The Board of Directors presents the 37th Annual Report of the Company on the business operations and performance of the Company along with the audited financial statements for the year ended 31 March 2024.
1. Financial performance:
The brief summary of the financial performance of the Company for the Financial Year ended 31st March 2024 along with the comparative figures for the previous year is summarized herein below:
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(H in Crore)
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Standalone
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Consolidated
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Year
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Year
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Year
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Year
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Particulars
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ended
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ended
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ended
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ended
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31-Mar-
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31-Mar-
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31-Mar-
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31-Mar-
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2024
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2023
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2024
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2023
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Total income
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2162.86
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2242.68
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2162.86
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2242.72
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Profit before interest &
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261.59
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252.09
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260.66
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251.28
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depreciation
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Interest
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16.10
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16.47
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16.10
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16.47
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Profit before depreciation
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245.49
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235.62
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244.56
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234.81
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Depreciation
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62.85
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46.13
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62.91
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46.16
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Profit before exceptional
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182.64
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189.49
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181.65
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188.65
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items
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Exceptional items
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0
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0
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0
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Profit before tax
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182.64
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189.49
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181.65
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188.65
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Provision for tax (including
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47.22
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49.51
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47.22
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49.51
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deferred tax)
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Profit after tax
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135.42
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139.98
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134.43
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139.14
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During the year under review, the standalone operating revenue of your Company was H 2162.86 Crore as compared to H 2242.68 Crore in the previous year. The gross margin for FY 2023-24 was H 418.88 Crore as compared to H 381.20 Crore in the previous year. Margins were improved due to lower raw material cost as compared to previous year.
Pursuant to Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”), the Management Discussion and Analysis Report forms an integral part of this Integrated Annual Report and gives the details, inter alia, about the performance , Company's state of affairs and Industrial Businesses of the Company in India and International , important changes, external environment, and economic outlook during the year under review.
During the year under review, there was no change in the nature of the Company's business.
2. Dividend
The Board of Directors has declared interim dividends of H 5 per equity share involving a cash outflow of H 29.35 Crore during the year. The Board of Directors considers the same as
final dividend. The Board recommends the dividend based on the parameters laid down in the dividend distribution policy of the Company.
Pursuant to the Regulation 43A of the Listing Regulations, the Board of Directors of the Company formulated and adopted the Dividend Distribution Policy of the Company. The said policy is available on the Company's website at https://www. iolcp.com/about-us/policies
3. Transfer to reserves
The Board has decided to retain the entire amount of the profits for the financial year 2023-24 in the profit and loss account and has not transferred any amount of profits to reserves not transferred any amount of profits to reserves for FY 2023-24.
4. Fixed Deposits
The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and as such no amount of principal or interest was outstanding as on 31st March 2024.
5. Share Capital
During the financial year 2023-24, there was no change in the authorised, issued, subscribed, and paid-up share capital of the Company. The paid up equity share capital of the Company has been H 58,70,55,020/- (Rupees Fifty Eight Crore Seventy Lakh Fifty Five Thousand and Twenty) consisting of 5,87,05,502 (Five Crore Eighty Seven Lakh Five Thousand Five Hundred Two) equity shares of H 10/- each as on 31.03.2024.
6. Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 124 of the Companies Act,2013 (“the Act") read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules"), and relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund (“IEPF"), constituted by the Central Government.
During the year under review, no amount of unpaid/unclaimed dividend was due for transfer to the Investors Education protection Fund.
Members who have not encashed any dividend declared by the Company, are advised to write to the Company immediately at email id investor@iolcp.com
7. Holding & Subsidiary Company
Details of subsidiaries / associates of your Company are provided in notes to financial statements.
We have 3 subsidiaries as on March 31, 2024. Out of these 3 subsidiaries IOL Foundations Corporate Overview Statutory Reports Financial Statements 41 is a Section 8 Company that undertakes the CSR activities of the Company. During the year under review, the company has closed its overseas subsidiary IOL GLOBAL LIMITED in UK
The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the provisions of Section 129(3) of the Act, which forms part of the Annual Report. A statement containing the salient features of financial statements of the Company's subsidiaries, associates & joint ventures in Form No. AOC-1 is annexed as Annexure - 1 to this report.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company at www.iolcp.com
The company has neither a holding company nor an associate company
8. Re-affirmation of External Credit Rating
During the year under review, the Credit Analysis & Research Ltd (CARE) has reaffirmed the credit rating of the Company for Long term Bank Facilities as 'CARE A ' (Single A plus ; Outlook: Stable) and the credit rating for Short Term Bank Facilities as 'CARE A1 '(A One plus).
9. Expansion
During the year 2023-24, the Company commenced “Acetic Anhydride” for captive consumption as well as merchant sale with installed capacity of 25000 MTPA .
