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IFB Industries Ltd.

BSE: 505726 | NSE: IFBIND |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE559A01017 | SECTOR: Consumer Goods - White Goods

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

To the Members,

The Directors have pleasure in presenting before you the forty third Annual Report of the Company together with the Audited Financial Statements for the year ended 31 March 2019.

FINANCIAL RESULTS

The performance during the period ended 31 March 2019 has been as under:

Rs. in lacs

Particulars

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Total revenue

2,55,228

2,20,710

267,181

227,753

Profit before depreciation/amortisation, finance costs and tax

13,714

17,502

13,955

17,439

Less : Finance costs

575

430

723

544

Less : Depreciation and amortisation

5,454

5,138

5,755

5,381

Profit before Tax

7,685

11,934

7,477

11,514

Add : Exceptional Items

1,935

-

1,935

-

Profit before Tax

9,620

11,934

9,412

11,514

Less : Current tax

2,905

3,655

2,919

3,655

Less : Deferred tax (net)

(680)

(46)

(615)

(69)

Profit after tax

7,395

8,325

7,108

7,928

Other comprehensive income

Items that will not to be classified to profit or loss

- Re measurements of defined benefit plan

(552)

(679)

(552)

(687)

- Income tax relating to items that will not be reclassified to profit or loss

193

235

193

235

Items that will reclassified to profit or loss

- Exchange differences in translating the financial statements of foreign operations

-

-

110

182

- Income tax relating to items that will be reclassified to profit or loss

-

-

-

-

Other comprehensive income

(359)

(444)

(249)

(270)

Total comprehensive income for the year

7,036

7,881

6,859

7,658

- Owners of the parents

NA

NA

7,046

7,831

- Non-controlling interests

NA

NA

(187)

(173)

Consolidated figure includes standalone figure and figure of Trishan Metals Private Limited, a subsidiary company acquired during 2016-17, Global Appliances & Automotive Limited ( GAAL), a wholly owned subsidiary company acquired during 2017-18 and Thai Automotive and Appliances Pte. Ltd. ( TAAL) a step down subsidiary.

OPERATIONS- Standalone

Your company completed another year of modest performance with strong top line growth , however, bottom line was hit mainly due to depreciation of rupee, higher material cost, increase in custom duty on AC/MWO and higher operating expenses etc. All business segments posted revenue growth. Gross sale of products for the year grew by 17.25% to Rs. 3,07,927 lacs. Net revenue from operations grew by 15.88% to Rs. 2,53,987 lacs. Appliance business grew by 17% and Engineering business grew by 21% (net of excise duty). Due to above reasons the profit before depreciation, finance cost and tax as compared to last year reduced by more than 21% to Rs. 13,714 lacs as compared to last year. Income under ‘Exceptional item’ is on account of compensation received from Bangalore Metro Rail Corporation Limited (BMRCL) on account of compulsory acquisition of 1578.63 sq. mtrs. of the factory land for Metro Rail Project at Bangalore.Earning per share for the year stands at Rs. 18.25 as against Rs. 20.55 in 2017-18.

OPERATIONS - Consolidated

Net Revenue from operations on consolidated basis grew by 17.56% to Rs. 2,65,915 lacs. Profit before depreciation, finance cost and tax on consolidated basis as compared to last year reduced by 20% to Rs. 13,955 lacs as compared to last year.

DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year under review to conserve resources for working capital, capital expenditure projects, acquisition 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 (LODR Regulations), 2015, the Management Discussion and Analysis Report is enclosed as a part of this report

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company has always taken adequate steps to adhere to all the stipulations laid down in LODR Regulations, 2015. 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 Listing Obligations & Disclosure Requirements, 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 2019-20 to NSE, BSE & CSE where the Company’s Shares are listed. The company applied for delisting from CSE which is pending.

DEMATERIALISATION OF SHARES

98.06% of the company’s paid up Equity Share Capital is in dematerialized form as on 31st March, 2019 and balance 1.94% is in physical form. The Company’s Registrars are M/s C.B. Management Services Pvt. Ltd., having their registered office at P-22, Bondel Road, Kolkata- 700 019.

NUMBER OF BOARD MEETINGS HELD

The Board of Directors duly met six times during the financial year from 01 April 2018 to 31 March 2019. The dates on which the meetings were held are as follows :

29 May 2018, 26 July 2018, 29 October 2018, 26 December 2018, 31 January 2019 and 28 March 2019.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Mr. Prabir Chatterjee retires by rotation and being eligible offers himself for reappointment.

