TO THE MEMBERS OF RUBFILA INTERNATIONAL LIMITED
The Directors have pleasure to present their 25 Annual Report and the audited AnnualAccounts for the year ended 31 March 2018.
1. Financial Results
Rs in Lakhs
|Particulars ||Year ended 31 March 2018 ||Year ended 31 March 2017 |
| ||(Rs in lakhs) ||(Rs in lakhs) |
|Gross Income ||21773.10 ||18513.09 |
|Profit before Interest and Depreciation ||3606.25 ||2238.27 |
|Finance Charges ||(2.64) ||6.47 |
|Profit before Depreciation ||3608.89 ||2231.80 |
|Provision for Depreciation ||356.24 ||299.60 |
|Net Profit before Tax ||3252.64 ||1932.20 |
|Provision for Tax ||1145.13 ||679.93 |
|Net Profit after Tax ||2107.51 ||1252.27 |
|Balance of Profit brought forward ||5717.89 ||4918.37 |
|Balance available for appropriation ||7825.42 ||6170.64 |
|Dividend on Equity Shares ||324.13 ||216.09 |
|Tax on proposed Dividend ||66.00 ||44.00 |
|Transfer to General Reserve ||105.38 ||62.61 |
|Surplus carried to Balance Sheet ||7720.02 ||6108.02 |
2. Performance Review
Your company achieved a higher turnover of Rs.21773.10 lakhs an increase of 17.60% ascompared to last year. This is the highest turnover achieved by the company in itshistory. The profit before depreciation and taxes is Rs.3608.89 Lakhs as compared to Rs.2231.80 lakhs posted during the previous year. The earnings per equity share (face valueRs. 5) for the year is Rs.4.80. as against Rs. 2.90 for the previous year.
3. Dividend and Transfer to Reserves
Your Directors have recommended a dividend of 20% (Rs.1 per Share of face value Rs.5/-)for the year subject to the approval of shareholders at the ensuing Annual GeneralMeeting. This will result in total payout for the year 2017-18 (including DividendDistribution Tax) of Rs.390.13 Lakhs. (Rs.260.09 Lakhs in 2016-17). An amount ofRs.105.38. Lakhs has been transferred to General Reserve as per the provisions ofCompanies Act 2013.
4. Capital Expenditure
As on 31st March 2018 the gross fixed assets of the company stand at Rs.10302.92 Lakhsand net fixed assets Rs. 4968.81 Lakhs. Capital additions during the year amounted to Rs1740.04 Lakhs which include addition to Building for Rs.341.51 Lakhs Plant &Machinery and other assets amounting to Rs.1079.11 Lakhs and Capital Work in Progress ofRs.319.42 Lakhs.
5. Future Prospects
Your company expects to retain its share in the domestic market even though there arechallenges in the form of huge volume of imports coming from Malaysia and Thailand atlower prices. Higher price of natural latex in India compared to international markets isa major factor which decides the market dynamics. This impacts the profitability of theoperations. With the brand well known in the Indian as well as international markets yourcompany is confident of meeting the challenges existing in the market and remainprofitable.
6. Directors' Responsibility Statement The Directors report that
i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for the period ended 31st March 2018.
iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.
iv. The Directors have prepared the annual accounts on a going concern basis.
v. The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
vi. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
7. Listing on Stock Exchanges
Your Company's shares are listed on the Bombay stock exchange Ltd. The Company has paidlisting fee for the year 2018-19.
8. Declaration on Independent Directors
Pursuant to the provisions of Section 149 of the Companies Act 2013 Mr. Samir K. Shah(DIN 01714717) Mr. S.N. Rajan (DIN 00105864) Mr. Patrick M Davenport (DIN 00962475) Ms.R. Chitra (DIN 01560585) and Mr. S H Merchant (00075865) are the Independent Directors ofthe Company. They have submitted a declaration that each of them meet the criteria ofindependence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 ("SEBI ListingRegulations"). There has been no change in the circumstances affecting their statusas an Independent Director during the year.
