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I G Petrochemicals Ltd.

BSE: 500199 Sector: Industrials
NSE: IGPL ISIN Code: INE204A01010
BSE 12:46 | 07 Dec 769.40 -0.10
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NSE 12:39 | 07 Dec 769.25 1.10
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OPEN 779.00
PREVIOUS CLOSE 769.50
VOLUME 3018
52-Week high 1017.90
52-Week low 363.10
P/E 8.41
Mkt Cap.(Rs cr) 2,369
Buy Price 768.70
Buy Qty 1.00
Sell Price 769.75
Sell Qty 3.00
OPEN 779.00
CLOSE 769.50
VOLUME 3018
52-Week high 1017.90
52-Week low 363.10
P/E 8.41
Mkt Cap.(Rs cr) 2,369
Buy Price 768.70
Buy Qty 1.00
Sell Price 769.75
Sell Qty 3.00

I G Petrochemicals Ltd. (IGPL) - Director Report

Company director report

To the Members

On behalf of the Board of Directors of your Company it gives mepleasure in presenting the Thirty Second Annual Report together with the Audited FinancialStatements for the year ended 31st March 2021:

1. Financials

(Rs. in lakhs)

2020-21 2019-20
Total Revenue 112835.52 106511.19
Profit before interest depreciation and tax 30333.11 7822.53
Finance Cost 1455.70 1595.43
Depreciation and 3410.37 2990.01
Amortization expenses
Profit before tax 25467.04 3237.09
Provision for tax 6453.73 1103.24
Profit for the year 18951.67 2104.40
Balance brought forward from previous year 51113.93 50529.68
Profit available for Appropriations 18951.67 2104.40
Earnings per share 61.54 6.83

2. Dividend

The Board of Directors have recommended a dividend of Rs. 7.50/- perequity share having face value of Rs. 10/- each (75%) for the year ended 31st March2021 aggregating to Rs. 2309.61 lakhs.

3. Operating & financial performance

During the year under review the Phthalic Anhydride market (bothdomestic and international) recovered sharply from its low during the previous years. TheCompany generated a total revenue of Rs. 112835.52 lakhs as compared to Rs. 106511.19lakhs in the year 2019-20 marginal increase by 6%. The increase in sales is attributed tothe commencement of commercial production for its new plant in December 2020. EBITDAincreased by almost three fold from Rs. 7822.53 lakhs in 2019-20 to Rs. 30333.11lakhs in 2020-21. As compared to the overall increase in the sales and profitability thefinance cost on the contrary decreased from Rs. 1595.43 lakhs to Rs. 1455.70 lakhs onaccount of the prudent management of its borrowings and the early repayment of term loan.The tax expenses for the year stood at Rs. 6453.73 lakhs vis--vis Rs. 1103.24 lakhs inthe previous year. After taking into account the above the Company recorded a substantialincrease in profit after tax by eight fold from Rs. 2104.40 lakhs in 2019-20 to Rs.18951.67 lakhs.

The Directors confirmthat no material changes or commitments haveoccurred between the end of the financial year and the date of this report which mayaffect the financial statements of the Company.

4. Covid-19 pandemic

During the year the operations at Plant remained almost unaffectedbaring mandatory closure by the government on account of Covid-19 during April/May 2020for few days. The Company has been able to maintain its momentum in the production withall necessary safety measures despite the threat of the pandemic disease not beingsubsided. For the overall protection of the employees work from home were initiated tothe extent possible. A separate task force was formed and SOP was put in place forimplementation. The Company had put in place adequate infrastructure and safety guidelinesto sustain and grow its operations thereby negating any adverse effect of the pandemic onall stakeholders vis--vis the business of the Company.

5. Expansion

During the year under review the Company successfully commissioned theexpansion of its plant by 53000 MTPA including MA and BA plants. Your Company is now oneof the largest producer of PAN at a single location.

Due to the augmentation of the end user industries viz. plasticizersPVC UPR etc. the PAN industry witnessed a strong recovery in demand in the second halfof the year.

