to the Members
The Directors have pleasure in presenting before you the forty first Annual Report ofthe Company together with the Audited Statement of Accounts for the year ended 31 March2017.
The performance during the period ended 31 March 2017 has been as under:
| || |
|Particulars ||2016-17 ||2015-16 ||2016-17 |
|Total revenue ||175187 ||151425 ||177006 |
|Profit before deprecia- tion/amortisation finance costs and tax ||10861 ||8275 ||10636 |
|Finance costs ||317 ||222 ||401 |
|Depreciation and amortisation ||4363 ||4537 ||4410 |
|Profit before Tax ||6181 ||3516 ||5825 |
|Current tax ||780 ||385 ||780 |
|Deferred tax (net) ||304 ||(5) ||311 |
|Profit after tax ||5097 ||3136 ||4734 |
|Surplus - opening balance ||9488 ||6352 ||9488 |
|Surplus - closing balance ||14585 ||9488 ||14397 |
Consolidated figure includes standalone figure and figure of Trishan Metals PrivateLtd. a subsidiary of the company acquired on July 11 2016 and accordingly comparablefigure for 2015-16 is not applicable.
OPERATIONS - Standalone
Your company completed another year of stable performance with decent top & bottomline growth. All business segments posted sound growth in revenues and enhanced theirmarket standing. Gross sale of products for the year grew by 17.5% to Rs 225149 lacs. Netrevenue from operations grew by 16.0% at Rs 174065 lacs. Appliance business grew by 17.6%and Engineering business grew by 8.5%.Earning per share for the year stands at Rs 12.58.PBDIT on standalone basis achieved Rs 10861 lacs as against Rs 8275 lacs in previous year(2015-16) and achieved a growth rate of 31.31%.
Revenue from operations on consolidated basis has achieved a figure of RS 177006 lacs.PBDIT on consolidated basis amounted to Rs 10636 lacs. Since the subsidiary company wasacquired only on July 11 2016 comparable figure for 2015-16 is not applicable.
Your Directors have decided not to recommend any dividend for the financial year underreview to conserve resources for working capital and capital expenditure projects.
TRANSFER TO RESERVE
The company does not propose to transfer any amount to Reserve.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Listing Obligations and Disclosure Requirements Regulations 2015(LODR) the Management Discussion and Analysis Report is enclosed as a part of this report.
CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
Your Company has always taken adequate steps to adhere to all the stipulations laiddown in LODR Regulations 2015. A report on Corporate Governance is included as a part ofthis Annual Report. Certificate from the Statutory Auditors of the company M/s. DeloitteHaskins & Sells Chartered Accountants confirming the compliance with the conditionsof Corporate Governance as stipulated under Listing Obligations & DisclosureRequirements Regulations 2015 (LODR) is included as a part of this report.
LISTING WITH STOCK EXCHANGES
The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 toNSE BSE & CSE where the Company's Shares are listed. The company applied fordelisting from CSE & DSE which are pending. DSE has been deregistered by SEBI.
DEMATERIALISATION OF SHARES
97.67% of the company's paid up Equity Share Capital is in dematerialized form as on 31March 2017 and balance 2.33% is in physical form. The Company's Registrar and ShareTransfer Agent is M/s C.B. Management Services Pvt. Ltd. having their registered officeat P-22 Bondel Road Kolkata-700 019.
NUMBER OF BOARD MEETINGS HELD
The Board of Directors duly met seven times during the financial year from 01 April2016 to 31 March 2017. The dates on which the meetings were held are as follows :
20 April 2016 18 May 2016 01 July 2016 27 July 2016 30 October 2016 31 January2017 and 25 March 2017.
Confirmation of Appointment :
The three year term as Joint Executive Chairman and Managing Director of Mr.Bikram Naghas expired on 31 October 2016. He was reappointed by the board for a further term ofthree years from 1 November 2016 subject to the approval of members.
Mr. Sudip Banerjee retires by rotation and being eligible offers himself forreappointment.
Mr. Radharaman Bhattacharya Independent Director expired on 26 March 2017. He wasinducted on the board of IFB Industries Ltd on 21 June 2003 and the company immenselybenefited for his contribution as a member of Audit Committee and Board.
Dr. Tridibesh Mukherjee Independent Director was inducted on the board of IFBIndustries Ltd on 29 July 2011. He resigned from the board of IFB Industries Ltd on 31March 2017. The board sincerely appreciated his association with the company and thesupport he has extended during his tenure.
At the recommendation of Audit Committee the Board proposes to appoint Mr. RahulChoudhuri as Independent Director of the Company for a term of 3 years from this AGM.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that:
a) in the preparation of the annual accounts for the year ended 31 March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b) have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for the year ended 31 March 2017;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the company that are adequate andwere operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.
A Nomination and Remuneration Policy has been formulated pursuant to the provisions ofSection 178 and other applicable provisions of the Companies Act 2013 and rules there toand Regulation 19 of the SEBI (LODR) Regulations 2015 stating therein the Company'spolicy on Directors/Key Managerial Personnel/other employees appointment and remunerationby the Nomination and Remuneration Committee and approved by the Board of Directors. Thesaid policy may be referred to company's website at www.iftindustries.com/Legal/Policies. As part of the policy the Company strives to ensure that:
The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors/ KMPs of the quality required to run the companysuccessfully;
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
This part is covered under Corporate Governance Report.
