Management Discussion and Analysis Report
Your Directors are happy to present Statement of Accounts both on Consolidated andStandalone basis for Financial Year (FY) 2020-21 together with Report of the Auditor'sforming part thereof of your Company.
Summary of Financial Results achieved for FY 2020-21 is as follows :
|Revenue from Operations ||10219.45 ||6490.74 |
|Other Income ||205.04 ||67.70 |
|Total Income ||10424.49 ||6558.44 |
|Profit before Depreciation Interest and Tax (PBDIT) ||1758.59 ||1429.49 |
|Depreciation and Amortisation ||485.79 ||392.89 |
|Finance Cost ||30.58 ||23.59 |
|Profit before Tax ||1242.22 ||1013.01 |
|Tax Expense ||586.31 ||564.69 |
|Profit for the year after Tax ||655.91 ||448.32 |
|Other Comprehensive Income/(Loss) for the year Net of Tax ||159.54 ||2.73 |
|Total Comprehensive Income for the year ||815.45 ||451.05 |
|Basic and Diluted Earnings per Share ||18.20 ||12.44 |
|Basic and Diluted Earnings per Share (Adjusted) ||23.80 ||18.04 |
|Disclosures under Regulations 34 (3) read with Clause B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) || || |
|Regulations 2015 (SEBI LODR 2015) || || |
|i) Debtors Turnover Ratio ||4.7:1 ||4.6:1 |
|ii) Inventory Turnover Ratio ||3.1:1 ||3.5:1 |
|iii) Interest Coverage Ratio ||41.6:1 ||43.9:1 |
|iv) Current Ratio ||3.2:1 ||2.9:1 |
|v) Debt Equity Ratio ||0.1 ||0.1 |
|vi) Operating Profit Margin (%) ||10.4% ||14.9% |
|vii) Net Profit Margin (%) ||6.4% ||6.9% |
|viii) Return on Net Worth (%) ||7.4% ||8.0% |
Despite disruptions caused by COVID-19 pandemic and the resultant lockdown enforced byrespective authorities your Company has achieved its best ever financial results both onconsolidated and standalone basis for FY 2020-21. Compared to FY 2019-20 Total IncomeProfit before Tax and Profit after Tax on Consolidated basis for FY 2020-21 are higher by12.30% 314.51% and 237.11% respectively. On Standalone basis Total Income Profit beforeTax and Profit after Tax for FY 2020-21 are higher by 29.44% 183.22% and 50.78%respectively. Return on Net Worth on Consolidated and Standalone basis has improved by4.96% and 2.24% respectively because of costs rationalization and other measures forimproving efficiency taken by the Management added by factors favorable to Steel Industry.Both on Consolidated and Standalone basis your Company continued to be Net Debt free. Ason 31st March 2021 Cash and Cash Equivalents including Investments (both Current andNon-Current and excluding Investment in wholly owned subsidiary) on Consolidated andStandalone basis aggregated to ` 3219.13 millions and `1745.12 millions respectively.EPS both on Consolidated and Standalone basis have improved substantially. EPS withoutconsidering one time Deferred Tax Charge is even better at ` 23.80 and ` 18.04respectively.
During FY 2020-21 the world experienced and still is experiencing a pandemic which canonly be compared with the Spanish Flue (1918-20). Most countries imposed a lockdown atvarying degrees bringing the economies at an all-time low as against a projection of 2.9%for 2020 the year ended with a negative world domestic product of (3.5%). Similarly forIndia FY 2020-21 closed with a (7.3%) GDP. The IMF has projected a global growth at 6% inFY 2020-21 moderating to 4.4% in FY 2021-22. The Reserve Bank of India has projected theIndian economy to grow at 9.5% in FY 2021-22. Despite the above scenario Steel productionwas 1.83 billion tonnes similar to that of 2019. World Steel Association has projectedthis to grow to 1.87 billion tonnes in 2021 and 1.92 billion tonnes in 2022.
Based on the record results achieved and in keeping with the Dividend DeclarationPolicy your Directors have recommend a Dividend of 40% i.e. ` 4/- per Equity Share andone time Special Dividend of 60% i.e ` 6/- per Equity Share making it a total of 100% i.e.`10/- per Equity Share. This is subject to (a) your approval at ensuing Annual GeneralMeeting (AGM) and (b) deduction of Tax at Source.
Industry Review Future Outlook and Expansion Plans and Impact of COVID-19
All the manufacturing facilities of your Company including its subsidiaries operatedsatisfactorily barring intermittent disruptions amidst various safety measures andsafeguards adopted to combat COVID-19. During the recent months India experienced secondwave of COVID which is now showing signs of coming under control. Your Directors alongwith the management teams including in the Subsidiaries ensured the impact of COVID_19 wascontained in the minimum level. Regrettably we had 2 fatalities. During FY 2020-21construction activities at the green field site in Visakhapatnam India for manufacture ofproducts like Monolithic and Precast Shapes continued with minimum interruption. Firstphase will get completed latest by June 2021 and trial production will be started soonthereafter.
To fuel further growth your Directors are continuing to look for inorganicopportunities in India and abroad.There is adequate cash support to finance anyopportunity that may arise.
