DIRECTORS’ REPORT TO THE MEMBERS, Your Directors have pleasure in presenting their report on business and operations of the Company together with 21st Annual Audited Accounts for the financial year ended 31st March, 2015 2) Operations Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report. 3) Dividend The company continues to evaluate and manage its dividend policy to build long term shareholder value. Your Directors recommends a Final Dividend of Rs.0.50 (i.e. 5%) per Equity Share having face value of Rs.10/- each on the fully paid up Equity Share Capital of the Company for the Financial Year ended 31st March 2015. The Final Dividend paid for the Financial Year ended 31st March 2014 was also Rs.0.50 (i.e. 5%) per Equity Share having face value of Rs.10/- each on the fully paid up Equity Share Capital of the Company. The Final Dividend, if approved by the members in the forthcoming 21st Annual General Meeting, will be paid to the eligible members as per stipulated Companies Act. The dividend will be paid to members whose names appear in the Register of Members as on record date as mentioned in forthcoming Notice of 21st Annual General Meeting and in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. 4) Unclaimed Dividend Transfer to Investor Education & Protection Fund (IEPF) The Company sends letters to all shareholders whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made in co-ordination with the Registrar to locate the shareholders who have not claimed their dues. Pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, during the year under review. The unclaimed / unpaid dividend for FY 2006-07 amounting Rs.170454.00 (One Lac Seventy thousand four hundred fifty four only) have been transferred / credited to IEPF on 07th November, 2014. The cumulative unclaimed / unpaid dividend amount up to FY 2006-07 lying in the credit of IEPF as at 31st March 2015 is amounting Rs.314934.00 (Rupees Three Lac Fourteen thousand Nine Hundred Thirty Four). Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 24th September 2014 (date of last Annual General Meeting) on the Company’s website (www. inteccapital.com) and on the website of the Ministry of Corporate Affairs. The unclaimed / unpaid dividend amount for the FY 2007- 08 as on 31st March, 2015 is due for transfer to IEPF on 07th November, 2015 amounting Rs171374.00 (One Lac Seventy One thousand Three hundred Seventy four only) Those members who have not yet claimed / encased are requested to claim the same at the earliest before transfer to IEPF. 5) Share Capital The paid-up Equity Share Capital of the Company as on 31 March 2015 is Rs.18.36 crore. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options. 6) Registration as a Systemically Important Non-Deposit taking NBFC and its Disclosures Your Company was registered on 4th May 1998 by Reserve Bank of India as a Non-Banking Financial Institution (Non-Deposit taking). In terms of provisions of Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, your Company is categorized as a ‘Systemically Important Non-Deposit taking Non-Banking Financial Company’. Your company has attained the status of Asset Finance Company and got converted into NBFC-AFC on 7th April 2014 The disclosures as prescribed by Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 and other NBFC Directions have been made in this Annual Report. 7) RBI Revised Regulatory Framework During the year under review, the RBI has notified the comprehensive Revised Regulatory framework for Non-Banking Financial Companies vide notification dated 10th November 2015. The RBI framework key changes is on minimum NOF, definition of systematically important NBFC’s, asset classification norms for NPA, Provisioning for Standard Assets, Corporate governance and disclosure norms, Fit and proper criteria for directors, Prudential Norms, Fair Practice code, disclosures in financial Statements. Your company is adhering to RBI Revised regulatory framework. 8) Non Acceptance of Public Deposits Your Company has not accepted public deposits during the year under review in terms of chapter-V of the Companies Act, 2013 and hence there are no defaults in repayments of amount of principle or interest as on date of Balance Sheet. 9) Credit Rating Agencies During the year under review, the company has sustained its Long Term Credit Rating assigned to the long term bank facilities by Credit Analysis & Research Limited (CARE) is CARE BBB+ (Triple B Plus) for an amount of Rs. 675 crore and for commercial papers is CARE A1+ (SO) for an amount of Rs.10 crore The rating indicates highest degree of safety regarding timely servicing of financial obligation. The rated instrument carries lowest credit risk. 10) Transfer to Reserves During the year under review Company has transferred Rs. 128.65 lakhs to the Reserves Fund from the profits of the Company in accordance with the provisions of Section 45IC of the Reserve Bank of India Act, 1934. 11) Capital Adequacy Ratio The Company’s total Capital Adequacy Ratio (CAR) as on 31st March, 2015 stood at 21.53% as compared to 22.63% for the previous year as a percent of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 20.00%. 12) Depository System As the members are aware, the Company’s shares are compulsorily tradable in electronic form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the Depositories. 13) Management Discussion Analysis Report (MDAR) The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section and annexed at Annexure – 1 to this report and forms part of the Annual Report. 14) Corporate Governance Report and its Compliance Certificate The Company is committed to maintain the highest standards of corporate governance and adhere to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms an integral part of this Report. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed at Annexure – 2 to this report and forms integral part of the Annual Report. The requisite Certificate from the practicing Company Secretary of the Company confirming compliance with the condition of Corporate Governance as provided under the aforesaid Clause 49 is annexed at Annexure – 3 to this report and forms integral part of the Annual Report. All Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the year 2014- 15. A declaration to this effect signed by the Managing Director of the Company is annexed at Annexure – 4 to this Report and forms integral part of this Annual Report. The Certificate by Managing Director and Chief Financial Officer on financial statements as stipulated under Clause 49 of the Listing Agreement is annexed at Annexure – 5 to this report and forms integral part of the Annual Report. 