Your Directors are pleased to present the 38th Annual Report of the Company togetherwith the standalone and consolidated Audited Statements of Accounts for the year endedMarch 31 2017.
| ||Standalone || ||Consolidated |
|Particulars ||2016-17 ||2015-16 ||2016-17 |
| ||(Rs. In lacs) ||(Rs. in lacs) ||(Rs. In lacs) |
|Sales and other Income ||18998.55 ||25787.81 ||19143.95 |
|Profit before Finance Cost & Depreciation ||3504.01 ||5094.13 ||3582.12 |
|Finance Cost ||30.75 ||29.42 ||81.37 |
|Profit before Depreciation ||3473.26 ||5064.71 ||3500.75 |
|Depreciation ||296.30 ||275.87 ||316.95 |
|Profit before tax ||3176.96 ||4788.84 ||3183.80 |
|Profit after tax (before minority) ||2204.42 ||3197.45 ||2206.56 |
|Profit after tax (after minority) ||2204.42 ||3197.45 ||2201.78 |
|Transfer to General Reserve ||- ||- ||- |
|Interim Dividend ||236.25 ||236.25 ||- |
|Proposed Final Dividend ||393.75 ||393.75 ||- |
During the year under review your Company had net revenue of Rs. 189.99 crores asagainst Rs. 257.88 crores in the previous year. The Profit before finance cost anddepreciation amounted to Rs. 35.04 crores as against Rs. 50.94 crores in the previousyear.
Profit before tax during the year worked out to Rs. 31.77 crores as compared to Rs.47.89 crores in the previous year.
During the year the Board of Directors declared an Interim dividend of Rs. 0.90 perequity share of Rs. 2/- each (45%) on October 24 2016 which has been paid to the memberson November 16 2016.
The Directors are pleased to recommend a final dividend of Rs. 1.50/- per equity shareof Rs. 2/- each (75%) for the financial year 2016-2017 thus making a total dividend ofRs.2.40/-per equity share of Rs. 2/- each (120%).
Subject to the approval of shareholders at the ensuing Annual General Meeting thefinal dividend will be paid to those shareholders whose name appears on the Register ofMembers of the company as on close of business hours on June 19 2017 (if shares are heldin physical form); in respect of shares held in dematerialized form it will be paid tothose members whose names are furnished by NSDL and CDSL as beneficial owners as on June12 2017.
INVESTOR EDUCATION AND PROTECTION FUND
Dividend which was declared by the company for the year ended March 31 2010 at theAnnual General Meeting held on July 30 2010 and remained unclaimed will be transferred tothe Investor Education and Protection Fund (IEPF) of the
Central Government on September 05 2017 pursuant to the provisions of Companies Act2013. Thereafter no claim shall lie on dividend for the year ended March 31 2010 from theshareholders. Notice for unpaid dividend is attached with this annual report.
Dividend remitted to IEPF during the last three years:
|Year ||Type ||Amount transferred to IEPF |
|2007-08 ||Final ||192820/- |
|2008-09 ||Final ||191546/- |
|2009-10 ||Interim ||115182/- |
The Company is required to transfer the shares in respect of which the dividendremained unpaid or unclaimed for a period of seven consecutive years to IEPF account. Allfuture benefits on such shares would also be transferred to IEPF.
TRANSFER TO RESERVES
There was no transfer to General Reserves during the financial year 2016-2017.
The appropriations for the year are:- Rupees in lacs
|Particulars ||Year Ended ||Year Ended |
| ||March 31 2017 ||March 31 2016 |
|Reserve at the beginning of the year ||1118.80 ||1118.80 |
|Transfer to general Reserve ||- ||- |
|Reserve at the end of the year ||1118.80 ||1118.80 |
|Balance of Profit & Loss account at the year end ||15034.54 ||13588.37 |
During the year prices of natural and synthetic rubber witnessed a sharp increaseafter declining for two consecutive years.
Industry faced competition from tyre manufacturers engaged in retreading and also fromimport of cheap tyres from China. Tyre import has come down significantly afterdemonetisation. There has been overall shrinkage in the market size of the retreadingindustry.
OPPORTUNITIES AND THREATS
The implementation of GST during first quarter of financial year 2017-2018 isanticipated to improve performance of organized retreading sector. GST would hitunorganized retreading sector who are able to take benefit in the current scenario whichwould not be possible under the GST regime.
