Mar 31, 2022
1. The Company''s investment properties consist of lands in India and includes an amount of Rs. 7 lacs (31 March 2021: Rs. 7 lacs) being assets given on an lease.
2. As at 31 March 2022 and 31 March 2021 the fair values of the properties are Rs. 715 lacs and Rs. 645 lacs respectively. These fair values are based on valuations performed by NagChowdhury Associates, an accredited independent registered valuer. NagChowdhury Associates is a specialist in valuing these types of investment properties. A valuation model (market approach) has been adopted and the valuation is in accordance with that recommended by the International Valuation Standards. The fair value measurement can be categorised into level 3 category. There has been no change in the valuation technique as compared to 31 March, 2021.
3. The Company has no restrictions on the realisability of its investment properties and no contractual obligations to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements. All the title deeds of the investment properties are held in the name of the Company.
The Company discounted certain trade receivables with an aggregate carrying amount of Rs. 351 lacs (31 March 2021: Nil) to a bank for cash proceeds of Rs. 348 lacs (31 March 2021: Nil). If the trade receivables are not paid at maturity, the bank has the right to request the Company to pay the unsettled balance. As the Company has not transferred the significant risks and rewards relating to these trade receivables, it continues to recognise the full carrying value of the receivables and has recognised the cash received on the transfer as secured borrowings.
At the end of the reporting period, there were no trade receivables that have been transferred but have not been derecognised and the corresponding associated liability.
Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.
Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
Scheme of Amalgamation
Pursuant to the Scheme of Amalgamation (Refer note 44) the Authorised Equity Share Capital of Trishan Metals Private Limited of Rs. 2,400 lacs has been added in the Authorised Equity Share Capital of IFB Industries Limited. The enhanced Authorised Equity Share Capital of IFB Industries Limited stands at Rs. 8,900 lacs, divided into 8,90,00,000 equity shares of Rs. 10 each.
(a) For sanction of term loan amounting to Rs. 650 lacs by Federal Bank Ltd. (Balance as at 31 March, 2022 is Rs. 128 lacs), the following securites have been created:
1. Primary Security:- First charge on the plant & machineries located at Village / Mouza - Bamunari, NH-2 Delhi Road, Hooghly - 712250, West Bengal.
2. Collateral Security :-Equitable mortgage of Factory land and building along with the properties & Fixed assets ( present & future) located at Village / Mouza - Bamunari, NH-2 Delhi Road, Hooghly - 712250, West Bengal.
The said loan was restructured in September 2020 and thereafter equal quarterly instalments of Rs. 43 lacs is payable for 10 quarters. The entire loan will be discharged by December, 2022.
(b) For sanction of credit facilities amounting to Rs. 2,000 lacs (including Capex Letter of Credit amounting to Rs. 1,500 lacs as its sublimit) and Rs. 3,000 lacs by ICICI Bank Ltd. (Balance as at 31 March, 2022 is Rs. 3,500 lacs), following securities have been created:
- Exclusive charge over the movable properties including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future, whether installed or not and whether now lying loose or in cases or which are now lying or stored in or about or shall hereafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about all the Company''s stamping and motor business''s factories, premises and godowns or wherever else the same may be or be held by any party to the
order or disposition of the Company or in the course of transit or in high seas or on order, or delivery, howsoever and wheresoever in the possession of the Company and either by way of substitution or addition in such manner that the security cover of 1.25 times is maintained. For the limit utilised the Term Loan is repayable in 20 quarterly instalments starting from 19 May, 2022.
(c) For sanction of credit facilities amounting to Rs. 6,000 lacs and Rs. 1,000 lacs by DBS Bank India Ltd. (Balance as at 31 March, 2022 is Rs. 3,139 lacs), following securities have been created:
- Hypothecation by way of first and exclusive floating charge over all present and future moveable plant and machinery, equipment, appliances, furniture, vehicles, machinery, spares and stores, tools and accessories and other moveables whether or not installed and whether lying loose or in cases or which are now lying or stored in or about and may hereafter from time to time during the currency of this deed be brought into or upon or be stored in or about all the Company''s factories, premises, warehouses and godowns or wherever else the same may be or be held by any party to the order or disposition of the Company or in the courses of transit or on high seas or on order, or delivery, howsoever and wheresoever in the possession of the Company and either by way of substitution or addition (all pertaining to Company''s units located at Kolkata and Bangalore) stored or to be stored at the Company''s Godowns or premises or wherever else the same may be except asset charged specifically for debt availed, if any for purchase of conventional press line subject to NOC being sought from DBS. The Term Loan was prepaid partially in 2020-21 and the balance as at 31 March 2021 is repayable in 14 equal quarterly instalments starting from June, 2021.
(d) For sanction of external commercial borrowings amounting to USD 200 lacs by Standard Chartered Bank, London, following securities have been created:
- Hypothecation by way of first and exclusive charge over all present and future moveable properties of the Company''s manufacturing unit of air conditioners in Goa and on the existing plant and machinery of washing machine division at Goa (Verna) plant (except exclusive charge to term lenders), including without limitations its moveable plant and machinery, furniture and fittings, equipments, computers, hardware, computer software, machinery spares, tools and accessories and other movables, both whether now lying loose or in cases or which are now lying or stored in or about or shall hereafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about all the Company''s premises, warehouses, stockyards and godowns or those of the Company''s agents, affiliates, associates or representatives or at various worksites or at any upcountry place or places wherever else the same maybe or be held by any party including, without limitation, the following plot no. N-7, Phase IV, Survey No. 261/10, Verna Industrial Estate, Verna, Goa - 403722. The external commercial borrowings is standing at USD 135 lacs as at 31 March, 2022. The loan is repayable in 13 equal quarterly instalments starting from 1 October, 2021.
a. Provision is estimated in respect of warranty cost in the year of sale of goods and it represents the present value of the management''s best estimate of the future outflow of economic benefit that will be required under the Company''s obligation for warranties.
b. Provision for warranty is expected to be utilised over a period of 1 to 5 years.
c. The estimates may vary as a result of product quality, availability of spare parts, price of raw materials, altered manufacturing processess and discount rates.
d. Warranty costs are estimated by the management on the basis of a technical evaluation and based on specific warranties, claims and claim history.
a) Unrecognised deferred tax assets on tax losses and unabsorbed depreciation : At the reporting date, tax losses amounting to Rs. 1,276 lacs and unabsorbed depreciation amounting to Rs. 8,866 lacs are available for offset against future profits. A deferred tax asset amounting to Rs. 447 lacs on tax losses and Rs. 3,099 lacs on unabsorbed depreciation has been recognised.
Tax losses are due to expire in assessment year 2031-32. Unabsorbed depreciation can be carried forward indefinitely.
b) Consequent to approval of the Scheme of Amalgamation (Refer note 44), deferred tax assets have been recognised on carry forward tax losses and unabsorbed depreciation pertaining to erstwhile Trishan Metals Private Limited amounting to Rs. 426 lacs. The same has been recognised by reducing the carrying amount of any goodwill related to that acquisition.
(a) The Company has used the borrowings from banks for the specific purpose for which they were taken at the balance sheet date.
(b) The Company has borrowings from banks on the basis of security of current assets and the final quaterly statements of current assets filed by the Company with the banks are materially in agreement with the books of accounts and there is no discrepancy that has been identified.
(c) All charges for the borrowings have been registered with the Registrar of Companies as at the balance sheet date.
(d) The Company has not received any fund from any other persons or entities (Funding Party) with the understanding that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party or shall provide guarantee, security or the like to or on behalf of the Funding Party.
(e) Charge and hypothecation details are as follows:
(i) Credit facilities utilised as at 31 March, 2022
(A) For sanction of working capital facility amounting to Rs 10,000 lacs by Standard Chartered Bank (Utilised as at 31 March, 2022 Rs. 6,203 lacs), following securities have been created
(i) First pari passu charge on the entire current assets, both present and future.
(ii) First and exclusive charge on the plant & machinery of washing machine division at Goa (Verna) plant (both present and future).
(iii) First and exclusive charge over the plant & machinery of air-conditioner division at Goa, (both present and future).
(B) Hypothecation details of cash credit facility by Federal Bank Limited (Utilised as at 31 March, 2022 Rs. 68 lacs) as at 31 March, 2022:
Working capital facilities has been sanctioned by The Federal Bank Limited to the extent Rs. 2,500 lacs. These can be used inter-changeably between fund based and non-fund based. Following securities has been created:
1. Primary security :- Hypothecation of all current assets including entire stocks and book debts (both present and future) relating to plant situated at Village / Mouza - Bamunari, NH-2 Delhi Road, Hooghly - 712250, West Bengal.
2. Collateral security :- Equitable mortgage of factory land & building along with the Fixed assets (present & future) located at Village / Mouza - Bamunari, NH-2 Delhi Road, Hooghly - 712250, West Bengal .
(ii) Credit facilities unutilised as at 31 March 2022
(C) For sanction of capex facility amounting to Rs 2,000 lacs by Standard Chartered Bank (Unutilised as at 31
March, 2022), following securities have been created:
(i) First and exclusive charge on the plant & machinery of washing machine division at Goa (Verna) plant (both present and future).
(ii) First and exclusive charge over the plant & machinery of air-conditioner division at Goa, (both present and future).
(D) For sanction of credit facilities amounting to Rs.5,000 lacs by ICICI Bank Ltd. (Unutilised as at 31 March,
2022), following securities have been created:
- First and pari passu charge on all the current assets of the Company - the whole of the Company''s stocks of raw materials, good-in-process, semi-finished and finished goods, consumable stores and spares and such other moveables, including book debts, bills whether documentary or clean, both present and future, whether in the possession or under the control of the Company or not, whether now lying loose or in cases or which are now lying or stored in or about or shall hereafter from time to time during the continuance of these presents be brought into or upon or be stored or be in or about all the Company''s factories, premises and godowns situated at all places of business or wherever else the same may be or be held by any party to the order or disposition of the Company or in course of transit or on high seas or on order or delivery.
- Hypothecation by way of first and pari passu charge on the receivables of the Company - all amounts owing to and received and / or receivable by, the Company and / or any person on its behalf, all book debts, all cash flows and receivables and proceeds arising from / in connection with business and all rights, titles, interest, benefits, claims and demand whatsoever of the Company into or in respect of all the aforesaid assets, including but not limited to the Company''s cash-in-hand, both present and future. This facility remains unutilised as at 31 March, 2022.
(E) For sanction of credit facilities amounting to Rs. 5,000 lacs by HDFC Bank Ltd (Unutilised as at 31 March,
2022), following securities have been created:
- First pari passu charge by way of hypothecation on all the stock in trade both present and future consisting of raw material, finished goods, goods in process of manufacturing and other goods, movable assets or merchandise whatsoever now.
- First pari passu charge by way of hypothecation on all the book debts, amounts outstanding, monies receivables, claims and bills which are now due and owing or which may at any time hereafter during the continuance of this security become due.
- Exclusive charge on the sum of Rs. 2,000 lacs deposited by the Company with the Bank at its branch.
32. Defined benefit plan - Gratuity
The Company operates a defined benefit plan for gratuity for its employees. It is administered through approved trust in accordance with its trust deeds and rules. The concerned trust is managed by trustees who provide guidance with regard to the management of their assets and liabilities and review their performance periodically or directly through insurance company. Risk mitigation systems are in place to ensure that the health of the portfolio is regularly reviewed and the investments do not pose any significant risk of impairment. Periodic audits are conducted to ensure the adequacy of internal controls.
The liability arising in the defined benefit plan is determined by an independent professionally qualified actuary using the projected unit credit method.
The risks commonly affecting the gratuity liability and the financial results are expected to be:
1. Interest rate risk - The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yield falls, the defined benefit obligations will tend to increase.
