DIRECTORS' REPORT Your Directors have pleasure in presenting the 51st Annual Report and Accounts for the year ended 31st March, 2015. OPERATIONS During the financial year ended 31st March, 2015, the net profit after tax of the company has increased by 27% to Rs.2,614 lacs, as compared to previous year's net profit after tax of Rs. 2,052 lacs, although the turnover of the Company increased marginally at Rs. 762 crores as compared to Rs. 736 crores of the previous year. DIVIDEND The Directors are pleased to recommend a dividend of Rs.2/-[20%] per equity share for the financial year ended 31st March, 2015 and a special dividend e.g. Re. 1/- [10%] per share on occasion of the Company's Golden Jubilee Year. FUTURE OUTLOOK Overall, global growth is expected to rise moderately to 3 percent in 2015-16 and average about 3.3 percent through 2017. High-income countries are likely to see growth of 2.2 percent during 2015-17, up from 1.8 percent in 2014, on the back of gradually recovering labour markets, fiscal consolidation, and still-low financing costs. India is likely to emerge as the fastest growing economy by clocking a growth rate of 7.5 percent in FY 2015-16 and 7.7 percent in 2016-17 on the back of recent policy initiatives, pick-up in investments and lower oil prices. The various initiatives being proposed by the Government such as labour reforms and GST will help boost investments in the Indian economy. The Government's launch of Swachh Bharat Mission, Smart Cities and National Rural Drinking Water Programme aims to provide drinking water and sanitation to rural and urban regions. These developments are expected to result in more opportunities for a company like yours. Also, with the projected growth in GDP of 7.5 percent, the water demand of various industries, institutions, communities and homes will continue to rise. With stricter enforcement of discharge norms and reduced water foot print, waste water treatment, recycle and zero liquid discharge plants will be in greater demand as they form an important part of the agenda for sustainable growth. Thus the future of the environment management industry, in which your Company is a prominent player, appears optimistic. Your Company expects to benefit from the above mentioned growth initiatives as it offers advanced products and services for total environment solutions. We expect to increase our market share and improve profitability in the resurgent economic scenario. Besides this, your Company's increased thrust in the international market will help strengthen its global position and we expect the share of international business in the overall turnover of the Company to go up. FINANCIAL RESOURCES Fixed Deposits The Company discontinued accepting Fixed Deposits from Public and shareholders in the previous year. The Company has not accepted deposit from the public falling within the ambit of section 73 of the Companies Act 2013. and The Companies (Acceptance of Deposits) Rules, 2014 Particulars of Loans, Guarantees or Investments. Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Employees' Stock Option Schemes The details of Employees' Stock Option Schemes ESOS -2001, ESOS - 2003, ESOS 2005 and ESOS 2008 as required to be given under SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, are given in the Report on Corporate Governance. SUBSIDIARY COMPANIES Aqua Investments (India) Ltd. and Water care Investments (India) Ltd. During the year ended 31st March, 2015, the Subsidiary companies M/s.Aqua Investments (India) Limited posted profit of Rs. 27.72 lacs compared to Rs. 2.12 lacs of the previous year and M/s. Watercare Investments (India) Ltd. posted profit of Rs.8.27 lacs compared to Rs.7.85 lacs of the previous year. Ion Exchange Enviro Farms Limited (IEEFL) During the year under review, company clocked a turnover of Rs. 56.80 Lacs as against Rs.106.69 Lacs in the previous year. The farm production was adversly attested due to vagaries of nature. The Company had approached SEBI to facilitate modalities of compliance of "SEBI Collective Investments Scheme (CIS) Regulations 1999". The company has submitted required documentation to SEBI and awaits direction. Ion Exchange Infrastructure Limited The Company achieved turnover of Rs. 618.05 lacs as compared to Rs. 1,474.16 lacs for the previous year. The Company incurred a loss of Rs.400.15 lacs compared to loss of Rs. 96.91 lacs for the previous year. The performance of the company was affected mainly due to continued slow down in economic conditions which resulted in delay in finalization of large infrastructure projects. The Company has been established with a view to undertake projects for intake water, water treatment, distribution and waste management on lump sum turn key basis. Ion Exchange Asia Pacific Pte Ltd., Singapore and Ion Exchange Asia Pacific (Thailand) Ltd., Thailand The Company achieved a consolidated turnover of Rs.3,183.72 lacs for the year under review and has registered a growth of 67% over previous year. The performance of the company improved and it has achieved financial stability during the year under review. Thailand subsidiary has maintained its focus on petroleum, power and sugar segments and also has increased its presence in chemical business in Thailand and neighbouring countries. IEI Environmental Management [M] SDN.BHD, Malaysia The Company achieved a turnover of Rs.109.56 lacs for the year under review. The Company's main activity is trading in water filtration equipments, water chemicals, resins and taking up projects of installing water filtration plants of any nature. The Company has been established with a view of facilitating operations in Malaysia and is a strategic investment which would be crucial for increasing the overall Exports to the country. Ion Exchange Environment Management (BD) Limited, Bangladesh The Company achieved a turnover of Rs. 864.45 lacs for the year under review showing improvement of 25% over the