Underscoring a major need for skill training in tyre sector and rubber technology theGovernment proposes to set up a national institute which would help the industry inemploying skilled people.
Government is taking every possible initiative to boost the infrastructure sectorurban development and implementation of National Highway Building project in differentphases. All these initiatives would revive the transport industry which will bring growthin coming years.
However cheap Chinese tyres will continue to be a threat to retreading industryunless anti-dumping duty is levied.
RISK AND AREA OF CONCERN
The company has laid down a well defined risk management mechanism covering the riskmapping and trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitor variousrisks. The Audit Committee and the Board periodically review the risks and suggest stepsto be taken to manage/ mitigate the same through a properly defined framework.
During the year a risk analysis and assessment was conducted and no major risks werenoticed which may threaten the existence of the company.
MATERIAL CHANGES AFFECTING FINANCIAL POSITIONS OF THE COMPANY
No material changes have occurred and commitments made affecting the financialposition of the company between the end of the financial year of the company and the dateof this report.
There is no order passed by any regulator or court or tribunal against the companyimpacting the going concern concept or future operations of the company.
INTERNAL CONTROL SYSTEM
The Company has adequate internal control systems and procedures designed toeffectively control the operations at its Head Office Plants and Depots. The internalcontrol systems are designed to ensure that the financial and other records are reliablefor the preparation of financial statements and for maintaining assets. The Company haswell designed Standard Operating Procedures.
Independent Internal Auditors conduct audit covering a wide range of operationalmatters and ensure compliance with specified standards. Planned periodic reviews arecarried out by Internal Audit. The findings of Internal Audit are reviewed by the topmanagement and by the Audit Committee of the Board of Directors.
Based on the deliberations with Statutory Auditors to ascertain their views on thefinancial statements including the Financial Reporting System and Compliance to AccountingPolicies and Procedures the Audit Committee was satisfied with the adequacy andeffectiveness of the Internal Controls and Systems followed by the company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
On the recommendation of Nomination and Remuneration Committee the Board appointed Mr.Harjiv Singh as an Independent Director of the company with effect from August 9 2016to fill up the casual vacancy caused due to resignation of Mr.K.M.S.Ahluwalia w.e.f.February 10 2016. The Company has received requisite notice under Section 160 of theCompanies Act 2013 from a member signifying his intention to propose the candidature ofMr. Harjiv Singh as Independent Director who would hold office till March 31 2019 notliable to retire by rotation.
As per the provisions of the Companies Act 2013 Mr. Uday Harsh Khemka will retire byrotation at the ensuing AGM and being eligible offered himself for re-appointment. TheBoard recommends his re-appointment.
The information on the particulars of Director eligible for appointment in terms ofRegulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015has been provided in the notes to the notice convening the Annual General Meeting.
INDEPENDENT DIRECTORS DECLARATION
The Independent Directors have confirmed and declared that they are not disqualified toact as an Independent Director in compliance with the provisions of Section 149 of theCompanies Act 2013 and the Board is also of the opinion that the Independent Directorsfulfill all the conditions specified in the Companies Act 2013 making them eligible toact as Independent Directors.
The details of number and dates of meetings held by the Board and its Committeesattendance of Directors and sitting fee/ commission/ remuneration paid to them is givenseparately in the attached Corporate Governance Report.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. More details on the same are givenin the Corporate Governance Report.
The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination and Remuneration Committee and theBoard. More details on the same are given in the Corporate Governance Report.
STAKEHOLDER RELATIONSHIP COMMITTEE
Stakeholder Relationship Committee comprises of Mr. R.Parameswar as Chairman and Mr.Nand Khemka and Mr. K.K.Kapur as members. The details of term of reference of theCommittee member dates of meeting held and attendance of the Directors are givenseparately in the Corporate Governance Report.
The Audit Committee comprises of Mr. R. Parameswar as Chairman and Mr. Nand Khemka Mr.P.R.Khanna as members. The details of term of reference of the Audit Committee memberdates of meeting held and attendance of the Directors are given separately in theCorporate Governance Report.
The company has a vigil mechanism for Directors and Employees to report their concernsabout unethical behavior actual or suspected fraud or violation of the company's Code ofConduct. The mechanism provides for adequate safeguards against victimization of Directorsand employees who avail of the mechanism. In exceptional cases Directors and employeeshave direct access to the Chairman of the Audit Committee.