The downstream product i.e. Advance Plasticizer with a capacity of8400 MTPA is expected to come on stream by June 2021 at the total cost of Rs. 3000lakhs.

The Company has also initiated a Greenfield Expansion of PhthalicAnhydride & its Derivatives up to 80000 MTPA. The total cost of the project isestimated to be Rs. 60000 lakhs.

6. Contribution to the Exchequer

The Company has contributed Rs. 26433.99 lakhs to the exchequer by wayof income tax customs duty goods and service tax etc.

7. Share Capital & Finance

a. Share Capital

The Company's paid-up Equity Share Capital remained unchanged atRs. 3079.81 lakhs as at 31st March 2021. The shareholdings of the Promotersand Persons Acting in Concert with Promoters are 68.74%.

b. Finance

The borrowings of the Company comprises of external commercialborrowings rupee term loan and working capital facilities. During the year the Companyrepaid the entire term loan of Cosmos Bank. The debts (including interest) are beingserviced regularly.

c. Credit Rating

The Credit Ratings of the Company are "IND A+" (long term)and "IND A1+" (short term) issued by India Ratings & Research.

d. Deposits

During the year the Company has not accepted or invited any depositsfrom the public.

e. Particulars of Loans Guarantees or Investments

Details of Loans Guarantees or Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

8. Transfer to General Reserves

The Company do not propose to transfer any amount to the GeneralReserves.

9. Subsidiaries/Associates/Joint Ventures

The Company's wholly owned subsidiary i.e. IGPL International Ltd.is yet to commence its operations and the present activities relates to investments. Theconsolidated financial statements of the Company are prepared in accordance with theapplicable provisions of the Act and the Ind AS. The audited consolidated financialstatements together with the Auditors' report thereon forms part of this AnnualReport. In accordance with the provision of Section 129 of the Act a statement containingsalient features of the financial statements of the subsidiary in Form AOC-1 is attachedwith this Annual Report.

The financial statements of the wholly owned subsidiary are placed onthe website of the Company and available for inspection by the members of the Company. Acopy of the audited accounts shall be made available to the member upon request.

10. Corporate Social Responsibility (CSR) initiatives

During the year the Ministry of Corporate Affairs introduced majoramendments in the provisions relating to the CSR viz. manner of spending introduction ofthe concept of ‘ongoing project' transfer of unspent amount to Funds specifiedunder Schedule VII or to a bank account (in the case of ongoing project) as the case maybe monitoring of implementation of the Project by the Board of Directors of the Companyregistration of the entity undertaking the CSR projects with MCA etc.

The CSR Committee proposes and plans the allocation of its budget inaccordance with the CSR Policy as approved by the Board of Directors of the Company. TheCSR Policy of the Company dwells upon betterment of the underprivileged communitycatering to issue of fundamental importance sustainable development etc. The CSRobligation of the Company for the year 2020-21 was Rs. 299.49 lakhs against which theCompany has spent Rs. 302.24 lakhs (including the transfer of Rs. 99.47 lakhs to a specialbank account opened by the Company as provided under Section 135(6) of the Companies Act2013) towards the various CSR activities as more specifically outlined in"Annexure-I". During the previous years the Company had through SaraswatiShishu Mandir Trust undertaken to construct a school an ‘ongoing' project asconsidered and approved by the Board of Directors of the Company. The said amount of Rs.99.47 lakhs so transferred to a special bank account shall be utilized solely towards theabove referred ongoing project.

The Report on CSR activities containing prescribed details are annexedto the Directors' Report as "Annexure-A".