15) Subsidiary Company and its Performance We have one 100% Wholly Owned Subsidiary i.e. Amulet Technologies Limited which was incorporated as private limited company on 30th April 2011. It converted in public limited company on 27th March 2012. The Primary objective of company is to offer consultancy, advisory & all related services in all areas of information technology including computer hardware & software, data communication, telecommunications, manufacturing & process control & automation, artificial intelligence, natural language processing. 1.Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries. Further, Pursuant to Section 129(3) of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of subsidiary Company in the prescribed form AOC-1 has been annexed at Annexure – 6 to this report and forms integral part of the Annual Report. In terms of provisions of 4th proviso of Section 136 of the Companies Act, 2013, the Company shall place separate Audited Accounts of the Subsidiary Companies on its website at www. inteccapital.com. The Company will make available physical copies of these documents upon request by any shareholder of the Company/ subsidiary interested in obtaining the same. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing Annual General Meeting. 16) Performance and Financial Position of Subsidiary Company included in Consolidated Financial Statement The detailed report on performance and financial position of subsidiary company is discussed in Management Discussion Analysis Report and also included in the consolidated Financial Statements, pursuant to Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014 17) Abridged Financial Statements In accordance with the listing agreement with Stock Exchanges and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014 of the said Act, the Abridged Annual Report containing salient features of the Financial Statements, including Consolidated Financial Statements, for the financial year 2014-15, along with statement containing salient features of the Directors’ Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode. Full version of the Annual Report 2014-15 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including Consolidated Financial Statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Director’s Report (including Management Discussion and Analysis Report, Corporate Governance Report and Business Responsibility Report) are being sent via email to all shareholders who have provided their email address(es). Full version of Annual Report 2014-15 is also available for inspection at the registered office of the Company during working hours up to the date of ensuing Annual General Meeting (AGM). It is also available at the Company’s website at www. inteccapital.com. A Cash Flow Statement for the year 2014-15 is attached to the Balance Sheet. 18) Consolidated Financial Statements The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and as prepared in compliance with the Companies Act, 2013, Accounting Standards and the Listing Agreement as prescribed by SEBI. A separate statement containing the salient features of its subsidiary as per prescribed Form No. AOC- 1 is annexed at Annexure No. 6 separately. 19) Material Changes and Commitments There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report. 20) Significant and Material Orders Passed by The Regulators or Courts During the year under review, there were no significant and material orders passed by the regulators or courts or tribunals, which may impact the going concern status of the Company and its operations in future. 21) Internal Financial Control System (IFCS) and its Adequacy The Company has satisfactory internal control system. According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company’s policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Independent Internal Auditors of the Company. The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board’s report. To ensure effective Internal Financial Controls the Company has laid down the following measures: • The Company also has a robust Management Information System which is an integral part of the control mechanism. • All key operations are executed through Standard Operating Procedures (SOPs) in all functional activities for which key manuals have been put in place. The manuals are updated and validated periodically. • All legal and statutory compliances are ensured on a monthly basis through a various compliance tools and framework. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system. • The Company has developed various comprehensive compliance processes and framework which are modified according to requirement and which prescribed the role and responsibility of various persons who is responsible for compliance. • The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board. • The audit reports for the above audits are compiled and submitted to Audit Committee for review and necessary action. • The Company has a comprehensive risk management framework. • The Company has a robust mechanism of building budgets at an integrated cross- functional level. The budgets are reviewed on a monthly basis so as to analyze the performance and take corrective action, wherever required. • The Company has a system of Internal Business Reviews. All departmental heads discuss their business issues and future plans in monthly review meetings. They review their achievements in quarterly review meetings. • The Company has in place a well-defined Whistle Blower Policy/ Vigil Mechanism. • The Compliance of secretarial functions is ensured by way of secretarial audit. • The control system is improved and modified on continuous basis to meet the changes in business, statutory and accounting requirements. • The Audit Committee of the Board and Statutory Auditors periodically reviews the internal audit findings and corrective actions are taken. • The Company has Mechanism in place for handling the grievances related to the customers. The NON GRO grievances are directly handled by the customer care department and others are handled by GRO itself. • ?The company has adopted Sexual Harassment policy. 