Dear Shareholders,
The Directors hereby present the 9th Annual Report of the Company together with the Audited Financial statements of the Company for the financial year ended 31st March, 2018.
OVERVIEW OF FINANCIAL PERFORMANCE
The Company recorded a growth in revenues of 23.18% in FY 2018. The revenues for the year stood at Rs. 401.45 Crores as against Rs. 325.91 Crores in the previous year. The operating margins excluding the one-time impact of compensation for increase in GST was at 12.35% against 12.28% in the previous year. The Gross EBITDA margins including the impact on GST and other income was at 12.54% against 13.91%. The profit before taxes for the year was up by 17.60% and stood at Rs. 39.10 Crores and net profit after taxes was at Rs. 25.44 Crores which is up by 11.38% from previous year's net profits of Rs. 22.84 Crores. The total comprehensive income was at Rs. 25.19 Crores against Rs. 22.89 Crores in the previous year.
To avoid repetition of information, a detailed discussion on the performance of the Company is given in the Management Discussion and Analysis Report which forms part of this Board's report.
FINANCE AND ACCOUNTS
The financial statements are prepared in accordance with Indian Accounting Standards (IND AS) as required under the notification issued by the Ministry of Corporate Affairs (MCA) in the Official Gazette dated 16th February, 2015 which is applicable to the Company from 01s April, 2017 with a transition date of 01April, 2016.
CHANGES TO SHARE CAPITAL
During the year under review, there were no changes to the share capital of the Company.
DIVIDEND
The Board of Directors with a view to conserve financial resources have not recommended any dividend for the financial year ended 31st March, 2018.
TRANSFER TO RESERVES
During the year under review, the Company has not transferred any amount to the reserves.
DISCLOSURE UNDER SECTION 67(3)(C) OF THE COMPANIES ACT, 2013
The disclosure with regard to voting rights not exercised directly by the employees of the Company as required under Section 67(3)(c) of Companies Act, 2013 read with rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is not applicable to the Company.
DEPOSITS
The Company has not accepted any deposits within the ambit of Section 73 of Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
CASH FLOW STATEMENT
In compliance with the provisions of Section 134 of Companies Act, 2013 and Regulation 34(2)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Cash flow statement for the financial year ended 31s March, 2018 forms part of this annual report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions with the related parties during the financial year were in the ordinary course of business and at Arm's length basis. The details of such transactions are disclosed in the notes to accounts. The Company has framed a policy on Related Party Transactions and the same is available in the Company's website www.indianterrain.com.
The details of related party transactions pursuant to Section 134(3)(h) of Companies Act, 2013 is disclosed in Form No. AOC-2 as ANNEXURE-II
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management Discussion & Analysis which forms part of this report are set out separately along with the Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in Schedule V of Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
COMPLIANCE WITH CODE OF CONDUCT
The Company has framed a Code of Conduct for the Board of directors and Senior Management personnel of the Company. The Code of Conduct is available on the Company's website www.indianterrain.com. The Board of directors and senior management personnel have affirmed compliance with the Code of conduct as on 31st March, 2018.
As required under Regulation 34(3) and Schedule V(D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a declaration from Mr. Venkatesh Rajagopal Chairman and Managing director to this effect is annexed to the report on corporate governance, which forms part of this annual report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In compliance with the requirements of Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Board of Directors have adopted a policy on CSR as recommended by the CSR committee duly constituted and the said policy is available on the Company's website www.indianterrain.com. The composition and terms of reference of the CSR Committee is detailed in the Corporate Governance report forming part of this annual report.
An update on the policy on Corporate Social Responsibility and activities of the Company is provided in ANNEXURE-V annexed to this annual report.
ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of Companies Act 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a whistle blower mechanism for the directors and employees to report concerns about unethical behavior, actual or suspected frauds or violation of the Company's code of conduct and ethics. The Audit Committee of the Board oversees the functioning of Whistle Blower Policy. The Whistle Blower Policy covering all employees and directors is available in the Company's website i.e., www.indianterrain.com.