11. Annual Return

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Actthe Annual Return of the Company as at 31st March 2021 is uploaded on theCompany's website www.igpetro.com/corporate-announcement/

12. Vigil Mechanism Policy

The Vigil Mechanism Policy of the Company deals with the instances ofactual or suspected unethical behavior fraud etc. which is being reviewed by the AuditCommittee. The details of the Vigil Mechanism has been elaborated in the CorporateGovernance Report and posted on the Company's websitewww.igpetro.com/corporate-governance/

13. Transfer of shares to IEPF Authority

There will be no shares due for transfer to the IEPF Authority duringthe year 2021-22. Members whose shares have been transferred to the IEPF can claim theirshares and dividend from the IEPF Authority by filing an online web based Form IEPF-5available at www.mca.gov.in. The application for the claiming of shares along with thesupporting documents are required to be submitted in an online mode only as required underthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016. Members may contact the Company for further guidance.

14. Directors & Key Managerial Personnel

Shri M M Dhanuka retires by rotation and being eligible offered himselffor re-appointment.

Shri J K Saboo was re-appointed as Executive Director of the Companyfor a period of one year effective 1st April 2021 as per the terms conditionsand remuneration more particularly set out in the Notice. The Directors proposes toreappoint him.

All Independent Directors of the Company have furnished declarationsunder Section 149(7) of the Act confirming that they meet the criteria of independencelaid down in Section 149(6) of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

In the opinion of the Board of Directors of the Company allIndependent Directors possess high integrity expertise and experience including theproficiency and responsibilities.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on 31st March 2021 are: Shri NikunjDhanuka Managing Director & CEO Shri Pramod Bhandari Chief Financial Officer andShri Sudhir R Singh Company Secretary.

14.1.Meetings

During the year four meetings of the Board of Directors and six AuditCommittee meetings were held as more particularly disclosed in the attached Report onCorporate Governance.

14.2.Board Evaluation

The annual evaluation of the performance of the Board of DirectorsCommittee and of the Directors individually has been made as more particularly specifiedin the Corporate

Governance Report.

14.3.Remuneration Policy

The details of the Remuneration Policy forms part of the CorporateGovernance Report. The information relating to remuneration as required pursuant toSection 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 ("the Rules") are given below: a. Ratio ofthe remuneration of each Director to the median remuneration of the employees of theCompany for the financial year 2020-21

Shri Nikunj Dhanuka Managing Director & CEO – 44:1 Shri J KSaboo Executive Director – 7:1 b. The percentage increase in the remuneration ofManaging Director

Chief Financial Officer and Company Secretary for the financial year -Nil c. The percentage increase in the median remuneration of employees in the financialyear Nil d. Number of permanent employees on to discharge their respective duties therolls of the Company – 380 e. Average percentage increase made in the salaries ofemployees other than the managerial personnel in the last financial year and themanagerial remuneration – Nil Since no increment was given in the financial year2020-21 the data pertaining to the percentage increase in the remuneration of KMP medianremuneration of employees and average percentage increase in salaries of employees otherthan the managerial personnel are not applicable.

It is hereby affirmed that the remuneration paid during the year is asper the Remuneration Policy of the Company.

15. Particulars of Employees

The disclosures pertaining to remuneration and other details underSection 197(12) of the Act read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given above.

In accordance with the provisions of Sections 197(12) and 136(1) of theAct read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the list pertaining to the names and other particulars of employees drawingremuneration in excess of the limits set out in the aforesaid Rules is kept open forinspection during working hours at the registered office of the Company and the report andaccounts as set out therein are being sent to all the members of the Company. The saidinformation will be provided to the members upon receipt of the request.

16. Directors' Responsibility Statement

To the best of our knowledge and belief and according to theinformation and explanation obtained by us in terms of Section 134(3) (c) of theCompanies Act 2013 we state:

a. that in the preparation of the annual financial statements for theyear ended 31st March 2021 all the applicable accounting standards have beenfollowed and no material departures have been made from the same;

b. that appropriate accounting policies have been selected and appliedconsistently and have made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31st March 2021 and of the profit of the Company for thatyear;

c. that proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing/ detecting fraud and otherirregularities;

d. that the annual financial statements have been prepared on a goingconcern basis;

e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

17. Related Party transactions

The transactions with related parties were on arm's length basisand in the ordinary course of business and necessary approvals were obtained whereverrequired.