22) Extract of Annual Return as per Section 92(3) and in Form Mgt-9 The extract of Annual Return as on March 31, 2015 in the prescribed Form No. MGT-9, pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is annexed at Annexure No. 7 and forms integral part of this Report. 23) Related Party Transactions The Company has in place a Related Party Transactions Policy (RPT Policy) in line with section 188 and other applicable section of the Companies Act, 2013 read with and clause 49 of the Listing Agreement. The Policy on RPTs as approved by Board is also uploaded on the Company’s website www.inteccapital.com During the financial year under review, in terms of section 134(3) (h) read with sub-section (1) of section 188 read with third proviso of section 188(1) of the Companies Act, 2013 and read with clause 49 of the Listing Agreement, your Company has not entered into any material transaction (as per Clause 49 of the Listing Agreement) with any of its related parties which may have potential conflict with the interest of the Company at large. Besides, during the year under review, all related party transactions done by the Company were in ordinary course of business and at arm’s length and were placed in the meetings of Audit Committee for its omnibus approval and subsequently placed before the board for its review, noting and approval wherever required pursuant to section 177 of the Companies Act, 2013 read with clause 49 of the Listing Agreement and read with Company’s RPT policy. Your Directors draw attention of the members to Note No. 2.29 to the financial statement which sets out related party transactions in terms of Accounting Standard 18. The disclosures pursuant to section 13(4)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014) in prescribed form AOC-2 is annexed at Annexure – 8 to this report. 24) Corporate Social Responsibility (CSR) and its Report The Company has in place a CSR Policy in line with Schedule VII of the Companies Act, 2013. As per the policy the CSR activities are focused not just around the plants and offices of the Company, but also in other geographies based on the needs of the communities. Intec’s vision is to help children achieve their ambitions in the right way by playing a broader role in the communities in which we live and work beyond what we deliver through core business activities. We do this through community investment programmes and the direct efforts of our colleagues. By aligning our community investment strategy to our skills and experience as an NBFC, the positive impact of our activity is much more than just a financial contribution Our Purpose is – “to actively contribute to the social and economic development of the communities in which we operate. In so doing build a better, sustainable way of life for the poor and disadvantaged children and raise the country’s human development index. The Company is committed to play a broader role in the communities in which it operates by way of supporting various initiatives through funding, fund raising and/or volunteering activities. Your Company undertakes its Corporate Social Responsibility (CSR) activities through a variety of effective programs. In order to achieve its goal, the company will undertake and support the under privileged children by focusing in following four areas: a) Providing elementary education b) Providing vocational knowledge c) Providing Financial literacy and Mathematical enhancement d) Eradication of poverty and providing basic amenities of Food, shelter and health to such children In addition to this, the Company will also undertake intervention in the areas of disaster relief, environment, rural and urban infrastructure and building social capital infrastructure. These activities are broadly in accordance with the Schedule VII of the Companies Act, 2013. The Board of Directors and the CSR Committee review and monitor from time to time all the CSR activities being undertaken by the Company. The Annual Report on Corporate Social Responsibility (CSR) and on CSR Activities Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed at Annexure – 8 to this report which forms integral part of Annual Report. The contents of the CSR Policy as well as the CSR activities undertaken by the Company are available on the Company website. 25) Reasons for not Incurring 2% CSR Expenditure The reasons for not incurring 2% CSR Expenditure as prescribed in the Companies at, 2013 read with rules made there under is mentioned below. As 2014-15 was the first year of the concerned provision, the Company was in the process of conceptualizing and operationalizing the right framework and feasible projects for the activity. In the Financial Year 2014-15, the Company had approved the CSR Budgets for an amount not exceeding Rs. 5 lakhs but could not incur the required expenditure on CSR Projects and activities. 26) Information on Voluntary Delisting in Terms of Applicable Laws During the period under review, the acquirers have sent the proposal of voluntary delisting of equity shares of the Intec Capital Limited from BSE and DSE to the Board of Directors of the Company in terms Securities and Exchange of India (Delisting of Equity Shares) Regulations, 2009. The aforesaid delisting proposal was accepted by the Board of directors subject to the applicable regulations and laws and subject to the approval of shareholders through postal ballot. Your company had sought shareholders’ approval through postal ballot for aforesaid delisting of equity shares of the Company which was passed by the shareholders on 25th September 2014. Subsequently, Acquirers has given the public announcement on November 12, 2014 and the company has dispatched letter of offer and bid forms to the shareholders on November 24, 2014 which was recognized as the specified date. Further the letter of offer was for acquisition of 46,55,586 Equity shares held by public constituting 25.35% of the equity Share capital of the Company and the floor price decided for the acquisition of Equity shares was 109.45. The Bid period i.e. the opening date of offer was December 11, 2014 and the end date of bid period was December 17, 2014 .Further it was sated that upon acquisition of a minimum 28,18,961, Equity shares and fulfillment of the condition stipulated under the Delisting Regulations and the public announcement and the letter of offer sent to shareholders , the Acquirer and the company will seek to voluntarily delist its Equity shares from the stock exchanges. On December 18th 2014 company had received a letter from the acquirers intimating that the delisting offer has been unsuccessful as the number of equity Shares tendered by the public shareholders of the Company during the bid period has not reached the minimum number of Equity Shares required to be accepted by the acquirers as stipulated in Regulation 17 of the SEBI Delisting Regulation 2009 so the delisting offer has been unsuccessful. 