2. Salary inflation risk - Higher the expected increase in salary, higher the defined benefit obligation.
3. Demographic risk - This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
- The Company is primarily engaged in business of fine blanked components, home appliances, motors and steel. Accordingly the Company considers the above business segment as the primary segment. Segment revenue, segment result, segment asset and segment liabilities include the respective amount identifiable to each of the segments as also amounts allocated on reasonable basis. The expenses, which are not directly relatable to the business segment, are shown as unallocable corporate cost and grouped as "Unallocated". Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities and are grouped as "Unallocated". These segments have been reported in the manner consistent with the internal reporting to divisional CEO''s, who are the chief operating decision makers.
- The geographical information considered for disclosure are revenue within India and revenue outside India.
- The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.
The Company is obligated under cancellable leases for residential, office premises, warehouses, etc. Total rental expense under cancellable short term operating lease amounted to Rs. 391 Lacs (31 March 2021: Rs. 298 lacs).
In applying Ind AS 116 - "Leases", the Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics. The leases with remaining lease term of less than 12 months are considered as "short term leases".
38. Dues to micro, small and medium enterprises
The Ministry of micro, small and medium enterprises has issued an office memorandum dated 26 August 2008 which recommends that the micro and small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprise Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on the information received and available with the Company. Payable to micro and small enterprises as at 31 March 2022: Rs. 14,374 lacs (31 March 2021: Rs. 10,141 lacs).
Further, in view of the management, the impact of the interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.
39. Financial instruments and related disclosures i) Capital management
The Company''s capital management policy is focused on business growth and creating value for shareholders. The Company determines the amount of capital required on the basis of annual business plans and the funding needs are met through internal accruals and bank borrowings.
(iii) Financial risk management objectives
The Company has a system-based approach to risk management, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Company''s risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.
a) Liquidity risks
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquid risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company does not trade in equities. Treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within the acceptable risk parameters after due evaluation.
The Company''s investments are predominantly held in debt mutual funds. Such investments are susceptible to market risks that arise mainly from changes in interest rate which may impact the return and value of such investments. Mark to market movements in respect of these investments are measured at fair value through Profit and Loss.
Fixed deposits are held with highly rated banks and generally have a short tenure and are not subject to interest rate volatility.
The Company has short-term borrowings which are generally not susceptible to interest rate volatility since they are for short tenure. Long term loans from banks are at highly competitive rates. Hence interest rate fluctuations on borrowings does not affect the Company significantly.
iii) Foreign currency sensitivity
For every percentage point change in the underlying exchange rate of the outstanding foreign currency denominated assets and liabilities, holding all other variables constant, the loss before tax would change by Rs. 311 lacs for the year ended 31 March 2022 (31 March 2021: Rs 308 lacs).
d) Credit risk
Credit risk arise from the possibility that the counter party may not be able to settle their obligations. Financial instruments that are subject to such risk primarily consists of investments, trade receivables, bank deposits, loans, derivative instruments and other financial assets.
Bank deposits are primarily held with highly rated and different banks.
The Company''s customer base is large and diverse limiting the risk arising out of credit concentration. Further the credit is extended in business interest in accordance with guidelines issued centrally and business-specific credit policies that are consistent with such guidelines. Exceptions are managed and approved by appropriate authorities after due consideration of the counter parties credentials and financial capacity, trade practices and prevailing business and economic conditions.
The Company''s historical experience of collecting receivables and the level of default indicates that the credit risk is low and generally uniform across markets. Loss allowances are recognised where considered appropriate by the management.
Goodwill as stated above is carried at cost and annually tested for impairment in line with applicable Accounting Standards. Impairment testing for goodwill has been carried out considering their recoverable amounts which, inter-alia, includes estimation of their value-in-use based on management projections. These projections have been made for a period of five years and consider various factors, such as market scenario, growth trends, growth and margin projections and terminal growth rates specific to the business. For such projections, discount rate of 15% and long-term growth rate of 5% have been considered. Discount rate has been determined considering the Weighted Average Cost of Capital (WACC) of market benchmarks. Based on the above assessment, no impairment has been recognised during the year.
41. The Company has disaggregated revenues from contract with customers for the year by the type of goods and services. The Company believe that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Refer note 21 for revenue disaggregation.
Reasons where the change in the ratios is more than 25% as compared to preceeding years:
a) Earnings before depreciation, interest and tax (EBDITA) has reduced due to increase in material cost, promotion cost, and offices expenses that have increased considerably. EBDITA being the numerator for the debt equity ratio, hence the fall in the ratio.
b) The ratios have been impacted due to fall in profits for the year for reasons stated in (a) above. Further depreciation and amortisation and finance cost have also increased.
c) Working capital for the period has reduced due to increase in trade payable whereas sales and service income has increased, hence the ratio has increased.
d) Capital employed has not changed significantly, however earnings before interest and tax has reduced for reasons stated above.
44. Business Combination Note:
(a) During the year, the Hon''ble National Company Law Tribunal (NCLT), Kolkata Bench vide its order dated 27 January, 2022 has approved the ''Scheme of Amalgamation'' of wholly owned subsidiary of IFB Industries Limited (IFBIL) namely Trishan Metals Private Limited (TMPL) (Transferor Company) with IFBIL (Transferee Company) with appointed date 1 April, 2021. IFBIL filed the certified copy of the said order along with the requisite form with the Registrar of Companies, Kolkata on 19 February, 2022 (effective date).
No voting interest were acquired in the above transaction.
(b) Since it was an amalgamation of a wholly owned subsidiary, no consideration was required to be transferred upon amalgamation. The ''Scheme of Amalgamation'' has accordingly been given effect in the financial statements of the Company from the appointed date. Accordingly the figures presented in the financial statements are after giving effect to the said Scheme. The ''Scheme of Amalgamation'' being a common control transaction, as per the requirement of Appendix C of Ind AS 103 on Business Combinations, the pooling of interest method has been applied and the comparative figures have been restated for the accounting impact of the Scheme. The effects of the ''Scheme of Amalgamation'' has been accounted for in the books of accounts of the Company in accordance with the Scheme and is in accordance with the Indian Accounting Standards.
(c) Acquisition related cost amounting to Rs. 8 lacs (31 March, 2021 Rs 6 lacs) has been included in note no. 29 under ''Office expenses''.
45. Impact of COVID-19 (pandemic)
The spread of COVID-19 has impacted businesses around the globe. The Company''s operations and financial statements for the year ended 31 March 2022 have been impacted by COVID-19 pandemic. On the basis of the assessment done by the management the carrying amounts of assets are recoverable.
46. As per the E-Waste (Management) Rules, 2016, as amended, companies dealing in certain categories of products as specified in Schedule-I therein are required to undertake Extended Producer Responsibility (EPR) for its end-of-life products. The obligation for a financial year is measured based on sales made in the preceding 9th/10th year and the Company has met its obligations for the current year. In accordance with Appendix B of Ind AS 37, ''Provisions, Contingent Liabilities and Contingent Assets'', the Company will have an e-waste obligation for future years, only if it participates in the market in those years.
47. No proceedings have been initiated or is pending against the company for holding any benami property under the ''Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
48. The Company has not been declared a wilful defaulter by any banks.
49. The Company has not identified any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
50. The Company has complied with the number of layers prescribed under (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
51. All transactions have been recorded in the books of accounts and there are no unrecorded income that have been disclosed during the year in the tax assessments under the Income Tax Act, 1961. Moreover there are no unrecorded income and related assets pertaining to previous years.
52. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
53. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification.
54. The standalone financial statements were approved by the Board of Directors on 28 May 2022.
Mar 31, 2019
1. The Companyâs investment properties consist of lands in India and it includes an amount of Rs. 7 lacs (31 March 2018: Rs. 7 lacs) being assets given on an operating lease.
2. As at 31 March 2019 and 31 March 2018 the fair values of the properties are Rs. 530 lacs and Rs. 500 lacs respectively. These valuations are based on valuations performed by Nag Chowdhury Associates, an accredited independent valuer. Nag Chowdhury Associates is a specialist in valuing these types of investment properties. A valuation model (market approach) in accordance with that recommended by Indian Institute of Surveyors has been applied. The fair value measurement can be categorised into level 3 category.
3. The Company has no restrictions on the realisability of its investment properties and no contractual obligations to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
4. Information regarding income and expenditure of investment property:
5. The cost of inventories recognised as an expense during the year was Rs. 1,74,890 lacs (31 March 2018: Rs. 1,44,130 lacs).
6. The cost of inventories recognised as an expense includes Rs. 428 lacs (31 March 2018 : Rs. 349 lacs) in respect of writedowns of inventory to its net realisable value. Further a sum of Rs. 219 lacs (31 March 2018: Rs. 306 lacs) is in respect of reversal of such write-downs. The write downs have been reduced primarily as a result of increased sales price or subsequent disposals.
7. Carrying amount of inventories carried at fair value Rs. 1,433 Lacs (31 March 2018: Rs. 898 lacs).
Transfer of financial assets
The Company discounted certain trade receivable with an aggregate carrying amount of Rs. 4,472 lacs (31 March 2018: Rs. 1,940 lacs) to a bank for cash proceeds of Rs. 4,439 lacs (31 March 2018: Rs. 1,916 lacs). If the trade receivable are not paid at maturity, the bank has the right to request the Company to pay the unsettled balance. As the Company has not transferred the significant risks and rewards relating to these trade receivable, it continues to recognise the full carrying amount of the receivables and has recognised the cash received on the transfer as a secured borrowings.
At the end of the reporting period, the carrying amount of the trade receivable that has been transferred but have not been derecognised and the carrying amount of the associated liability is as under:
Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Companyâs residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.
Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
First and exclusive floating charge over all present and future movable property, plant and equipment of the Companyâs engineering division located at Kolkata and Bangalore stored or to be stored at the Companyâs godown or premises or wherever else the same may be. The Term Loan is repayable in 16 quarterly installments from the end of the 15th month from the date of first disbursement i.e. 09 March 2016.
a. Provision is estimated in respect of warranty cost in the year of sale of goods and it represents the present value of the managementâs best estimate of the future outflow of economic benefit that will be required under the Companyâs obligation for warranties.
b. Provision for warranty is expected to be utilised over a period of 1 to 5 years.
c. The estimates may vary as a result of product quality, availability of spare parts, price of raw materials, altered manufacturing processess and discount rates.
d. Warranty costs are estimated by the management on the basis of a technical evaluation and based on specific warranties, claims and claim history.
Hypothecation details for current borrowings existing as at 31 March 2019
For sanction of credit facilities amounting to Rs. 3,500 lacs by DBS Bank Ltd., following securities have been created:
(i) Hypothecation by way of first pari passu and floating charge over goods being finished goods, semi-finished goods, stocks of raw-materials, work-in-process located at various factories/ warehouses/ godowns of the company and whether in transit or lying at any other place and hypothecation by way of first pari passu and floating charge over the companyâs present and future book debts, outstanding monies receivables, claims, bills, contracts, engagements, securities, investments, rights and assets.
(ii) Hypothecation by way of exclusive charge over all present and future movable fixed assets of the engineering division of the Company including without limitation its movable plant and machinery, furniture and fittings, equipment, computer hardware, computer software, machinery spares, tools and accessories and other movables etc. stored or to be stored at Companyâs godowns or premises situated at 14, Taratolla Road, Kolkata and 16/17, Visveswaraiah Industrial Estate, Whitefield Road, Bangalore - 560048 (Engineering Division) or wherever else the same may be.
Hypothecation details for credit facilities
For sanction of capex letter of credit amounting to Rs 2,000 lacs by Standard Chartered Bank (undrawn as at 31 March, 2019), following securities have been created:
First charge on existing movable fixed assets of Goa (Verna) plant (except exclusive charge to term lenders) of the company including without limitations its movable plant and machinery, furniture and fittings, equipment, computer hardware, computer software, machinery spares, tools and accessories and other movables etc stored or to be stored at the companyâs godown or premises situated at Plot no L-1, Verna Electronic City, Verna Industrial Estate, Goa - 403722 or wherever else the same may be.
