To The Members of Indo Borax & Chemicals Ltd
Your Directors have pleasure in presenting 36 Annual Report and the Audited Statementof Accounts for the year ended on 31 March 2017.
The performance of the Company for the financial year ended 31 March 2017 issummarized below:
(R. in lacs)
|Particulars ||Standalone ||Consolidated |
| ||31-3-2017 ||31-3-2016 ||31-3-2017 ||31-3-2016 |
|Sales ||7486.90 ||7340.63 ||7486.90 ||7765.63 |
|Less: Excise Duty ||825.98 ||803.94 ||825.98 ||803.94 |
|Net Sales ||6660.92 ||6536.69 ||6660.92 ||6961.69 |
|Other Income ||303.22 ||289.79 ||297.92 ||283.66 |
|Profit before Depreciation & Taxation ||1331.38 ||1477.72 ||1298.30 ||1488.21 |
|Less : Depreciation ||146.62 ||124.49 ||147.00 ||125.29 |
|Provision for Taxation ||305.30 ||388.20 ||305.30 ||390.99 |
|Deferred Tax ||61.20 ||49.09 ||61.24 ||49.06 |
|Prior period Adjustments ||(11.80) ||-- ||(11.73) ||-- |
|Profit after Depreciation & Taxation ||830.06 ||915.94 ||796.49 ||922.87 |
|Balance brought forward from previous year ||7289.93 ||6521.93 ||7404.75 ||6629.82 |
|Profit available for appropriation ||8119.99 ||7437.87 ||8201.24 ||7552.69 |
|Less : Appropriations || || || || |
|Proposed Final Dividend ||48.14 ||48.14 ||48.14 ||48.14 |
|Tax on Dividend ||9.80 ||9.80 ||9.80 ||9.80 |
|Transfer to General Reserve ||80.00 ||90.00 ||80.00 ||90.00 |
|Balance carried to Balance Sheet ||7982.05 ||7289.93 ||8063.30 ||7404.75 |
Your Directors are pleased to recommend final dividend of Rs. 1.50 (One Rupee &Fifty Paise) per equity share of Rs. 10/- each on 3209000 Equity Shares if approved bythe members would involve a cash outflow of Rs. 57.94 Lacs including dividend tax.
TRANSFER TO RESERVES
During the year your company has transferred Rs. 8000000/- to General Reserve out ofthe amount available for appropriation and an amount of Rs. 798204954/- is proposed tobe retained in the profit and loss account.
On consolidated basis sales for the financial year 2016-17 stood at Rs. 6660.92 lacswhich was lower by 4.32% over last year (Rs. 6961.69 lacs in 2015-16). Earnings before taxand depreciation was Rs. 1298.30 lacs which was lower by 12.76% over EBTD of Rs. 1488.21Lacs in 2015-16. The profit after tax for the year was Rs. 796.49 lacs which was lower by13.69% over the PAT of Rs. 922.87 lacs in 2015-16. The drop in the sales and profit wasthe result of shutdown of the plant for clearance of inventory.
On standalone basis sales for the financial year 2016-17 stood at Rs. 6660.92 lacswhich was higher by 1.90% over last year (Rs. 6536.69 lacs in 2015-16). Earnings beforetax and depreciation was Rs. 1331.43 lacs which was lower by 9.90% over EBTD of Rs.1477.72 Lacs in 2015-16. The profit after tax for the year was Rs. 830.06 which was lowerby 9.38% over the PAT of Rs. 915.93 lacs in 2015-16.
The production of boron products increased by 10.39% as compare to 6.93% in previousyear which was due to capacity expansion of the plant.
A subsidiary company Indoborax Infrastructure Private Limited is wholly ownedsubsidiary company. There are no associate companies within the meaning of Section 2(6) ofthe Companies Act 2013 ("Act"). There has been no material change in the natureof business of the subsidiary.
During the year there is an inventory of one residential unit constructed.
As pursuant to Section 129 of the Companies Act 2013 the Audited accounts and Reportsof Board of Directors and Auditors for the year ended 31st March 2017 relating to thesubsidiary company are attached to the accounts hence the AOC-1 is not required to begiven.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the company and its subsidiary which form partof Annual Report have been prepared in accordance with section 129(3) of the CompaniesAct 2013. Consolidated Financial Statements for the year ended 31st March 2017 alongwith report of the auditors thereon are attached herewith.
INTERNAL FINANCIAL CONTROL
The details in respect of the internal financial control and their adequacy areincluded in Management Discussion & Analysis which forms part of this report.