27) Statutory Auditors and their Report Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules made there under, BSR & Associates LLP, Chartered Accountants (Firm No 116231 W / W – 100024), Gurgaon, Haryana (hereinafter to as “Resigning Statutory Auditors”) were re-appointed as Statutory Auditors by the shareholder at 20th Annual General Meeting held on 24th September 2014 for conducting the Statutory Audit for the ?Financial year ended 31st March 2015 and to hold office from conclusion of 20th Annual General Meeting to conclusion 21st Annual General Meeting. The aforesaid ‘Resigning Statutory Auditors’ have tendered their resignation with immediate effect vide their Letter dated 17th March 2015 from the post of Statutory Auditor due to paucity of time in auditing resulting into casual vacancy in the office of Statutory Auditor of the Company as envisaged by Section 139(8) of the Companies Act 2013. On recommendation of the Audit Committee, the Board of Directors in its meeting held on 20th March 2015 and subsequently Shareholders by passing ordinary resolution through Postal Ballot on 8th May 2015, had approved the appointment of S.R. Batliboi & Associates LLP (LLP Identity No AAB-4295), Chartered Accountants (Firm No. FRN 101049W) having its office at 14th Floor, The Ruby, 29 Senapati Bapat Marg, Dadar (West), Mumbai-400028 (herein after referred to as Current Statutory Auditors) as Statutory Auditors of the Company to fill the Casual Vacancy caused due to resignation of Resigning Statutory Auditors for conducting the Statutory Audit for the Financial Year Ended 31st March 2015 and to hold office for the period starting from 20th March 2015 till conclusion of ensuing AGM on the remuneration decided by the Board of Directors. S.R. Batliboi & Associates LLP will hold their office with effect from 17th March 2015 till the 21st Annual General Meeting and are eligible for reappointment have confirmed their eligibility and willingness to accept office if re-appointed. The Company has received letters from the Current Statutory all of them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for reappointment. The Board recommends the Current Statutory Auditors reappointment for conducting the statutory Audit for the financial ended on 31st March 2016 and for a term of one year starting from conclusion of 21st Annual General Meeting and till 22nd Annual General Meeting of the Company the approval of the shareholders with a request to approve their re-appointment. The Auditor’s Report for the financial year ended 31st March 2015 does not contain any qualification, reservation or adverse remark or disclaimer. However, the Auditor’ report contains the observations the extract of which along with management reply is mentioned below Extract of Auditor’s Observations is below: Emphasis of Matter:- “We draw attention to Note 2 (c) (I) (i) in the statements for the change in Company’s estimates related to provisioning for loans, which have been revised in order to align the same in accordance with Reserve Bank of India (‘RBI’) prudential norms on Non-Performing Assets (NPA). As informed to us, the above mentioned change has been carried out in view of management’s re-assessment of recoverability of its non-performing assets, considering the quality and quantum of primary and collateral security available with the Company. Our opinion is not qualified in respect of this matter.” Note 2(c)(I)(i) given in the financial statements: “During the year ended March 31, 2015, the Company has changed its estimates related to provisioning for all loans in order to align the same in accordance with RBI Prudential norms on Non- Performing Assets (NPA). Consequent to the change in such estimates, provision and write off is lower by Rs.1,525.99 lakhs for the year ended March 31,2015. The above mentioned change has been carried out in view of management re-assessment of recoverability of its NPA, considering the quality and quantum of primary and collateral security available with the Company.” Management Reply on the aforesaid Auditor’s Observations on Emphasis of Matter Earlier NPA provisioning was done on higher side considering the size of the loans and the risks attached to it. During the quarter ended December 31, 2014, the Company had changed its estimates related to provisioning for all loans in order to align the same in accordance with RBI Prudential norms on Non- Performing Assets (NPA). Besides, management had also decided to provide higher provision in those cases where it deems fit and judicious considering the quality and quantum of primary and collateral security available with the Company in order to have reassessment of recoverability of its NPA. Due to above changes, provisioning is showing a lower side. 28) Internal Auditor and their Report The Board of Directors had appointed JRA & ASSOCIATES, Chartered Accountants, Firm Registration Number- 010576N as Internal Auditor to carry out Internal Audit of the Company, pursuant to the provisions of section 138 of the Companies Act, 2013 and Rules made there under. The Internal Audit Report is directly presented to the Audit Committee Chairman for its review. 