The five years term as an Independent Director of Dr. Rathindra Nath Mitra is expiring on conclusion of 43rd Annual General Meeting of the Company. Based on recommendation of Nomination and Remuneration Committee, it is proposed to reappoint him for second term of five consecutive years from the conclusion of 43rd Annual General Meeting to the conclusion of 48th Annual General Meeting.

Mr. R Muralidhar, (DIN 01687752) was appointed as an Independent Director of the Company for a term of five consecutive years in 38th Annual General Meeting held on 30th Day of July, 2014. He has resigned from the Office of Independent Director of IFB Industries Limited with effect from April 16, 2019 due to disqualification U/s 164(2) of Companies Act, 2013 before the expiry of his tenure. The Board records his appreciation for valuable advises he made to the Board from time to time during his tenure as Independent Director of the Company.

During the year under review, there is no change in KMP of the Company.

Brief particulars and expertise of directors seeking reappointment together with their other Directorship and Committee membership have been given in the annexure to the notice of the Annual General Meeting.

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 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) 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) the directors 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.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Companies Act, 2013. The declaration was placed and noted by the Board in its meeting held on 29th May, 2019.

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 there to and Regulation 19 of SEBI ( LODR) Regulation 2015 stating therein the Company’s policy on Directors/ Key Managerial Personnel/ other employees appointment and remuneration by the Nomination and Remuneration Committee and approved by the Board of Directors. The said policy may be referred to company’s website at www. iftindustries.com/Legal/Policies. As part of the policy, the Company strives to ensure that the level and composition of remuneration is reasonable and sufficient to attract , retain and motivate Directors / KMPs of the quality required to run the company successfully; Relationship between remuneration and performance is clear and meets appropriate performance benchmarks;

ANNUAL EVALUATION OF BOARD’S PERFORMANCE

This part is covered under Corporate Governance Report.

AUDIT COMMITTEE

The Board has constituted an Audit Committee, the details pertaining to the composition of the audit committee are included in the report on Corporate Governance. There have no instance during the year where recommendations of the Audit Committee were not accepted by the board.

AUDITORS’ 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(Firm Registration No.: 302009E), Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 43rd Annual General Meeting. Accordingly, M/s Deloitte Haskins & Sells, Chartered Accountants, will continue as Statutory Auditors of the Company till the conclusion of the 43rd Annual General Meeting. Their tenure of such appointment will expire upon conclusion of the 43rd Annual General Meeting of the Company.

We have received consent from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of the section 141 or other applicable provision of the Companies Act, 2013.

On recommendation of the Audit Committee the Board recommends reappointment of M/s. Deloitte Haskins & Sells (Firm Registration No.: 302009E), Chartered Accountants as the Auditors of the Company for second term of five consecutive years from the conclusion of 43rd Annual General Meeting to the conclusion of 48th Annual General Meeting subject to approval by the Members of the Company at 43rd Annual General Meeting.

Accordingly, a resolution proposing re-appointment of M/s Deloitte Haskins & Sells (Firm Registration No.: 302009E), Chartered Accountants as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the Notice of Annual General Meeting.

COST AUDITORS

Your Board has appointed M/s MANI & Co., Cost Accountants as Cost Auditors of the Company for conducting cost audit for the financial year 2019-20. Accordingly, a resolution seeking approval of the members for ratifying the remuneration payable to Cost Auditors for financial year 2019-20 is provided in the Notice to the ensuing Annual General meeting.

COSTRECORDS

The Cost accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by the Company.

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 1 April 2014 by a Company Secretary in practice. The board in its meeting held on 28 March 2019 appointed M/s. Patnaik and Patnaik, Company Secretaries as the Secretarial Auditor for the financial year ended 31st March 2019.

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 as Annexure-A. There are no qualifications, observations or adverse remarks or disclaimers in the said report.

SECRETARIAL STANDARDS

The Company has in place proper system to ensure compliance with the provisions of the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

DIVIDEND DISTRIBUTION POLICY

The Board of Directors of IFB Industries Limited at its meeting held on May 29, 2018 has adopted this Dividend Distribution Policy (the “Policy”) as required by Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) is available at our website www.ifeindustries.com

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 enclosed as a part of this report as Annexure-B to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company 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 part of this report as Annexure-C. Additionally, the CSR Policy has been uploaded on the website of the Company at http://ifeindustries.com/ csrpolicy.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 aforesaid projects. Considering the multi year projects, total amount to be spent and the extent of due diligence to be performed, the Company is focusing on select projects to ensure maximum impact to the society. However, due to multi year projects and certain procedural delay at the implementation level at different schools, the Company couldn’t spend the allotted budget outlays. The Company made an expenditure of Rs. 48.76 lacs only against the budgeted amount of Rs. 143.83 lacs.