For sanction of working capital facility amounting to Rs 10,000 lacs by Standard Chartered Bank, following securities have been created:
(i) First pari passu charge on all current assets, both present and future.
(ii) First charge on existing movable fixed assets of Goa (Verna) plant (except exclusive charge to term lenders).
(iii) Second charge on the leasehold land and building of Goa (Verna) unit on all that piece and parcel of non-agricultural land bearing at No. L1 situated within the village panchayat of Nagoa, Verna Plateau, Verna Industrial Estate, Taluka Salcete, District South Goa and registration sub district ILHAS in the state of Goa containing by admeasuring 48,695 square meters or thereabout.
8. Defined benefit plan - Gratuity
The Company operates a defined benefit plan for gratuity for its employees. It is administered through approved trust in accordances with its trust deeds and rules. The concerned trusts are managed by trustees who provide guidance with regard to the management of their assets and liabilities and review their performance periodically. Risk mitigation systems are in place to ensure that the health of the portfolio is regularly reviewed and the investments do not pose any significant risk of impairment. Periodic audits are conducted to ensure the adequacy of internal controls.
The liability arising in the defined benefit plan is determined by an independent professionally qualified actuary using the projected unit credit method.
Risk management
The risks commonly affecting the gratuity liability and the financial results are expected to be:
1. Interest rate risk - The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yield falls, the defined benefit obligations will tend to increase.
2. Salary Inflation risk - Higher the expected increase in salary will increase the defined benefit obligation.
3. Demographic risk - This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is importantly not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
IX. Sensitivity analysis
The sensitivity results below determine their individual impact on the planâs year end defined benefit obligations. In reality, the plan is subject to multiple external experience items which may move the defined benefit obligations in similar or opposite directions, while the plansâs sensitivity to such changes can vary over time.
NOTES :
- The Company is primarily engaged in business of fine blanked components and home appliances. Accordingly the Company considers the above business segment as the primary segment. Segment revenue, segment result, segment asset and segment liabilities include the respective amount identifiable to each of the segments as also amounts allocated on reasonable basis. The expenses, which are not directly relatable to the business segment, are shown as unallocable corporate cost and grouped as âUnallocatedâ. Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities and are grouped as âUnallocatedâ. These segments have been reported in the manner consistent with the internal reporting to the Board of Directors, who are the chief operating decision makers.
- The geographical information considered for disclosure are revenue within India and revenue outside India.
- The Company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.
9. Leases
The Company is obligated under cancellable leases for residential, office premises, warehouses, etc. Total rental expense under cancellable operating lease amounted to Rs. 3,127 Lacs (31 March 2018: Rs. 2,352 lacs).
It is not practicable for the Company to estimate the closure of these cases and the consequential timings of cash flows, if any, in respect of the above.
1 The Honâble Delhi High Court by its order dated 10 September 2015 set aside the order of Policy Relaxation Committee (PRC) with liberty to the petitioner to file a representation before the PRC. The respondents were directed to pass a reasoned order after giving the opportunity of hearing. The matter was heard by PRC and PRC by its order dated 13 October 2015 rejected the prayer of petitioner. Being aggrieved by PRCâs order the company filed writ application before Division Bench of Delhi High Court. After prolonged hearing the bench by its order dated 03 April 2017 allowed the writ petition and set aside the order of PRC and directed PRC inter-alia to reconsider its order dated 13 October 2015 in the light of observation made by the Division Bench. Subsequently the PRC in its meeting held on 05 September 2017 allowed most of the prayers of the Company and decided inter alia that Regional Authorities (RA) shall ensure that other requirement as per Free Trade Agreements (FTA)/ Hand Book of Procedures (HBP) are complied with. During the year the Company has obtained the necessary Export Obligation Discharge Certificates for 11 nos of above advance licenses from Additional Director General of Foreign Trade, Government of India, Ministry of Commerce & Industry.
10. Dues to micro, small and medium enterprises
The Ministry of micro, small and medium enterprises has issued an office memorandum dated 26 August 2008 which recommends that the micro and small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the âMicro, Small and Medium Enterprise Development Act, 2006â (âthe Actâ). Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on the information received and available with the Company. Payable to micro and small enterprises as at 31 March 2019 : Rs 3,833 lacs (31 March 2018 : 4,728 lacs).
Further, in view of the management, the impact of the interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.
11. Financial instruments and related disclosures
i) Capital management
The Companyâs capital management policy is focused on business growth and creating value for shareholders. The Company determines the amount of capital required on the basis of annual business plans and the funding needs are met through internal accruals and bank borrowings.
Investments exclude investment in subsidiaries of Rs. 3,360 lacs (31 March 2018: 3,360 lacs) which are shown at cost in balance sheet as per Ind AS 27 - âSeparate Financial Statementsâ.
iii) Financial risk management objectives
The Company has a system-based approach to risk management, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Companyâs risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.
a) Liquidity risks
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquid risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from banks. Furthermore, the Company has sufficient quantities of finished goods and stock-in-trade which are liquid and readily saleable. Hence the risk that the Company may not be able to settle its financial liabilities as they become due does not exist.
The following tables shows a maturity analysis of the anticipated cash flows for the Companyâs derivative and non-derivative financial liabilities.
b) Market risks
The Company does not trade in equities. Treasury activities, focused on managing investments in debt instruments, are centralised and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within the acceptable risk parameters after due evaluation.
The Companyâs investments are predominantly held in debt mutual funds. Such investments are susceptible to market risks that arise mainly from changes in interest rate which may impact the return and value of such investments. Mark to market movements in respect of these investments are measured at fair value through Statement of Profit and Loss.
Fixed deposits are held with highly rated banks and generally have a short tenure and are not subject to interest rate volatility.
The company has short-term borrowings which are generally not susceptible to interest rate volatility since they are for short tenure. Long term loans from banks are at highly competitive rates and as such these loans are not that material taking into account the Companyâs asset base. Hence interest rate fluctuations on borrowings does not affect the Company significantly.
c) Foreign currency risk
The Company undertakes transactions denominated in foreign currency (mainly US Dollar, Euro, GBP, RMB and AED) which are subject to the risk of exchange rate fluctuations.
iii) Foreign currency sensitivity
For every percentage point change in the underlying exchange rate of the outstanding foreign currency denominated assets and liabilities, holding all other variables constant, the profit before tax would change by Rs. 129 lacs for the year ended 31 March 2019 (31 March 2018: Rs 109 lacs).
d) Credit risk
Credit risk arise from the possibility that the counter party may not be able to settle their obligations. Financial instruments that are subject to such risk primarily consists of investments, trade receivables, bank deposits, loans, derivative instruments and other financial assets.
Bank deposits are primarily held with highly rated and different banks.
The Companyâs customer base is large and diverse limiting the risk arising out of credit concentration. Further the credit is extended in business interest in accordance with guidelines issued centrally and business-specific credit policies that are consistent with such guidelines. Exceptions are managed and approved by appropriate authorities after due consideration of the counter parties credentials and financial capacity, trade practices and prevailing business and economic conditions.
The Companyâs historical experience of collecting receivable and the level of default indicates that the credit risk is low and generally uniform across markets. Loss allowances are recognised where considered appropriate by the management.
Other than financial assets mentioned above, none of the Companyâs financial assets are either impaired or past due, and there were no indications that defaults in payment would occur.
e) Fair value hierarchy
The fair value of trade receivables, current loans, other current financial assets, current borrowings, trade payables and other current financial liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature.
12. Business Combinations
a) The Company entered into business transfer agreement with Ramsons Garments Finishing Equipment Private Limited, Ramsons Udhyog Private Limited and its Promoters at a consideration of Rs. 3,500 lacs to acquire the entire âIndustrial Laundry Equipmentâ business from above two companies. The Company has taken control of the business w.e.f. 18 October, 2018 (acquisition date).
No voting interest were acquired in the above transaction.
Ramsons has been a pioneer in the design and manufacture of Commercial Laundry Equipment. This acquisition is in the same field of business and will help in consolidation and growth of âIndustrial Landry Equipmentâ business of the Company.
b) The acquisition-date fair value of the total consideration transferred was Rs. 3,456 lacs and the interest on present valuation of the same amounted to Rs. 44 lacs. The sum of Rs. 3,500 lacs was paid in cash (online transfer). Out of the above consideration an amount of Rs. 150 lacs was subsequently paid after the year end.
(e) An amount of Rs. 1,317 lacs and a loss of Rs. 233 lacs pertaining to the âIndustrial Laundry Equipmentâ manufacture business from the acquisition date till 31 March, 2019 is included in the Revenue from operations and Profit before tax of the Company.
(f) Acquisition related cost amounting to Rs. 42 lacs has been included in in note no. 30 under âOffice expensesâ.
13. Exceptional item represents gain of Rs. 1,935 lacs towards Compulsory Acquisition of 1578.63 square metres of factory land etc. situated at 16/17, Visveswariah Industrial Estate, Whitefield Road, Bangalore - 560048 by Bangalore Metro Rail Corporation Limited for a consideration of Rs. 1956 lacs. Out of the gain Rs. 26 lacs is towards building and the balance amount of Rs. 1,909 lacs is towards freehold land.
14. The company has adopted new standard on revenue recognition, Ind AS 115 âRevenue from Contract with Customerâ and has also appropriately evaluated its revenue recognition policy with effect from 1 April 2018. The Company has used âModified Retrospective Approachâ for transition to Ind AS 115 and thus the previous period/year numbers are not restated. The adoption of the standard did not have any material impact on the financial statements.
The Company has disaggregated revenues from contract with customers for the year ended 31 March 2019 by the type of goods and services. The Company believe that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Refer note 21 for revenue disaggregation.
The Company recognized revenue of Rs. 4,875 lacs (31 March 2018 : Rs. 4,096 lacs) arising from contract liability balances comprising of income earned in advance on annual maintenance contracts and extended warranty services and advance from customers at the beginning of the year.
Invoicing in excess of revenues from sale of services are classified as âIncome earned in advance on annual maintenance contracts and extended warranty servicesâ and Invoicing in excess of revenues from sale of goods are classified as âAdvance from customersâ in note no 17.
15. The standalone financial statements were approved by the Board of Directors on 29 May 2019.
Mar 31, 2018
1. The Company''s investment properties consist of lands in India and it includes an amount of Rs. 7 lacs (31 March 2017: Rs. 7 lacs and 01 April 2016: Rs. 7 lacs) being assets given on an operating lease.
2. As at 31 March 2018, 31 March 2017 and 01 April 2016 the fair values of the properties are Rs. 500 lacs, Rs. 458 lacs and Rs. 422 lacs respectively. These valuations are based on valuations performed by NagChowdhury Associates, an accredited independent valuer. NagChowdhury Associates is a specialist in valuing these types of investment properties. A valuation model (market approach) in accordance with that recommended by Indian Institute of Surveyors has been applied. The fair value measurement can be categorized into level 3 category.
3. The company has no restrictions on the reliability of its investment properties and no contractual obligations to either purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
4. Information regarding income and expenditure of investment property:
The cost of inventories recognized as an expense during the year was Rs. 1,44,130 lacs (31 March 2017: Rs. 1,22,588 lacs).
The cost of inventories recognized as an expense includes Rs. 349 lacs (31 March 2017 : Rs. 424 lacs) in respect of write-downs of inventory to its net realizable value. Further a sum of Rs. 306 lacs (31 March 2017: Rs. 84 lacs) is in respect of reversal of such write-downs. The write downs have been reduced primarily as a result of increased sales price or subsequent disposals.
Carrying amount of inventories carried at fair value Rs. 898 Lacs (31 March 2017: 1,245 lacs, 01 April 2016: Rs. 761 lacs)
The company discounted certain trade receivable with an aggregate carrying amount of Rs. 1,940 lacs (31 March 2017: Rs. 2,713 lacs) to a bank for cash proceeds of Rs. 1,916 lacs (31 March 2017: Rs. 2,669 lacs). If the trade receivable are not paid at maturity, the bank has the right to request the company to pay the unsettled balance. As the company has not transferred the significant risks and rewards relating to these trade receivable, it continues to recognize the full carrying amount of the receivables and has recognized the cash received on the transfer as a secured borrowings.
voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.
Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.
For sanction of term loan amounting to Rs 3,000 lacs by DBS Bank Ltd, following securities have been created :
First and exclusive floating charge over all present and future movable property, plant and equipment of the Company''s engineering division located at Kolkata and Bangalore stored or to be stored at the Company''s go down or premises or wherever else the same may be.
a. Provision is estimated in respect of warranty cost in the year of sale of goods and it represents the present value of the management''s best estimate of the future outflow of economic benefit that will be required under the company''s obligation for warranties.
b. Provision for warranty is expected to be utilized over a period of 1 to 5 years.
c. The estimates may vary as a result of product quality, availability of spare parts, price of raw materials, altered manufacturing processes and discount rates.
d. Warranty costs are estimated by the management on the basis of a technical evaluation and based on specific warranties, claims and claim history.
Hypothecation details for current borrowings existing as at 31 March 2018
For sanction of credit facilities amounting to Rs. 3,500 lacs by DBS Bank Ltd., following securities have been created:
(i) Hypothecation by way of first pari passu and floating charge over goods being finished goods, semi-finished goods, stocks of raw-materials, work-in-process located at various factories/ warehouses/ god owns of the company and whether in transit or lying at any other place and hypothecation by way of first pari passu and floating charge over the company''s present and future book debts, outstanding monies receivables, claims, bills, contracts, engagements, securities, investments, rights and assets.
(ii) Hypothecation by way of exclusive charge over all present and future movable fixed assets of the engineering division of the Company including without limitation its movable plant and machinery, furniture and fittings, equipment, computer hardware, computer software, machinery spares, tools and accessories and other movables etc. stored or to be stored at Company''s godowns or premises situated at 14, Taratolla Road, Kolkata and 16/17, Visveswaraiah Industrial Estate, Whitefield Road, Bangalore - 560048 (Engineering Division) or wherever else the same may be.
Hypothecation details for credit facilities
For sanction of capex letter of credit amounting to Rs 2,000 lacs by Standard Chartered Bank, following securities have been created:
First charge on existing movable fixed assets of Goa (Verna) plant (except exclusive charge to term lenders) of the company including without limitations its movable plant and machinery, furniture and fittings, equipment, computer hardware, computer software, machinery spares, tools and accessories and other movables etc stored or to be stored at the company''s godown or premises situated at Plot no L-1, Verna Electronic City, Verna Industrial Estate, Goa - 403722 or wherever else the same may be.
For sanction of working capital facility amounting to Rs 10,000 lacs by Standard Chartered Bank, following securities have been created:
(i) First pari passu charge on all current assets, both present and future.
(ii) First charge on existing movable fixed assets of Goa (Verna) plant (except exclusive charge to term lenders).
(iii) Second charge on the leasehold land and building of Goa (Verna) unit on all that piece and parcel of non-agricultural land bearing at No. L1 situated within the village panchayat of Nagoa, Verna Plateau, Verna Industrial Estate, Taluka Salcete, District South Goa and registration sub district ILHAS in the state of Goa containing by admeasuring 48,695 square meters or thereabout.
33. Defined benefit plan - Gratuity
The Company operates a defined benefit plan for gratuity for its employees. It is administered through approved trust in accordanceâs with its trust deeds and rules. The concerned trusts are managed by trustees who provide guidance with regard to the management of their assets and liabilities and review their performance periodically. Risk mitigation systems are in place to ensure that the health of the portfolio is regularly reviewed and the investments do not pose any significant risk of impairment. Periodic audits are conducted to ensure the adequacy of internal controls.
The liability arising in the defined benefit plan is determined by an independent professionally qualified actuary using the projected unit credit method.
Risk management
The risks commonly affecting the gratuity liability and the financial results are expected to be:
1. Interest rate risk - The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yield falls, the defined benefit obligations will tend to increase.
2. Salary Inflation risk - Higher the expected increase in salary will increase the defined benefit obligation.
3. Demographic risk - This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is importanty not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
NOTES :
- The Company is primarily engaged in business of fine blanked components and home appliances. Accordingly the Company considers the above business segment as the primary segment. Segment revenue, segment result, segment asset and segment liabilities include the respective amount identifiable to each of the segments as also amounts allocated on reasonable basis. The expenses, which are not directly relatable to the business segment, are shown as unallowable corporate cost and grouped as "Unallocated". Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities and are grouped as "Unallocated". These segments have been reported in the manner consistent with the internal reporting to the Board of Directors, who are the chief operating decision makers.
- The geographical information considered for disclosure are revenue within India and revenue outside India.
- The company is not reliant on revenues from transactions with any single external customer and does not receive 10% or more of its revenues from transactions with any single external customer.
35. Leases
The Company is obligated under cancellable leases for residential, office premises, warehouses, etc. Total rental expense under cancellable operating lease amounted to Rs. 2,352 Lacs (31 March 2017: Rs. 1,777 lacs).
It is not practicable for the Company to estimate the closure of these cases and the consequential timings of cash flows, if any, in respect of the above.
1 The Hon''ble Delhi High Court by its order dated 10 September 2015 set aside the order of Policy Relaxation Committee (PRC) with liberty to the petitioner to file a representation before the PRC. The respondents were directed to pass a reasoned order after giving the opportunity of hearing. The matter was heard by PRC and PRC by its order dated 13 October 2015 rejected the prayer of petitioner. Being aggrieved by PRC''s order the company filed writ application before Division Bench of Delhi High Court. After prolonged hearing the bench by its order dated 03 April 2017 allowed the writ petition and set aside the order of PRC and directed PRC inter-alia to reconsider its order dated 13 October 2015 in the light of observation made by the Division Bench. Keeping in mind the direction of Hon''ble Delhi High Court and taking into consideration the genuine hardship expressed in the revised representation by the Company, the PRC in its meeting held on 05 September 2017 allowed most of the prayers of the Company and decided inter alia that Regional Authorities (RA) shall ensure that other requirement as per Free Trade Agreements (FTA)/ Hand Book of Procedures (HBP) are complied with. The Company is now dealing with RA to obtain discharge certificates.
38. Related party disclosures
(A) The Company has the following related parties
Investor Company : |
IFB Automotive Private Limited |
Subsidiary Companies : |
- Trishan Metals Private Limited (TMPL) (w.e.f. 11 July 2016) - Global Automotive and Appliances Pte Limited (GAAL) (w.e.f. 13 July 2017) - Thai Automotive and Appliances Limited (TAAL) - subsidiary of GAAL |
Key Management Personnel |
Mr. Bijon Nag, Executive Chairman |
(KMP) : |
Mr. Bikram Nag, Joint Executive Chairman and Managing Director |
Mr. Sudam Maitra, Deputy Managing Director |
|
Mr. Prabir Chatterjee, Director and Chief Financial Officer |
|
Mr. G. Ray Chowdhury, Company Secretary |
|
Mr. A K Nag, President |
|
Mr. Sujan Kumar Ghosh Dastidar, President, Legal |
|
Mr. Susanta Das, Head of Personnel and Administration |
|
Mr. Uma Shankar Ghosh Dastidar, Head - Taxation |
|
Mr. Rahul Choudhary, Vice President, Corporate affairs and banking (resigned w.e.f. 01 December 2017) |
|
Mr. Rajat Paul, Assistant Vice President, IT |
|
Mr. Diptanil Saha, General Manager (GM), Corporate affairs |
|
Mr. Soumitra Goswami, GM, Accounts and Finance |
|
Mr. Jayanta Chanda , GM, Finance |
|
Mr. Ashok Hazra, Assistant General Manager, Internal Audit |
|
Mr. Rajshankar Ray, Chief Executive Officer (CEO), Home Appliances Division |
|
Mr. A.S. Negi, National Service Head , Home Appliances Division |
|
Mr. B.M. Shetye, Vice President, Sustainability, Home Appliances Division |
|
Mr. Pawan Koul, Head of Goa Factory |
|
Mr. Sukhdev Nag, National Sales Head |
|
Mr. T.R. Ramesh, Business Head, Home Appliances Division, Central |
|
Mr. Ranjan Mohan Mathur, Business Head, Home Appliances Division - North and National Head, IFB Points |
|
Mr. Abhi it Gangopadhyay, Business Head, East |
|
Mr. Partha Sen, CEO, Engineering Division |
|
Mr. K.R.K. Prasad, CEO, Bangalore Engineering Factory. |
|
Mr. Arup Das, Head Marketing , Engineering Division |
|
Mr. R. Anand, Head, Motor Division |
Other related parties - IFB Agro Industries Limited
- Travel Systems Limited
- IFB Global Limited
- IFB Appliances Limited
- Anjali foundation
Employee trusts where - Indian Fine Blank Limited Employees Gratuity Fund (IFBLEGF)
there is significant influence - IFBL Senior Management Superannuation Fund (IFBLSMSF)
(Employee trusts) - IFBL Employees'' (Category-I) Superannuation Scheme (IFBLESS-Cat-I)
- IFBL Employees (Category Two) Group Superannuation Scheme (IFBLEGSS-Cat two)
39. Dues to micro, small and medium enterprises
The Ministry of micro, small and medium enterprises has issued an office memorandum dated 26 August 2008 which recommends that the micro and small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprise Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on the information received and available with the Company. Payable to micro and small enterprises as at 31 March 2018: Rs 666 lacs (31 March 2017: Rs 475 lacs, 31 March 2016: Rs 283 lacs).
Further, in view of the management, the impact of the interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.
40. Financial instruments and related disclosures i) Capital management
The Company''s capital management policy is focused on business growth and creating value for shareholders. The Company determines the amount of capital required on the basis of annual business plans and the funding needs are met through internal accruals and bank borrowings.
Investments exclude investment in subsidiaries of Rs. 3,360 lacs (31 March 2017: 1,200 lacs, 01 April 2016: Nil) which are shown at cost in balance sheet as per Ind AS 27 - ''Separate Financial Statements''.
iii) Financial risk management objectives
The Company has a system-based approach to risk management, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Company''s risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.
a) Liquidity risks
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquid risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The company has obtained fund and non-fund based working capital lines from banks. Furthermore, the Company has sufficient quantities of finished goods and stock-in-trade which are liquid and readily saleable. Hence the risk that the company may not be able to settle its financial liabilities as they become due does not exist.
The following tables shows a maturity analysis of the anticipated cash flows for the company''s derivative and no derivative financial liabilities.
b) Market risks
The Company does not trade in equities. Treasury activities, focused on managing investments in debt instruments, are centralized and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within the acceptable risk parameters after due evaluation.
The Company''s investments are predominantly held in debt mutual funds. Such investments are susceptible to market risks that arise mainly from changes in interest rate which may impact the return and value of such investments. Mark to market movements in respect of these investments are measured at fair value through Statement of Profit and Loss.
Fixed deposits are held with highly rated banks and generally have a short tenure and are not subject to interest rate volatility.
The company has short-term borrowings which are generally not susceptible to interest rate volatility since they are for short tenure. Long term loans from banks are at highly competitive rates and as such these loans are not that material taking into account the Company''s asset base. Hence interest rate fluctuations on borrowings does not affect the Company significantly.
c) Foreign currency risk
The Company undertakes transactions denominated in foreign currency (mainly US Dollar, Euro, RMB and THB) which are subject to the risk of exchange rate fluctuations.
For every percentage point change in the underlying exchange rate of the outstanding foreign currency denominated assets and liabilities, holding all other variables constant, the profit before tax would change by Rs 109 lacs for the year ended 31 March 2018 (31 March 2017: Rs 79 lacs).
d) Credit risk
Credit risk arise from the possibility that the counter party may not be able to settle their obligations. Financial instruments that are subject to such risk primarily consists of investments, trade receivables, bank deposits, loans, derivative instruments and other financial assets.