29) Secretarial Auditor and their Report The Board of Directors had appointed Sudhanshu Singhal, (membership number: 7819) Company Secretary in Practice (COP No 8762) as Secretarial Auditor to carry out the Secretarial Audit of the Company, pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made thereunder. The Secretarial Audit Report for the year 2014-15 given Sudhanshu Singhal in the prescribed form MR-3 is annexed at Annexure – 10 to this Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor. 30) Key Managerial Personnel The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows: Mr. Sanjeev Goel : Managing Director Mr. Sudhindra Sharma : Chief Financial Officer Mr. Puneet Sehgal : Company Secretary During the year there was no change (appointment or cessation) in the office of any KMP 32) Committees of the Board The company has following below mentioned Committees of Shareholders/Investors’ Grievance Committee cum Share Transfer Committee cum Stakeholders Relationship Committee Board (COB). Audit Committee ?Risk Management Committee ?Nomination and Remuneration Committee ?Corporate Social Responsibility Committee ?Asset Liability Management Committee (ALCO) Shareholders/Investors’ Grievance Committee cum Share Transfer Committee cum Stakeholders Relationship Committee ?Independent Directors Committee (See Note-1) ?Operations Review Committee The detailed note on the Board and the Committees of the Board (COB) covering its member’s composition, brief terms of reference of the committee, meetings held and attended during the year is separately mentioned in “Corporate Governance Report section” in this Annual Report. Note-1: This committee was dissolved by Board of Director’s in its Meeting held on 7th February 2015 33) Board of Directors and Changes among them A. Appointment of Directors During the year Mrs. Ritika Goel (DIN 00053387) is appointed as an Additional Director on the Board of Directors subject to approval of shareholders in the forthcoming 21st Annual General Meeting in the category of Non-executive Non Independent Woman Director, who shall hold office up to ensuing Annual General Meeting of the Company in terms of Section 161 and second proviso to Section 149 (1) read with Section 152 and other applicable provisions and rules made there under (including any modification or re-enactment thereof for the time being in force), if any, of the Companies Act, 2013 read with Clause 49 (II) (A) (1) of Listing Agreement, and her period of office is liable to be determined by retirement of directors by rotation in terms of section 152(6) of Companies Act, 2013 read with rules made there under. Mrs. Ritika Goel holds a Bachelor of Arts degree from Lady Shriram College. She is Director on the Board of Directors of various Companies and possesses over 10 years of various industry experience The Directors recommends the regularization of appointment of Mrs. Ritika Goel as Non-executive Non-independent Woman Director on the Board of Director of the company in the forthcoming 21st Annual General Meeting of the Company. B. Retirement During the year, Board approved the retirement of Mr. Robindra Gupta from designation of Non-Executive Independent Director pursuant to RBI Regulatory Framework dated 10th November 2014 related to age criteria whereby independent directors shall not be more than 70 years of age. The Board would like to thank and record its appreciation for the services rendered by him to the Board and to the Company. C. Re-appointments As per the provisions of Companies Act, 2013 and Article 86 of the Articles of Association of the Company Mr. Vishal Kumar Gupta (DIN: 02368313), Director of the Company will be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Directors recommends the re-appointment of Vishal Kumar Gupta as Non-Executive Nominee Director on the Board of Director of the company in the forthcoming 21st Annual General Meeting of the Company. D. Independent directors During the year under review, the members in their Annual General Meeting held on 24th September 2014 had approved the appointments of Mr. S.K. Goel, Mr. Robindra Gupta, Mr. Praveen Sethia, Mr. Rakesh Kumar Joshi, Mr. Y.L. Madan and Mr. Dhruv Prakash as Independent Directors who are not liable to retire by rotation for a period of 5 years from date of appointment but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report. During the year under review, all the independent directors had submitted the Declaration of Independence, as required pursuant to section 149(7)of the Companies Act, 2013 stating that they meet the criteria of independence as provided in section 149 (6) of the Companies Act, 2013 read with clause 49 of the Listing Agreement. E. Fit and proper criteria for directors in terms of Revised Regulatory Framework for NBFC During the year under review, all the non-executive / independent directors have executed ‘Deeds of Covenants’ with the company and had also submitted the ‘Fit and Proper Criteria Declaration’ required pursuant to Revised Regulatory Framework for NBFC notified by RBI vide notification dated 10th November 2015 as part of Corporate Governance norms. F. Directors’ profile A brief resume of Directors, nature of their expertise in specific functional are as and names of companies in which they hold Directorships, Memberships /Chairmanships of Board Committees, and shareholding in the Company are provided in this Report. 34) Separate Meeting of Independent Director During the year under review, the Independent Director’s viz. of the company meets without the presence of non-independent directors, in terms of Section 149(8) and Schedule – IV and Clause 49 (B) (II) (6), and members of management and discussed, interalia, (a) to review the performance of non-independent directors and the Board as a whole; (b) to review the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors; (c) to assess the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. 35) Familiarization Policy and Programme During the year under review and as defined under clause 49 of the Listing, your Company, for many years now, has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies, including significant aspects of the Industry and its future outlook. The Familiarization Policy and programmeis at annexed at Annexure No. 12 to this report. The details of familiarization programs extended to the Non-executive & Independent Directors during the year are also disclosed from time to time at Company website. 36) Performance Evaluation of The Board, its Committees and Individual Directors Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors. The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of Non- Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors. The Nomination and Remuneration Committee has also carried out evaluation of every Director’s performance. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 to the Listing Agreement, the Board has carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Committees. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report. The Directors expressed their satisfaction with the evaluation process. 37) Disclosure on Nomination and Remuneration Committee and Nomination and Remuneration Policy The Nomination and Remuneration Committee as on March 31, 2015 comprises of the following Directors viz. Mr. Praveen Sethia, Mr. Sanjeev Goel, Mr. Vishal Kumar Gupta, Mr. Rakesh Joshi and Mr. Y. L Madan Further, all recommendations of Nomination and Remuneration Committee were accepted by the Board of Directors. The detailed Nomination and Remuneration Committee and its terms of reference and meetings held and attended by the members during the year are mentioned in Corporate Governance Report Section. The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, framed the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013. The Policy is annexed at Annexure No. 11 to this report which forms integral part of this report. The contents of the policy are uploaded in company website and also stated in the Corporate Governance Report. 38) Disclosure on Audit Committee The Audit Committee as on March 31, 2015 comprises of the following Independent Directors viz. Mr. Praveen Sethia, Mr. Vishal Kumar Gupta, Mr. Rakesh Kumar Joshi. Further, all recommendations of Audit Committee were accepted by the Board of Directors. The detailed Audit Committee and its terms of reference and meetings held and attended by the members during the year are mentioned in Corporate Governance Report Section. During the year 2014-15, the company has complied the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members of the Audit Committee possess financial / accounting expertise / exposure. The Company Secretary of the Company acts as the Secretary to the Committee. The Statutory Auditors, the Managing Director and the Chief Financial officer of the Company attends and participates in the meetings of the Audit Committee. 39) Disclosure of Board and Committee Meeting Process A. Board material distributed in advance The agenda and notes on agenda are circulated to Directors in advance, and in the defined agenda format. All material information is incorporated in the agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda, it is tabled before the meeting with specific reference to this effect in the agenda. In special and exceptional circumstances, additional or supplementary item(s) on the agenda are permitted. B. Recording minutes of proceedings of board and committees meetings The Company Secretary records minutes of proceedings of each Board and Committee meeting. Draft minutes are circulated to Board/Board Committee members for their comments. The minutes are entered in the Minutes Book within 30 days from the conclusion of the meeting. C. Post meeting follow-up mechanism The guidelines for Board and Board Committee meetings facilitate an effective post meeting follow-up, review and reporting process for decisions taken by the Board and Board Committees thereof. Important decisions taken at Board/ Board Committee meetings are communicated promptly to the concerned departments/divisions. Action-taken report on decisions/minutes of the previous meeting(s) is placed at the succeeding meeting of the Board/Board Committee for noting. D. Finalization of meetings The Chairman of the Board and Company Secretary, in consultation with other concerned members of the senior management, finalise the agenda for Board meetings. E. Compliance The Company Secretary, while preparing the agenda, notes on agenda and minutes of the meeting(s), is responsible for and is required to ensure adherence to all applicable laws and regulations, including the Companies Act, 1956/ Companies Act, 2013 read with rules issued there under, as applicable and the Secretarial Standards as Notified by Ministry Corporate Affairs and issued by the Institute of Company Secretaries of India, as applicable. 40) Directors’ Responsibility Statement Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors, based on the representations received from the Management, confirm : a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same; b) that they have, in selection of the accounting policies, consulted the statutory auditors and have 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 that period; c) that to the best of their knowledge and information, they have taken proper and sufficient care 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) that they have prepared the annual accounts on a going concern basis; e) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) that they have had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 41) Non-Convertible Debentures During the year under review, the Company met its funding requirements through a combination of short term debt (comprising Commercial Paper, Inter Corporate Deposits and Bank Loans) and long term debt (comprising Non-Convertible Debentures (“NCDs”) and Bank Term Loans). Pursuant to the approval of the shareholder in November 2014, accorded by way of a Postal Ballot, the Company had issued on Listed Fully Secured Redeemable Non-Convertible Debentures amounting Rs. 50 crore on private placement basis with tenor of 48 months pursuant to section 42 of and applicable provisions of the Companies Act, 2013 read with Companies (Prospectus and Allotment of Securities) Rules, 2014 which helped in Asset Liability Management and strengthened the long term resource base of the Company. The Company has been regular in servicing all of its debt obligations. The Half Yearly and Annual Results of the Company are regularly submitted to the Stock Exchanges in accordance with the Listing Agreement for Debt Securities and are published in a leading English daily newspaper. The information regarding the performance of the Company is shared with the debenture holders every six months through a half yearly communiqué. Official news releases, including on the half-yearly and annual results, are also posted on the Company’s website. The ‘Investors’ section on the Company’s website keeps the investors updated on material developments in the Company by providing key and timely information such as Financial Results, etc. The debenture holders can also send in their queries/complaints at the designated email address: complianceofficer@inteccapital. com As per the