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Ion Exchange (India) Ltd.

BSE: 500214 Sector: Engineering
NSE: IONEXCHANG ISIN Code: INE570A01014
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OPEN 1777.00
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VOLUME 1768
52-Week high 2493.80
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P/E 16.39
Mkt Cap.(Rs cr) 2,588
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Sell Qty 0.00
OPEN 1777.00
CLOSE 1770.15
VOLUME 1768
52-Week high 2493.80
52-Week low 1500.70
P/E 16.39
Mkt Cap.(Rs cr) 2,588
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ion Exchange (India) Ltd. (IONEXCHANG) - Director Report

Company director report

To

The Members

Directors have pleasure in presenting the 57th Annual Report and Accountsfor the year ended 31st March 2021.

FINANCIAL RESULTS

The highlights of the financial results are as follows:

Year ended March 2021 Year ended March 2020
(INR in Lacs) (INR in Lacs)
Profit before taxation 19587 13418
Less: Provision for taxation:
Current tax 5385 3642
Deferred tax (395) (136)
tax Profit after 14597 9912
Other comprehensive income (Net of Taxes) 95 (92)
Total Comprehensive income 14692 9820

OPERATIONS

During the financial year ended 31 st March 2021 the net profit after tax of thecompany has increased to INR 14597 Lacs as compared to previous year's net profit aftertax of INR 9912 Lacs showing a mark improvement of 47% over the previous year. TheCompany has achieved a turnover of INR 1401.76 crores as compared to INR 1407.18 crores ofthe previous year.

DIVIDEND

The Directors are pleased to recommend a dividend of INR 10/-[100%] per equity sharefor the financial year ended 31st March 2021.

FUTURE OUTLOOK

India's GDP bounced back to the pre-pandemic level in the fourth quarter of FY 2020-21after a sharp contraction in the firstquarter followed by a V shaped recovery in thesubsequent quarters. The world economy also experienced a good but highly disparaterecovery during this period. However the second Covid-19 wave from downside risk to thegrowth April2021posesasignificant forecast. This is now expected to be 8 8.3% in FY2021-22 with the GDP expected to surpass the pre-pandemic level only in the thirdquarter.

One of the important demand side driver of economic growth viz investments was greatlyaffected in the previous financial year. Gross fixed (GFCF) declined 10.8% last fiscal toINR 42 Lac crore a figure similar to 2018. While there was slight improvement in laterpart of previous year the second wave can once again create uncertainties in demand andpotentially reduce private sector investment in new capacity building. That said CentralGovernment's planned investment in infrastructure core sectors like steel oil refiningand petrochemicals etc is expected to continue its contribution to gross capitalformation.

Investments in construction activity especially roads and water infrastructure augurswell for both capacity utilization and brownfield expansion in sectors like steel cementchemicals etc.

In the budget for FY 2021-22 there were significant policy shifts as the governmentannounced doubling of the spend on health. The Reserve Bank of India (RBI) announcedfurther measures to support the liquidity provision to micro small and medium firms andfurther relaxation on provisioning for non-performing loans. Recently the governmentannounced an INR 6.28 Lac crore stimulus package for Covid affected sectors. TheProduction Linked Incentive scheme (PLI) that provides incentives of INR 2 Lac croreacross 14 targeted industrial sectors aimsatsignificantincremental revenue from thesectors with a capex outlay of INR 2.7 Lac crore which will give a much required boost toeconomic growth. Your Company has a good enquiry bank and order backlog from theindustrial and municipal sector. Your Company offers predesigned and pre-engineered waterand waste treatment products catering to a wide range of industries such as food andbeverage sugar electronicscapital formation pharmaceutical automotive cementchemicals realty etc. The demand from these segments is expected to be better in thecoming financial year. As mentioned elsewhere in the section investment optimism is alsohigh in core sectors like steel refinery and municipal infrastructure which augurs wellfor new orders to add to the existing order backlog. Further with easing of pandemicrelated restrictions particularly in the construction of new projects your Companyexpects a steady quarter-wise growth in turnover during the financial year.

