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Indo Borax and Chemicals Ltd.

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

To The Members of Indo Borax & Chemicals Ltd,

The Directors have pleasure in presenting 37th Annual Report and the Audited Statement of Accounts for the year ended on 31st March, 2018.

FINANCIAL RESULTS

The performance of the Company for the financial year ended 31st March, 2018 is summarized below:

(Rs. in lacs)

Particulars

Standalone

Consolidated

31-3-2018

31-3-2017

31-3-2018

31-3-2017

Sales

9858.09

7486.90

10263.09

7486.90

''Less: Excise Duty

174.40

825.98

174.40

825.98

Net Sales

9683.69

6660.92

10088.69

6660.92

Other Income

339.02

303.99

353.57

298.69

Profit before Depreciation & Taxation

2143.36

1333.62

2182.02

1300.54

Less : Depreciation

133.18

146.62

142.90

147.00

Provision for Taxation

658.00

293.50

658.76

293.57

Deferred Tax

39.48

61.20

39.99

61.24

Profit after Depreciation & Taxation

1312.70

832.30

1340.37

798.73

Other Comprehensive Income for the year

(287.12)

9.78

(287.12)

9.78

Total Comprehensive Income for the year

1025.58

842.08

1053.25

808.51

Balance brought forward from previous year

7993.18

7289.04

8074.42

7403.85

Profit available for appropriation

9018.76

8131.12

9127.67

8212.36

Less : Appropriations Dividend

48.13

48.14

48.13

48.14

Tax on Dividend

9.79

9.80

9.79

9.80

Transfer to General Reserve

100.00

80.00

100.00

80.00

Balance carried to Balance Sheet

8860.84

7993.18

8969.75

8074.42

DIVIDEND

Your Directors are pleased to recommend final dividend of Rs. 1.50 (One Rupee & Fifty Paise) per equity share of Rs. 10/- each on 32,09,000 Equity Shares, if approved by the members, would involve a cash outflow of Rs. 57.94 Lacs including dividend tax.

TRANSFER TO RESERVES

During the year your company has transferred Rs. 100.00 Lakhs to General Reserve out of the amount available for appropriation and an amount of Rs. 8860.84 Lakhs is proposed to be retained in the profit and loss account.

COMPANY’S PERFORMANCE

On standalone basis, sales for the financial year 2017-18 stood at Rs. 9683.69 lacs, which was higher by 45.38% over last year (Rs. 6660.92 lacs in 2016-17). Earnings before tax and depreciation was Rs. 2143.36 lacs, which was higher by 60.72% over EBTD of Rs. 1333.62 Lacs in 2016-17. The profit after tax for the year was Rs. 1312.70, which was higher by 57.72% over the PAT of Rs. 832.30 lacs in 2016-17.

On consolidated basis, sales for the financial year 2017-18 stood at Rs. 10088.69 lakhs which was higher by 51.46% over last year (Rs. 6660.92 lacs in 2016-17). Earnings before tax and depreciation was Rs. 2182.02 lacs, which was higher by 67.78% over EBTD of Rs. 1300.54 Lacs in 2016-17. The profit after tax for the year was Rs. 1340.37 lacs, which was higher by 67.81 over the PAT of Rs. 798.73 lacs in 2016-17. The production of boron products increased by 31.30% as compare to 10.39% increase in previous year.

SUBSIDIARY COMPANY

Company has only one wholly owned subsidiary, Indoborax Infrastructure Private Limited. There are no associate companies or joint ventures companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). There has been no material change in the nature of business of the subsidiary.

As pursuant to provision of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company''s subsidiary in Form AOC-1 is attached to the financial statements of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the company and its subsidiary which form part of Annual Report have been prepared in accordance with section 129(3) of the Companies Act, 2013. Consolidated Financial Statements for the year ended 31st March, 2018 along with report of the auditors thereon are attached herewith.

INTERNAL FINANCIAL CONTROL

The details in respect of the internal financial control and their adequacy are included in Management Discussion & Analysis, which forms part of this report.

NUMBER OF MEETING OF THE BOARD

Seven meetings of the board were held during the year. For details of meetings of Board, please refer to the Corporate Governance Report, which is a part of this report.

COMMITTEES OF THE BOARD

Details of all the committees along with their composition, name of the members, meetings held during the year and attendance are provided in the Corporate Governance Report, which forms a part of this Report.

RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS

Pursuant to Section 134 (5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts; the applicable accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of section 149 of the Act, Mr. Arun Sureka, Mr. N.K. Mittal and Mr. Govind Parmar, are independent directors of the company. Company has received declaration from all the Independent Directors of the company confirming that they meet the criteria of independence prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to provisions of section 203 of the Act, the key managerial personnel of the company are Mr. S. K. Jain, Chairman and Managing Director, Mr. Sajal Jain, Chief Executive and Chief Financial Officer and Mr. Pravin Chavan, Company Secretary.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as board composition and structure, effectiveness of board process, information and functioning etc. The performance of the committees was evaluated by the board after seeking inputs from committee members on the basis of criteria such as composition of committees, effectiveness of committee meetings etc.