provisions of the Companies Act, 2013, interest on application money, matured debentures and interest on matured debentures remaining unclaimed for a period of seven years from the date it becomes due for payment has to be transferred to the Investor Education and Protection Fund (“IEPF”) established by the Central Government. However, no such amount had to be transferred to the IEPF during the year, as the seven year period has not elapsed for the Company’s debentures. In case any of the above dues remain outstanding, the debenture holders are requested to claim the same at the earliest by contacting the Company or the Registrars. In terms of the provisions of the Companies Act, 2013, no claims would lie against the Company or the IEPF after the transfer of any amount to the IEPF. The Debentures issued on private placement basis are listed on BSE. The Company has paid Annual Listing fees for FY 2014-15 to BSE, where the Company’s debentures, whether issued on a private placement basis, are listed. Debenture Trustee GDA Trusteeship Limited Plot No 85, Street, Bhusari Colony, Paud Road, Pune – 411038. Registrar and Transfer Agents for Fully Secured redeemable Non-convertible Debentures on Private Placement Basis BIG SHARE SERVICES PVT. LTD. 306, Right Wing, 3rd Floor, Amrutha Ville, Opp. Yashoda Hospital, Raj Bhavan Rd, Somajiguda, Hyderabad, Telangana 500082 Compliance Officer Mr. Puneet Sehgal complianceofficer@inteccapital.com Address of BSE PhirozeJeejeebhoy Towers, Dalal Street, Mumbai – 400 001 www.bseindia.com Scrip Code 951360 ISIN No. INE017E07015 42) Risk Management Policy The Company has in place a Risk Management Policy in line business requirement. The Risk Management was constituted originally on 8th January 2013 and was reconstituted from time to time according to need of the company. The Risk Management Committee has been entrusted with the responsibility of Formulation of policies, procedures and practices to identify, evaluate, address and monitor risk and to ensure business growth plans are supported by effective risk infrastructure. The Risk practices and conditions adopted are appropriate for the business environment and to assist the Board in discharge of its duties & responsibilities and in overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. Information on identification and elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the Management Discussion Analysis & Report section in this Annual Report. The detailed information on Risk Management Committee its constitution, its meeting held and attended during the year under review is separately mentioned in Corporate Governance Report Section. The Company has introduced several improvements to existing internal policies / processes / framework / audit methodologies to mitigate / minimize the enterprise risk. 43) Whistle Blower / Vigil Mechanism The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a whistle blower policy wherein the employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the management to the work groups. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice 47 Your Company has an effective Whistle Blower / Vigil Mechanism system in terms of Section 177(9) of the Companies Act, 2013 and other applicable provisions as amended from time to time read with clause 49(II) (F) of the revised Listing Agreement as enforced by the SEBI and Stock Exchanges The Whistle Blower / Vigil Mechanism Policy was adopted in terms of Section 177(9) of the Companies Act, 2013 and other applicable provisions as amended from time to time read with clause 49(II) (F) of the revised Listing Agreement as enforced by the SEBI and Stock Exchanges. The Whistle Blower / Vigil Mechanism Policy is also available on the Company website to report any genuine concerns about unethical behavior, any actual or suspected fraud or violation of Company’s Code of Conduct. 44) Particulars of Employees, Key Managerial Personnel and Related Disclosures In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the Name, Designation, Qualifications, Experience (in Years), Remuneration (in H), Date of Appointment, Age (in years), Particulars of last employment of the employees drawing remuneration in excess of the limits set out in the said rules is annexed at Annexure – 13 which forms part of this report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed at Annexure – 14 which forms part of this report. As required under the section 197(12) of the Companies Act, 2013 read with the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the prescribed particulars are disclosed in the Director’s Report Also in terms of provisions of section 136(1) of the said Act, these particulars will be made available to shareholder on request. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company’s website. None of directors is holding any shares in the company except Mr. Sanjeev Goel, Managing Director holding 544464 fully paid equity shares as individual promoter category and Mr. Praveen Sethia holding 18 fully paid equity shares in individual nonpromoter category. None of directors is having any pecuniary relationship with the company except Mr. Dhruv Prakash, Non-executive Independent Director and Mr. Y.L. Madan, Non-executive Independent Director who are having business relationship in the ordinary course of business and on arm’s length basis. During the year under review, Mr. Dhruv Prakash, Non-executive Independent Director was paid H 10,00,000/- towards consultancy of HR services which is in ordinary course of business and on arm’s length basis. Besides, Mr. Y.L. Madan, Non-executive Independent Director was also H 420,000/- towards consultancy of Treasury Services which is in ordinary course of business and on arm’s length basis. During the year the Managing Director was paid the remuneration amounting Rs.1 crore (Rupees One crore only) the break-up of which is mentioned in Annexure -7 of this report 45) Particulars of Loans, Guarantees or Investments Under Section 186 of The Companies Act, 2013 There are particulars of loans guarantees or investments required to be reported pursuant to Section 134(3) (g) of the Companies Act, 2013 in terms of Section 186 of the Companies Act and same is mentioned in the Schedules forming part of the Balance Sheet. 