India's export performance with its major trading partners like EU US and Asia isexpected to be bolstered by the strong global growth forecast of 5.5%. This growth isexpected from large fiscal stimulus committed by developed economies and acceleratedrecoveries aided by increased vaccine coverage in these economies.

Further Indian exports can expect to benefit from "China

Plus" sourcing strategy being contemplated by various global customers.

One of the major outcome of the pandemic is the increased awareness of sustainabilityand the urgent need for environment protection. Post-pandemic recovery also presents anopportunity on greener development path through government's planned investment in waterinfrastructure renewable energy thereby also improving its commitment to improveenvironmental performance on lowering greenhouse gas emissions. Further the government'splan to enhance environmental cleanup activities also offers good growth prospects for thewater and environment industry which will also see more private investment in this sector.This will certainly result into increased opportunities for your Company in water wastemanagement and renewable energy from waste. The risk for the above future outlook andforecasted growth will be emergence of a third wave and resultant localized lockdowntardy pace of vaccination and rising international commodity prices resulting in higherinflationlower consumption and reduced current account balance. In states like DelhiMaharashtra Karnataka Kerala Tamil Nadu and Uttar Pradesh that were most impactedduring the first wave and suffering heavily the second time the lockdown restrictionswere not as strict as those imposed during the first construction and transport wereallowed to function with SOP restrictions. The concern is that these restrictions arestretching longer. Thus private final consumption expenditure the biggest demand sidedriver of GDP can come under renewed pressure if the urban demand for products andservices remain weak.

Strategy to ensure business continuity and growth

Your Company has evolved a sound business strategy based on the future outlook and alsolearnings from the previous year on managingitsbusinessefficientlydespite challenges posedby the pandemic. Thus in order to achieve its business goals and growth prospects it hasdevised segment specific strategies to ensure planned level of revenues through timelysupplies of products and services against temporary disruptions. Further it aims atincreasing its market share through faster proliferation of new products with enhancedmarket coverage in geographies it serves. It will also continue to manage its cash flowsand overheads efficiently through risk mitigating measures including careful selection ofcredit-worthy customers.

FINANCIAL RESOURCES Fixed Deposits

The Company has not accepted any deposits during the year within the meaning ofSection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014.

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.

SUBSIDIARY COMPANIES

Aqua Investments (India) Ltd. and Watercare Investments (India) Ltd.

During the year ended 31st March 2021 the Subsidiary companies M/s. AquaInvestments (India) Limited posted profit after tax of INR 16.06 Lacs compared to INR29.18 Lacs of the previous year and M/s. Water Care Investments (India) Ltd. posted profitafter tax of INR 12.90 Lacs compared to INR 22.54 Lacs of the previous year.

Ion Exchange Enviro Farms Limited (IEEFL)`

During the year under review Company's a turnover was lower at INR 0.04 Lacs asagainst INR 68.05 Lacs in the previous year . The sale of organic goods was affected dueto the impact of Covid -19 pandemic in the country resulting in lower turnover for thecompany.

The Company's appeal at Securities Appellate Tribunal (SAT) was decided on 18thOctober 2019 and a review petition was filed rd December 2019 for correctionsof factual errors inon3 the said order.

SAT vide its order dated 19 wave. Manufacturing th March 2021 rejected Company'sreview petition. Further based on the legal advice pending final order from SAT on thereview petition an appeal has also been filed in the Supreme Company's appeal filed inSupreme Court is pending for hearing.

Ion Exchange Asia Pacific Pte Ltd. Singapore and Ion Exchange Asia Pacific (Thailand)Ltd. Thailand and Pt Ion Exchange Asia Pacific Indonesia

The company achieved consolidated turnover of INR 1981.84 Lacs during the year underreview. Resurgence of second wave of Covid -19 during last quarter posed challenges forthe execution of the ongoing projects. Order inflow however improved during the yearunder review. With a healthy order backlog the Company is in a position to improve itsperformance in the coming year.

Warehousing and assembly centre earlier set up in Indonesia is well equipped to handlethe growth.

IEI Environmental Management [M] SDN.BHD Malaysia

The Company's main activity is trading in water filtration equipments water chemicalsresins and taking up projects of installing water filtration plants of any nature. TheCompany has been established with a view of facilitating operations in Malaysia and is astrategic investment. Company has initiated the process of restructuring its operations inthis region.