NUMBER OF MEETING OF THE BOARD
During the financial year 2016-17 the Board of Directors met 7 times on the followingdates: 30-May-2016 30-Jun-2016 8-Aug-2016 16-Sept-2016 14-Nov-2016 14-Feb-2017 and29-Mar-2017. For details of the meeting of the board please refer to the CorporateGovernance Report which forms part of this report.
COMMITTEES OF THE BOARD
As per requirement of SEBI (Listing Obligation and Disclosures Requirements)Regulation 2015 & the Companies Act 2013 there are four Committees of the Board asfollows:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholder's Relation Committee
4. Corporate Social Responsibility Committee
Details of all the committees along with their composition name of the membersmeetings held during the year and attendance are provided in the Corporate GovernanceReport which forms a part of this Report.
RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS
Pursuant to Section 134 (5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts; the applicable accounting standards havebeen followed and there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give true and fair viewof the state of affairs of the Company at the end of financial year and of the profit ofthe Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively.
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 149 of the Act Mr. Arun Sureka Mr. N.K. Mittaland Mr. Govind Parmar were appointed as independent directors at the annual generalmeeting of the company held on 27 September 2014. Company has received declaration fromall the Independent Directors of the company confirming that they meet the criteria ofindependence prescribed under sub-section (6) of Section 149 of the Companies Act 2013and Listing Regulations with Stock Exchange.
During the year Mr. Sajal Jain Executive Director retires by rotation in theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.
Pursuant to provisions of section 2013 of the Act the key managerial personnel of thecompany are Mr. S. K. Jain Chairman and Managing Director Mr. Sajal Jain ChiefExecutive and Chief Financial Officer and Mr. Pravin Chavan Company Secretary. During theyear Mr. S. K. Jain was reappointed as Chairman and Managing Director of the Company forthe period of 5 years from 1 April 2017 Subject to approval of members through PostalBallot.
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by the SEBI (Listing Obligation andDisclosure Requirements) Regulation 2015. The performance of the Board was evaluated bythe Board after seeking inputs from all the directors on the basis of criteria such asboard composition and structure effectiveness of board process information andfunctioning as provided by the guidance note on Board Evaluation issued by the SEBI inJanuary 2017. The performance of the committees was evaluated by the board after seekinginputs from committee members on the basis of criteria such as composition of committeeseffectiveness of committee meetings etc.
In separate meeting of independent Directors performance of the non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of the executive directors and non-executivedirectors. Performance evaluation of independent directors was done by the entire boardexcluding the independent director being evaluated.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility Policy (CSR Policy) of theCompany and initiatives undertaken by the Company on CSR activities during the year areset out in Annexure I of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The details about the CSR committeeplease refer to the Corporate Governance Report which form part of this report. The CSRpolicy is available on the website of the company http://www.indoborax.com/csr.php
WHISTLE BLOWER POLICY
The Company has formulated whistle blower policy for Directors and employees to reporttheir genuine concerns regarding unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct and Ethics Policy. The said mechanism alsoprovides for adequate safeguard against victimization of persons who use such mechanismand makes provision for direct access to the chairman of the Audit Committee in theappropriate or exceptional cases. We affirm that no employee of the company was deniedaccess to the Audit Committee. The Whistle Blower Policy have been disclosed on website ofthe Company at http://www.indoborax.com/Whistle-Blower-Policy.php
PARTICUALRS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
|Name of the Directors ||Ratio of median remuneration |
|Mr. Sushil Kumar Jain Managing Director ||29.35 |
|Mr. Sajal Jain Chief Executive & Chief Financial Officer ||29.35 |
Company has not paid any remuneration to non-executive directors except sitting fees.
b) The percentage increase/(decrease) in remuneration of each director key managerialpersonnel in the financial year:
|Name of the Directors ||% increase/ (decrease) in remuneration in the financial year |
|Key Managerial Personnel || |
|Mr. Sushil Kumar Jain MD ||(12.38) |
|Mr. Sajal Jain CEO & CFO ||(12.38) |
|Mr. Pravin Chavan Company Secretary ||6.24 |
c) The percentage increase in the median remuneration of the employees in the financialyear: 14.35%
d) The number of permanent employees on the rolls of the company : 84
e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration : Theaverage annual increase was around 5%. However during the year the total increase inemployee benefits is approximately 22%.