The Vigil Mechanism (Whistle Blower Policy) is available on the company's website.
CODE OF CONDUCT
Directors Key Managerial Personnel and senior management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany and the declaration in this regard made by the CEO & Whole Time Director isattached as Annexure I' which forms a part of this Report of the Directors.The Code of Conduct is available on the Company's website www.indagrubber.in.
HUMAN RESOURCE MANAGEMENT HEALTH AND SAFETY
During the year the Company had cordial relations with workers staff and officers. Theshop floor management is done through personal touch using various motivational tools andmeeting their training needs. The company has taken steps for safety of employees andimplemented regular safety audit imparted machine safety training wearing protectiveequipments etc. The Company believes in empowering its employees through greaterknowledge team spirit and developing greater sense of responsibility. On the job trainingas well as classroom training by way of seminars conventions functional and managerialprograms for capability development and building technical expertise were attended byrespective functions such as Sales & Marketing Finance & Accounts ProcurementSupply Chain HR etc. The Company organized a diagnostic camp to monitor health as well asphysical and emotional well-being of all employees and workers. There were 345 regularemployees as at March 31 2017.
DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The company has a policy on prohibition prevention and redressal of Sexual Harassmentof women at workplace and matters connected therewith or incidental thereto covering allthe aspects as contained under "The Sexual Harassment of women at workplace(Prohibition Prevention and Redressal) Act 2013".
During the financial year 2016-17 no complaint was received under the policy.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 regarding employees is given in AnnexureII'.
COMMITMENT TO QUALITY AND ENVIRONMENT
Indag recognizes quality and productivity as a pre-requisite for its operations and hasimplemented ISO 9001:2008 standards and ISO 14001:2004 standards.
Anti-pollution systems are fully installed and operational. Continuous efforts topreserve the environment are pursued.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility Committee comprises of Mr. Nand Khemka as the Chairmanand Mr. P.R.Khanna and Mr. K.K.Kapur as the members.
During the year we focused on improving the quality of life of the community in andaround Nalagarh through health and sanitation education and skill based training sportsand infrastructure development. Details about the CSR policy and initiatives taken by theCompany during the year are available on your company's website www.indagrubber.in. TheReport on CSR activities is given in Annexure III' forming part of thisReport.
M/s. S. R. Batliboi & Co. LLP Chartered Accountants Statutory Auditors of theCompany were appointed in the 35th Annual General Meeting to hold office until theconclusion of 38th Annual General Meeting.
As per Companies Act 2013 M/s S.R.Batliboi & Co.LLP have completed their term andare not eligible for re-appointment. Based on the recommendation of Audit Committee yourcompany seeks approval for the appointment of M/s. Khanna & Annandhanam CharteredAccountants as our Statutory Auditors to hold office from the conclusion of 38thAnnual General Meeting upto the conclusion of 43rd Annual General Meeting.
There are no qualifications or reservation or remarks made by the Auditors in theirReport.
A Secretarial Audit was conducted during the year by the Secretarial Auditor M/s. RMG& Associates Practicing Company Secretaries. The Secretarial Auditors Report isattached as Annexure IV'. There are no qualifications or observations orremarks made by the Secretarial Auditor in their Report.
The Board of Directors has on the recommendation of Audit Committee approved theappointment of M/s. Shome & Banerjee Cost Accountants as the Cost Auditors of thecompany for the year 2017-2018 at a remuneration of Rs. 1 lac plus out of pocket expenses.The proposed remuneration of the Cost Auditors would be approved by the members in theensuing AGM.
The due date for filing the Cost Audit Report of the Company for the financial yearended March 31 2016 was September 30 2016 and the Cost Audit report was filed in XBRLmode on September 8 2016.
LOANS GUARANTEES OR INVESTMENT
In compliance with Section 186 of the Companies Act 2013 loans to employees bearinterest at applicable rates. The company has made investments in securities of other bodycorporate(s) and given guarantees in the ordinary course of its business the details ofwhich are given in Note 11' to Financial Statements which are within the limitsprescribed under Section 186 of the Companies Act 2013.
Your company has not accepted any fixed deposit and accordingly no amount wasoutstanding as at the Balance Sheet date.
The Company had made investment of 75.84% in the equity of SUN-AMP Solar India Pvt. Ltdwhich has become subsidiary on October 13 2016. SUN-AMP Solar India Pvt. Ltd holds 74%equity in Samyama Jyothi Solar Energy Private Limited (step-down subsidiary).