Ion Exchange Environment Management (BD) Limited Bangladesh

Company achieved turnover of INR 921.75 lacs.

Country wide lockdown imposed due to Covid-19 pandemic in first quarter and resurgenceof second wave of Covid -19 in later part of the year under review affected the turnoverof the company.

As Bangladesh economy has seen increase in investment in infrastructure segmentespecially power sector the company is well equipped to cater to the growing demand inthis sector which will enable the Company to show improved performance in the comingyears.

Ion Exchange WTS (Bangladesh) Limited Bangladesh

The Company achieved a turnover of INR Nil for the year under review. The Company iscurrently not in operation.

Ion Exchange & Co. LLC Oman

The company achieved a turnover of INR 1800.87 Lacs for the year under review asagainst INR 1985.46 lacs in previous year. It registered a profit after tax of INR 213.84Lacs as compared to INR 205.53 Lacs for the previous year During the year in spite oflockdown and challenges posed by Covid-19 pandemic company continued its industrialservice activities (O&M activities) at various customers' sites by following all theGovernment mandated protocols and safety measures to ensure continuity of customers'operations and also ensuring safety and wellness of employees.

Ion Exchange LLC USA

The Company achieved a turnover of INR 5092.10 Lacs for the year under review asagainst INR 6819 Lacs for the previous year. Turnover of the company was affected due toCovid-19 pandemic in North America during the year under review. It registered a profitafter tax of INR 211.87 Lacs as compared to INR 173.20 Lacs for the previous year onaccount of better realization of certain products and product mix.

Ion Exchange Projects and Engineering Limited

The Company achieved a turnover of INR 3606.12 Lacs for the year under review asagainst INR 2860.01 lacs in previous year. The Company has provided project Managementservices and design services to the parent company for its ongoing contracts which ensuredbetter utilization of its resources thus resulting profit after tax of INR 311.54 Lacs ascompared to loss after tax of INR 159.40 Lacs during the previous year.

Global Composites and Structurals Limited

The Company achieved a turnover of INR 457.72 Lacs for the year under review. Theturnover of the company was affected due to the impact of Covid -19 pandemic in thecountry and consequent lockdowns imposed during major part of the year under review.

The Company is in the business of providing integrated engineering services across thelife cycle of a project and has expertise in the manufacture of RO pressure tubes and FRPtanks and electrical panels for water treatment industries.

Ion Exchange Safic (Pty) Limited South Africa

The Company achieved a turnover of INR 905.58 Lacs for the year under review ascompared to INR 803.63 Lacs of the previous year.

The Company is a Joint venture Company set up in South

Africa with Safic (Pty) Ltd. which is a part of Accentuate Group. The battling SouthAfrican economy was further affected due to the continued onslaught of Covid-19 pandemic.This affected overall performance of the Company.

Ion Exchange Arabia

The Company achieved a turnover of INR 260.91 Lacs for the year under review.

Due to the continued Covid-19 related restrictions prevailing in the country theCompany was not able to run full fledged operations during the year under review. We areconfident that once the lockdown restrictions are eased the company will be in a positionto operate at optimum capacity.

Total Water Management Services (India) Ltd.

The Company achieved a turnover of INR 14.28 Lacs for the year under review as againstINR 45.92 Lacs for the previous year. The Company is in the business of providing totalwater management consultancy across the spectrum.

Ion Exchange Purified Drinking Water Pvt. Ltd.

The Company achieved a turnover of INR 407.44 Lacs for the year under review.

The Company is set-up as a special purpose vehicle to implement PPP (Public PrivatePartnership) project for bottle water supply to Indian Railway Catering and TourismCorporation Limited (IRCTC). Since the railway operations were severely affected due toCovid-19 related restrictions offtake by IRCTC for bottled water produced was low. Thisaffected the Company's turnover.

Ion Exchange Environment Management Limited

The Company achieved a turnover of INR 137.15 Lacs for the year under review. Theturnover of the company was mainly affected due to the impact of Covid -19 pandemic in thecountry.

