IIT Investrust Limited

BOARD'S REPORT

To,

The Members,

The Indian Card Clothing Company Limited

01. Your Directors take pleasure in presenting their 62nd Annual Report on the business and operations of the Company together with Audited Financial Statements for the year ended 31st March, 2016.

02. PERFORMANCE REVIEW

During the year under review, the Company earned a total revenue of Rs.8,610.92 Lacs as against Rs.7,105.66 Lacs in the Previous Year. The net profit after tax earned by the Company for the financial year 2015-16 has been Rs. 1,360.21 Lacs against the loss after tax of Rs.382.80 Lacs for the financial year 2014-15.

Operations Highlights:

A) Manufacturing:

- During the year under review, the entire range of Metallic Card Clothing was manufactured only at the Nalagarh plant.

- Sale of Metallic Card Clothing from Nalagarh plant increased from Rs. 2,609.26 Lacs to Rs. 3,217.17 Lacs during the financial year 2015-16.

- Development of setting and grinding operations for Tops was commenced at the Nalagarh plant during the year under review. Sale of Tops in the year under review from Nalagarh plant was Rs. 82.53 Lacs.

- In order to strengthen the operational efficiency and reduce cost of operations, existing policies and procedures of the Company were reviewed and modified and new processes were implemented during the financial year 2015-16.

-Tops Height Measuring Device (THM), a new innovation by the Company during the financial year 2015-16 was introduced in the domestic and overseas market for which a patent application has made.

B) Realty:

- During the year under review, your Company successfully completed sale transaction of 1st ?oor of the ICC Devi Gaurav Technology Park, Pimpri, Pune.

- Entire commercial building at Powai, Mumbai and the remaining floor of the IT park at Pimpri, Pune were fully occupied during the financial year 2015-16.

03. SHARE CAPITAL:

The paid up share capital of the Company as on March 31, 2016 was Rs. 455.11 Lacs. 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, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

04. STATE OF COMPANY'S AFFAIRS :

Though the card clothing segment has incurred losses for the financial year ended March 31, 2016, efforts have been made by the Management Team to improve operational efficiency and reduce costs. The card clothing segment incurred certain non-recurring costs in the period under review which masked the improvements in the cost of operation of the segment.

Your directors are positive and confident that the same drive to reduce costs and improving operational efficiency would continue in the coming years. Your directors are also optimistic about better performance in improving sales of the Company in the coming years through improvements in processes and the deployment of appropriate resources which will substantially contribute to the profitability 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 SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”)

05. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a) Meetings of the Board of Directors held during the financial year 2015-16:

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 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All 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 financial year 2015-16:

The following changes have taken place in the Board of Directors of the Company during the financial year 2015-16:

i) At the 61st Annual General Meeting held on August 6, 2015, Mrs. Sangeeta Pandit, who was appointed as an additional director of the Company on November 12, 2014, was appointed as an Independent Director of the Company to hold the office upto 11th November, 2019.

ii) No Director of the Company resigned during the year.

iii) Approval of members was obtained at the 61st Annual General of the Company held on August 6, 2015 for re-appointment of Mr. Mehul Trivedi as a Managing Director for the period of three years with effect from 1st October, 2014.

Mr. Prashant Trivedi (DIN: 00167782) is liable to retire by rotation at the ensuing Annual General Meeting.

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) Detail of Key Managerial Personnel other than Managing Director:

There has been no change in Key Managerial Personnel during the financial year 2015-16.

06. DIVIDEND

The Board of Directors in its meeting held on May 19, 2016 declared Special Dividend of Rs. 12/- per equity share of face value of Rs. 10/- each which was paid as Interim Dividend for the financial year 2015-16.

Further to the Special Dividend, your Directors have recommended, subject to approval of the members of the Company, a final dividend of Rs. 2.50/- per equity share of face value of Rs.10/- each for the Financial year ended March 31, 2016 to be paid out of the profits of the Company.

No amount was transferred to Reserves for the year under review.

07. SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITION:

In accordance with Section 129 (3) of the Companies Act, 2013 and Accounting Standard (AS) 21, 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 percent of the consolidated net worth of the holding company in the immediately preceding accounting year or has generated 20 percent 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://www.cardindia.com/content/pdf/Policy_on_Material_Subsidiaries.pdf

The Statement in form AOC-1 containing salient features of the financial statements of 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 Ltd.:

ICC International Agencies Ltd (ICCIAL) recorded a decrease of 36.25 percent in revenue from Rs. 555.89 Lacs in the previous year to Rs. 354.36 Lacs in the financial year 2015-16. The reduced revenue was due to the termination of an agency agreement with one principal whose business was taken over by its competitor and the global economic slowdown in the textile industry. The Subsidiary Company recorded loss after tax of Rs. 26.16 Lacs in the current year against previous year's profit after tax of Rs. 103.13 Lacs.

b) Garnett Wire Ltd., UK:

Garnett Wire Ltd, a U.K. Company, in which your Company holds 60 percent of the issued share capital, recorded reduction of 1.13 percent in its revenue from £1,269,333 (equivalent to Rs. 1,224.84 Lacs) to £1,255,011 (equivalent to Rs. 1,180 Lacs). The profit after tax was £884,739 (equivalent to Rs. 831.57 Lacs) as against a profit of £31,957 (equivalent to Rs. 30.84 Lacs) in the previous year. The improvement in the subsidiary's performance was primarily due to the sale of its premises. Garnett Wire Ltd. proposes to move its operations to a more modern rented facility. The subsidiary has paid dividend of £2.42857 per equity shares for the financial year ended March 31, 2016.

c) Shivraj Sugar and Allied Products Pvt. Ltd.:

Shivraj Sugar and Allied Products Pvt. Ltd. is yet to commence the operations.