(a) in the opinion of the Board these persons are of integrity and possess relevantexpertise and experience;
(b) (i) who were not Promoters of the company or its holding subsidiary or associatecompany
(ii) who are not related to Promoters or Directors in the company its holdingsubsidiary or associate Company;
(c) who have or had no pecuniary relationship with the company its holding subsidiaryor associate company or their Promoters or Directors during the two immediately precedingfinancial years or during the current financial year;
(d) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their Promoters or Directorsamounting to two percent or more of its gross turnover of total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;
(e) Who neither himself/herself nor any of his/her relatives -
i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial year immediately preceding the financial year in which he is proposed tobe appointed;
ii) is or has been an employee or propriety or a partner in any of the three financialyears immediately preceding the financial year in which he is proposed to be appointed of-
(A) a firm of auditors or company secretaries in practice or cost auditors or thecompany or its holding subsidiary or associate company; or
(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten percent or more of the grossturnover of such firm;
(iii) holds together with his/ her relative two per cent or more of the total votingpower of the company; or
(iv) is a Chief Executive or Director by whatever name called of any non-profitorganization that receives twenty-five percent or more of its receipts from the companyany of its Promoters Directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; or
(f) Who possess appropriate skills experience and knowledge in one or more fields offinance law management sales marketing administration research corporategovernance technical operations and other disciplines related to the Company's business.
A note on the familiarizing programme adopted by the Company for the orientation andtraining of the Directors and the Board evaluation process undertaken in compliance withthe provisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is provided in the Corporate Governance Report which formspart of this Report.
Further the Independent Directors of the Company met once during the year on28.01.2018 to review the performance of the Non-executive directors Chairman of theCompany and performance of the Board as a whole
9. Particulars of Loans guarantees or investments
Pursuant to Section 186 of the Companies Act 2013 your company has not directly orindirectly -
a) given any loan to any person or other body corporate other than usual advancesenvisaged in a contract of supply of materials if any
b) given any guarantee or provide security in connection with a loan to any other bodycorporate or person and
c) acquired by way of subscription purchase or otherwise the securities of any otherbody corporate
d) exceeding sixty percent of its paid-up share capital free reserve and securitiespremium account or one hundred percent of its free reserves and securities premium accountwhichever is more.
Your company has not accepted any deposits from public as envisaged under Sections 73to 76 of Companies Act 2013 read with Companies (acceptance of Deposit) Rules 2014 andno amount remain unpaid or unclaimed as at the end of the period under review.
11. Conservation of Energy technology absorption foreign exchange earnings and outgo
Information relating to conservation of energy technology absorption foreign exchangeearnings and outgo as required to be disclosed under the Act are given in Annexureforming part of this report.
12. Related Party Transactions
All contracts/ arrangements / transaction entered by the Company during the financialyear were in compliance with the applicable provisions of the Companies Act 2013 andRules made thereunder and according to SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. All transactions entered into with the Related Partiesduring the financial year under the review were on an arm's length basis and were in theordinary course of business. There are no materially significant Related Partytransactions made by the Company with its Promoters Directors Management or theirrelatives that could have had a potential conflict with the interests of the Company atlarge. All Related Party Transactions were placed before the Audit Committee and alsobefore the Board for their approval.
The Company had framed a policy on materiality of related party transactions and ondealing with related party transactions. The policy as approved by the Board is u p l o ad e d o n t h e C o m p a n y ' s w e b s i t e : http://www.rubfila.com/policies.
The Members may refer to Note 40 to the Standalone Financial Statements which sets outthe related party disclosures as per the Accounting Standards.
13. Corporate Social Responsibility:
The Board of Directors the Management and all of the employees subscribe to thephilosophy of compassionate care. The company believes and acts on an ethos of generosityand compassion characterized by a willingness to build a society that works for everyone.
The CSR Policy may be accessed on the Company's website at the link:http://www.rubfila.com/about us
The CSR activities are overseen by a committee of Directors comprising of Mr. Bharat J.Dattani (DIN 1462746) Mr. S.N.Rajan (DIN 00105864) and Mr.G Krishna Kumar on a regularbasis.
During the year Company has spent Rs.22.33 Lakhs towards CSR expenditures. The areas inwhich amounts spent are palliative care infrastructure development for charitablesocieties and schools financial assistance to the needy in the society. A report on theCorporate Social Responsibility activities is annexed to this report.