The Company is in the business of providing advanced environmental solutions andservices for industrial infrastructure and municipal applications.

ASSOCIATE AND JOINT VENTURE COMPANIES

A statement as required under Section 129 of the Companies Act 2013 is attached tothe Annual Report in form AOC 1.

DIRECTORS

Mr. M.P. Patni Director of the company retires by rotation and being eligible hasoffered himself for re-appointment. All Independent Directors have given declarations thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013 and Regulation 25 of the Listing Regulations.

BOARD PERFORMANCE EVALUATION

Pursuant to the provisions of the Section 149 Companies Act 2013 and the ListingRegulations the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsCommittees. The evaluation was done after taking into consideration the criteria laid downby Nomination and Remuneration committee. The criteria for evaluation includedparticipation in deliberations specific contributions made compliance with company'scode of conduct carrying out assigned tasks in timely and efficient manner and planningand formulating the company's strategies. The performance evaluation of IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmannon- independent Directors and the Board was carried out by Independent Directors. TheBoard of Directors expressed satisfaction with the evaluation process.

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3) (c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:

• in the preparation of the annual accounts for the year ended 31stMarch 2021 the applicable accounting standards have been followed along with properexplanation given relating to material departures if any;

• appropriate accounting policies have been selected and applied consistently andjudgments and estimates were made that were reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company at the end of the financial year andof the profit of Company for that period;

• proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities have beentaken to the best of their knowledge;

• the annual accounts have been prepared for the financial year ended 31stMarch 2021 on a going concern basis.

• proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively.

• The directors have devised proper systems to ensure compliance with theprovisions of all applicable laws were in place and were adequate and operatingeffectively.

KEY MANAGERIAL PERSONNEL

The Company has following persons as Key Managerial Personnel.

Sr. Name of the No. Person Designation
1 Mr. Rajesh Sharma Chairman & Managing Director
2 Mr. N.M. Ranadive Chief Financial Officer
3 Mr. Milind Puranik Company Secretary

NUMBER OF MEETINGS OF THE BOARD

The details of number of meetings of the Board held during the financial year 2020-21forms part of the Corporate Governance Report.

WHISTLE BLOWER POLICY

The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company (www.ionindia.com).

RELATED PARTY TRANSACTIONS

All transactions entered with related parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of section 188of the Companies Act 2013 are not attracted. Further there are no material related partytransactions under review with the promoters directors or key managerial personnel. TheCompany has developed a related party transactions framework through standard operatingprocedures for the purpose of identification and monitoring of such transactions.

As per the policy on Related Party Transactions the Audit Committee granted omnibusapproval for the transactions which are repetitive in nature. The related partytransactions were placed before the Audit Committee and the Board on quarterly basis forreview pursuant to omnibus approval.

The policy on related party transactions as approved by the board of directors has beenuploaded on the website of the company. The web link of the same has been provided in thecorporate governance report. None of the directors has any pecuniary relationship vis avis the Company

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with

Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of employees of the Company will be provided upon request. In terms ofSection 136 of the Act the Report and Accounts are being sent to the Members and othersentitled thereto excluding the information on employees' particulars which is availablefor inspection by the Members at the Registered Office of the Company during businesshours on working days of the Company up to the date of the ensuing Annual General Meeting.If any Member is interested in obtaining a copy thereof such Member may write to theCompany Secretary in this regard.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

QUALITY INITIATIVES

Your Company has always been passionate about achieving the highest standards ofquality for its products and services.

All its manufacturing establishments and even support functions like technologyservices corporate communications are certified for Quality Management System namely ISO9001:2015. Your Company's facilities for manufacturing Resins at Ankleshwar - GujaratChemicals at Patancheru and Membranes at Goa is certified for ISO 14001:2015 EnvironmentalManagement System. Besides this the Resins manufacturing facility has obtained renewedcertificates for WQA-Gold seal; Kosher Halal EU Canadian Health WHOGMP GMP (GoodManufacturing Practice) and GLP (Good Laboratory Practice).