Bank deposits are primarily held with highly rated and different banks.
The Company''s customer base is large and diverse limiting the risk arising out of credit concentration. Further the credit is extended in business interest in accordance with guidelines issued centrally and business-specific credit policies that are consistent with such guidelines. Exceptions are managed and approved by appropriate authorities after due consideration of the counter parties credentials and financial capacity, trade practices and prevailing business and economic conditions.
The Company''s historical experience of collecting receivable and the level of default indicates that the credit risk is low and generally uniform across markets. Loss allowances are recognized where considered appropriate by the management.
Other than financial assets mentioned above, none of the Company''s financial assets are either impaired or past due, and there were no indications that defaults in payment would occur.
e) Fair value hierarchy
The fair value of trade receivables, current loans, other current financial assets, current borrowings, trade payables and other current financial liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature.
There were no transfers between Level 1 and Level 2 during the year ended 31 March 2018 and 31 March 2017.
41. First-time adoption of Ind AS
i) Ind AS 101 - First-time adoption of Indian Accounting Standards provides a suitable starting point for accounting in accordance with Ind AS and is required to be mandatorily followed by first-time adopters. The Company has prepared the opening balance sheet as per Ind AS as of 01 April 2016 (the transition date) by:
a) recognizing all assets and liabilities whose recognition is required by Ind AS,
b) not recognizing items of assets or liabilities which are not permitted by Ind AS,
c) reclassifying items from previous GAAP to Ind AS as required under Ind AS, and
d) applying Ind AS in measurement of recognized assets and liabilities.
iii) Ind AS 101 mandates certain exceptions and allows first-time adopters exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions in the financial statements:
a) Property, plant and equipment and intangible assets were carried in the Balance sheet prepared in accordance with previous GAAP as at 31 March 2016. Under Ind AS, the Company has elected to regard such carrying values as deemed cost at the date of transition.
iv) In addition to the above, the principal adjustments made by the Company in restating its previous GAAP financial statements, including the balance sheet as at 01 April 2016 and the financial statements as at and for the year ended 31 March 2017 are detailed below:
a) Under previous GAAP, current investments were stated at lower of cost and fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition and fair value changes after the date of transition has been recognized in statement of profit and loss.
b) Under previous GAAP, the premium or discount arising at the inception of forward exchange contracts entered into, to hedge existing assets/ liabilities were amortized as expense or income over the life of the contracts. Exchange
difference on such contracts were recognized in the statement of profit and loss in the reporting period in which the exchange rates changed. Any profit or loss arising on cancellation or renewal of such a forward exchange contract were recognized as income or as an expense for the period. Under Ind AS, such derivative financial instruments are recognized at fair value through profit or loss and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gains / losses is recognized in the statement of profit and loss.
c) Under previous GAAP, discounting of provisions was not permitted and provisions were measured at the best estimate of the expenditure required to settle the obligation at the balance sheet date without considering the effect of discounting. Under Ind AS, provisions are measured at discount amounts, if the effect of time value of money is material. The Company has discounted the provision for warranty to present value at reporting dates. Consequently, the unwinding of discount has been recognized as a finance cost.
d) Under previous GAAP, actuarial gains and losses related to the defined benefit schemes for gratuity were recognized in statement of profit and loss. Under Ind AS, actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the defined benefit liability are recognized in other comprehensive income instead of profit and loss. Consequently, the tax effect of the same has also been recognized in other comprehensive income instead of statement of profit and loss.
e) Under previous GAAP, all the lands were presented as fixed assets. Under Ind AS, the Company has reclassified lands given on operating lease and the lands held for a currently undetermined future use as investment property. Such reclassification has resulted in decrease in the value of property, plant and equipment by Rs. 11 lacs as at 01 April 2016 and 31 March 2017 and a corresponding increase in the value under Investment property as at respective dates.
f) Under previous GAAP, leasehold lands were presented as fixed assets and depreciated over the period of lease. Under Ind AS, such properties have been classified as Prepaid Lease rent (refer note 9 ''Other assets'') and have been amortized over the period of the lease. This has resulted in decrease in net book value of property, plant and equipment by Rs. 18 lacs as at 01 April 2016 and by Rs. 14 lacs as at 31 March 2017 and a corresponding increase in other assets by Rs. 18 lacs as at 01 April 2016 and by Rs. 14 lacs as at 31 March 2017.
Such reclassification has resulted in decrease in depreciation and amortization expense by Rs. 4 lacs for the year ended 31 March 2017 and a corresponding increase in other expenses by Rs. 4 lacs but does not affect profit before tax and profit for the year ended 31 March 2017.
g) Under previous GAAP, grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment were ordinarily expected in respect thereof were treated as capital reserve. Under Ind AS, grants received from Government authorities are required to be recognized in the statement of profit and loss over the life of the asset. Accordingly, capital reserve amounting to Rs 25 lacs received as a part of investment subsidy in earlier years was recognized as retained earnings. However, there was no change in the equity as at 01 April 2016 and 31 March 2017.
2. The standalone financial statements were approved by the Board of Directors on 29 May 2018.
Mar 31, 2017
1. Dues to Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprises Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2017 has been made in the financial statements based on information received and available with the Company. A sum of Rs. 475 lacs is payable to Micro and Small Enterprises as at 31 March 2017 (31 March 2016 Rs. 283 lacs). Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.
2. Employee benefits
(a) Gratuity and leave encashment
The Company operates a defined benefit scheme for gratuity for which a separate fund is maintained and other long-term benefit plan like leave encashment which is managed through an insurance company. Annual actuarial valuations are carried out by independent actuaries using the Projected Unit Credit Method.
It is not practicable for the Company to estimate the closure of these cases and the consequential timings of cash flows, if any, in respect of the above.
(#) The Company obtained a bank guarantee of Rs. 16 lacs in connection with the execution of a civil contract awarded by the State Health Department, Government (Govt.) of West Bengal. Following a dispute, the State Health Department, Govt. of West Bengal invoked the said Bank Guarantees whereupon the Company challenged such invocation by way of a writ petition before the Hon''ble Calcutta High Court. The Hon''ble Calcutta High Court allowed an interim order of injunction dated 22 May 2003 restraining the State Health Department not to give any effect to the invocation of the guarantee till further order with the condition that the guarantee shall be renewed from time to time. The bank guarantee expired and has not been renewed since the case has been dismissed by the Hon''ble Calcutta High Court. The amount has been included in Claims against the Company not acknowledged as debts as at 31 March 2017 and 31 March 2016.
(*) The Hon''ble Delhi High Court by its order dated 10 September 2015 set aside the order of Policy Relaxation Committee (PRC) with liberty to the petitioner to file a representation before the PRC. The respondents were directed to pass a reasoned order after giving the opportunity of hearing. The matter was heard by PRC and PRC by its order dated 13 October 2015 rejected the prayer of petitioner. Being aggrieved by PRC''s order the company filed writ application before Division Bench of Delhi High Court. After prolonged hearing the bench by its order dated 03 April 2017 allowed the writ petition and set aside the order of PRC and directed PRC interalia to reconsider its order dated 13 October 2015 in the light of observation made by the Division Bench.
3. Segment reporting- Information pursuant to Primary Business segment
The Company is primarily engaged in business of home appliances and engineering components. Accordingly the Company considers the above business segment as the primary segment. Segment revenue, segment result, segment asset and segment liabilities include the respective amount identifiable to each of the segments as also amounts allocated on reasonable basis. The expenses, which are not directly relatable to the business segment, are shown as unallocable corporate cost and grouped as "Unallocated". Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities and are grouped as "Unallocated".
There is no geographical segment identified by the Company.
4. Related party transactions
The Company has the following related parties in accordance with Accounting Standard 18 "Related Party Disclosures".
Investor Company : IFB Automotive Private Limited
Subsidiary Company : Trishan Metals Private Limited (w.e.f. 11 July 2016)
Companies that have a IFB Agro Industries Limited, Travel Systems Limited, Thai Automotive and
member(s) of KMP in Appliances Limited, Global Automotive and Appliances Limited, IFB Global
common : Limited
Company over which a KMP IFB Appliances Limited is able to exercise significant influence :
Enterprise over which a Anjali foundation
relative of KMP is able to exercise significant influence :
Key Management Personnel Mr. Bijon Nag, Executive Chairman
(KMP) : Mr. Bikram Nag, Joint Executive Chairman and Managing Director
Mr. Sudam Maitra, Deputy Managing Director Mr. Prabir Chatterjee, Director and CFO Mr. A K Nag, President
Mr. Rahul Choudhary, Vice President, Corporate affairs and banking
Mr. Rajshankar Ray, CEO, Home Appliances Division
Mr. A.S. Negi, National Service Head , Home Appliances Division
Mr. Jayanta Chanda , Service Accounts Head, Home Appliance Division
Mr. Partha Sen, CEO, Engineering Division
Mr. K.R.Krishna Prasad, CEO, Bangalore Engineering Factory.
Mr. B.M. Shetye, Vice President, Sustainability, Home Appliances Division
Mr. G. Ray Chowdhury, Company Secretary
Mr. Susanta Das, Head of Personnel and Administration
Mr. Uma Shankar Ghosh Dastidar, Head - Taxation
Mr. Arup Das, Head Marketing , Engineering Division
Mr. Diptanil Saha, GM, Corporate Affairs
Mr. Sukhdev Nag, Business Head, Home Appliances Division, South
Mr. T.R. Ramesh, Business Head, Home Appliances Division, East
Mr. Ranjan Mohan Mathur, , Business Head, Home Appliances Division, North
Mr. Soumitra Goswami, GM, Accounts and Finance
Mr. Ashok Hazra, AGM - Internal Audit
Mr. R. Anand, Head, Motor Division
The above figures does not include cash balance held in foreign currency.
5. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification.
For and on behalf of the Board of Directors of IFB Industries Limited
Joint Executive Chairman and Managing Director Bikram Nag
Director Dr. Rathindra Nath Mitra
Director and Chief Financial Officer Prabir Chatterjee
Company Secretary G. Ray Chowdhury
Kolkata 26 May 2017
Mar 31, 2016
1. Estate, Taluka Salcete, District South Goa and registration sub
district ILHAS in the state of Goa containing by admeasuring 48,695
square meters or thereabout.
(&) For sanction of capex letter of credit amounting to Rs 1,000 lacs
by Standard Chartered Bank, following charge have been created:
First charge on existing movable fixed assets of Goa (Verna) plant
(except exclusive charge to term lenders) of the company including
without limitations its movable plant and machinery, furniture and
fittings, equipment, computer hardware, computer software, machinery
spares, tools and accessories and other movables, etc. stored or to be
stored at the company''s godown or premises situated at Plot no L-1,
Verna Electronic City, Verna Industrial Estate, Goa - 403 722 or
wherever else the same may be.
(A) For sanction of working capital facility amounting to Rs. 9,000
lacs by Standard Chartered Bank, following charge have been created:
(i) First charge on all current assets, both present and future.
(ii) First charge on existing movable fixed assets of Goa (Verna) plant
(except exclusive charge to term lenders).
(iii) Second charge on the leasehold land and building of Goa (Verna)
unit on all that piece and parcel of non-agricultural land bearing at
No. L1 situated within the village panchayat of Nagoa, Verna Plateau,
Verna Industrial Estate, Taluka Salcete, District South Goa and
registration sub district lLHAS in the state of Goa containing by
admeasuring 48,695 square meters or thereabout.
(*) For sanction of credit facilities amounting to Rs. 3,500 lacs by
DBS Bank Ltd., following charge have been created :
(i) Hypothecation by way of first pari passu and floating charge over
goods being finished goods, semi-finished goods, stocks of
raw-materials, work-in-process located at various factories /
warehouses / godowns of the company and whether in transit or lying at
any other place and hypothecation by way of first pari passu and
floating charge over the company''s present and future book debts,
outstanding monies receivables, claims, bills, contracts, engagements,
securities, investments, rights and assets.