In separate meeting of independent Directors, performance of the non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of the executive directors and non-executive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility Policy (CSR Policy) of the Company and initiatives undertaken by the Company on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The details about the CSR committee, please refer to the Corporate Governance Report, which form part of this report. The CSR policy is available on the website of the company http://www.indoborax.com/CSR-Policy.php

WHISTLE BLOWER POLICY

The Company has formulated whistle blower policy for Directors and employees to report their genuine concerns regarding unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct and Ethics Policy. The said mechanism also provides for adequate safeguard against victimization of persons who use such mechanism and makes provision for direct access to the chairman of the Audit Committee in the appropriate or exceptional cases. We affirm that no employee of the company was denied access to the Audit Committee. The Whistle Blower Policy have been disclosed on website of the Company at http://www.indoborax.com/Whistel-Blower-Policy.php

PARTICUALRS OF EMPLOYEES

The information required under Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given below:

a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary in the financial year:

Name of the Directors

Ratio of median remuneration

% increase in remuneration in the financial year

Mr. Sushil Kumar Jain, Managing Director

42.01

45.73

Mr. Sajal Jain, Chief Executive & Chief Financial Officer

42.01

45.73

Mr. Pravin Chavan, Company Secretary

-

6.84

Company has not paid any remuneration to non-executive directors except sitting fees.

b) The percentage increase in the median remuneration of the employees in the financial year: 1.80%

c) The number of permanent employees on the rolls of the company : 95

d) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 6%. However during the year, the total increase in employee benefits is approximately 20%.

During the year under review there was no such increment in the managerial salary, the commission which is based on % of profit have been increased, which is directly linked with the performance of the company. Increase in the managerial remuneration for the year was 45.73%.

e) Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remuneration is as per the remuneration policy of the company.

f) The statement containing names of top ten employees in terms of remuneration drawn and particulars of employees as required under Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel ) Rules, 2014 is provided in annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In term of section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company''s policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of the Directors Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

TRANSACTIONS WITH RELATED PARTIES

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. The information on the transactions with related parties pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in AOC-2 in Annexure II and same forms part of this report.

DELISTING OF SECURITIES

The Company had applied for delisting of shares from Kolkatta Stock Exchange in 2005-2006, however, till date the confirmation of delisting has not been received from Exchange.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy

i) Energy Conservation Measures taken

ii) Utilization of alternate source of energy

iii) Capital Investment on energy conservation equipment.

The Company continues to lay special emphasis on conservation of energy and have taken measures like regular monitoring of consumption, reduction of transmission losses and up to date maintenance of systems.

B. Technology Absorption

1. Research & Development

The Company has no specific Research & Development Department. However in house quality control facilities are utilised for product and process improvement and updation.

2. Technology Absorption

The Company has not imported any technology.

C. Foreign Exchange Earnings and Outgo

a) Earnings : Nil

b) Outgo

- Import of Raw Materials : Rs. 4961.50 lakhs

- Foreign Travel : Rs. 34.18 lakhs

- Others : Rs. 2.46 lakhs

DEPOSITS FROM PUBLIC

The Company has not accepted any deposit from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of Balance Sheet.

RISK MANAGEMENT

The Board of the company has formed a risk management committee to frame, implement and monitor the risk management plan for the company. The committee is responsible for reviewing the risk management plan and ensuring effectiveness. The audit committee has additional oversight in the areas of financial risk and controls. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.

The risk management policy has been covered in the management discussion and analysis, which forms part of this report.

CORPORATE GOVERNANCE REPORT

A separate detailed Corporate Governance Report and Certificate of Auditor of your Company regarding the compliance of the conditions of Corporate Governance as per SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 are annexed to this report.

EXTRACT OF ANNUAL RETURN

As provided under section 92(3) of the Act, the extract of the Annual Return is given Annexure-III in the prescribed Form MGT-9, which forms part of this report.

STATUTORY AUDITORS

M/s. Pulindra Patel & Co., Chartered Accountants, was appointed as Auditors of the Company, for a term of 5(five) consecutive years, at the Annual General Meeting held on 19th August, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

COMMENTS OF AUDITORS REPORT AND SECRETARIAL AUDIT REPORT

The auditor''s report and the secretarial audit report do not contain any qualifications, reservations or adverse remarks. Secretarial Audit report is attached to this report.

COST AUDIT

Pursuant to the provisions of Section 148 (3) of the Companies Act, 2013, qualified Cost Auditors have been appointed to conduct cost audit for the year under review relating to the products manufactured by the Company.

ACKNOWLEDGEMENTS

Your Directors thank to the clients, vendors, shareholders & bankers for their continued support during the year. Your Directors place on record their appreciation for the contribution made by employees at all levels. Your Company''s growth has been possible due to their hard work, co-operation & support.

For and on behalf of the Board of Directors

Director’s Report