A statement containing salient features of the financial statements of the Company'ssubsidiary in Form AOC-1 is attached to the financial statements of the Company as AnnexureV'.
The company has framed a Policy for determining Material Subsidiary.
RELATED PARTY TRANSACTIONS
All related party transactions entered by the company during the financial year were inthe ordinary course of business and at arm's length basis which were not material innature. All related party transactions were entered with the prior or omnibus approval ofthe Audit Committee and periodically placed before the Board for review. The details ofthe transactions with Related Party are provided in the company's financial statements inaccordance with the Accounting Standards.
The company has a policy on materiality of and dealing with Related Party Transactionsas approved by the Board which is available at its website www.indagrubber.in
EXTRACT OF ANNUAL RETURN
The particulars required to be furnished under Section 134(3)(a) of the Companies Act2013 read with Companies (Management and Administration) Rules 2014 as prescribed in FormNo. MGT-9 is given in Annexure VI'.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
The particulars required to be furnished under Section 134(3)(m) of the Companies Act2013 read with Companies (Disclosure of particulars of Board of Directors) Rules 1988 areset out in Annexure VII' which forms part of the report.
The equity shares of your Company are listed with the Bombay Stock Exchange.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid. Ason March 31 2017 98.37% of the share capital stands dematerialized.
A separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report as Annexure VIII' and the Certificate from RMG& Associates Practicing Company Secretary confirming compliance with the requirementsof Corporate Governance as stipulated in Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed as Annexure IX'.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required by Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 are already dealtwith in various sections of this Report.
ANNEXURES FORMING A PART OF DIRECTOR'S REPORT
The Annexures referred to in this Report and other information which are required to bedisclosed are annexed herewith and form a part of this Report:
|Annexure ||Particulars |
|I ||CEO & Whole Time Director's Certificate under Schedule V Part D of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 on compliance of Code of Conduct |
|II ||Particulars of Employees under Section 134(3)(q) and Section 197(12) of the Companies Act 2013 |
|III ||Report on Corporate Social Responsibility |
|IV ||Secretarial Audit Report |
|V ||Form AOC-1 |
|VI ||Extract of the Annual Return in Form MGT-9 |
|VII ||Particulars of Conservation of Energy Technology Absorption and Foreign Exchange and Outgo |
|VIII ||Corporate Governance Report |
|IX ||Certificate from Practicing Company Secretary on Corporate Governance Report |
Statements in this report describing the Company's objectives expectations and/oranticipations may be forward looking within the meaning of applicable Securities Law andRegulations.
Actual results may differ materially from those stated in the statement. Importantfactors that could influence the Company's operations include global and domestic supplyand demand conditions affecting selling prices of finished goods availability of inputsand their prices changes in the Government policies regulations tax laws economicdevelopments within the country and outside and other factors such as litigation andindustrial relations.
The Company assumes no responsibility in respect of the forward-looking statementswhich may undergo changes in future on the basis of subsequent developments informationor events.
DIRECTOR'S RESPONSIBILITY STATEMENT
Your Directors wish to inform Members that the Audited Accounts containing FinancialStatements for the Financial Year 2016-17 are in conformity with the requirements of theCompanies Act 2013. They believe that the Financial Statements reflect fairly the formand substance of transactions carried out during the year and reasonably present theCompany's financial condition and results of operation.
In terms of provisions of Section 134(3)(c) of the Companies Act 2013 your Directorsfurther confirm as under:
i) That in preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of financialperiod and of profit or loss of the Company for that period;
iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) That the Directors have prepared the annual accounts on a "going concernbasis".
v) That the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) That the Directors had devised proper system to ensure compliance with theprovision of all applicable laws and that such systems were adequate and operatingeffectively.
The Company's Internal Auditors have conducted periodic audits to provide reasonableassurance that the Company's approved policies and procedures have been followed.
Your Directors wish to place on record their appreciation for the continuous supportreceived from the Members customers suppliers bankers various statutory bodies of theGovernment of India and the Company's employees at all levels.
| ||For and on behalf of the Board of Directors |
| ||Indag Rubber Limited |
| ||P. R. Khanna ||K. K. Kapur |
|Date : May 5 2017 ||Director ||CEO & Whole Time Director |
|Place : New Delhi ||DIN: 00048800 ||DIN: 00745117 |