(ii) Hypothecation by way of exclusive charge over all present and
future movable fixed assets of the engineering division of the Company
including without limitation its movable plant and machinery, furniture
and fittings, equipment, computer hardware, computer software,
machinery spares, tools and accessories and other movables etc. stored
or to be stored at Company''s godowns or premises situated at 14,
Taratolla Road, Kolkata and 16/17, Visveswaraiah Industrial Estate,
Whitefield Road, Bangalore - 560048 (Engineering Division) or wherever
else the same may be.
2. Leases
The Company is obligated under cancellable leases for residential,
office premises, warehouses, etc. Total rental expense under
cancellable operating lease amounted to Rs. 1,305 Lacs (31 March 2015 :
Rs. 898 Lacs).
3. Changes in Accounting Policy and Accounting Estimates
Pursuant to the notification of Schedule II to the Companies Act, 2013,
with effect from 1 April 2014, the Company had changed the policy of
providing depreciation of buildings from written down value (WDV)
method to straight line method (SLM) thereby resulting in a surplus of
Rs. 844 Lacs for the year ended 31 March 2015.
Pursuant to the transition provisions prescribed in Schedule II to the
Companies Act, 2013 and its subsequent amendment by Ministry of
Corporate Affairs, the Company charged off the carrying value of assets
net of residual value, where the remaining useful life of the asset was
determined to be nil as on 1 April 2014 to the Statement of Profit and
Loss. Thereby for such assets, the Company has charged an amount of Rs.
1,196 Lacs as depreciation in the Statement of Profit and Loss for the
year ended 31 March 2015.
As a result of change in estimated useful life as prescribed in
Schedule II of the Companies Act, 2013, the depreciation charge for the
year ended 31 March 2015 is higher by Rs. 1,496 Lacs.
4. Dues to Micro and Small Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an
office memorandum dated 26 August 2008 which recommends that the Micro
and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing
of the Memorandum in accordance with the ''Micro, Small and Medium
Enterprises Development Act, 2006'' (''the Act''). Accordingly, the
disclosure in respect of the amounts payable to such enterprises as at
31 March 2016 has been made in the financial statements based on
information received and available with the Company. A sum of Rs. 283
lacs is payable to Micro and Small Enterprises as at 31 March 2016 (31
March 2015 : Rs. 398 lacs). Further in view of the Management, the
impact of interest, if any, that may be payable in accordance with the
provisions of the Act is not expected to be material. The Company has
not received any claim for interest from any supplier as at the balance
sheet date.
5. Employee benefits
(a) Gratuity and leave encashment
The employees'' gratuity fund scheme, determined as post-employment
benefit, is managed through Insurance Companies under a defined benefit
plan. The present value of obligation is determined based on an
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation. The obligation for unfunded leave encashment
determined as other long-term benefit plan is recognized in the same
manner as gratuity.
(b) Provident Fund, Superannuation Fund and other defined contribution
schemes:
The company contributed Rs. 944 Lacs (31 March 2015 : Rs. 785 Lacs) to
defined contribution scheme (Provident Fund, superannuation fund and
others) during the year ended 31 March 2016.
6. Disclosure requirement for Derivatives Instruments
The Company uses foreign currency hedges to manage its risks associated
with foreign currency fluctuations relating to certain existing foreign
currency payables. The Company does not use derivative contracts for
trading or speculative purposes.
7. Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification.
Mar 31, 2015
1. Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all
equity shares rank equally with regard to dividends and share in the
Company's residual assets. The equity shares are entitled to receive
dividend as declared from time to time. The voting rights of an equity
shareholder on a poll (not on show of hands) are in proportion to its
share of the paid-up equity capital of the Company.
Voting rights cannot be exercised in respect of shares on which any
call or other sums presently payable have not been paid.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive the residual assets of the Company,
remaining after distribution of all preferential amounts in proportion
to the number of equity shares held.
(i) Exclusive charge on moveable fixed assets financed by the bank.
(ii) First charge on existing movable fixed assets of Goa (Verna) plant
(except exclusive charge to term lenders).
(iii) First and exclusive charge on the leasehold land and building of
Goa (Verna) unit on all that piece and parcel of non- agricultural land
bearing at No. LI situated within the village Panchayat of Nagoa, Verna
Plateau, Verna Industrial Estate,
Taluka Salcete, District South Goa and registration sub district
ILHAS in the state of Goa containing by admeasuring 48695 square meters
or thereabout and bounded as follows: On or towards the north: proposed
30 meters wide road, on or towards the south : open space reserved for
gardening, on or towards the east: proposed road of 25 meters wide, on
or towards the west: proposed road of 20 meters wide together with all
buildings and structures standing thereon or to be erected hereafter
and the plant and machinery attached to the earth or permanently
fastened to anything attached to the earth, both present and future.
(*) For sanction of working capital facility amounting to Rs. 9,000
lacs by Standard Chartered Bank, following securities have been
created:
(i) First charge on all current assets, both present and future.
(ii) First charge on existing movable fixed assets of Goa (Verna) plant
(except exclusive charge to term lenders).
(iii) Second charge on the leasehold land and building of Goa (Verna)
unit on all that piece and parcel of non-agricultural land bearing at
No. LI situated within the village Panchayat of Nagoa, Verna Plateau,
Verna Industrial Estate, Taluka Salcete, District South Goa and
registration sub district lLHAS in the state of Goa containing by
admeasuring 48695 square meters or thereabout and bounded as follows:
On or towards the north: proposed 30 meters wide road, on or towards
the south: open space reserved for gardening, on or towards the east:
proposed road of 25 meters wide, on or towards the west: proposed road
of 20 meters wide together with all buildings and structures standing
thereon or to be erected hereafter and the plant and machinery attached
to the earth or permanently fastened to anything attached to the earth,
both present and future.
(*) For sanction of working capital facility amounting to Rs. 3,500
lacs by DBS Bank Ltd., following securities have been created:
(i) Hypothecation by way of first pari passu and floating charge over
goods being finished goods, semi-finished goods, stocks of
raw-materials, work-in-process located at various factories /
warehouses godowns of the company and whether in transit or lying at
any other place and hypothecation by way of first pari passu and
floating charge over the company's present and future book debts,
outstanding monies receivables, claims, bills, contracts, engagements,
securities, investments, rights and assets.
(ii) Hypothecation by way of exclusive charge over all present and
future movable fixed assets of the engineering division of the Company
including without limitation its movable plant and machinery, furniture
and fittings, equipment, computer hardware, computer software,
machinery spares, tools and accessories and other movables etc. stored
or to be stored at Company's godowns or premises situated at 14,
Taratolla Road, Kolkata and 16/17, Visveswaraiah Industrial Estate,
Whitefield Road, Bangalore - 560048 (Engineering Division) or wherever
else the same may be.
2. Leases
The Company is obligated under cancellable leases for residential,
office premises, warehouses, etc. Total rental expense under
cancellable operating lease amounted to Rs. 898 Lacs (31 March 2014 :
Rs. 772 Lacs).
3. Changes in Accounting Policy and accounting estimates
Pursuant to the notification of Schedule II to the Companies Act, 2013,
with effect from 1 April 2014, the Company has changed the policy of
providing depreciation of buildings from written down value (WDV)
melhod to straight line method (SLM) thereby resulting in a surplus of
Rs. 844 Lacs for the year ended 31 March 2015.
Pursuant to the transition provisions prescribed in Schedule II to the
Companies Act, 2013 and its subsequent amendment by Ministry of
Corporate Affairs, the Company has an option to charge off the carrying
value of assets net of residual value, where the remaining useful life
of the asset was determined to be nil as on 1 April 2014 either to the
opening balance of retained earnings or to the Statement of Profit and
Loss. Thereby for such assets, the Company has charged an amount of Rs.
1,196 Lacs as depreciation in the Statement of Profit and Loss. If the
same is adjusted against the opening balance of retained earnings then
the profit before tax for the year would be Rs. 7,123 Lacs and profit
after tax would be Rs. 5,763 Lacs.
As a result of all the above stated changes the depreciation charge for
the year ended 31 March 2015 is higher by Rs. 1,496 Lacs.
4. Dues to Micro and Small Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an
office memorandum dated August 26, 2008 which recommends that the Micro
and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing
of the Memorandum in accordance with the 'Micro, Small and Medium
Enterprises Development Act, 2006' ('the Act'). Accordingly, the
disclosure in respect of the amounts payable to such enterprises as at
31 March 2015 has been made in the financial statements based on
information received and available with the Company. Further in view of
the Management, the impact of interest, if any, that may be payable in
accordance with the provisions of the Act is not expected to be
material. The Company has not received any claim for interest from any
supplier as at the balance sheet date.
5. Employee benefits
(a) Gratuity and leave encashment
The employee's gratuity fund scheme, determined as post-employment
benefit, is managed through Insurance Companies under a defined benefit
plan. The present value of obligation is determined based on an
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation. The obligation for unfunded leave encashment
determined as other long-term benefit plan is recognized in the same
manner as gratuity.
I. Percentage of each category of plan assets to the fair value of
plan assets as at 31 March 2015
The plan assets of the fund has been invested 100% (previous year 100%)
with the schemes of insurance companies.
II. Provident Fund, Superannuation Fund and other defined contribution
schemes:
The company contributed Rs. 785 Lacs (31 March 2014 : Rs. 642 Lacs) to
defined contribution scheme (Provident Fund, superannuation fund and
others) during the year ended 31 March 2015.
6 Contingent Liabilities : Rs. Lacs
31 March 2015 31 March 2014
i) Disputed sales tax matters,
excise matters, income tax
matters and 1,653 1,564
other matters contested in appeals.
(These disputes mostly relate to
arbitrary disallowances of claims of
the Company under various state laws,
which are under appeal. The
management is of the view that these
demands are not sustainable in law
and is hopeful of succeeding in appeals.)
ii) Other claims against the Company
not acknowledged as debts (#) 16 39
iii) Custom duty and interest obligation
for advance licenses (*) 681 -
(#) The Company obtained a bank guarantee of Rs. 16 lacs in connection
with the execution of a civil contract awarded by the State Health
Department, Government (Govt.) of West Bengal. Following a dispute, the
State Health Department, Govt. of West Bengal invoked the said Bank
Guarantees whereupon the Company challenged such invocation by way of a
writ petition before the Hon'ble Calcutta High Court. The Hon'ble High
Court allowed an interim order of injunction dated 22 May 2003
restraining the State Health Department not to give any effect to the
invocation of the guarantee till further order with the condition that
the guarantee shall be renewed from time to time. The bank guarantee
expired and has not been renewed since the case has been dismissed by
the Hon'ble Calcutta High Court. The amount has been included in
Claims against the Company not acknowledged as debts as at 31 March
2015 and 31 March 2014.
(*) Pursuant to direction from Directorate General of Foreign Trade
(DGFT) dated 24 February 2010, the period for fulfilment of export
obligations against 11 advance licenses was extended by 5 years with
effect from 29 September 2009 which is remaining outstanding as at 31
March 2015. The Company has filed an application on 9 September 2014
before the 'Policy Interpretation Committee', DGFT to clarify the
ambiguity regarding the date of fulfilment of export obligation.
Simultaneously the Company has also applied before the 'Policy
Relaxation Committee', DGFT, on 31 July 2014 for clubbing of the
referred advance licenses. The Company expects a favourable order from
DGFT.
7. Related party transactions
The Company has the following related parties in accordance with
Accounting Standard 18 "Related Party Disclosures".
Investor Company : IFB Automotive Private Limited.
