DIRECTORS' REPORT To The Members of Indo Borax & Chemicals Ltd, Your Directors have pleasure in presenting 34th Annual Report and the Audited Statement of Accounts for the year ended on 31 st March, 2015. 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. RESERVES During the year your company has transferred Rs. 27,20,000/-to Capital Redemption Reserve on Buy-back of 2,72,000 equity shares of Rs. 10/- each and Rs. 1,25,00,000/- to General Reserve out of the amount available for appropriation. COMPANY'S PERFORMANCE On consolidated basis, sales for the financial year 2014-15 stood at Rs. 8745.16 lacs was higher by 14.03% over last year 7669.45 lacs in 2013-14). Earnings before tax and depreciation was Rs. 2110.66 lacs, registering a growth of 29.61% over EBTD of Rs. 1628.52 Lacs in 2013-14. The profit after tax for the year was Rs. 1310.10 lacs recording a growth of 29.48% over the PAT of Rs. 1011.82 lacs in 2013-14. On standalone basis, sales for the financial year 2014-15 stood at Rs. 7260.90 lacs was higher by 15.96% over last year 6261.72 lacs in 2013-14). Earnings before tax and depreciation was Rs. 1939.67 lacs, registering a growth of 26.82% over EBTD of Rs. 1529.42 Lacs in 2013-14. The profit after tax for the year was Rs. 1242.03 lacs recording a growth of 27.83% over the PAT of Rs. 971.65 lacs in 2013-14. The production of boron products increased by 6.93 % as compare to 0.37% decrease in previous year. SUBSIDIARY COMPANY A subsidiary company Indoborax Infrastructure Private Limited is became a wholly owned subsidiary company as on 31 st March, 2015. There are no associate 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. The residential building project for 11 units undertaken by the company is completed. Out of 11 units constructed, company has sold 9 units till 31 st March, 2015. During the year under review, the company recorded turnover of Rs. 1484.26 lacs and earned profit after tax of Rs. 113.46 lacs for the year. As pursuant to Section 129 of the Companies Act, 2013 the Audited accounts and Reports of Board of Directors and Auditors for the year ended 31 st March, 2015 relating to the subsidiary company are attached to the accounts. CONSOLIDATED FINANCIAL STATEMENTS As required under clause 32 of the listing agreement, Consolidated Financial Statements for the year ended 31st March, 2015 along with report of the auditors thereon are attached herewith. BUY BACK OF EQUITY SHARES Board of Directors of the company at its meeting held on 27th February, 2014 approved the Buy-back of up to three lakhs fully paid up Equity Shares of Rs. 10/- each (hereinafter referred to as "buy-back") at a price not exceeding Rs. 145/- per equity share, payable in cash, up to an aggregate amount not exceeding Rs. 4,35,00,000/- representing 7.27% of the Company's Paid Equity & Free Reserves as on March 31, 2013. The Buy-back is being made out of the free reserve and the securities premium account of the company, from the open market through BSE Ltd (Stock Exchange), as per the provisions contained in the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 as amended and applicable provisions of the Companies Act, 1956 & 2013. The buy-back offer has been commenced from 10th March, 2014. The Buy-back offer was closed on 21st May, 2014. Pursuant to the aforesaid Buy-back offer, the company has bought back and extinguished 2,72,000 Equity Shares of Rs. 10/- each of an aggregate face value of Rs. 27,20,000/- as at 31st March, 2015 at an average price of Rs. 125.99 per shares, utilizing Rs. 3,42,67,998/-. 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 During the financial year 2014-15 the Board of Directors met 10 times on the following dates: 21-May-2014, 30-May-2014, 30-June-2014, 5-Aug-2014, 13-Aug-2014, 22-Sep-2014, 14-Nov- 2014, 27-Dec-2014, 12-Feb-2015 and 31-Mar-2015. For details of the meeting of the board, please refer to the Corporate Governance Report, which forms part of this report. COMMITTEES OF THE BOARD Pursuant to application of the Companies Act, 2013, and as per requirement of clause 49 of the listing agreement, company has renamed some of the committees. During the year company has formed a Corporate Social Responsibility Committee. There are currently five Committees of the Board, as follows: 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholder's Relation Committee 4. Corporate Social Responsibility Committee 5. Risk Management Committee 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 the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed: (i) that in the preparation of the annual accounts; the applicable accounting standards have been followed and there are no material departures; (ii) that the Directors 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) that the Directors 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) that the Directors have prepared the annual accounts on a going concern basis; (v) that Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively. (vi) that Directors 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 Mrs. Sushila Jain, retires by rotation in the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment. 