Performance of Company's subsidiaries for FY 2020-21 were satisfactory including theGerman subsidiary and hopefully such trend will continue in the future too. Total Revenueand PBT on consolidated basis for FY 2020-21 of Company's immediate subsidiary IFGLWorldwide Holdings Ltd is lower by 5.45% and higher by 738.59% respectively than those ofimmediately preceding FY 2019-20.
Business Responsibility Report
Your Directors adopted Business Responsibility Policy at their meeting held on 18thJuly 2020 a copy of which is hosted on Company's website: www.ifglref.com. BusinessResponsibility Report (BRR) having details of initiatives taken by the Company fromEnvironmental Social and Governance perspectives in format specified for FY 2020-21 asper Regulation 34(2)(f) of SEBI LODR 2015 is annexed hereto as
Corporate Governance/Vigil Mechanism etc
Report on Corporate Governance (CG Report) and Report of the Statutory Auditors thereonform part of this Report and are annexed as Annexure B'. CG Report conformsto provisions of Regulation 34 of the SEBI LODR 2015 amended to date and notificationscirculars clarifications etc issued by SEBI from time to time.
Policies including Vigil Mechanism (Whistle Blower) Prevention of Sexual HarassmentInsider Trading and Risks Management etc commensurate to nature and size of business ofthe Company are in place. They are reviewed and updated from time to time. These Policieshave been hosted on the Company's website www.ifglref.com. During FY 2020-21 no complaintand or alert was received either under Vigil Mechanism (Whistle Blower) or for SexualHarassment. Internal Complaints Committees following provisions of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 are also in place andfunctioning.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act Annual Return in theprescribed format has been hosted on the Company's website www.ifglref.com. Informationregarding Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo are given in Annexure C'. During FY 2020-21 the Company entered intotransactions with related parties in ordinary course of its business at arms length.Hence Form AOC-2 has not been annexed herewith with details of those transactions. DuringFY 2020-21 the Company did not give loans and guarantees or made investments underSection 186 of the Companies Act 2013 (the Act). Evaluation of performance of theCompany's Board of Directors and its Committees and Individual Directors includingIndependent Directors and Chairman of Board has been carried out. Outcome of suchevaluation is that the Board and its Committees continued to function satisfactorily andflow of information has been commensurate to the nature of business and size of yourCompany. From time to time Directors received briefings on key matters includingregulatory which improved their performance.
Following Announcement of Quarterly and Annual Results the Company made quarterlypresentations conference calls and interactions resulting in enhanced confidence ofInvestors in the Company. As on 31st March 2021 12.73% of the Company's equity shares washeld by Mutual Funds. A statement in Form AOC-1 having financial information of SubsidiaryCompanies form part of this Report as AnnexureD'. The Company does not haveany Indian Subsidiary. Shareholders of the Company who are desirous of having completeStatement of Accounts and related detailed information of Subsidiary Companies may sendtheir request therefor to the Company's Registered Office. They are available forinspection electronically to the members during working hours on working days (excludingSaturday) provided prior request therefor is sent at email@example.com and arealso available on Company's website: www.ifglref.com.
Information including those to be provided following Section 134(3) of the Act readwith relevant provisions of the Companies (Accounts) Rules 2014 and Regulations 34 ofSEBI LODR 2015 have been included in Annexures hereto including Audited FinancialStatements and Notes and have not been reproduced herein again. During FY 2020-21 theCompany neither invited nor accepted Deposits.
Particulars of meetings of the Board of Directors and Committees held during FY 2020-21and attendance are given in CG Report. Between end of FY 2020-21 and date of this Reportthere has been no material changes and/or commitments affecting financial position of theCompany. There have also not been any Order(s) passed by the Regulators or Courts orTribunals likely to impact going concern status or operations in future of the Company.Your Board of Directors in their meeting held to-day 5th June 2021 have constituted RiskManagement Committee comprising of Managing Director Mr P Bajoria Director and ChiefFinancial Officer Mr K Sarda and Independent Director Mr D K Banerji. In this meetingDividend Distribution Policy has also been approved and adopted by your Board of Directorsand copy of the same is available on website of the Company www.ifglref.com.
Following Regulation 17(8) read with Part B of Schedule II of SEBI LODR 2015Certificate on Financial Statements has been received from Managing Director and Directorand Chief Financial Officer of the Company.
The Company review checks and balances for IT security and take steps to strengthen thesame from time to time irrespective of instances of hacking and/or breaches reported inpublic domain.
Directors Responsibility Statement
Your Directors state that :
a) in preparation of Annual Accounts applicable Accounting Standards have beenfollowed.
b) Accounting Policies selected and applied are consistent and judgments and estimatesmade are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the FY and of the Profit and Loss of the Company for thatperiod.
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with provisions of the Act for safeguarding the Assets of theCompany and for preventing and detecting fraud and other irregularities.
d) the Annual Accounts have been prepared on a Going Concern basis.
e) Internal Financial Controls i.e. policies and procedures for ensuring orderly andefficient conduct of business including adherence to Company's Policies safeguarding ofassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial information have beenlaid down and that such controls are adequate and operating effectively.
f) Proper systems to ensure compliance with provisions of all applicable laws have beendevised and that such systems are adequate and operating effectively.
