IFB Industries Ltd.
|BSE: 505726||Sector: Consumer|
|NSE: IFBIND||ISIN Code: INE559A01017|
|BSE 00:00 | 20 Sep||669.20||
|NSE 00:00 | 20 Sep||666.90||
|Mkt Cap.(Rs cr)||2,712|
|Mkt Cap.(Rs cr)||2711.60|
IFB Industries Ltd. (IFBIND) - Director Report
Company director report
To the Members
The Directors have pleasure in presenting before you the forty second Annual Report ofthe Company together with the Audited Statement of Accounts for the year ended 31 March2018.
The performance during the period ended 31 March 2018 has been as under :
Rs. in lacs
Consolidated figure includes standalone figure and figure of Trishan Metals Private Ltdsubsidiary company acquired during 2016-17 Global Appliances & Automotive Ltd.(GAAL) a wholly owned subsidiary company acquired during 2017-18 and step down subsidiaryThai Automotive and Appliances Ltd. (TAAL).
OPERATIONS - Standalone
Your company completed the year with better performance with decent top & bottomline growth. All business segments posted sound growth in revenues profits and enhancedtheir market standing. Gross sale of products for the year grew by 16.5% to Rs 262307lacs. Net revenue from operations grew by 15.2% at Rs 218865. Appliance business grew by15.5% and Engineering business grew by 14.3%. Earning per share for the year stands at Rs20.55. PBDIT on standalone basis achieved Rs 17502 lacs as against Rs 11612 lacs inprevious year (2016-17) and achieved a growth rate of 50.7 %.
OPERATIONS - Consolidated
Net Revenue from operations on consolidated basis has achieved a figure of Rs 225872lacs. PBDIT on consolidated basis amounted to Rs 17439 lacs. Since GAAL and itssubsidiary were acquired only on July 13 2017 figures for 2016-17 are not comparable.
Your Directors have decided not to recommend any dividend for the financial year underreview to conserve resources for working capital capital expenditure projectsacquisition etc.
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 (LODRRegulations) 2015 the Management Discussion and Analysis Report is enclosed as a part ofthis 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 Fee for the year 2018-19 toNSE BSE & CSE where the Company's Shares are listed. The company applied fordelisting from CSE which is pending.
DEMATERIALISATION OF SHARES
97.81% of the company's paid up Equity Share Capital is in dematerialized form as on31st March 2018 and balance 2.19% is in physical form. The Company's Registrar is M/sC.B. Management Services Pvt. Ltd. having their registered office at P-22 Bondel RoadKolkata- 700 019.
NUMBER OF BOARD MEETINGS HELD
The Board of Directors duly met six times during the financial year from 01 April 2017to 31 March 2018. The dates on which the meetings were held are as follows :
26 May 2017 27 July 2017 30 October 2017 21 December 2017 30 January 2018 and 28March 2018
Confirmation of Appointment :
The two years term as Executive Chairman of Mr. Bijon Nag is expiring on 31 May 2018.It is proposed to reappoint him for a further period of two years from 1 June 2018.
The two years term as Deputy Managing Director of Mr. Sudam Maitra is expiring on 30July 2018. It is proposed to reappoint him for a further period of two years from 31 July2018.
The two years term as Director & CFO of Mr. Prabir Chatterjee has expired on 31March 2018. It is proposed to reappoint him for a further period of two years from 1 April2018.
Mr. Sudip Banerjee retires by rotation and being eligible offers himself forreappointment.
Mr. Ashok Bhandari was appointed as Independent Director w.e.f 30th January 2018 for aperiod of three years.
During the year Board of Directors of your Company appointed Mr. Raj Shankar Ray asCEO Home Appliance Division and Mr. Partha Sen as CEO Engineering Division pursuant toSection 203 of the Companies Act 2013.
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 2018 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 same period;
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.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted a declaration that each of them meets thecriteria of independence as provided in section 149(6) of the Companies Act 2013. Thedeclaration was placed and noted by the Board in its meeting held on 29th May 2018.
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 SEBI (LODR) Regulation 2015 stating therein the Company's policy onDirectors/ Key Managerial Personnel/ other employees appointment and remuneration by theNomination and Remuneration Committee and approved by the Board of Directors. The saidpolicy may be referred to company's website atwww. ifeindustries.com/Legal/Policies. Aspart of the policy the Company strives to ensure that : the level and composition ofremuneration is reasonable and sufficient to attract retain and motivate Directors / KMPsof the quality required to run the company successfully;
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
This part is covered under Corporate Governance Report. AUDITORS' REPORT
The Auditors' Report do not contain any qualification reservation or adverse remarks.The notes on Financial statements referred to in the Auditors' Report are self-explanatoryand do not call for any further explanation.