14. Directors and Key Managerial Personnel
The Board of directors of the Company comprises of 11 directors as on the date ofreport. Your Board comprises Mr. Bharat J Patel as Non-executive Chairman Mr. G. KrishnaKumar as Managing Director (Executive) Mr. Tommy Thompson Mr. Bharat J. DattaniMr.Dhiren S. Shah Mr.Hardik B. Patel as Promoter Non-executive Non-independent Directorsand five Non-executive Independent Directors namely Mr.Samir K. Shah Mr.Patrick MDavenport Mr.S.N.Rajan Mrs.R.Chitra and Mr.S.H.Merchant. The Details of composition ofthe mandatory Board committees namely Audit Committee Nomination and RemunerationCommittee CSR Committee Stakeholders Relationship Committee number of meetings heldduring the year under review and other related details are set out in the CorporateGovernance Report which forms a part of this Report.
In accordance with the Companies Act 2013 Mr. Thomas Calton Thompson III (DIN01509260) and Mr. Hardik B. Patel (holding DIN 00590663) retires by rotation and beingeligible offer themselves for re-appointment in the ensuing Annual General Meeting.
No directors or Key Managerial Personnel were appointed or have resigned during theperiod under review.
During the reporting period your Board met five times. The details of the meeting andattendance of directors are provided in the Corporate Governance Report annexed herewith.There were no instances in which the Board had not accepted any recommendation of theAudit Committee.
15. Performance Evaluation
The Companies Act 2013 and SEBI (LODR) Regulations 2015 stipulates the performanceevaluation of the Directors including Chairman the Board and its Committees. The Companyhas devised a Policy for performance evaluation of the Board Committees and otherindividual Directors (including Independent Directors) which includes criteria forperformance evaluation of the Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategybenchmarks established by global peers etc which is in compliance with applicable lawsregulations and guidelines.
The Board carried out annual performance evaluation of the Board Board Committees andIndividual Directors and Chairperson. The Chairman of the respective Board Committeesshared the report on evaluation with the respective Committee members. The performance ofeach Committee was evaluated by the Board based on report on evaluation received fromrespective Board Committees.
The reports on performance evaluation of the Individual Directors were reviewed by theChairman of the Board.
16. Policy on Nomination and Remuneration and Performance evaluation of Directors KMPand Senior Management Personnel:
Policy in accordance with the provisions of Section 178 of Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Nomination andRemuneration Committee of the Company oversees the implementation of the Nomination andRemuneration Policy. The Nomination and Remuneration Policy prescribes for the criteriafor determining the qualifications positive attributes independence of a Director andthe policy on remuneration of Directors Key Managerial Personnel senior managementemployees including functional heads and other employees. The Nomination and RemunerationPolicy of the Company is available on the website of the Company in the following web link: http://www.rubfila.com/img/pdf/ Nomination-RemunerationPolicy.pdf
a) Statutory Auditors
Shareholders in their meeting held on 15-09-2017 appointed M/s. Cyriac &Associates Chartered Accountants (Firm Registration No. 014033S.) as Statutory Auditorsof the Company for a term of 5 years to hold office from the conclusion of 24th AnnualGeneral Meeting until the conclusion of 29th Annual General Meeting subject toratification of their appointment at every Annual General Meeting.
There is no qualification disclaimer reservation or adverse remark made by theStatutory Auditors in Auditors' Report.
During the period under review there were no frauds reported by the auditors underprovisions of the Companies Act 2013
b) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of the Directors of theCompany had appointed M/s. SVJS & Associates Company Secretaries to undertake theSecretarial Audit of the Company for the year ended March 31 2018. The SecretarialAuditors have submitted their report and the Board took note of the same. The SecretarialAudit Report is annexed herewith.
c) Cost Audit
M/s. Ajith Sivadas & Co. Cost Accountants was appointed as Cost Auditors for theyear 2017-18 and a resolution for ratification of the appointment and remuneration payablewas approved by the members in their meeting held on 15-09-2017. The remuneration payablefor the Financial Year 2018 - 19 will be ratified in the ensuing Annual General Meeting.
d) Internal Auditors
The Board has appointed M/s.Pratapkaran Paul & Company Chartered AccountantsChennai as the Internal Auditors of the Company pursuant to Section 138 of the CompaniesAct 2013 for the period 2017 - 18.