previous year. The company's main focus area is industrial water and waste water treatment. Company proposes to enter into infrastructure segment in nearfuture. Ion Exchange WTS (Bangladesh) Limited, Bangladesh The Company achieved a turnover of Rs. Nil for the year under review. The Company is currently not in operation. Ion Exchange & Co. LLC, Oman The Company achieved a turnover of Rs.1,908.66 lacs forthe year under review as against Rs.2118.23 lacs forthe previous year. However it registered a higher profit at Rs. 329 lacs as compared to Rs. 43 lacs for previous year. The company showed improvement over the previous year mainly due to cost optimization and improvement in operating efficiencies. The company has started looking into possible in infrastructure sector for drinking water and saintation projects. Ion Exchange LLC, USA The Company achieved a turnover of Rs.1,559.70 lacs for the year under review. This subsidiary is established to address the needs ofUS and Canada markets. The major focus continues to be marketing of Ion Exchange resins. Focus to promote speciality resins has helped in improving the Company's margins. Ion Exchange Projects and Engineering Limited The Company achieved a turnover of Rs.3,364.78 lacs forthe year under review. The Company has acquired the Project Division (covering domestic turnkey projects) of Ion Exchange (India) Limited, the holding company, with effect from 1st August 2012, vide Business Transfer Agreement dated 29th October 2012. Global Composites and Structurals Limited The Company achieved a turnover of Rs. 434.97 lacs for the year under review. The Company is in the business of providing integrated engineering services across the life cycle of a project and has expertise in the manufacture of RO pressure tubes and FRP tanks and electrical load distribution for water treatment industries. Ion Exchange Safic (Pty) Limited, South Africa The Company achieved a turnover of Rs. 273.04 lacs for the year under review. The Company is a Joint venture Company set up in South Africa with Safic (Pty) Ltd. which is part of Accentuate Group. Business volume did not pick up as anticipated due to local economic conditions in general and mining industry in particular. South Africa is a gaterway to other African countries and the company intends to increase its presence in other African countries in the coming year. Total Water Management Services (India) Ltd. The Company achieved a turnover of Rs.15.53 lacs forthe year under review. The Company is in the business of providing total water management solutions across the spectrum. Ion Exchange Purified Drinking Water Pvt Ltd. The Companywas incorporated on 25th September2013. The Company is set-up as a special purpose vehicle to implement PPP (Public Private Partnership) project for bottle water supply to Indian Railway Catering and Tourism Corporation Limited (IRCTC). The project is under advance stage of implementation. ASSOCIATE AND JOINT VENTURE COMPANIES A statement as required under Section 129 of the Companies Act, 1956, is attached tothe Annual Report in formAOC-1. DIRECTORS Mr. M. P. Patni, Director, retires by rotation and being eligible has offered himselffor re-appointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Committees. The evaluation was done after taking into consideration the criteria laid down by Nomination and Remuneration committee. The criteria for evaluation included participation in deliberations, specific contributions made, compliance with company's code of conduct, carrying out assigned tasks in timely and efficient manner and planning and formulating the company's strategies. The performance evaluation of Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman, non- independent Directors and the Board was carried out by Independent Directors. The Board of Directors expressed satisfaction with the evaluation process. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(3) (c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation given relating to material departures; (ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period ; (iii) proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities have been taken to the best of their knowledge ; (iv) the annual accounts have been prepared for the financial year ended 31st March, 2015 on a going concern basis. (v) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. (vi) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. NUMBER OF MEETINGS OF THE BOARD The details of number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report. WHISTLE BLOWER POLICY The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company (www.ionindia.com RELATED PARTY TRANSACTIONS All transactions entered with related parties forthe year under review were on arm's length basis and in the ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 are not attracted. Further, there are no material related party transactions under review with the promoters, directors or key managerial personnel. The Company has developed a related party transactions framework through standard operating procedures for the purpose of identification and monitoring ofsuch transactions. All related party transactions are placed before the audit committee as also to the board for approval. A statement giving details of all related party transactions are placed before the audit committee and board for review and approval on a quarterly basis. Suitable disclosure as required by accounting standards (AS-18) has been made in the notes to the financial statements. The policy on related party transactions as approved by the board of directors has been uploaded on the website of the company. The web link of the same has been provided in the corporate governance report. None of the directors has any pecuniary relationship or transactions vis a vis the Company. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule, 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respectofemployees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS. There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. QUALITY INITIATIVES The management of the company has always been committed to high quality products & services to its customers and ensuring safety to its customers and ensuring safety & occupation health of its employees. The integrated occupational health system, the Quality system namely ISO9001:2008 and Environmental Management system namely ISO14001:2004 have been adopted by all factories. During the year (2014-15), the chemical factory, International Division & Customer Support Division have been re-certified for the ISO9001-2008 quality systems. In addition, the chemical factory has been recertified for ISO14001-2004 and OHSAS18001-2007 standards. Apart from this, our Resin, SSD Goa, Hosur factories and the subsidiary namely Ion Exchange Projects and Engineering Ltd has successfully cleared their Surveillance audits. The resin facility at Ankleshwar has also obtained renewed prestigious certificates for various products and facilities. which are on follows : WQA-Gold seal certificate from the Water Quality Association - USA, Kosher Certificate from the Kashruth council of Canada, Halal Certificate from the Manjellis Ulama Indonesia, The Indonesia Counsil of Ulama, c GMP (Current Good Manufacturing Practice) and cGLP(Good Laboratory Practice) certificate from the Food and Drug Control Administration -Gujarat state. Our chemical factory obtained product certification of Halal from the Manjellis Ulama Indonesia, The Indonesia Counsil of Ulama. The company uses Balance Scorecard as a tool for implementing and monitoring the business strategies and action plans. Our company also undertakes regular quality improvements projects to continuously improve level of operational performance. AUDITORS The Statutory Auditors, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, resigned during the year. The Board of Directors at their meeting held on 16th October 2014 appointed M/s BSR & Co LLP, Chartered Accountants, as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants. Subsequently as provided under Companies Act 2013 shareholders approved the appointment of M/s BSR & Co LLP, Chartered Accountants as Statutory Auditors within three months by way of Postal Ballot. As provided under section 139 (8) they hold the office of Statutory Auditors till the conclusion of ensuing Annual General Meeting and are eligible for reappointment. Pursuant to the provisions of section 139 of the Companies Act 2013 and rules framed there under, it is proposed to appoint M/s BSR & Co LLP, Chartered Accountants as statutory auditors of the Company from the conclusion of forthcoming AGM till the conclusion of fifty sixth AGM to be held in the year 2020, subject to ratification of their appointment at every AGM. Branch Auditors The Branch Auditors, M/s Charantimath Associates appointed to conduct Audit of Ion Exchange Services [ A division of Ion Exchange (India) Limited], Bangaluru, hold office until the conclusion of this meeting and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act 2013 and rules framed there under, it is proposed to appoint M/s Charantimath Associates as branch auditors of the Company from the conclusion of forthcoming AGM till the conclusion ofnextAGM.. Cost Audit Pursuantto Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Chemicals Manufacturing activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Kishore Bhatia & Associates to audit the cost accounts of the Company forthe financial year ending 31st March 2016. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting fortheir ratification. Accordingly, a Resolution seeking Member's ratification forthe remuneration payable to M/s. Kishore Bhatia & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting. CONSOLIDATED FINANCIAL STATEMENTS As required by Accounting Standard 21 'Consolidated Financial Statements' issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements of the Group are enclosed. As required by Accounting Standard 21 'Consolidated Financial Statements' issued by the Institute of Chartered Accountants of India, the audited Consolidated Financial Statements of the Group are enclosed. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies are placed on Company's website and the same are open for inspection atthe Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. CORPORATE GOVERNANCE A report on Corporate Governance as required under Clause 49 of the listing agreement forms part of this annual report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Report on Management discussion and analysis as required under Clause 49(V) of the listing agreement forms part of this annual report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure I". SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. GMJ & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure II". CORPOARTE SOCIAL RESPONSIBILITY (CSR) As a part of its initiative under the "Corporate Social Responsibility" (CSR) drive, the Company has undertaken projects in the areas of enviornment, education and safe drinking water. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company's CSR Policy. The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as "Annexure III" forming part of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO Information in accordance with Section 134 (m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 and forming part of this Report forthe year ended 31st March, 2015 is given in "Annexure IV". ACKNOWLEDGEMENTS Your Board conveys its deep appreciation of the co-operation extended by customers, suppliers, banks, financial institutions, contribution made by employees for the company's growth, shareholders and fixed deposit holders. On behalf of the Board of Directors Rajesh Sharma Chairman & Managing Director Date : 25th May, 2015 Place : Mumbai |