EMPLOYEE STOCK OPTION PLAN (ESOP)
During the financial year ended 31s March, 2018 there were no pending options to be vested or exercised.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL RE-APPOINTMENT OF WHOLE TIME DIRECTOR
Mrs. Rama Rajagopal (DIN: 00003565) was re-appointed as the Executive director of the Company by the Shareholders at the 7th Annual General Meeting of the Company held on 30th September, 2016 for a period of 3 years with effect from 1s October, 2016 as recommended by the Nomination and Remuneration Committee and approved by the Board of Directors of the Company at their meeting held on 1August, 2016.
In accordance with the provision of Section 152 of the Companies Act 2013, Mrs. Rama Rajagopal retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. A brief resume, nature of expertise, disclosure of relationships between directors inter-se, details of directorships held in other Companies of the director proposed to be re-appointed, along with their shareholding in the Company, as stipulated under Secretarial Standard 2 (SS-2) and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to the notice of the annual general meeting.
APPOINTMENT OF MR. KALPATHI SUBRAMANIAN SURESH AS AN ADDITIONAL DIRECTOR (INDEPENDENT DIRECTOR) OF THE COMPANY
Mr. Kalpathi Subramanian Suresh (DIN: 00526480) was appointed as an Additional Director (Independent Director) of the Company by the Board of Directors with effect from 28th May, 2018 as recommended by the Nomination and Remuneration Committee who holds office upto the date of the ensuing annual general meeting subject to regularization by the shareholders of the Company.
KEY MANAGERIAL PERSONNEL CHIEF FINANCIAL OFFICER
Mrs. L. Visalakshi was appointed by the Board of Directors as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 27th May, 2017 as recommended by the Audit Committee in accordance with Section 203 of Companies Act, 2013 in place of Mr. M. Thiyagarajan who resigned from the position with effect from 26th May, 2017.
COMPANY SECRETARY AND COMPLIANCE OFFICER
Mr. Ravi B.S.G was appointed by the Board of directors as Company Secretary and Compliance Officer (Key Managerial Personnel) of the Company with effect from 28th November, 2016 in accordance with Section 203 of Companies Act, 2013.
DECLARATION BY INDEPENDENT DIRECTOR
The Company has received declarations from the Independent Directors of the Company confirming that they continue to meet with the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013, Regulation 25 and 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
EXTRACT OF ANNUAL RETURN
Pursuant to the Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended, an extract of the Annual Return in the prescribed Form MGT-9 is annexed as ANNEXURE- III.
NUMBER OF MEETINGS OF THE BOARD & COMMITTEES
The Board of Directors met 05 (five) times during the financial year ended 31st March, 2018 i.e., on 8th April, 2017, 26th May, 2017, 8th September, 2017, 14th December, 2017 and 13th February, 2018. The gap between the Board meetings were within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The particulars of meeting of all Committees held during the financial year ended 31s March, 2018 are disclosed in the Corporate Governance report forming part of this annual report.
AUDIT COMMITTEE
Pursuant to Section 177(8) of Companies Act 2013, the particulars relating to the composition and all other details about Audit Committee have been detailed in the Corporate Governance Report forming part of this annual report. During the year, all the recommendations of the Audit Committee were accepted by the Board.
NOMINATION AND REMUNERATION COMMITTEE POLICY
Pursuant to the provisions of Section 178(4) of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Nomination and remuneration committee policy of the Company as stated hereunder:
The Remuneration policy of the Company has been structured to match the market trends of the industry, qualifications and experience of the employee and responsibilities handled by them.
The Policy inter alia provides for the following:
a) attract, recruit, and retain good and exceptional talent;
b) list down the criteria for determining the qualifications, positive attributes, and independence of the directors of the Company;
c) ensure that the remuneration of the directors, key managerial personnel and other employees is performance driven, motivates them, recognises their merits and achievements and promotes excellence in their performance;
d) motivate such personnel to align their individual interests with the interests of the Company, and further the interests of its stakeholders;
e) ensure a transparent nomination process for directors with the diversity of thought, experience, knowledge, perspective and gender in the Board; and
f) fulfill the Company's objectives and goals, including in relation to good corporate governance, transparency, and sustained long term value creation for its stakeholders.