Financial Statements for FY 2020-21 have been audited in accordance with GenerallyAccepted Accounting Principles as indicated in Report of the Statutory Auditors.
CSR Human Resource and Industrial Relations
CG Report include details of the Company's CSR Committee and Annual Report incompliance of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014is forming part of this Report as Annexure E'.
Particulars of Nomination and Remuneration Committee (NRC) have also been included inCG Report. Nomination and Remuneration Policy adopted by your Directors based onrecommendation of NRC is hosted on the Company's website www.ifglref.com. Said Policyinter-alia provide for matters concerning Directors appointment and remuneration includingcriteria for determining qualifications positive attributes Independence of Directorsand those provided in Section 178(3) of the Act. For the sake of brevity the Policy hasnot been reproduced here.
An Annexure having information following provisions of Section 197(12) of the Act readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 form part of this Report as Annexure F'.
During FY 2020-21 4(four) persons (including Executive Directors) employed with theCompany received remuneration of `102 lacs per annum or more or ` 8.50 lacs per month ormore. As on 31st March 2021 the Company had employed 1049 people worldwide including 793in India.
During FY 2020-21 Industrial Relations in the Company remained cordial. Workingenvironment provided to employees was conducive. Trainings were imparted which helpedemployees achieve skills befitting their roles and responsibilities ultimately resultingin increased productivity. Compensation packages and benefits provided have beencomparable with those of the peers and continued to motivate employees at large.
Consolidated Financial Statements
In accordance with IND AS 110 and other relevant provisions particularly Section 129(3)of the Act Consolidated Financial Statements duly audited by Statutory Auditors M/s S RBatliboi & Co. LLP (Regd No. 301003E/E300005) form part of this Annual Report.Consolidated Financial Statements have been prepared considering Financial Statements ofSubsidiary Companies and Reports of Auditors relating thereto.
Directors and Key Managerial Personnel (KMP's)
Particulars of the Company's Key Managerial Personnel are appearing at Note 36 ofAudited Statement of Accounts as per Section 203 of the Act. All Independent Directorshave given their Statement of Declaration under Section 149(7) of the Act and continue tofulfil independence criteria and other conditions specified in the Act and SEBI LODR2015.
Managing Director Mr P Bajoria (DIN: 00084031) will retire by rotation at ensuing AGMand being eligible have offered himself for reappointment for further period liable toretire by rotation. Such re-appointment has been recommended by the NRC and Board of theCompany. Mr Y Yamaguchi (DIN: 09047766) will cease to hold his office of AdditionalDirector of the Company on conclusion of ensuing AGM. He being eligible has offeredhimself for appointment as a Director of the Company liable to retire by rotation. YourBoard and NRC have recommended the appointment of Mr Yamaguchi. Resolutions for aforesaidre-appointment/appointment and Explanatory Statement thereon wherever necessary and otherdetails form part of Notice of AGM. The Directors recommend passing of said resolutionsproposed being in the interest of the Company.
All of the Directors and Senior Management Personnel as on 31st March 2021 haveconfirmed compliance of Code of Conduct for Board of Directors including IndependentDirectors and Senior Management Personnel of the Company. This Code continues to help theCompany maintain standard of ethics and ensure compliance of legal requirementsapplicable.
The Company maintained accounts and records during FY 2020-21 to the extent provisionsof Section 148 of the Act applied. M/s Mani & Co. Practicing Cost Accountant havebeen re-appointed as Cost Auditors of the Company for FY 2021-22.Your approval for paymentof remuneration not exceeding ` 3 lacs to them is being sought inasmuch as OrdinaryResolution has been included in Notice of forthcoming AGM.
Secretarial Audit Report in Form MR 3 following provisions of Section 204 of the Act ofM/s S M Gupta & Co. Practicing Company Secretaries form part hereof as AnnexureG'. Following Regulation 24A of SEBI LODR 2015 Secretarial Auditor have alsocarried out Secretarial Compliance Audit for FY 2020-21. Both of said Report andCertificate are free of qualification reservation or adverse remark.
Auditors' Report and Auditors
Report of the Statutory Auditors M/s S R Batliboi & Co. LLP (Regd No.301003E/E300005) Chartered Accountants on statement of Accounts for FY 2020-21 onStandalone and Consolidated basis are self-explanatory. Their Reports have noqualification reservation adverse remark or disclaimer except 2(two) emphasis ofmatters. They have also not reported any fraud under Section 143(12) of the Act. Theirappointment will come to an end on conclusion of 17th AGM and have confirmed that theycontinue to comply with all requirements and criteria specified and are qualified to actas Auditors of the Company.
Your Directors thank all concerned particularly you the Shareholders and allStakeholders for your continued support during these unprecedented times.
On behalf of the Board of Directors
|S K Bajoria ||P Bajoria |
|Chairman ||Managing Director |
|(DIN- 00084004) ||(DIN- 00084031) |
5th June 2021