18. Disclosures :
i) Particulars of employees :
Your Company believes that 'people make the difference' and acts according to thisprinciple. In line with the importance of its human capital it provides positive workenvironment which is conducive flexible and enriched.
No employee of the Company was in receipt of remuneration exceeding the amountprescribed under 197 of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Company is notpaying any commission to its Directors.
The details of other employees required to be provided in compliance with theprovisions of Section 197 of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed herewith.
ii) Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177 of the Companies Act 2013 the rules made thereunder and theRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Company has established a Vigil Mechanism and has adopted a whistle blower policy forthe directors and employees to report genuine concerns about any instance of anyirregularity unethical practice and/or misconduct.
The whistle blower policy of the Company is available in the following web link:http:www.rubfila.com/policies
iii) Risk Management Policy :
The Company has set up a robust risk management framework to identify monitor andminimize risk and also to identify business opportunities. The Audit Committee alsofunctions as the Risk Management Committee.
The Risk Management policy of the Company is available in the following weblink:www.rubfila.com/policies
iv) Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. An Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment.
The following is the summary of sexual harassment complaints received and disposed offduring the period under review :
|No. of complaints at the beginning of the year ||: Nil. |
|No. of complaints received during the year ||: Nil. |
|No. of complaints disposed off during the year ||: Nil. |
|No. of complaints at the end of the year ||: Nil |
v) Employees Stock Option Scheme (ESOS):
The Scheme "RUBFILA ESOS-2017" introduced by the Company to reward theeligible employees of the Company for their performance and to motivate them to contributeto the growth and profitability of the Company was approved by the members in theirmeeting held on 15-09-2017 in terms of SEBI (Share Based Employee Benefits) Regulations2014 (SEBI Regulations). No options were granted by the Company under the above scheme ason 31-03-2018.
Company has obtained in-principle approval from BSE vide their letter dt. 03-07-2018for the Scheme. Accordingly the Nomination and Remuneration Committee has granted 670000options to the eligible employees of the Company in their meeting held on 01-08-2018.
There has not been any material change in the Employee Stock Option Scheme during thereporting period.
The Scheme is in line with the SEBI (Share Based Employee Benefits) Regulations 2014(SBEB Regulations). The Company has received a certificate from the Auditors of theCompany that the scheme is implemented in accordance with the SBEB Regulations and theresolution passed by the shareholders in the Annual General Meeting held on 15-09-2017.The certificate would be available at the Annual General Meeting for inspection by theshareholders. The details as required to be disclosed under SBEB Regulations andcertificate from Auditors are available on the Company's website and may be accessed atwww.rubfila.com/ investors
vi) Change in the Nature of Business if any
There was no change in the nature of business of the Company during the Financial Year2017-18.
vii) Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe financial statements relate and the date of the report.
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year to which this financial statements relateand the date of report.
viii) Significant or Material Orders passed by Regulators / Courts / Tribunals
During the year under review there were no significant or material orders passed bythe regulators or courts or tribunals impacting the going concern status and Company'soperations in future.
ix) Subsidiaries Joint Ventures and Associate Companies
The Company does not have any subsidiaries Joint Ventures and Associate Companies ason the reporting date. During the year under review no companies have become or ceased tobe Company's subsidiaries joint ventures or associate companies.
x) Internal Financial Controls
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented digitised and embedded in the business processes.
Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control self assessment continuous monitoring by functional expertsas well as testing of the internal financial control systems by the internal auditorsduring the course of their audits. We believe that these systems provide reasonableassurance that our internal financial controls are designed effectively and are operatingas intended
xi) Extract of Annual Return
The Extract of Annual Return in Form No.MGT-9 as per Section 134 (3) (a) of theCompanies Act 2013 is available on the website of the Company in the following weblink:www.rubfila.com/ investors
xii) Cost Records
The Company has maintained cost records as prescribed by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013 in respect of manufacturingactivities of the Company.
xiii) Secretarial Standards
The directors state that the applicable Secretarial Standards as prescribed theInstitute of Company Secretaries of India i.e. SS-1 and SS-2 relating to 'Meetings of theBoard of Directors' and 'General Meetings' respectively have been duly followed by theCompany.
xiv) Management Discussion Analysis Report
Management Discussion Analysis Report for the year under review as stipulated underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presented in aseparate section forming part of the Annual Report.
xv) Corporate Governance
The report on Corporate Governance as stipulated under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms an integral part of this Report. Therequisite certificate from the Statutory Auditors of the Company confirming compliancewith the conditions of corporate governance is attached to the report on CorporateGovernance.