Particulars pertaining to the constitution of the Nomination and remuneration Committee and its terms of reference have been detailed in the Corporate Governance report forming part of this annual report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees covered under the provision of section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the notes to the financial statements forming part of this annual report.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had carried out an annual evaluation of the Board as a whole, various Committees, directors individually and the Chairman. Performance of the Board and Board committees were evaluated on various parameters such as structure, composition, quality, diversity, experiences, competencies, performance of specific duties and obligations, quality of decision making and overall board effectiveness.
The Performance of the individual directors was evaluated on parameters, such as meeting attendance, participation and contribution, responsibility towards stakeholders and independent judgment. The Chairman and Managing Director was evaluated on certain additional parameters, such as performance of the Company, leadership, relationships, communication, growth, recognition, achievements and awards received by the Company.
The statement including the manner in which the evaluation exercise was conducted is included in the Corporate Governance report forming part of this annual report.
REPORT AS PER SECTION 134 READ WITH RULE 8 AND SUB RULE 5 OF COMPANIES ACCOUNTS RULES 2014
Change in nature of business, if any: NIL
Name of Companies which have become or ceased to be its subsidiaries, Joint Ventures or associate companies during the year: NIL
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Company has not received any orders / notices from the regulators/ courts/ tribunals impacting the going concern status and future operations of the Company.
INTERNAL FINANCIAL CONTROLS
The Company has an adequate internal financial controls with reference to financial statements which commensurate with the size, scale and complexity of its operations.
To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board and to the Chairman and Managing Director. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal financial controls in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. A report of auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of internal financial controls with reference to financial statements is annexed with the Auditors report.
During the year ended 31st March, 2018, such controls were tested and no reportable material weaknesses in the design or operation were observed. The Company has put in place adequate internal financial controls with reference to financial statements. The Audit Committee and Board of Directors of the Company were appraised on the performance of the internal financial controls.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Pursuant to section 134(3)(n) of the Companies Act, 2013 the Company has framed Risk Management Policy which lays down the framework to define, assess, monitor and mitigate the business, operational, financial and other risks associated with the business of the Company. During the year under review, the Company has not identified any element of risk which may threaten the existence of the Company.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibilities, the working of the Company, nature of the Industry in which the Company operates, business model, etc. The details of the familiarization programme are explained in the Corporate Governance report and also available on the Company's website www.indianterrain.com.
AUDITORS STATUTORY AUDITORS
M/s Anil Nair & Associates, Chartered Accountants, Chennai and M/s. CNGSN & Associates LLP, Chartered Accountants, Chennai, are the Joint Statutory Auditors of the Company.
The Statutory Auditors were appointed in the 8th Annual General Meeting of the Company to hold the office till the conclusion of the 10th Annual General Meeting subject to ratification of the shareholders at every Annual General Meeting. The item related to ratification for appointment of Statutory Auditors by members at this Annual General Meeting is done away with vide notification dated 07th May, 2018 issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of Statutory Auditors, who were appointed in the Annual General meeting held on 25th September, 2017.
The financial statements of the Company including its Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, notes and Schedules to the accounts for the financial year ended 31st March, 2018 have been audited by M/s. Anil Nair & Associates, Chennai and M/s CNGSN & Associates LLP, Chennai. The Statutory Auditors' Report does not contain any qualification, reservation or adverse remark on the financial Statements of the Company. The Independent Auditors' Report is enclosed with the financial statements in the annual report.
SECRETARIAL AUDITOR
Pursuant to the Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Board of Directors had appointed M/s. BP & Associates, Practicing Company Secretaries, Chennai as the Secretarial Auditors of the Company for conducting the Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2018 does not contain any adverse remark, qualification or reservation or disclaimer which requires any explanation/comments of the Board. The Secretarial Audit Report is annexed as ANNEXURE-IV forming part of this Annual Report.