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 Companies AmendmentAct 2017 (came into force from May 7 2018) the first proviso to section 139 of theCompanies Act 2013 i.e ratification at every Annual General Meeting the appointment ofthe Auditors has been omitted. Accordingly M/s Deloitte Haskins & Sells CharteredAccountants will continue as Statutory Auditors of the Company till the conclusion of the43rd Annual General Meeting. They have confirmed that they are not disqualified fromcontinuing as Auditors of the Company.
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 on28 March 2018 appointed Mr. Jitendra Patanaik Practising Company Secretary (Certificateof Practice no 3102) as the Secretarial Auditor for the financial year ended 31st March2018.
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 as Annexure-A. The enclosed Secretarial Audit Report confirms compliance ofapplicable Secretarial Standard.
BUSINESS RESPONSIBILITY REPORT
In conformance to the requirements of the clause (f) of subregulation (2) of regulation34 of Securities and Exchange Board of India (SEBI) Listing Regulations the BusinessResponsibility Report for Financial Year 2017-18 is enclosed as a part of this report asAnnexure F which forms part of this Report.
DIVIDEND DISTRIBUTION POLICY
The Board of Directors of IFB Industries Limited at its meeting held on May 29 2018has adopted this Dividend Distribution Policy (the "Policy") as required byRegulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (the "Listing Regulations") is available at our website
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 enclosed as a part of this report asAnnexure-B to this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company constituted a CSR Committee. The Committee comprises IndependentDirector non-executive director and executive director. CSR Committee of the Board hasdeveloped a CSR Policy which is enclosed as part of this report as Annexure-C.Additionally the CSR Policy has been uploaded on the website of the Company at http://iftindustries.com/ csrpolicy.php. Your company has judiciously identified the activitiesand accordingly projects mainly relating to (a) Promoting education and (b) skilldevelopment programme were undertaken in line with the CSR policy . The necessary budgetoutlay were assigned to aforesaid projects. However due to multi year project and certaindelay at implementation level at different schools the company could not spend theallotted budget outlays. The company made an expenditure of Rs 62.04 lacs only against thebudgeted amount of Rs 100.43 lacs.
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aVigil 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.iftindustries.com under legal/ investorsrelation/policy documents/Vigil Mechanism 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 any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the company or materiality of related party transaction. The policy onmateriality of related party transaction and dealing with related party transaction asapproved by the board may accessed on company's website at the link www.iftindustries.comunder legal/investors relation /policy documents/ related party policy link. Yourdirectors draw attention of members to note 38 to the Financial Statements which set outrelated party disclosures.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as 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 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is separately enclosed as Annexure E.
The number of permanent employees on the role of the company as on 31 March 2018 is1690.
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 during the 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 and manage the inherentrisks 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 the Independent Directors about the company's strategy operations product andservice offerings markets finance quality etc. Independent Directors are also visitingfactories and branch offices to familarise themselves with the operations of the companyand to offer their specialized knowledge for improvement of the performance of thecompany.
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.ifeindustries.com underlegal/investors relation/ appointment of independent directors.
IFB Industries Limited has subsidiary Trishan Metals Pvt. Ltd (TMPL) wholly ownedsubsidiary Global Automotive & Appliances Pte Ltd. (GAAL) and step down subsidiaryThai Automotive and Appliances Ltd. (TAAL).
Trishan Metals Private Ltd :
IFB Industries Ltd. holds 51.12% equity shares of TMPL which was acquired during2016-17. TMPL's performance has still not reached its potential mainly due to a delay inline balancing at the plant leading to inadequate capacity utilization. It is expectedthat things will stabilize during 1st half of 2018-19.
Rs in lacs
As you can see that sales has increased however much below the budget. The loss wasdue to lower capacity utilization. It is expected that in current financial Trishan Metalswill be in profit.
Global Automotive & Appliances Pte Ltd. (GAAL) and step down subsidiary ThaiAutomotive and Appliances Ltd. (TAAL).
IFB Industries Ltd. acquired 100 % equity shares of GAAL during July 2017. GAAL holds100% equity holding in
TAAL. GAAL acts as a special purpose vehicle for further investment in TAAL. TAAL isengaged in the business of Fine Blanking and Conventional Blanking and its acquisitionwill help IFB to consolidate its position in similar type of business in Thailand. Weexpect sound growth of TAAL during 2018-19.
We have in accordance with Section 129(3) of the Companies Act 2013 preparedconsolidated financial statements of the company and its subsidiary Trishan Metals Pvt.Ltd and Global Automotive & Appliances Pte Ltd. Further the report on the performanceand financial position of the subsidiary companies in the prescribed form AOC-1 isenclosed as a part of this report as Annexure-G.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the Consolidated financial statements and related information of thecompany and financial statement of the subsidiary companies will be available on ourwebsite www.ifeindustries.com . These documents will also be available for inspectionduring business hours 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.