46) Green Initiatives and E-Voting This year we had started Green Initiative in Corporate Governance: Go Paperless as a sustainability initiative and minimizing our impact on the environment. Under this Go Green initiative electronic copies of the Annual Report 2015 and Notice of 21st Annual General Meeting shall be sent to those Members whose email addresses are registered with the Company/RTA. For other members who have not registered their email addresses, physical copy of the Annual Report and Notice of AGM are sent in the permitted mode. Members requiring physical copies can send a request to Compliance Officer of the Company. The Company is providing e-voting facility to all its members to enable them to cast their votes electronically on all the resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act 2013 and Rule 20 of the Companies (Management and Administration) Rules 2014.The instructions for E-voting is provided in the Notice. 47) Reminder to investors: Reminders for unclaimed shares, unpaid dividend are sent to shareholders/debenture holders as per records every year. 49) SEBI (Prohibition Of Insider Trading) Regulations 2002 And Its Disclosures Under Insider Trading Code The Company has in place the “Internal Code for prevention of Insider Trading” pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2002. SEBI vide its Circular No. dated 15th January, 2015, has introduced SEBI (Prohibition of Insider Trading) Regulations, 2015, to be effective from 15th May, 2015 which has replaces the old SEBI PIT Regulations. Accordingly, the Board of Directors has formulated “Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders pursuant to Regulation 9 of SEBI (Prohibition of Insider Trading), 2015” Besides, the Board of Directors has also formulated the “Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information” (hereinafter referred to as the “Code”) pursuant to Regulation 8 under Chapter — IV of SEBI Prohibition of Insider Trading) Regulation, 2015 All the necessary disclosures pursuant to the Insider Trading Code have been made by all the directors. 50) Secretarial Standards Notified by Ministry of Corporate Affairs and Issued by the Institute of Company Secretary of India The Institute of Company Secretaries of India (ICSI), one of India’s premier professional bodies, has issued Secretarial Standards on important aspects like Board meetings, General meetings, Payment of Dividend, Maintenance of Registers and Records, Minutes of Meetings, Transmission of Shares and Debentures, Passing of Resolutions by Circulation, Affixing of Common Seal and Board’s Report. Although these standards, during the year under review, are recommendatory in nature. However, the Ministry Corporate Affairs vide notification dated 23rd April 2015 had notified two secretarial Standards i.e. 1) Secretarial Standard on Meetings of the Board of Directors (SS-1); 2) Secretarial Standard on General Meetings (SS-2). The aforesaid Secretarial Standards is applicable from 1st July 2015 onwards. 51) Annual Report The Annual Report containing, inter alia, Audited Financial Statement, Consolidated Financial Statements, Directors’ Report, Auditors’ Report and other important information is circulated to members and others entitled thereto. The Management’s Discussion and Analysis (MD&A) Report forms part of the Annual Report and is displayed on the Company’s website. 52) BSE Corporate Compliance & Listing Centre (The Listing Centre): BSE’s Listing Centre is a web-based application designed for corporates. All periodical compliance filings like shareholding pattern, corporate governance report, media releases, amongothers are also filed electronically on the Listing Centre. 53) SEBI complaints redress system (SCORES) The investor complaints are processed in a centralized webbased complaints redress system. The salient features of this systemare: Centralized data base of all complaints, online upload of Action Taken Reports (ATRs) by concerned companies and online viewing by investors of actions taken on the complaint and its current status. 54) HRD Initiatives- Training & Development The Company recognizes the importance of Human Resource and the continuous need of development of the same. The Company stresses on the need to continuously upgrade the competencies of its employees and equip them with the latest developments. In order to achieve this, the Company organizes various programs including in-house training and professional skills development programs across all levels of employees 55) Report Under The Prevention of Sexual Harassment Act Your Company recognizes its responsibility and continues to provide a safe working environment for women, free from sexual harassment and discrimination and to boost their confidence, morale and performance. Pursuant to the legislation ‘Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013’ introduced by the Government of India, which came into effect from 9 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace which is also reviewed by the Committee at regular intervals. There was no case reported during the year under review under the said Policy. There were no complaints reported under aforesaid Act. The employee relations in the Company continued to be healthy, cordial and progressive. 56) Acknowledgements The Board of Directors would like to convey their appreciation to the Customers, Shareholders, Vendors, Banks, Financial Institutions, various Government Authorities, RBI, SEBI and Stock Exchanges for their cooperation and support throughout the year. The Board recognizes that it is accountable to shareholders for the performance of the Company, believes in transparency in its conduct and strives to disseminate the material information to the shareholders and the public. Looking forward to receive continued patronage from all our business partners and associates to become better and strong organization. The Board of Directors would also place on record the appreciation for the contributions made by the employees at all levels. Your Directors place on record their gratitude to the Central Government, State Governments and Company’s Bankers for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of investors, vendors, dealers, business associates and employees in ensuring an excellent all around operational performance. For Intec Capital Limited Sanjeev Goel S.K. Goel Managing Director Non-executive Independent Director Date : 6th August, 2015 Place : New Delhi |