There were no material related party transactions. The necessarydisclosures regarding the transactions are given in the notes to accounts.

18. Internal Control

The Audit Committee defines the framework for the audit based on theareas identified in discussion with the Internal Auditors. The Internal Audit function isdesigned to cover all the major areas of operations. The Internal Auditor participates inall meetings of and reports directly to the Audit Committee.

The Internal Audit strives to evaluate the efficacy and adequacy ofinternal control system and processes accounting policies and procedures compliance withlaws and regulations concerning the operations of the Company.

The Company's internal financial control systems commensurate withits nature of business size and operations.

19. Risk Management

The internal control mechanism of the Company enables it to identifyassess and mitigate the risk related to its business. Risks are evaluated on variousparameters which are reviewed as and when needed.

The risk management framework enables the management to identify andanalyze the risks faced by the Company and implements risk management practices therebyensuring that all activities are conducted in accordance with the principles as outlinedby it. It also helps in setting appropriate risk limits and controls and hasbeentaken tomonitor the risks and adherence to limits. The Company's risk management practicesaims to limit the business risk through its operations and finance activities.

The Board of Directors reviews the risk assessment and managementprogram.

20. Auditors

20.1.Statutory Auditors

M/s Uday & Co. and M/s SMMP & Associates are the StatutoryAuditors of the Company appointed by the members of the Company at the annual generalmeetings.

20.2.Cost Auditor

The cost accounts and records are required to be maintained underSection 148(1) of the Act. In terms of the provisions of Section 148 of the Act read withthe Companies (Cost Records and Audit) Rules 2014 the Board of Directors of the Companyhas appointed M/s Krishna S & Associates Cost Accountants as the Cost Auditor toconduct an audit of the cost records of the Company for the year 2021-22.

A resolution seeking members' ratification for the remunerationpayable to M/s Krishna S & Associates is included in the Notice convening the AGM.

20.3.Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Makarand M Joshi & Co. Practicing Company Secretaries to conductthe Secretarial Audit and their Report on the Secretarial Audit for the year 2020-21 isannexed herewith as "Annexure-II".

21. Material changes and commitment affecting financial position of theCompany

There are no material changes and commitments affecting the financialposition of the Company which has occurred between the end of the financial year and thedate of the Board's Report.

22. Energy Reservation Technology Absorption and Foreign Exchangeearnings and outgo

The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-III".

23. Business Responsibility Report

Pursuant to the Regulation 34 of the SEBI Listing Regulations BusinessResponsibility Report for the year ended 31st March 2021 is providedseparately and annexed to the Directors' Report as "Annexure-IV".

24. Corporate Governance

The Company has complied with the requirements of Corporate Governanceand a report on the same along with the Auditors' Certificate compliance is attachedwith and forms part of this report.

A report on Management Discussion and Analysis forms an integral partof this report.

25. Prevention of sexual harassment

The Company is an equal opportunity provider and has zero tolerancein any form or manner towards the sexual harassment of women at work place. In accordancewith the Sexual Harassment of Women at Work Place (Prevention Prohibition and Redressal)Act 2013 the Company has formulated a policy on prevention prohibition and redressal ofsexual harassment of women at work place.

The Company has constituted Internal Complaints Committee which meetsas and when required. No complaints pertaining to sexual harassment of women employeeswere received during the year.

26. ISO 9001 : 2015 and ISO 14001 : 2015 certification

Your Company is certified under ISO 9001:2015 for quality managementsystems and ISO 14001:2015 for environment management systems by Bureau Veritas.

27. Acknowledgements

Your Directors convey their sincere appreciation to the businesspartners for their unstinted support and contribution and thank the customers membersdealers employees bankers and all stakeholders for their co-operation and confidencereposed in the Company.

For and on behalf of the Board of Directors
M M Dhanuka
Chairman
Mumbai 24th May 2021 DIN: 00193456

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