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 Clause 49 of the Listing Agreement with Stock Exchange. During the year company has appointed Mr. Pravin Chavan, as Company Secretary and Mr. Sajal Jain, who is an Executive Director, who is also responsible for the finance & accounts functions, has been designated as Chief Financial Officer of the company w.e.f. 31st March, 2015. ANNUAL EVALUATION OF BOARD OF DIRECTORS 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 under clause 49 of the Listing Agreement. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as 1. Attendance of Board Meeting and other Board Committee meetings, 2. Contribution made in deliberation in meetings 3. Inputs regarding future growth of company and its performance, 4. Providing feedback going beyond information provided by the management and 5. Commitment to shareholders and other stakeholders. 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. CORPORATE SOCIAL RESPONSIBILITY The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Policy of the company and details of development of CSR policy and the initiative taken by the company on Corporate Social Responsibility during the year have been appended as Annexure I to this Report. 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/Whistle-Blower-Policy.php <http://www.indoborax.com/Whistle-Blower-Policy.php> PARTICULARS 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 for the financial year: Since this information is for part of the year, the same is not comparable. c) The percentage increase in the median remuneration of the employees in the financial year: 16.45%. d) The number of permanent employees on the rolls of the company : 64 e) The explanation on the relationship between average increase in remuneration and company performance: On an average, employees received an annual increase of 10%. The individual increment varied from 8% to 18%, based on individual performance. In order to ensure that remuneration reflects Company performance, the salary increment is also linked to overall performance of the company. f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company: g) Variation in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year: i) 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 10%. However during the course of year, the total increase in employee benefits is approximately 22%. During the year under review there was no increment in the managerial salary, however the commission which is based on % of profit has been increased, which is directly linked with the performance of the company. Increase in the managerial remuneration for the year was 25.79%. j) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company: k) The key parameters for any variable component of remuneration availed by the directors: The members have, at the AGM of the company held on 26th July, 2012 & 22nd August, 2013 approved the commission to Managing Director & Executive Director, respectively. The overall remuneration payable to Managing Director & Executive Director shall not exceed the maximum limits specified in the Act. l) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None. m) 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. n) The information required to be given under section 197(12) read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel ) Rules, 2014 is given below POLICY ON DIRECTOR'S 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. DETAILS OF LOAN GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013 Loans given and investments made are given under respective heads in the Standalone Financial Statements. (Please refer Note No. 10, 11, 26 (9) (A) to the standalone financial statements) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO SECTION 188 (1) 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. Contracts arrangement with related parties as per accounting standard, please refer Note No. 26(9) A & B to the standalone financial statements. 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. RISK MANGEMENT 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 Auditors of your Company regarding the compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchange 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. V. S. Lalpuria & Co, Chartered Accountants, Statutory Auditors of the Company hold office, in accordance with the provisions of the Companies Act, 2013, up to conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received letter from them to effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and they are not disqualified from appointment. SECRETARIAL AUDIT REPORT The Board of Directors of the Company has appointed Prasad Parab & Associates, Practicing Company Secretary to conduct Secretarial Audit and his report on Companies Secretarial Audit is annexed to this report. COMMENTS ON AUDITORS REPORT There are no qualifications, reservations, adverse remarks or disclaimers made by V S Lalpuria & Co., Statutory Auditors, in their report and by Prasad Parab & Associates, Company Secretary in Practice, in his secretarial audit report. The statutory auditors have not reported any incident of fraud to the Audit Committee of the company in the year under review. 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 S. K. Jain Managing Director Date : May 30, 2015 Place : Mumbai |