The Chemical manufacturing facility at Patancheru is also certified System namely ISO45001:2018. The facility has also obtained renewed certificates for Kosher Halal andNSF/ANSI 60. Further our R&D laboratories at Patancheru and Vashi are certified byDSIR and the laboratory at Bangalore by NABL. Your Company strives for continuousimprovement in its operations processes and procedures. Towards this end your companyundertakes several Quality improvement programs like ‘Lean Six Sigma Program' etc.

AUDITORS Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. B S R & Co. LLP Chartered Accountants (Reg No. 101248W/W-100022) were appointedas statutory auditors of the Company for a period of four years from the conclusion of theFifty Sixth Annual General Meeting (AGM) of the Company held on September 22 2020 tillthe conclusion of the Sixtieth AGM to be held in the year 2024. Consequent to amendment toCompanies Act 2013 ratification of Statutory Auditor's appointment is not required atevery Annual General Meeting.

Branch Auditors

The Branch Auditors M/s. Angadi & Co. appointed to conduct Audit of Ion ExchangeServices [A division of Ion Exchange (India) Limited] Bangaluru hold office until theconclusion of this meeting and are eligible for appointment. Pursuant to the provisions ofsection 139 and 143(8) of the Companies Act 2013 and rules framed there under it isproposed to appoint

M/s. Angadi & Co. as branch auditors of the Company from the conclusion offorthcoming AGM till the conclusion of next AGM.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its Chemicals Membranes and Standard water treatment plants manufacturingactivity are required to be audited. Your Directors had on the recommendation of theAudit Committee appointed M/s. Kishore Bhatia & Associates to audit the cost accountsof the Company for the financial year ending 31st March 2021. As required underthe Companies Act 2013 the remuneration payable to the cost auditor is required to beplaced before the Members in a general meeting for their ratification. Accordingly aResolution seeking Member's ratification for the remuneration payable to M/s. KishoreBhatia & Associates Cost Auditors is included in the Notice convening the AnnualGeneral Meeting.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 (The Act) read with the Companies(Accounts) Rules 2014 SEBI (Listing Regulations) and Ind AS 110 Consolidated FinancialStatements and Ind AS 28 Investment in Associates and Joint Venture the auditedconsolidated financial statements are provided in this report.

The consolidated financial statements have been prepared on the basis of the auditedfinancial statements of the company its forISOOccupationalHealthandSafetyManagementSubsidiaries Joint Venture and Associate companies as approved by their Board ofDirectors.

The Company will make available the Annual Accounts of the subsidiary companies and therelated detailed information to any member of the Company who may be interested inobtaining the same. The annual accounts of the subsidiary companies are placed onCompany's website and the same are open for inspection at the Registered Office of theCompany.

CORPORATE GOVERNANCE

A report on Corporate Governance as required under Regulation 34 of Listing Regulationsread with Schedule V (Part C) forms part of this annual report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Report on Management discussion and analysis as required under Regulation 34 of ListingRegulations forms part of this

Annual Report.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report as Required Under Regulation 34 of Listing Regulationsread with Schedule V (Part B) forms part of this Annual Report.

ANNUAL RETURN

The annual return of the Company as required under the Companies Act 2013 will beavailable on the website of the Company (www.ionindia.com).

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 Company has appointed M/s. GMJ & Associates a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company. The SecretarialAudit Report is annexed herewith as

"Annexure I".

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the areas of environment education and safedrinking water. These projects are in accordance with Schedule VII of the Companies Act2013 and the Company's CSR Policy. The Report on CSR activities as required underCompanies (Corporate Social Responsibility Policy) Rules 2014 is set out as "AnnexureII" forming part of this report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

Information in accordance with Section 134 (3) (m) of the Companies Act 2013 read withthe Companies (Accounts)

Rules 2014 and forming part of this Report for the year ended 31st March2021 is given in "Annexure III".

ACKNOWLEDGEMENTS

Your Board conveys its deep appreciation of the co-operation extended by customerssuppliers banks financial institutions contribution made by employees for the company'sgrowth shareholders and fixed deposit holders.

On behalf of the Board of Directors
Rajesh Sharma
Chairman & Managing Director
Mumbai
Date: 8th June 2021

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