VIGIL MECHANISM

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 website of the Company at www.ifeindustries.

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 accessed on company’s website at the link www.ifeindustries.com . Your directors draw attention of members to note 38 to the Financial Statements which set out related party disclosures.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 may be referred to, at the Company’s official website at the weblink :http://www.ifeindustries.com. The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure D.

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 and Directors is separately enclosed as Annexure E.

The number of permanent employees on the role of the company as on 31 March 2019 is 1970.

BUSINESS RESPONSIBILITY REPORT

In conformance to the requirements of the clause (f) of sub-regulation (2) of regulation 34 of Securities and Exchange Board of India (SEBI) Listing Regulations, the Business Responsibility Report for Financial Year 2018-19 is given in Annexure F which forms part of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars 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.

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 during the year..

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant and material orders passed by the Regulators/ Courts/ Tribunals which would impact the going concerns status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments have occurred after the closure of the year till the date of this Report, which affect the financial position of the Company.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL ) ACT, 2013

As per the requirement of Sexual Harassment of Women at workplace (Prevention, Prohibition & redressal) Act, 2013, your Company has in place a Policy for Prevention of Sexual Harassment of Women at Work Place and constituted Internal Complaints Committees. No compliant has been raised during the year ended March, 2019.

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.

FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

To familiarize the Independent Directors with the strategy, operations and functions of our company, the executive directors/ senior managerial employees make presentation to the Independent Directors about the company’s strategy, operations, product and service offerings, markets, finance, quality etc. Independent Directors are also visiting factories and branch offices to familarise themselves with the operations of the company and to offer their specialized knowledge for improvement of the performance of the company.

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 at our website www.ifeindustries.com.

SUBSIDIARY COMPANIES

IFB Industries Limited, has subsidiary Trishan Metals Pvt. Ltd. ( TMPL), wholly owned subsidiary Global Automotive & Appliances Pte Ltd. ( GAAL) and step down subsidiary Thai Automotive and Appliances Ltd. ( TAAL).

Trishan Metals Private Ltd. :

IFB Industries Ltd. holds 51.12% equity shares of TMPL, which was acquired during 2016-17. TMPL’s performance has still not reached its potential, and needs improvement. It is expected that things will stabilize during 2019-20.

Rs. in lacs

2018-19

2017-18

Sales

12,420

7,711

PBDIT

(11)

(112 )

PBT

(318)

(369)

PAT

(383)

(346)

As you can see that sales has increased, however the company suffered loss. It is expected that in current financial Trishan Metals will be in profit.

Wholly Owned Subsidiary Global Automotive & Appliances Pte Ltd. ( GAAL) and step down subsidiary Thai Automotive and Appliances Ltd. ( TAAL)

IFB Industries Ltd. acquired 100 % equity shares of GAAL during July 2017. GAAL holds 100% equity holding in TAAL. GAAL acts as a special purpose vehicle for further investment in TAAL. TAAL is engaged in the business of Fine Blanking and Conventional Blanking and its acquisition will help IFB to consolidate its position in similar type of business in Thailand. We expect sound growth of GAAL & TAAL during 2019-20.

GAAL

This is the first year of operation of GAAL, achieved revenue of US$ 2.65 Million and made a PBT of 7.47% and PAT of 6.71%. GAAL is optimistic about its business plan and forecast a good growth based on increasing demand in India and other places for electronics parts and semi conductors.

TAAL

During the year under review, TAAL has achieved modest turnover of 143.92 ML THB, which is a 7% increase compared to 134.90 ML THB achieved during 2017-18. During the year the company earned PBT of 0.15 ML THB as compared to loss of 1.92 ML THB during 2017-18.

We have, in accordance with Section 129(3) of the Companies Act, 2013 prepared consolidated financial statements of the company and its subsidiary Trishan Metals Pvt. Ltd and Global Automotive & Appliances Pte Ltd. Further, the report on the performance and financial position of the subsidiary companies in the prescribed form AOC-1 is enclosed as a part of this report as Annexure - G.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated financial statements and related information of the company and financial statement of the subsidiary companies will be available on our website www.ifeindustries.com. These documents will also be available for inspection during business hours at the corporate office of company.

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.

For and on behalf of the Board of Directors

Bikram Nag

Joint Executive Chairman

& Managing Director

Place : Bengaluru Prabir Chatterjee

Date : 29 May 2019 Director & CFO

Director’s Report