The notes on Financial statements referred to in the Auditor's Report areself-explanatory and do not call for any further explanation.
Statutory Auditors :
At the Annual General Meeting held on 30 July 2014 Deloitte Haskins & SellsChartered Accountants were appointed as Statutory Auditors of the Company to hold officetill the conclusion of the 43rd Annual General Meeting. In terms of the first proviso tosection 139 of the Companies Act 2013 the appointment of the Auditor's shall be placedfor ratification at every Annual General Meeting. Accordingly the appointment of DeloitteHaskins & Sells Chartered Accountants as Statutory Auditors of the Company isplaced for ratification by the shareholders. In this regard the Company has received acertificate from the Auditors to the effect that if they are reappointed it would be inaccordance with the provisions of section 141 of the Companies Act 2013.
Secretarial Audit :
The provision of Section 204 read with Section 134(3) of the Companies Act 2013mandates Secretarial Audit of the Company to be done from the financial year commencing onor after 1 April 2014 by a Company Secretary in practice. The board in its meeting held on25 March 2017 appointed Mr. Jitendra Patanaik Practising Company Secretary (Certificateof Practice no 3102) as the Secretarial Auditor for the financial year ended 31 March2017.
According to the provision of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report submitted by Company Secretary in Practice is enclosed as a partof this report in Annexure-A.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given in the Annexure-B to thisreport.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company have constituted a CSR Committee. The Committee comprises ofIndependent Director non-executive director and executive director. CSR Committee of theBoard has developed a CSR Policy which is enclosed as part of this
report in Annexure-C. Additionally the CSR Policy has been uploaded on thewebsite of the Company at http:// ifb industries.com/csrpolicy.php. Yourcompany has judiciously identified the activities and accordingly projects mainly relatingto (a) Promoting education and (b) skill development programme were undertaken in linewith the CSR policy. The necessary budget outlay were assigned to aforesaid projects.However due to multi year project and certain delay at implementation level at differentschools the company could not spend the allotted budget outlays. The company made anexpenditure of Rs 28.24 lacs only against the Budgeted amount of Rs 78.76 lacs.
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.ifbindustries.com under legal/ investors relation/policydocuments/VigilMechanism Policy link.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the company during the financialyear with related parties were in ordinary course of business and on an arm's lengthbasis. During the year the company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the company or materiality of related party transaction.The policy on materiality of related party transaction and dealing with related partytransaction as approved by the board may be accessed on company's website at the link www.ifbindustries.comunder legal/ investorsrelation/policydocuments/relatedpartypolicy link. Yourdirectors draw attention of members to note 35 to the Standalone FinancialStatements which set out related party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 isannexed herewith as Annexure (Annexure D).
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act
2013 are given in the notes to the Financial Statements.
REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given in AnexureE which forms part of this Report.
The number of permanent employees on the role of the company as on 31 March 2017 is1646.
Your company has not accepted any deposit from the public/members u/s 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 duringthe year.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Risk management is the process of minimizing or mitigating the risk. It starts with theidentification and evaluation of risk followed by optimal use of resources to monitor andminimize the same. The company is exposed to several risks. They can be categorized asoperational risk and strategic risk. The company has taken several mitigating actionsapplied many strategies and introduced control and reporting systems to reduce andmitigate those risks. Appropriate structures are in place to proactively monitor andmanage the inherent risks in businesses with unique/ relatively high risk profiles.
A strong and independent Internal Audit function at the corporate level carries outrisk focused audits across all business enabling identification of areas where riskmanagement processes may need to be strengthened. The Audit Committee of the board reviewsinternal audit findings and provides strategic guidance on internal controls.
FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
To familiarize the Independent Directors with the strategy operations and functions ofour company the executive directors/ senior managerial employees make presentation to theIndependent Directors about the company's strategy operations product and serviceofferings markets finance quality etc. Independent Directors are also visitingfactories and branch offices to familarise themselves with
the operations of the company and to offer their specialized knowledge for improvementof the performance of the company.
Further at the time of appointment of an Independent director the company issues aformal letter of appointment outlining his/ her role function duties andresponsibilities as a director. The format of the letter of appointment is available atour website www.iftindustries.com under legal/investorsrelation/appointmentofindependentdirectors.
During the year the company has invested in Trishan Metals Private Ltd and acquired51.12% equity shares of Trishan Metals Pvt. Ltd. It will help to obtain timely supply ofmaterial for our fine blanking factories. We have in accordance with Section 129(3) ofthe Companies Act 2013 prepared consolidated financial statements of the company whichform part of this Annual Report. Further the report on the performance and financialposition of the subsidiary in the prescribed form AOC-1 is annexed as Anexure F tothis report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of thecompany and audited accounts of the subsidiary will be available on our websitewww.iftindustries. com. These documents will also be available for inspection duringbusiness hours (Monday to Friday) at the corporate office of company.
Directors take this opportunity to express their thanks to various departments of theCentral and State Government Bankers Customers and Shareholders for their continuedsupport.
The Directors wish to place on record their appreciation for the dedicated efforts putin by the employees of the Company at all levels.
For and on behalf of the Board of Directors
| ||Bikram Nag |
|Registered Office : ||Joint Executive Chairman |
|14 Taratala Road ||& Managing Director |
|Kolkata - 700 088 ||Dr. Rathindra Nath Mitra |
|Dated : 26 May 2017 ||Director |