Key Management Personnel (KMP) : Mr. Bijon Nag, Executive Chairman
Mr. Bikram Nag, joint Executive
Chairman and Managing Director
Mr. Sudam Maitra,
Deputy Managing Director
Mr. Prabir Chatterjee,
Director and CFO
Mr. Gautam Dasgupta, Mentor
Mr. A K Nag, President
Mr. Rajshankar Ray, CEO,
Home Appliances Division
Mr. A.S. Negl,
National Service Head,
Home Appliances Division
Mr. Jayanta Chanda,
Service Accounts Head,
Home Appliance Division
Mr. Govindaraj Collegal,
Head, Goafactory
Mr. Partha Sen, CEO,
Kolkata Engineering Factory
Mr. K.R.Krishna Prasad, CEO,
Bangalore Engineering Factory
Mr. B.M. Shetye, Vice President,
R&D, Home Appliances Division
Mr. G. Ray Chowdhury,
Company Secretary
Mr. Susanta Das,
Head of Personnel and
Administration
Mr. Uma Shankar Ghosh Dastidar,
Head - Taxation
Mr. Arup Das, Head Marketing,
Engineering Division
Mr. Diptanil Saha, GM,
Corporate Affairs
Mr. Sukhdev Nag, Regional Manager,
Home Appliances Division, South
Mr.T.R. Ramesh, Regional Manager,
Home Appliances Division, East
Mr. Ranjan Mohan Mathur,
Regional Manager, North
Mr. Soumitra Goswami, DGM,
Accounts and Finance
Mr. Ashok Hazra, AGM - Accounts,
Bangalore Engineering Factory
Mr. R. Anand, Head, Motor Division
Companies that have a member(s) IFB Agro Industries Limited,
of KMP in common : Travel Systems Limited, Thai
Automotive and Appliances Limited,
Global Automotive and Appliances
Limited, IFB Global Limited.
Company over which a KMP is able IFB Appliances Limited.
to exercise significant Influence :
8. Previous year's figures have been regrouped/reclassified wherever
necessary to correspond with the current year's classification.
Mar 31, 2013
1. Leases
The Company is obligated under cancellable leases for residential, ofce
premises, warehouses, etc. Total rental expense under cancellable
operating lease amounted to Rs. 740 Lacs (31 March 2012: Rs. 635 Lacs).
2. Dues to Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an ofce
memorandum dated August 26, 2008 which recommends that the Micro and
Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated afer fling
of the Memorandum in accordance with the ''Micro, Small and Medium
Enterprises Development Act, 2006'' (''the Act''). Accordingly, the
disclosure in respect of the amounts payable to such enterprises as at
31 March 2013 has been made in the fnancial statements based on
information received and available with the Company. Further in view of
the Management, the impact of interest, if any, that may be payable in
accordance with the provisions of the Act is not expected to be
material. The Company has not received any claim for interest from any
supplier as at the balance sheet date.
3. Employee benefts
(a) Gratuity and leave encashment
The employee''s gratuity fund scheme, determined as post-employment
beneft, is managed through Insurance Companies under a defned beneft
plan. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee beneft
entitlement and measures each unit separately to build up the fnal
obligation. The obligation for unfunded leave encashment determined as
other long term beneft plan is recognized in the same manner as
gratuity.
The following tables sets out the status of the gratuity plans and
leave encashment under AS 15 - Employee benefts
4. Commitments and contingent liabilities:
Rs. Lacs
31 March
2013 31 March 2012
i) Outstanding capital commitments
for tangible assets 3,037 2,258
ii) Outstanding capital commitments
for intangible assets 893 17
iii) Disputed sales tax maters,
excise maters, income tax maters
and other 1,445 689
maters contested in appeals
(These disputes mostly relate to arbitrary disallowances of claims of
the Company under various state laws, which are under appeal. The
management is of the view that these demands are not sustainable in law
and is hopeful of succeeding in appeals.)
iv) Other claims against the Company not acknowledged as debts (#) 116
76
v) Corporate guarantee to bank on behalf of associate company - 100
(#) The Company obtained a bank guarantee of Rs. 16 lacs in connection
with execution of a civil contract awarded by State Health Department,
Government (Govt.) of West Bengal. Following a dispute, the State
Health Department, Govt. of West Bengal invoked the said Bank
Guarantees whereupon the Company challenged such invocation by way of a
writ petition before the Hon''ble Calcuta High Court. The Hon''ble High
Court allowed an interim order of injunction dated 22 May 2003
restraining the respondent not to give any efect to the invocation of
the guarantee till further order with the condition that the guarantee
shall be renewed from time to time. The bank guarantee expired and has
not been renewed since the case has been dismissed by the Hon''ble
Calcuta High Court. The amount has been included in Claims against the
Company not acknowledged as debts as at 31 March 2013 and 31 March
2012.
5. Related party transactions
The Company has the following related parties in accordance with
Accounting Standard 18 "Related Party Disclosures" notifed under
Section 211 (3C) of the Companies Act, 1956. Investor Company: IFB
Automotive Private Limited
Associate Company: IFB Agro Industries Limited, Travel Systems Limited,
Thai Automotive and
Appliances Limited, Global Automotive and Appliances Limited, IFB
Appliances Limited
Key Management Personnel: Mr. Bion Nag, Executive Chairman
Mr. Bikram Nag, Joint Executive Chairman and Managing Director
Mr. Prabir Chaterjee, Additional Director and CFO
Mr. Dipak Mitra, President - Legal
Mr. A. K. Nag, Sr. Vice President, Corporate Afairs
Mr. Gautam Dasgupta, Mentor
Mr. Rajshankar Ray, CEO, Home Appliances
Mr. A.S. Negi, National Service Head, Home Appliances
Mr. Partha Sen, CEO, Kolkata Engineering Factory
Mr. K.R.Krishna Prasad, CEO, Bangalore Engineering Factory
Mr. B.M. Shetye, Vice President, R & D, Home Appliances
Mr. Dipak Sen, Vice President, Corporate Afairs & Strategies
Mr. G. Ray Chowdhury Company Secretary
Mr. Susanta Das, Head of Personnel and Administration
Mr. Uma Shankar Ghosh Dastidar, Head - Taxation
Mr. Sukhdev Nag, Product Head, Microwave Ovens, Dishwasher
Mr. Arup Das, Head Marketing , Engineering
Mr. Diptanil Saha, DGM, Corporate Afairs
Mr. T.R. Ramesh, Regional Manager, East
Mr. Ranjan Mohan Mathur, Regional Manager, North
Mr. Jayanta Chanda, Finance Head, Goa Factory
Mr. Soumitra Goswami, DGM, Accounts and Finance
Mr. Ashok Hazra, AGM - Accounts, Bangalore Engineering
Mr. Ritesh Agarwal, Deputy Company Secretary & Head Banking
6. Disclosure requirement for Derivatives Instruments
The Company uses foreign currency hedges to manage its risks associated
with foreign currency fuctuations relating to certain existing foreign
currency payables. The Company does not use derivative contracts for
trading or speculative purposes.
7. The Company has established a comprehensive system of maintenance
of information and documents as required by the transfer pricing
legislation under Section 92-92F and Specifed Domestic Transactions''
(SDT) under Section 92BA of the Income Tax Act 1961. Since the law
requires existence of such information and documentation to be
contemporaneous in nature, the Company is in the process of updating
the documentation for the international transactions and specifed
domestic transaction entered into with the associated enterprises
during the fnancial year. The management is of the opinion that its
international transactions with associated enterprises are at arm''s
length so that the aforesaid legislation will not have any impact on
the fnancial statements, particularly on the amount of tax expense and
that of provision for taxation to be recognised.
8. Previous year''s fgures have been regrouped/ reclassifed wherever
necessary to correspond with the current year''s classifcation.
Mar 31, 2012
A. Rights, preferences and restrictions attached to equity shares
The company has only class of equity shares having par value of Rs. 10
per share. Each holder of equity shares is entitled to one vote per
share other than the partly paid shares which have been forfeited.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company.
The distribution will be in proportion to the number of equity shares
held by the shareholders.
b. Shares issued under Employees Stock Purchase Scheme
During the year the Company has issued 61,900 (31 March 2011: 701,850)
fully paid equity shares of Rs. 10 each to its employees under IFB
Industries Limited - Employees Stock Purchase Scheme 2008 at premium of
Rs. 5 per share.
Provision for warranty
The Company warrants that their products will perform in all material
respects in accordance with the Company's standard specifications in
effect at the time of delivery of the products to the customers for the
warranty period. Accordingly based on specific warranties, claims and
claim history the Company provides for warranty claims. The movements
in the provision for warranty cost is as follows :
Note : (a) R and D denotes Research and Development
(b) For sanction of import letter of credit amounting to Rs 3,000 lacs
for import of capital goods by Standard Chartered Bank, following
securities have been created :
(i) First charge on all present and future movable fixed assets of the
Company situated at Goa Plant (except exclusive charge to term
lenders).
(ii) Exclusive charge on plant & machinery financed by the Bank
including movable plant & machinery, furniture & fittings, equipments,
computer hardware & software, machinery spares tools, accessories and
other movables.
(iii) First and exclusive charge over company's immovable property
i.e.., non-agricultural land bearing at No. LI SIT within the village
panchayat of Nago, Verna Plateau, Verna Industrial Estate, Taluka
Salcete, District South Goa (Goa) admeasuring 48695 square meters
together with all buildings and structures thereon or to be thereon and
all plant and machinery installed thereon or to be thereon.
(c) For sanction of import letter of credit amounting to Rs 3,000 lacs
for raw materials and other trade related goods by Standard Chartered
Bank, following securities have been created:
(i) First charge on all current assets, both present and future.
(ii) Second charge on existing movable fixed assets of Goa unit (except
exclusive charge to term lenders) and company's immovable properties
i.e., non-agricultural land bearing at No. LI SIT within the village
panchayat of Nago, Verna Plateau, Verna Industrial Estate, Taluka
Salcete, District South Goa (Goa) admeasuring 48695 square meters
together with all buildings and structures thereon or to be thereon and
all plant and machinery installed thereon or to be thereon.
(*) Includes semi finished process components and semi finished tools
amounting to Rs. 533 lacs (31 March, 2011 : Rs. 672 Lacs) and semi
finished motors amounting to Rs. 69 lacs (31 March, 2011: Rs. 119
Lacs).
The company has entered into a mutual compromise settlement in respect
of one of the past claims on the company, pertaining to a business
discontinued since year 1999-2000. As per the terms of settlement, the
company has paid a sum of Rs. 150 lacs (31 March 2011: Nil).
This amount has been recognized as an exceptional item for the year.
1. Impairment
The Company has reviewed potential generation of economic benefits from
its cash generating units and concluded that there are no further
impairments during the year.
2. Dues to Micro, Small and Medium Enterprises
Information as required to be disclosed under the Micro, Small and
Medium Enterprises Development Act, 2006 has been determined to the
extent such parties have been identified on the basis of information
available with the Company.
3. Employee Benefits
(a) Gratuity and Leave Encashment
The employee's gratuity fund scheme, determined as post employment
benefit, is managed through Insurance Companies under a defined benefit
plan. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation. The obligation for unfunded leave encashment determined as
other long term benefit plan is recognized in the same manner as
gratuity.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary.
VI. Percentage of each category of plan assets to the fair value of
plan assets as at March 31,2012
The plan assets of the trust has been invested 100% (previous year
100%) with the schemes of insurance companies
(b) Provident Fund and Superannuation Fund:
In addition to the above benefits, employee of the company receives
benefits from provident fund and superannuation fund, a defined
contribution plan. The employee and employer each make monthly
contribution to Government's Provident Fund equal to 12% of the covered
employee's eligible salary. The company contributed Rs. 467 lacs
(Previous year Rs. 352 lacs) to defined contribution scheme during the
year ended March 31, 2012.
4. Commitments and contingencies : Rs.' lacs
March 31,2012 March 31, 2011
i) Outstanding capital
commitments for tangible
assets 2,258 1,276
ii) Outstanding capital
commitments for intangible
assets 17 18
iii) Disputed sales tax
matters, excise duties,
income tax contested in
689 484
appeals (These
disputes mostly relate
to arbitrary
disallowances of
claims of the Company under
various state laws, which
are under appeal.