During the year under review there was no increment in the managerial salary thecommission which is based on % of profit have also been decreased which is directlylinked with the performance of the company. Decrease in the managerial remuneration forthe year was 12.38%.
f) Affirmation that the remuneration is as per the remuneration policy of the Company:The Company affirms remuneration is as per the remuneration policy of the company. g) Thestatement containing names of top ten employees in terms of remuneration drawn andparticulars of employees as required under Section 97(12) read with Rule 5(2) & (3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isprovided in annexure forming part of this report. Further the report and the accounts arebeing sent to the members excluding the aforesaid annexure. In term of section 136 of theAct the said annexure is open for inspection at the Registered Office of the Company. Anyshareholder interested in obtaining a copy of the same may write to the Company Secretary.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Company's policy on directors appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Directors Report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
TRANSACTIONS WITH RELATED PARTIES
None of the transactions with related parties falls under the scope of Section 188(1)of the Act. The information on the transactions with related parties pursuant to Section134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 aregiven in AOC-2 in Annexure II and same forms part of this report.
DELISTING OF SECURITIES
The Company had applied for delisting of shares from Kolkatta Stock Exchange in2005-2006 however till date the confirmation of delisting has not been received fromExchange.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy
|i) Energy Conservation Measures taken ||The Company continues to lay special emphasis on conservation of energy and have taken measures like regular monitoring of consumption reduction of transmission losses and up to date maintenance of systems. |
|ii) Utilization of alternate source of energy || |
|iii) Capital Investment on energy conservation equipment. || |
B. Technology Absorption
1. Research & Development
The Company has no specific Research & Development Department. However in housequality control facilities are utilised for product and process improvement and updation.
2. Technology Absorption
The Company has not imported any technology.
|C. Foreign Exchange Earnings and Outgo || || || |
|a) Earnings ||Nil || || |
|b) Outgo || || || |
|- Import of Raw Materials ||Rs. ||1645.50 ||lacs |
|- Foreign Travel ||Rs. ||6.78 ||lacs |
DEPOSITS FROM PUBLIC
The Company has not accepted any deposit from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of BalanceSheet.
The Board of the company has formed a risk management committee to frame implement andmonitor the risk management plan for the company. The committee is responsible forreviewing the risk management plan and ensuring effectiveness. The audit committee hasadditional oversight in the areas of financial risk and controls. Major risks identifiedby the business and functions are systematically addressed through mitigating actions on acontinuing basis.
The risk management policy has been covered in the management discussion and analysiswhich forms part of this report.
CORPORATE GOVERNANCE REPORT
A separate detailed Corporate Governance Report and Certificate of Auditors of yourCompany regarding the compliance of the conditions of Corporate Governance as per SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 are annexed to thisreport.
EXTRACT OF ANNUAL RETURN
As provided under section 92(3) of the Act the extract of the Annual Return is givenAnnexure-III in the prescribed Form MGT-9 which forms part of this report.
V. S. Lalpuria & Co Chartered Accountants the statutory auditors of the Companyhold office till the conclusion of the 36 Annual General Meeting of the Company. The Boardhas recommended the appointment of Pulindra Patel & Co. Chartered Accountants asstatutory auditors of the Company in their place from the conclusion of 36 Annual GeneralMeeting of the Company scheduled to be held in the year 2017 till the conclusion of 37Annual General Meeting to be held in the year 2018 for approval of shareholders of theCompany based on recommendation of the Audit Committee of the Company.
SECRETARIAL AUDIT REPORT
The Board of Directors of the Company has appointed Prasad Parab & AssociatesPracticing Company Secretary to conduct Secretarial Audit and his report on CompaniesSecretarial Audit is annexed to this report.
COMMENTS ON AUDITORS REPORT
There are no qualifications reservations adverse remarks or disclaimers made by V.S.Lalpuria & Co. Statutory Auditors in their report and by Prasad Parab &Associates Company Secretary in Practice in his secretarial audit report.
The statutory auditors have not reported any incident of fraud to the Audit Committeeof the company in the year under review.
Pursuant to the provisions of Section 148 (3) of the Companies Act 2013 qualifiedCost Auditors have been appointed to conduct cost audit for the year under review relatingto the products manufactured by the Company.
Your Directors thank to the clients vendors shareholders & bankers for theircontinued support during the year. Your Directors place on record their appreciation forthe contribution made by employees at all levels. Your Company's growth has been possibledue to their hard work co-operation & support.
| ||For and on behalf of the Board of Directors |
| ||S. K. Jain |
|Mumbai: 30 May 2017 ||Chairman |