Directors held during the year 2017-18:

During the year under review, six (6) meetings of the Board of Directors took place, details of which have been provided in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the two (2) meetings did not exceed 120 days in accordance with the provisions of the Companies Act, 2013.

b) Declaration by Independent Directors:

The Company has received necessary declaration from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

The Independent Directors are not liable to retire by rotation as per Section 152 of the Companies Act, 2013.

c) Changes in the Board of Directors during the year 2017-18:

During the year under review, there has been no change in the constitution of the Board of Directors of the Company.

Further, Mr. Prashant Trivedi (DIN: 00167782) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. The brief profile of Mr. Prashant Trivedi seeking re-appointment at the ensuing Annual General Meeting, as a Director liable to retire by rotation has been included in the Notice convening the ensuing Annual General Meeting.

d) Details of Key Managerial Personnel:

In view of the resignation of Mr. Amogh Barve, Manager (Legal) & Company Secretary of the Company, with effect from February 2, 2018, the Board in its meeting held on February 9, 2018, appointed Ms. Jaimeetkaur Sial as the Manager (Legal), Company Secretary & Compliance Officer of the Company, with effect from April 17, 2018.

There was no other change in the Key Managerial Personnel of the Company.

6) DIVIDEND:

Your Directors do not recommend any dividend for the year under review.

7) SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITION:

In accordance with Section 129(3) of the Companies Act, 2013 and Indian Accounting Standard (Ind-AS) 27, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which forms part of this Annual Report.

The Company does not have any material subsidiary whose net worth exceeds 20% of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20% of the consolidated income of the Company and its subsidiaries during the previous financial year. However, the Company has prepared a policy for determining material subsidiaries which is uploaded on the Company’s website and can be accessed vide weblink: http://cardindia.com/wp-content/uploads/2018/01/ICC-Policy-on-Material-Subsidiaries.pdf.

The Statement in Form AOC-I containing salient features of the financial statements of the Company’s Subsidiaries is attached to the financial statements of the Company. The brief details about the performance and financial position of the subsidiaries of the Company are given below:

a) ICC International Agencies Limited:

ICC International Agencies Limited (ICCIAL) recorded a decrease of 0.73% in its revenue from Rs. 352.43 Lakh in the previous year to Rs. 349.85 Lakh in the financial year 2017-18. Further, ICCIAL recorded loss after tax of Rs. 59.07 Lakh in the current year against previous year’s loss after tax of Rs. 43.74 Lakh. The reduced revenue and the after-tax loss incurred was due to the difficult trading conditions in the textile industry within India leading to many customers postponing or cancelling capital equipment purchases. The global slowdown in the textile industry also contributed to reduced revenue.

b) Garnett Wire Limited, U.K.:

Garnett Wire Limited, a U.K. Company, in which your Company holds 60% of the issued share capital, recorded increase of 0.80% in its revenue from £1,137,224 (equivalent to Rs. 1,000.64 Lakh) to £1,146,372 (equivalent to Rs. 987.31 Lakh). The profit after tax is £24,376 (equivalent to Rs. 20.99 Lakh) as against previous year’s loss of £18,988 (equivalent to Rs. 16.70 Lakh).

c) Shivrai Sugar and Allied Products Private Limited:

Shivraj Sugar and Allied Products Private Limited is yet to commence operations.

8) AUDIT COMMITTEE:

Pursuant to the provisions of Section 177(8) of the Companies Act, 2013, read with Rules 6 and 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Audit Committee consists of the following Members:

-Inducted as a member with effect from February 9, 2018.

The above composition of the Audit Committee consists of Independent Directors only.

All the recommendations of the Audit Committee during the year were accepted by the Board of Directors of the Company.

9) VIGIL MECHANISM:

The Company has established a vigil mechanism as per Regulation 22 of the Listing Regulations. The details of which have been provided in the Corporate Governance Report and also posted on the website of the Company at: http://cardindia.com/wp-content/uploads/2018/01/ICC-Vigil-Mechanism-Policy.pdf.

10) STATUTORY AUDITORS:

M/s. P. G. Bhagwat, Chartered Accountants (Firm Registration No. 101118W), have been acting as auditors of the Company since conclusion of the 63rd Annual General Meeting (AGM) of the Company held on August 11, 2017. They were appointed for a period of five (5) consecutive years commencing from the conclusion of 63rd AGM till the conclusion of the 68th AGM of the Company, subject to ratification by the members, if any, required as per applicable laws from time to time, at every AGM.

Pursuant to notification of certain sections of the Companies (Amendment) Act, 2017, on May 7, 2018, the requirement of ratification of auditors by the members is no longer required. However, as matter of abundant precaution, the ratification by the members is being sought for the approval of members in the ensuing AGM. Further, taking into consideration this recent amendment, the annual ratification will not be sought next year onwards.

11) AUDITOR’S REPORT:

There are no adverse remarks nor any disclaimer, qualifications or reservations in the Auditor’s Report.

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 re-enactment for the time being in force).

12) SECRETARIAL AUDIT REPORT:

S. Anantha & Ved LLP, (LLPIN: AAH8229), Company Secretaries, Mumbai, were appointed as the Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2017-18, as required under Section 204 of the Companies Act, 2013 and the rules made thereunder.

The Secretarial Audit Report for the financial year 2017-18 is annexed as Annexure - A to this Report.

There are no adverse remarks nor any disclaimer, qualifications or reservations in the Secretarial Audit Report.

13) DIRECTORS’ RESPONSIBILITY STATEMENT:

In terms of Sections 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 March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

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 the Company at the end of the financial year and of the loss of the Company for the year ended March 31, 2018;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls, which are to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

14) CORPORATE GOVERNANCE:

As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate section on Corporate Governance practices followed by the Company, together with a certificate from Apte Joshi & Associates, Practicing Company Secretaries, confirming compliance, is set out separately under Corporate Governance Report.