INTERNAL AUDITOR
Pursuant to Section 138 of the Companies Act 2013 read with rule 13 of the Companies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereto) of the Companies Act 2013 and as recommended by the audit committee M/s. RVKS & Associates, Chartered Accountants, Chennai was re-appointed as the Internal Auditors of the Company for the financial year 2017-18.
The audit conducted by the Internal Auditors is based on an internal audit plan, which is reviewed each quarter in consultation with the Audit Committee. These audits are based on risk based methodology and inter alia involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances. The Internal Auditors share their findings on an ongoing basis during the financial year for corrective action. The Audit Committee oversees the work of the Internal Auditors.
LISTING FEE
The Equity shares of the Company are listed on the stock exchanges viz., BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE). The Company has paid the applicable listing fees to the stock exchanges within the stipulated time.
PARTICULARS OF EMPLOYEES
Disclosure with respect to the remuneration of directors and employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as ANNEXURE-I.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company firmly provides a safe, supportive and friendly workplace environment -a workplace where our values come to life through the underlying behaviors. Positive workplace environment and a great employee experience are integral parts of our culture.
The Company has zero tolerance towards sexual harassment at work place. The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment and Non-discrimination at Work Place in line with the requirements of Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
An Internal Complaints Committee (ICC) had been set up to redress the complaints received from women regarding sexual harassment and discrimination at workplace.
During the year ended 31s March, 2018, ICC did not receive any complaint pertaining to sexual harassment / discrimination at various work locations.
DISCLOSURE REGARDING FRAUDS
The Statutory Auditors of the Company has stated that there was no material fraud by the Company or on the Company by its officers or employees was noticed or reported during the course of our audit in their Independent Auditors Report which forms part of this Annual Report. Hence, there is no requirement to report the same to Audit Committee or Board of Directors of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) and 134(5) of the Companies Act, 2013 the directors on the basis of information made available to them, confirm that:
a) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards read with requirements set out under Schedule III to 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 were 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 profit or loss of the Company for that period;
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 to be followed by the company and that such internal financial controls are adequate and are operating effectively.
f) the directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such system are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, external consultants, including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2017-18.
CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE
A. Conservation of Energy:
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Steps taken for conservation
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The operations of the Company are not energy-intensive. However, wherever possible, the Company strives to curtail the consumption of energy on a continuing basis.
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Steps taken for utilizing alternate sources of energy
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Capital investment on energy conservation equipments
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B. Technology absorption:
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Efforts made for technology absorption
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Benefits derived
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Expenditure on Research &
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Development, if any
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Details of technology imported, if any
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Not Applicable
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Year of import
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Whether imported technology fully
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absorbed
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Areas where absorption of imported
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technology has not taken place, if any
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C. Foreign Exchange Earning and Outgo:
a. Total Foreign exchange earned : Nil
b. Total Foreign exchange outgo : Rs. 14.93 Crores
SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards i.e. SS-1 for 'Meetings of the Board of Directors' and SS-2 for 'General Meetings' which are prescribed by the Institute of Company Secretaries of India (ICSI) as per Companies Act, 2013.
PERSONNEL
The employee relations have been very cordial during the financial year ended 31st March, 2018. The Board wishes to place on record its appreciation to all its employees for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year. The management team of the Company comprises of young passionate driven professionals committed to achieve the organizational goals.
ACKNOWLEDGEMENT
The directors place on record their high appreciation and contribution made every member of the Indian Terrain family. The Board places on record its appreciation for the support and co-operation the Company has been receiving from its suppliers, distributors, retailers, business partners, investors, regulatory and government authorities.
For and on Behalf of the Board
sd/-
Venkatesh Rajagopal
Place: Chennai Chairman & Managing Director
Date: 28th May, 2018 (DIN: 00003625)
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