DIRECTORS' REPORT To the Members, 1. The Directors have pleasure in presenting before you the fortieth Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31 March 2016. 2. OPERATIONS: Your company completed another year of modest performance with strong top line growth, however, bottom line was hit due to increased material cost on account of weakening of rupee, product mix, high depreciation etc. All business segments posted sound growth in revenue and enhanced their market standing. Gross sale of products for the year grew by 23.7.% to Rs 191,583 lacs. Net revenue from operations grew by 19.0% to Rs 150,094 lacs. Appliance business grew by 19.9% and Engineering business grew by 15.1%. Due to above reasons the profit before tax as compared to last year reduced by more than 40.7% to Rs 3,516 lacs. Earning per share for the year stands at Rs 7.74. as against Rs 12.27 in 2014-15. 3. DIVIDEND Your Directors have decided not to recommend any dividend for the financial year under review to conserve resources for working capital and capital expenditure projects. 4. TRANSFER TO RESERVE The company does not propose to transfer any amount to Reserve. 5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), the Management Discussion and Analysis Report is enclosed as a part of this report. 6. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION Your Company has taken adequate steps to adhere to all the stipulations laid down in SEBI LODR. A report on Corporate Governance is included as a part of this Annual Report. Certificate from the Statutory Auditors of the Company M/s. Deloitte Haskins & Sells, Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI LODR is included as a part of this report. 7. LISTING WITH STOCK EXCHANGES The Company confirms that it has paid the annual listing fees for the year 2016-17 to NSE, BSE & CSE where the Company's Shares are listed. The Company applied for delisting from Calcutta Stock Exchange Association of India (CSE) & Delhi Stock Exchange (DSE) which are pending. DSE has been derecognized by Securities and Exchange Board of India (SEBI). 8. DEMATERIALISATION OF SHARES 97.61% of the company's paid up Equity Share Capital is in dematerialized form as on 31 March 2016 and balance 2.39% is in physical form. The Company's Registrar and Share Tranfer Agent is M/s CB Management Services (P) Ltd., having its registered office at P-22, Bondel Road, Kolkata- 700 019. 9. NUMBER OF BOARD MEETINGS HELD The Board of Directors duly met four times during the financial year from 1 April 2015 to 31 March 2016. The dates on which the meetings were held are as follows : 29 May 2015,30 July 2015,30 October 2015 and 29 January 2016 10. DIRECTORS Confirmation of Appointment: The one year term as Executive Chairman of Mr. Bijon Nag is expiring on 31 May 2016. It is proposed to reappoint him for a further period of two years The one year term as Deputy Managing Director of Mr. Sudam Maitra is expiring on 30 July 2016. It is proposed to reappoint him for a further period of two years. The three year term as Director & CFO of Mr. Prabir Chatterjee has expired on 31 March 2016. He was reappointed for a further period two years from 01 April 2016 subject to approval of members. Mr. Sudam Maitra retires by rotation and being eligible offers himself for reappointment. 11. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that: a) in the preparation of the annual accounts for the year ended 31 March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the same period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 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 and were operating effectively. f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively. 12. REMUNERATION POLICY A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and rules thereto and SEBI LODR stating therein the Company's policy on Directors/ Key Managerial Personnel/other employees appointment and remuneration recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. The said policy may be referred to company's website at <http://ifbindustries.com/nomination> remuneration policy.php 13. ANNUAL EVALUATION OF BOARDS PERFORMANCE This part is covered under Corporate Governance Report. 14. AUDITOR'S REPORT: The notes on Financial statements referred to in the Auditor's Report are self-explanatory and do not call for any further explanation. Statutory Auditors: At the Annual General Meeting held on 30 July 2014 Deloitte Haskins & Sells, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 43rd Annual General Meeting. In terms of the first proviso to section 139 of the Companies Act, 2013, the appointment of the Auditors' shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of section 141 of the Companies Act, 2013. Secretarial Audit: The provision of Section 204 read with Section 134(3) of the Companies Act, 2013 mandates Secretarial Audit of the Company to be done from the financial year commencing on or after 01 April 2014 by a Company Secretary in practice. The Board in its meeting held on 20 April 2016 appointed Mr. Jitendra Patnaik, Practising Company Secretary (Certificate of Practice no 3102) as the Secretarial Auditor for the financial year ended 31 March 2016. According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed as a part of this report Annexure-A. 15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure-B to this report. 16. CORPORATE SOCIAL RESPONSIBILITY (CSR) In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company have constituted a CSR Committee. The Committee comprises Independent Director, Non-Executive Director and Executive director. CSR Committee of the Board has developed a CSR Policy which is enclosed as Annexure-C to this report. Additionally, the CSR Policy has been uploaded on the website of the Company at <http://ifbindustries.com/csr> policy.php Your Company has judiciously identified the activities and accordingly projects mainly relating to (a) Promoting education and (b) Skill development programme were undertaken in line with the CSR policy. The necessary budget outlay were assigned to the aforesaid projects. However, due to multi year project and certain procedural delay at the implementation level the Company could not spend the allotted budget outlays. The Company made an expenditure of Rs 8.64 lacs only against the stipulated amount of Rs 84.26 lacs. 17. VIGILMECHANISM: In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the company's website at the link : <http://ifbindustries.com/vigil_mechanism.php> 18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements/ transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm's length basis. During the year, the company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company or materiality of related party transaction. The policy on materiality of related party transaction and dealing with related party transaction as approved by the board may be accessed on company's website at the link <http://ifbindustries.com/csr> policy.php Your Directors draw attention of members to note 35 to the Financial Statements which set out related party disclosures. 19. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-D. 20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 21. 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 is given in Annexure-E which forms part of this Report. The number of permanent employees on the role of the company as on 31 March 2016 is 1,626. 22. DEPOSITS Your company has not accepted any deposit from the public / members u/s 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, during the year. 23. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY Risk management is the process of minimizing or mitigating the risk. It starts with the identification and evaluation of risk followed by optimal use of resources to monitor and minimize the same. The company is exposed to several risks. They can be categorized as operational risk and strategic risk. The company has taken several mitigating actions, applied many strategies and introduced control and reporting systems to reduce and mitigate those risks. Appropriate structures are in place to proactively monitor and manage the inherent risks in businesses with unique/ relatively high risk profiles. A strong and independent Internal Audit function at the Corporate level carries out risk focused audits across all business, enabling identification of areas where risk management processes may need to be strengthened. The Audit committee of the board reviews internal audit findings and provides strategic guidance on internal controls. 24. FAMILARISATION PROGRAMME INDEPENDENT DIRECTORS FOR To familiarize the Independent Directors with the strategy, operations and functions of our Company, the executive directors/senior managerial employees intimate to the Independent Directors the Company's strategy, operations, product and service offerings, markets, finance, quality etc. Further, at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/ her role, function, duties and responsibilities as a director. The format of the letter of appointment is available on company's website at the link: <http://ifbindustries.com/pdf/BOARD> COMMITTEES.pdf. 25. ACKNOWLEDGEMENT Directors take this opportunity to express their thanks to various departments of the Central and State Government, Bankers, Customers and Shareholders for their continued support. The Directors wish to place on record their appreciation for the dedicated efforts put in by the employees of the Company at all levels. On behalf of the Board Bikram Nag joint Executive Chairman & Managing Director Dr. Rathindra Nath Mitra Director Registered Office: 14, Taratala Road Kolkata - 700 088 Date : 18 May 2016 |