19. Appreciation and Acknowledgement
Your Directors acknowledge with gratitude the cooperation and assistance given by M/s.Rubpro Sdn. Bhd. Malaysia Kerala State Industrial Development Corporation Ltd M/s.Integrated registery management services Pvt Ltd. Enterprises India Ltd Banks and otheragencies of the Central and State government.
Your Directors also wish to place on record the sincere appreciation of servicesrendered by the employees at all the levels towards your company's success during the yearunder review and shareholders for their active support and co-operation.
For and on behalf of Board of Directors
| ||Bharat J. Patel |
| ||DIN 01100361 |
| ||Chairman |
|Place : Mumbai || |
|Date : 01-08-2018 || |
ANNEXURE TO THE DIRECTORS' REPORT
Details of Conservation of Energy technology absorption foreign exchange earnings andoutgo
A. CONSERVATION OF ENERGY
a) The company continues with its efforts to improve conservation of energy through aseries of steps which were implemented over the past years some of which are listed below:
1. Rainwater harvesting system in all plant area.
2. Surplus water collected which cannot be stored is directed back to the aquifers torecharge the water tables.
3. Waste Heat recovery system for heating purposes so as not to waste any energy.
4. Water flow meters installed in various pipe lines to monitor and reduce waterconsumption.
5. Wet scrubber installed at Thermic Fluid Heater flow gas outlet to control the dustemission.
6. Additional 320 KVR Capacitor Bank incorporated in the main distribution system toimprove electrical efficiency.
7. LED light fittings provided at various points to reduce electricity consumption.
b) Additional investment and proposal if any : Nil
c) Impact of the measures (a) and
|(b) above for reduction of energy consumption and consequent impact on the cost of production || |
| ||: Above initiatives have resulted in overall reduction in the consumption of power and fuel. |
| ||Rainwater harvesting has helped the company to limit the usage of underground water during mon soon . |
| ||Rainwater in excess of storing capacity is directed back to the aquifers to recharge water table. |
B. TECHNOLOGY ABSORPTION
Disclosure of Particulars with respect to Research and Development TechnologyAbsorption is as follows:
Research and Development :
|1) Specific areas of Research and Development || |
|Activities carried out by the Company ||Nil |
|2) Benefits derived as a result of the above || |
|Research and Development work ||N.A |
|3) Future plan of action ||Nil |
|4) Expenditure on Research and Development || |
|a) Capital ||Nil |
|b) Recurring ||Nil |
|c) Total ||Nil |
|a) Total Research & Development charged to Expenditure as a percentage of total turnover Technology - Absorption Adaptation & Innovation ||Nil |
|1. Efforts in brief made towards technology || |
|Absorption adaptation and innovation ||Nil |
|2. Benefits derived as a result of the above efforts product improvement cost reduction product development import substitution etc || |
|3. In case of imported technology (imported During the last 5 years reckoned from the beginning of the financial year) the information may be furnished ||Nil |
|a) Technology imported ||Nil |
|b) Year of Import ||N.A |
|c) Extent of absorption ||N.A |
C) FOREIGN EXCHANGE EARNINGS & OUT GO
(Rs. in lacs)
1) FOREING EXCHANGE EARNINGS
|a) Export of HRLRT ||2830.62 |
|2) FOREIGN EXCHANGE OUT GO || |
|a) Raw materials ||810.22 |
|b) Capital Purchase ||55.86 |
|c) Sales Commission ||6.13 |
|d) Travelling Expenses ||3.86 |
|e) Other Expenditure ||8.89 |
| ||For and on behalf of Board of Directors |
| ||Bharat J. Patel |
| ||DIN 01100361 |
| ||Chairman |
|Mumbai || |
|01-08-2018 || |