The management is of the
view that these demands
are not sustainable in
law and is hopeful of
succeeding in appeals.)
iv) Indemnity bonds executed
in favour of excise and customs 150 100
v) Guarantees given by the
bankers on behalf of the Company 118 61
vi) Letter of credits 226 538
vii) Corporate Guarantee for
Advance licenses 603 1,498
viii) Claims against the Company
not acknowledged as debts (#)(@) 76 470
ix) Corporate Guarantee to
bank on behalf of Associate
Company 100 100
(#) The Company obtained a bank guarantee of Rs. 16 lacs in connection
with execution of a civil contract awarded by State Health Department,
Government (Govt.) of West Bengal. Following a dispute the Health
Department, Govt. of West Bengal invoked the said Bank Guarantees
whereupon the Company challenged such invocation by way of a writ
petition before the Hon'ble Calcutta High Court. The Hon'ble High
Court was pleased to allow interim order of injunction dated May 22,
2003 restraining the respondent not to give any effect to the
invocation of guarantees till further order with the condition that the
guarantee shall be renewed from time to time. The bank guarantee
expired and has not been renewed since the case has been dismissed by
the Hon'ble Calcutta High Court. The amount has been included in Claims
against the Company not acknowledged as debts as at 31st March 2012 and
31st March 2011.
(@) As at 31st March 2011, claims against the company not acknowledged
as debts included a claim relating to material rejection amounting to
Rs. 454 lacs. During the year the company has entered into a mutual
compromise settlement wherein the Company has settled and paid an
amount of Rs. 150 lacs as settlement amount. The same has been
recognized as an exceptional item for the year ended 31st March 2012.
(figures for the previous year, March 31, 2011, have been shown below
each item)
Segment revenue, segment result, segment asset and segment liabilities
include the respective amount identifiable to each of the segments as
also amounts allocated on reasonable basis. The expenses, which are not
directly relatable to the business segment, are shown as unallowable
corporate cost and grouped as "Unallocated". Assets and liabilities
that cannot be allocated between the segments are shown as unallowable
corporate assets and liabilities and are grouped as "Unallocated".
5. Disclosure requirement for Derivatives Instruments
The Company uses foreign currency hedges to manage its risks associated
with foreign currency fluctuations relating to certain existing foreign
currency payables. The Company does not use derivative contracts for
trading or speculative purposes.
6. The Revised Schedule-VI has become effective from 1 April, 2011
for the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped/reclassified
wherever necessary to correspond with the current year's
classification.
Mar 31, 2011
1. Share Capital
During the year the Company has issued 701,850 (previous year 891,599)
fully paid equity shares of Rs. 10 each to its employees under IFB
Industries Limited - Employees Stock Purchase Scheme 2008 of which
701,850 (previous year 812,199) shares were issued at premium of Rs 5
per share.
2. Impairment
The Company has reviewed potential generation of economic benefits from
its cash generating units and concluded that there is no further
impairments during the year.
3. Dues to Micro, Small and Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Companies
owes dues, which are outstanding for more than 45 days as at March 31,
2011 except for the details mentioned below. Information as required to
be disclosed under the Micro, Small and Medium Enterprises Development
Act, 2006 has been determined to the extent such parties have been
identified on the basis of information available with the Company.
4. Employee Benefits
(a) Gratuity and Leave Encashment
The employee's gratuity fund scheme, determined as post employment
benefit, is managed through Insurance Companies under a defined benefit
plan. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation. The obligation for unfunded leave encashment determined as
other long term benefit plan is recognized in the same manner as
gratuity.
VI. Percentage of each category of plan assets to their fair value of
plan assets as at March 31,2011
The plan assets of the trust has been invested 100% (previous year
100%) with the schemes of insurance companies.
(b) Provident Fund and Superannuation Fund :
In addition to the above benefits, employee of the company receives
benefits from provident fund and superannuation fund, a defined
contribution plan. The employee and employer each make monthly
contribution to Government's Provident Fund equal to 12% of the covered
employee's eligible salary. The company contributed Rs. 35,220 thousand
(Previous year Rs. 32,134 thousand) to defined contribution scheme
during the year ended March 31, 2011.
5. Commitments and contingencies:
March 31,2011 March 31, 2010
(Rs.'000) (Rs.'000)
i) Outstanding capital commitments 129,366 302,479
ii) Disputed sales tax matters, excise
duties contested in appeals 48,421 46,608
(These disputes mostly relate to
arbitrary disallowances of claims of the
Company under various state laws, which are
under appeal. The management is of the view
that these demands are not sustainable in
law and is hopeful of succeeding in appeals.)
iii) Indemnity bonds executed in favour
of excise and customs 10,000
iv) Guarantees given by the bankers on
behalf of the CompanyO(#) 6,780 21,019
v) Letter of credits 53,772
vi) Corporate Guarantee for Advance
licenses 149,844 149,844
vii) Claims against the Company not
acknowledged as debts (#)(@) 47,004 45,958
viii) Corporate Guarantee to bank on
behalf of Associate Company 10,000
6 At 31st March 2010, bank guarantees includes four bank guarantees of
Rs 13,734 thousand in favour of DGFT in respect of EPCG licenses. Such
Bank guarantees were invoked by the beneficiaries and the company has
disputed the claim by way of writ petition filed before the Calcutta
High Court. The Hon'ble High Court had earlier granted an order of
status quo on September 18, 2003 and since extended from time to time.
In the meantime, the said guarantees expired on September 30,
2003.Thereafter the Hon'ble High Court by an Order dated May 11, 2010
directed the company to renew the said guarantees The said order dated
May 11, 2010 was modified by a further order dated May 19, 2010
directing the company to deposit the aggregate amount of guarantees in
the form of fixed deposits in favour of The Registrar/Calcutta High
Court, original Side to secure possible claim of DGFT in place of old
bank guarantees. The company has made the fixed deposit pursuant to the
said order amounting to Rs 13,800 thousands which have been lodged by
the Company's banker Standard Chartered Bank with the DGFT.
At 31st March 2010, the Company had an outstanding provision of Rs
81,880 thousands for customs duty payable to DGFT due to non-
fulfillment of export obligations under Advance License and EPCG
Schemes. Pursuant to direction from the DGFT dated 24th February 2010
the period for fulfillment of export obligations against 11 Advance
Licenses was extended by 5 years with effect from 29th September 2009.
Moreover vide direction from DGFT dated 23rd February 2011, the Company
got an extension for fulfillment of export obligations under 5 EPCG
Licenses for a period of 12 years from 30th January 2009 to 29th
January 2021. Consequent to such directions from DGFT, the Company has
written back the provision of Rs 81,880 thousand and recognized the
same as Other Income for the year ended 31st March 2011.
(#) At 31st March 2010, Guarantees given by the bankers on behalf of
the Company included a bank guarantee of Rs 1,563 thousand obtained in
connection with execution of a civil contract awarded by State Health
Department, Govt, of West Bengal. Following a dispute the Health
Department, Govt, of West Bengal invoked the said Bank Guarantees
whereupon, the Company challenged such invocation by way of a writ
petition before the Hon'ble Calcutta High Court. The Hon'ble High Court
was pleased to allow interim order of injunction dated May 22, 2003
restraining the respondent not to give any effect to the invocation of
guarantees till further order with the condition that the guarantee
shall be renewed from time to time. The bank guarantee expired and has
not been renewed since the case has been dismissed by the Hon'ble
Calcutta High Court. The amount has been included in Claims against the
Company not acknowledged as debts as at 31st March 2011.
(@) Includes claim relating to material rejection amounting to Rs.
45,441 thousands (Previous year Rs. 45,958 thousand). The management is
of the opinion that the claim is not tenable.
7. Previous year's figures have been regrouped and rearranged
wherever necessary.
Mar 31, 2010
1. Share Capital
During the year the Company has issued 5,000,000 fully paid equity
shares of Rs. 10 each at par on preferential basis to the promoters of
the Company as per the order dated September 11, 2009 of the Board for
Financial Reconstruction (BIFR) under Sick Industrial Companies
(Special Provision) Act 1985, as amended (SICA). The Company has also
issued 891,599 fully paid equity shares of Rs.10 each to its employees
under IFB Industries Limited - Employees Stock Purchase Scheme 2008 of
which 812,199 shares were issued at premium of Rs. 5 per share.
The Company has redeemed 16,000,000 5% cumulative redeemable preference
shares of Rs. 10 each out of profits of the Company and consequently a
sum of Rs. 160,000 thousand equal to the nominal amount of shares
redeemed, has been transferred to Capital Redemption Reserve Account.
2. Impairment
The Company has reviewed potential generation of economic benefits from
its cash generating units and concluded that there is no further
impairments during the year.
3. Dues to Micro, Small and Medium Enterprises
There are no Micro, Small and Medium Enterprises, to whom the Companies
owes dues, which are outstanding for more than 45 days as at March 31,
2010 except for the details mentioned below. Information as required to
be disclosed under the Micro, Small and Medium Enterprises Development
Act, 2006 has been determined to the extent such parties have been
identified on the basis of information available with the Company.
4. Employee Benefits
(a) Gratuity and Leave Encashment
The employees gratuity fund scheme, determined as post employment
benefit, is managed through Insurance Companies under a defined benefit
plan. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation. The obligation for unfunded leave encashment determined as
other long term benefit plan is recognized in the same manner as
gratuity.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary.
VI. Percentage of each category of plan assets to their fair value of
plan assets as at March 31, 2010
The gratuity fund administered and managed by Aviva Life Insurance has
invested 35% (previous year 64%) in Government of India Securities, 32%
(previous year 22%) in Equities, 20% (previous year 9%) in Corporate
Bonds and balance 13% (previous year 5%) in Money market investment.
The Company has not received any break-up of the compositions of
investment by category with respect to Gratuity fund administered and
managed by Life Insurance Corporation of India and hence disclosure
required for compositions of investment for plan assets under
Accounting Standard 15 on Employee Benefits have not been given to that
extent.
(b) Provident Fund and Superannuation Fund :
In addition to the above benefits, employee of the company receives
benefits from provident fund and superannuation fund, a defined
contribution plan. The employee and employer each make monthly
contribution to Governments Provident Fund equal to 12% of the covered
employees eligible salary. The company contributed Rs. 32,134 thousand
(Previous year Rs. 27,705 thousand) to defined contribution scheme
during the year ended March 31, 2010.
5. Related party transactions
The Company has the following related parties in accordance with
Accounting Standard 18 issued by the Institute of Chartered Accountants
of India :
Associate Companies:
IFB Agro Industries Limited, Travel Systems Private Limited CPL
Projects Limited
Investor Company: IFB Automotive Private Limited
Key Management Personnel:
Mr. Bijon Nag, Executive Chairman
Mr. Bikram Nag, Joint Executive Chairman and Managing Director
Mr. Gautam Dasgupta, President & CEO
Mr. Dipak Mitra, President- Legal
Mr. A K Nag, Sr. Vice President, Corporate Affairs
Mr. S Bhattacharya, Chief Financial Officer
Mr. Indroneel Goho, Vice President - Finance
Mr. B.M. Shetye, Vice President
Mr. P Chatterjee, Vice President - Finance
Mr. Siddhartha Chatterjee, Unit Head Engineering
Mr. G. Ray Chowdhury, Company Secretary
Mr. Rajshankar Ray, Vice president- Sales
Mr. A.S. Negi, Vice President
Mr. B.D. Jung, President R&D
Mr. T.R. Ramesh, Regional Manager West
Mr. Sukhdev Nag, Regional Accountant South
Mr. Jayanta Chanda, Finance Head, Goa Factory
Mr. Ranjan Mohan Mathur, Regional Manager North
Mr. Arup Das, Senior Manager
6. Previous years figures have been regrouped and rearranged
wherever necessary.
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