15) POLICY FOR SELECTION, APPOINTMENT AND REMUNERATION OF DIRECTORS INCLUDING CRITERIA FOR THEIR PERFORMANCE EVALUATION:

The Company has adopted a policy titled as “Nomination & Remuneration Policy” which interalia includes the Company’s policy on Board diversity, selection, appointment and remuneration of Directors, criteria for determining qualifications, positive attributes, independence of a Director and criteria for performance evaluation of the Directors.

The Nomination & Remuneration Policy as approved by the Board is annexed to this Report as Annexure - B and is also uploaded on the Company’s website at: http://cardindia.com/wp-content/uploads/2018/01/ICC-Nomination-Remuneration-Policy.pdf.

16) PERFORMANCE EVALUATION:

Pursuant to Regulation 4(2)(f)(ii)(9) read with Regulation 17(10) of the Listing Regulations, mandates that the Board shall monitor and review the Board evaluation framework and shall carry out performance evaluation of the Independent Directors. The Companies Act, 2013, states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The performance evaluation of the Directors, the Board and its Committees was accordingly carried out based on the criteria laid down under the SEBI Circular dated January 5, 2017, for Performance Evaluation in the Nomination & Remuneration Policy and approved by the Board of Directors. Further details in respect of the criteria of evaluation has been provided in the Corporate Governance Report.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also assessed the quality, quantity and timelines of flow of information between the Company management and the Board. Your Directors express their satisfaction with the evaluation process.

17) PARTICULARS OF EMPLOYEES AS REQUIRED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

None of the employees have drawn remuneration more than the limit prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and none of the employees hold (by himself or along with his spouse and dependent children) more than 2% of the equity shares of the Company. Hence, the requirement of disclosure under Section 197(12) of the Companies Act, 2013, is not applicable.

The details of Top 10 employees together with the remuneration drawn by them is annexed as Annexure - C to this Report.

18) PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES:

a) The ratio of the remuneration of each Director to the median employee’s remuneration for the financial year and such other details as prescribed is as given below:

The Company did not have any Executive Director on its roll during the financial year 2017-18. Therefore, the ratio required above is not applicable.

b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

* Resigned with effect from February 2, 2018.

c) The percentage increase in the median remuneration of employees in the financial year: Nil.

d) The number of permanent employees on the rolls of the Company as on March 31, 2018: 345.

e) Average percentile increase already made in the salaries of employees’ other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

During the year under review, there was no increase in the average remuneration of employees other than the managerial personnel. Further, there was no increase in the average managerial remuneration during the year.

f) The remuneration has been paid to all the employees of the Company as per the Nomination & Remuneration Policy of the Company.

19) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013:

All the transactions with related parties are in the ordinary course of business and on arm’s length basis; and therefore, disclosure in Form AOC-2 is not required.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at http://cardindia.com/wp-content/uploads/2018/01/ICC-Policy-on-Related-Party-Transactions.pdf.

20) DEPOSITS:

During the year 2017-18, the Company did not accept any deposit from public within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

21) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year under review, no loans or guarantees were given or investments were made pursuant to provisions of Section 186 of the Companies Act, 2013.

22) SIGNIFICANT AND MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

23) ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company is giving due consideration to the conservation of energy and all efforts are being made to properly utilize the energy resources.

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure - D to this Report.

24) ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company operates in ERP environment and has implemented the Oracle System for the purpose of “Internal Financial Controls” within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013, read with Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014. The Company has laid down internal financial controls, which are adequate and were operating effectively and the Board of Directors has adopted necessary internal control policies and procedure for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Board of Directors is of the opinion that for the year ended March 31, 2018, the Company has sound internal financial controls commensurate with the nature and size of the business operations of the Company.

25) RISK MANAGEMENT:

The Company has in place a Risk Management System which takes care of risk identification, assessment and mitigation. The Company has a 2-tier structure consisting of Risk Steering Committee and Risk Council to monitor and mitigate the risks of the Company. There are no risks which in the opinion of the Board threaten the existence of the Company. Risk factors and its mitigation are covered extensively in the Management Discussion and Analysis Report forming part of this Report.

26) EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return pursuant to Section 92(3) of the Companies Act, 2013, prepared in Form MGT-9 is annexed as Annexure - E to this Report.

27) CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has constituted CSR Committee considering the requirements of the Companies Act, 2013. Details regarding constitution of the Committee and its meetings have been provided in the Corporate Governance Report.

Considering the threshold requirements specified under Section 135(1) of the Companies Act, 2013, the Company was not liable for CSR spending as specified under Section 135(5) of the Companies Act, 2013, for the financial year 2017-18 and hence, has not spent any amount on CSR activities during the financial year 2017-18.

28) POLICY ON PREVENTION OF SEXUAL HARASSMENT:

The Company has in place Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment and to conduct regular awareness programs .All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2017-18, no complaints were received regarding sexual harassment.

29) DISCLOSURE UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

Except as stated above and disclosed elsewhere in this Report, no material changes and commitments have occurred between the end of the financial year of the Company and date of this Report which can affect the financial position of the Company.

30) SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI):

The Company complies with the Secretarial Standards issued by ICSI, one of the premier professional bodies in India.

31) CHANGES IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the financial year under review.

32) APPRECIATION:

Your Directors place on record their sincere thanks and appreciation for the continued support extended by Central and State Governments, bankers, customers, suppliers and members. Your Board would like to record its sincere appreciation to the employees for the dedicated efforts and contribution in playing a significant part in the Company’s operations.

For and on behalf of the Board of Directors

Place : Mumbai Prashant Trivedi

Date : May 29, 2018 Chairman

(DIN :00167782)