08. AUDIT COMMITTEE

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

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.

09. VIGIL MECHANISM:

The Company has adopted Vigil Mechanism, details of which have been provided in the Corporate Governance Report and also posted on the website of the Company at:

http://www.cardindia.com/content/fr_investors.htm

10. STATUTORY AUDITORS

At the 61st Annual General Meeting, M/s. B.K. Khare & Co., Chartered Accountants, Pune (Firm Reg. No. 105102W) were re-appointed as the Statutory Auditors for the financial year 2015-16 and, subject to ratification by the members at the ensuing Annual General Meeting, for the financial year 2016-17.

The 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 ratified, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued thereunder. As required under Regulation 33(1)(d) of the SEBI (LODR) Regulations, 2015, M/s. B.K. Khare & Co., Chartered Accountants, Pune, have also confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

Your Directors propose that their appointment as Statutory Auditors of the Company for the financial year 2016-17 be ratified by the members at the ensuing Annual General Meeting.

11. AUDITORS' REPORT:

There are no adverse remarks nor any disclaimer, qualifications or reservations in the Auditors' 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

Mr. S. Anantha Rama Subramanian, Proprietor of M/s. S. Anantha & Co., Practising Company Secretaries, Mumbai was appointed as the Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and rules made thereunder.

The Secretarial Audit report for the financial year 2015-16 is enclosed as Annexure - A to the Board's Report.

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

13. DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of section 134 (3) (c) and section 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, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) Mr. J. M. Kothary Chairman (Independent Director)

Mr. H. C. Asher Member (Independent Director)

Mr. Sudhir Merchant Member (Independent Director)

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 Profit of the company for the year;

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 the Company's Auditors 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 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 uploaded on company's website at: http://cardindia.com/content/pdf/nomination_Remuneration_Policy.pdf.

16. PERFORMANCE EVALUATION:

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 carried out based on the criteria/manner approved by the Nomination & Remuneration Committee 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 reviewed the performance of the Secretarial Department. 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 has 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 two percent of the Equity Shares of the Company. Hence, the requirement of disclosure under Section 197 (12) of the Companies Act, 2013 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:

c) The percentage increase in the median remuneration of employees in the financial year: 10.03 percent.

d) The number of permanent employees on the rolls of company as on 31 March, 2016 : 317

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;

The average annual increase in the salaries of employees other than the managerial personnel was 3.70 percent. Managerial remuneration increased by 10.30 percent during the year. There was no exceptional increase in the managerial remuneration.

18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES

a) The percentage increase in the median remuneration of employees in the ?nancial year: 10.03 percent.

b) The number of permanent employees on the rolls of company as on 31 March, 2016 : 317

c) 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 justi?cation thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

d) 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 OF ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 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 from 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://www.cardindia.com/content/fr_abus.htm

20. DEPOSITS:

During the year 2015-16, 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 herewith as Annexure - B to the Board’s 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 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, 2016 the Company has sound internal financial controls commensurate with the nature and size of the business operations of the Company.

25. RISK MANAGEMENT:

Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the constitution of Risk Management Committee is mandatory for only top 100 listed Companies. The Company had, however, voluntarily formed Risk Management Committee to ensure that adequate systems and processes for Risk Management are implemented in the Company. The Company has a two tier structure consisting of Risk Steering Committee and Risk Council to monitor and mitigate the risks of the Company. After satisfying itself about the adequacy of systems and processes implemented in the Company for Risk Management, the Board of Directors of the Company dissolved the Risk Management Committee in its meeting held on February 12, 2016. The Company has in place Risk Management System which takes care of risk identification, assessment and mitigation. 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 Board's Report

26. EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 prepared in form MGT 9 is annexed herewith as Annexure - C to the Board’s 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 eligible for CSR spend as specified under section 135 (5) of the Companies Act, 2013 for the financial year 2015-16 and has not spent any amount on CSR activities during the financial year 2015-16.

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 (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2015-16, no complaints were received regarding sexual harassment.

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

The Company has sold 2nd floor of the ICC Devi Gaurav Technology Park, Pimpri, Pune admeasuring 47,867 Sq. Ft. on April 30, 2016 for a consideration of Rs. 21 Crores. 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. APPRECIATION:

Your Directors place on record their sincere thanks and appreciation for the confidence reposed and continued support extended by Central and State Governments, Bankers, Customers, Suppliers and Shareholders. Your Board would like to place on record its sincere appreciation to the employees for the dedicated efforts and contribution in playing a very significant part in the Company's operations.

For and on behalf of the Board of Directors

Prashant K. Trivedi

Chairman

(DIN : 00167782)

Place : United Kingdom

Date : July 1, 2016