During the year 2023-24, the Company has got additional approval from Center for Drug Evaluation (CDE) of National Medical Products Administration (NMPA), China for “Metformin Hydrochloride” whereas European Directorate for the Quality of Medicines & Health Care (EDQM) has issued a Certificate of Suitability for Gabapentin.
Further, during the year 2023-24, the Company successfully completed the Brazilian Health Regulatory Agency (ANVISA) GMP audit for all the 10 APIs manufacturing Units situated at Barnala, Punjab without any observation and later on received a Certificate of Good Manufacturing Practices in May 20024.
10. Directors and Key Managerial Personnel
The members of the company have appointed Mr Abhiraj Gupta as Executive Director for a Period of five years w.e.f 03rd April 2022 till 2nd April 2028 and has varied the terms of appointment of Mr Vikas Gupta by re-designating him as Joint Managing Director of the Company w.e.f 3rd April 2023
The Board of Directors has appointed Mr. Vikas Vij as Chief Executive Officer of the Company effective from 3rd April 2023 at the board meeting held same day.
Mr Vikas Gupta, Joint Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. A resolution seeking shareholders' approval for his re-appointment forms part of the Notice for the ensuing AGM.
Further, On 14th May, 2024 the Board of Directors, subject to the shareholders' approval, re-appointed Mr. Kushal Kumar Rana as Director(Works) of the Company for a period of 5 years w.e.f. 4th June 2024. A resolution in this regard has been proposed in the notice for the ensuing annual general meeting for the shareholders consideration and approval.
The brief details of all the directors seeking appointment/ re-appointment at the ensuing Annual General Meeting is furnished in the explanatory statement to the notice calling the Annual General Meeting.
During the year under review Mr Varinder Gupta, Managing Director; Mr Kushal Kumar Rana, Director-Works(Whole-time Director); Mr Vikas Gupta, Joint Managing Director (Wholetime Director); Mr Abhiraj Gupta, Executive Director (Wholetime Director); Mr Pardeep Kumar Khanna, Chief Financial Officer (CFO); Mr Abhay Raj Singh, Sr. VP & Company Secretary and Mr Vikas Vij, Chief Executive Officer continues to be the Key Managerial Personnel (KMP) of the Company in accordance with the provisions of Section(s) 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
11. Procedure for Nomination and Appointment of Directors
The Nomination and Remuneration Committee ('NRC') evaluate the appropriate characteristics, skills and experience for the individual director and board with an idea to form a well diverse board having diversified backgrounds and experiences and recommends the eligible candidate to the Board for appointment as new directors.
Your directors consider that the Board diversity is a key factor in promoting effective governance, innovation, and decisionmaking. By focusing on board diversity, organizations can harness the full potential of their leadership teams, drive sustainable growth, and build a more inclusive corporate culture. Having a diverse Board is a strategic advantage that can lead to better performance, greater innovation, and enhanced reputation for the organization.
Pursuant to the Regulation 19(4) & 20(4) and Part D of Schedule II of Listing Regulations, 2015 the Board of the Company has adopted a Policy on diversity of Board of Directors. The said policy is available on the website of the company at https:// www.iolcp.com/about-us/policies
Detailed information regarding the nomination and appointment process of Directors, along with the list of core skills, expertise, and competencies of the Board of Directors, are provided in the Corporate Governance Report, which forms part of the Annual Report.
12. Woman Director
In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, Dr Sandhya Mehta is serving as Independent Woman Director on the Board of the Company. She is also Chairperson of Stakeholders Relationship Committee and member of Audit Committee, Nomination and Remuneration Committee, CSR Committee and Risk Management Committee.
13. Board Evaluation
Pursuant to the provisions of Companies Act, 2013 and SEBI Listing Regulations, Company has formulated and adopted Policy of Evaluation of Board (the “Board Evaluation Policy”) to formulate the procedures and to prescribe & lay down the criteria to evaluate Board of Directors. The annual evaluation is carried out by the Board of its own performance and that of its committees and individual Directors by way of individual and collective feedback from all the Directors. The Directors expressed their satisfaction with the evaluation process. In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, considering the views of executive as well as non-executive directors. The evaluation criteria are mainly based on the Guidance Note on Board Evaluation issued by the SEBI.
14. Number of Meetings of the Board
During the year the Board met 4 times. The gap between any 2 two consecutive meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations. The details of meetings of the Board of Directors and its Committees are provided in the Corporate Governance Report forming part of this report.
15. Meeting of Independent Directors
Pursuant to the requirements of Schedule IV of the Companies Act, 2013 and in terms of Regulation 25 of the Listing Regulations, a separate meeting of the Independent Directors of the Company were convened on 29th March, 2024 to review the matters as laid down in the aforesaid Schedule and Regulations.
16. Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your
Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a. that in the preparation of the annual financial statements for the year ended 31 March 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the year and of the profit of the Company for that year;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively
17. Declaration by Independent Directors
All the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company and hance, they continue to comply the criteria to serve as independent directors.
18. Nomination and Remuneration Policy
The Board, has on the recommendation of the Nomination & Remuneration Committee, framed a Nomination and Remuneration Policy (“Remuneration Policy”), which provides process for selection and appointment of Directors, key managerial personnel and Senior Management employees including criteria for determining qualifications, positive attributes, fixation of remuneration, independence of a Director and other matters, as required under sub-section (3) of Section 178 of the Act.
The Remuneration Policy is available on the company's website at https://www.iolcp.com/uploads/Nomination-and-Remuneration-Policy.pdf
19. Corporate Governance
The Company has complied with the requirements of the Listing Regulations regarding corporate governance. A report on the Company's Corporate Governance practices and the Auditors' Certificate on compliance of mandatory requirements thereof are given as an annexure to this Report and the same is also available on the website of the Company at https://www. iolcp.com/investors
20. Management Discussion and Analysis
In terms of the Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Report on Management Discussion and Analysis (MDA) forms part of the Annual Report. The MDA provides detailed insights on Company's business, financial performance, key achievements, challenges etc.
21. Audit Committee
The Composition and role of the Committee has been provided in the Corporate Governance Report annexed with the report.
22. Internal financial control systems and their adequacy
The Company's internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
Effectiveness of internal financial controls is ensured through management reviews, controlled self-assessment and Independent Auditors. Refer para on Internal Control Systems and their Adequacy in MDA for additional details.
23. Risk Management
The Risk Management Committee ('RMC') is constituted to frame, implement and monitor the Enterprise Risk Management ('ERM') Framework of the Company, while Board takes responsibility for the overall process of risk management throughout the organisation. Through an ERM programme, our business units and corporate functions address risks by adopting an institutionalized approach aligned to our objectives. The Business risk is managed through crossfunctional involvement and communication across businesses.
RMC reviews on a regular interval monitor and reviews the ERM framework of the Company to assess and manage various existing risk and to identify new risks and prepare mitigation plan.
The Audit Committee also has an additional oversight in the area of financial risks and controls.
A detailed note on Risk Management has been provided in the Management Discussion and Analysis Report, which forms part of this report.
24. Related Party Transactions
All related party transactions that were entered into during the financial year were on arm's length and were in the ordinary course of business and therefore did not attract the provisions of Section 188 of the Companies Act 2013. Moreover, there were no material transaction entered into with any related party during the year under review.
All related party transactions were approved by the Audit Committee and periodically reported to the Audit Committee. Prior omnibus approval of the Audit Committee was taken for related party transactions which are of repetitive nature and entered in the ordinary course of the business on arm's length basis.
The details of the related party transaction during financial year 2023-24 are provided in the accompanying financial statements.
Accordingly, the disclosures of related party transactions as required under Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules,2014 in Form No. AOC-2 is not applicable to the Company for the financial year 2023-24 and hence does not form part of this report.
Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations 2015, the Company has formulated a Policy on Materiality of and Dealing with Related Party Transactions and the same is available on the Company's website www.iolcp.com.
25. Corporate Social Responsibility (CSR)
The Board has constituted a Corporate Social Responsibility Committee ('CSR Committee'). The Company has in place a Corporate Social Responsibility Committee ('CSR Committee') in terms of the requirements of section 135 of the Companies Act, 2013 read with the rules made thereunder.
A brief note regarding the Company's initiatives with respect to CSR and the composition of the CSR Committee and the Annual Report on the Corporate Social Responsibility (CSR) initiatives undertaken by the Company during the year under review are set out in Annexure - 2 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on Company's website: https://www.iolcp.com/about-us/policies
26. Research and Development
IOL is committed to investing in R&D, as part of our mission to find breakthroughs to safeguard lives. Our R&D program is designed to develop safe and effective breakthroughs for human lives across the globe. R&D has played a significant role in the development of customized requirements, addressing regulatory requirements, leading to four new CEP filings, three USDMF fillings & two new approval of CEPs.
We are active supporters of finding new ways of developing API's using latest technological tools by minimizing energy consumption & minimal waste generation to keep environment cleaner. In this context R&D team has successfully developed & scale up a key intermediate of an API via continuous flow chemistry. In continuation to last year, we have established novel route of synthesis for one of our API & filed patent application.
Our Commitment to Improving Health through R&D in API's is continuous & this year three products have been scaled up at commercial scale in multipurpose production facility, and three new products are at kilo scale.
27. Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, M/s Ashwani & Associates, Chartered Accountants, Ludhiana, Registration No:000497N were appointed as statutory auditors of the Company from conclusion of 36th Annual General Meeting of the Company held on 10th August 2023 till the conclusion of the 41st Annual General Meeting to be held in the year 2028.
The report of the Statutory Auditor forms part of this Report and Annual Accounts 2023-24. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors did not report any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca)of the Act.
28. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s B. K. Gupta & Associates, practicing Company Secretary for conducting secretarial audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure - 3.
The Secretarial Audit report does not contain any qualification, reservation or adverse remark.
29. Secretarial Standards
The Company has proper system in place to ensure the due compliance with the provisions of the applicable secretarial standards issued by the Institute of the Company Secretaries of India.
30. Cost Records & Cost Auditors
In accordance with Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the Company maintains cost records as required, and a Cost Accountant conducts the audit of these records.
The Board of Directors, based on the recommendation of the Audit Committee, has approved the appointment of M/s. Ramanath Iyer & Co., Cost Accountants, New Delhi, as the Cost Auditors of the Company for the financial year 2024-25 at a remuneration of H 181500/- plus applicable taxes and out-ofpocket expenses in connection with the cost audit.
Further, pursuant to the provisions of Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of Cost Auditors as approved by the Board is required to be ratified by the shareholders of the Company and therefore, the same is included in the ensuing AGM notice for the ratification of the shareholders.
The Cost Audit Report for the financial year ended 31st March 2023, provided by the Cost Auditor, does not contain any qualification or adverse remarks that require any clarification or explanation.
31. Particulars of managerial remuneration and related disclosures
Disclosures relating 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 are provided in Annexure-4.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.
32. CEO & CFO Certification
In accordance with the provisions of the SEBI Listing Regulations the Executive Director & CEO and Chief Financial Officer of the Company have submitted the relevant certificate
for the Financial Year 2023-24 to the Board of Directors, which forms part of this Report.
33. Annual Return
Pursuant to the provisions of Section 134(3)(a) of Companies Act, 2013, the web address of the Annual Return of the Company is https://www.iolcp.com/investors/annual-returns
34. Loan, guarantees or investment under Section 186 of the Companies Act, 2013
The particulars of loans, guarantees and investments have been provided in the notes of the financial statements.
35. Material Changes and Commitments
There have been no material changes and commitments affecting the financial position of the Company which occurred between the end of the Financial Year of the Company as on 31st March 2024 and the date of this report.
36. Significant and Material Orders impacting Operations of Company in Future
There are no significant or material orders that have been passed by any Regulators/Court or Tribunals impacting the going concern status and future operations of your company.
37. Reporting of Frauds
There have been no instances of fraud reported by the Statutory Auditors of the Company under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder either to the Company or to the Central Government.
38. Industrial Relations
Industrial relations remained cordial and harmonious throughout the year under review.
39. Safety, Health and Environment
Safety is Company's top priority with regard to employment and it is encouraging safety measures at all levels of operations especially at the floor level. Regular training programmes are being conducted to bring in awareness of safety at workplace.
40. Prevention of Sexual Harassment Policy
In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013, the Company has set up Complaints Committees at its workplace. No complaints have been received during the year 2023-24.
41. Vigil Mechanism
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy can be accessed at company's website: www.iolcp.com
42. Business Responsibility and Sustainability Report
In terms of Regulation 34(2)f of the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) of your Company detailing initiatives undertaken by the Company on environmental, social and governance front during the year under review, forms part of this Annual Report and is also available on the website of the Company at www.iolcp.com
43. Energy Conservation / Technology Absorption and Foreign Exchange Earnings and Outgo
Energy conservation continues to be an area of major emphasis in the Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure - 5 and forms part of the Report.
44. Integrated Reporting
The Company is complying with the applicable requirements of the Integrated Reporting Framework. The Integrated Report tracks the sustainability performance of the organization and its interconnectedness with the financial performance, showcasing how the Company is adding value to its stakeholders. The Integrated Report forms a part of this Integrated Annual report.
45. General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Change in the nature of business of the Company.
3. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
6. No fraud has been reported by the Auditors to the Audit Committee or the Board.
7. There has been no one time settlement of loans with any bank or financial institution.
8. There are no proceedings admitted against the Company under the Insolvency and Bankruptcy Code, 2016.
46. Acknowledgement
The Directors wish to place on record their appreciation of the continuous support received by the Company from the investors, Bankers, Central/State Government Departments, its Customers and Suppliers.
We also place on record our sincere appreciation of the contribution made by the employees at all levels. Our consistent growth is made possible by their devout, sincere and unstinted services.
Further, the Board expresses its gratitude to you as Shareholders for the confidence reposed in the management of the Company
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