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Indian Metals & Ferro Alloys Ltd.

BSE: 533047 Sector: Metals & Mining
NSE: IMFA ISIN Code: INE919H01018
BSE 00:00 | 18 May 438.75 0.85
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442.95

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NSE 00:00 | 18 May 438.20 1.30
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OPEN 442.95
PREVIOUS CLOSE 437.90
VOLUME 5548
52-Week high 560.10
52-Week low 128.60
P/E 23.64
Mkt Cap.(Rs cr) 1,184
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 442.95
CLOSE 437.90
VOLUME 5548
52-Week high 560.10
52-Week low 128.60
P/E 23.64
Mkt Cap.(Rs cr) 1,184
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Metals & Ferro Alloys Ltd. (IMFA) - Director Report

Company director report

Your Directors are pleased to present the 57th Annual Report and the Audited FinancialStatements of the Company for the financial year ended 31st March 2019.

Financial Results

Amount in Rs. crores
FY 2018-19 FY 2017-18
1 Revenue from operations 1633.78 1769.26
2 Other Income 14.51 27.66
3 Total Revenue 1648.29 1796.92
4 Profit before finance cost depreciation taxation prior period income and exceptional items 284.58 461.03
5 Finance Cost 80.50 78.23
6 Depreciation 98.16 100.80
7 Exceptional items 75.97 -
8 Profit before Tax 29.95 282.00
9 Tax including Deferred Tax 18.91 95.38
10 Profit after Tax 11.04 186.62
11 Other Comprehensive Income/ (Expenses) (2.05) (2.35)
12 Total Comprehensive Income/ (Expenses) for the year 8.99 184.27
13 Dividend (including Tax on Dividend) 48.37 23.14
14 Balance carried forward 1129.67 1169.05

Your Company's revenue from operations during the year decreased to Rs.1633.78 crores(previous year: Rs.1769.26 crores) including foreign exchange earnings of Rs.1470.02crores (previous year: Rs.1506.87 crores); EBITDA before exceptional items decreased toRs.284.58 crores (previous year: Rs.461.03 crores) and profit after tax stood at Rs.11.04crores (previous year: profit of Rs.186.62 crores) mainly on account of lower productionhigher input costs and impairment of investment in Indonesia & related arbitrationexpenses which are exceptional in nature.

Dividend

Your Directors are pleased to recommend a dividend of Rs.5/- per equity share (@ 50%)of face value of Rs.10/- each for the year ended 31st March 2019 subject to approval ofshareholders at the forthcoming Annual General Meeting of the Company.

State of Company's Affairs

Ferro Alloys

During the year under review manufacturing operations at the Therubali Unit in Dist.Rayagada Odisha was disrupted from 23rd April - 10th May 2018 and again from 27th June -29th June 2018 because of an agitation by a group of people without any ostensible link tothe Company. This led to shell puncture of one furnace at Therubali (TCP-3) which remainedout of operation for 118 days.

As a result the production of ferro chrome during the year under review was lower at216046 tonnes (previous year: 234443 tonnes).

Electricity

During the year under review your Company generated 914.60 MU's of electricityincluding 4.92 MU from Solar Power (previous year: 946.05 MU's including 3.32 MU's fromSolar Power) in accordance with captive requirement.

The Company's second major initiative in renewable energy is now a reality with the 1.5MWp solar power facility at Therubali being successfully commissioned in December 2018taking the total solar power capacity to 4.5 MWp.

Mining

Chrome ore production stood at 518615 tonnes as compared to 550670 tonnes during theprevious year.

It is pertinent to note here that your Company has consistently followed in letter andspirit the practice of value addition with ore raised from its mines being used only forcaptive consumption thus maximising contribution to the exchequer and generatingemployment.

Scheme of Amalgamation

During the year under review Hon'ble National Company Law Tribunal Cuttack Benchpassed an order on 26th March 2019 approving the scheme of amalgamation amongst IndianMetals & Carbide Limited (IMCL) B Panda & Company Private Limited (BPCO) andIndian Metals & Ferro Alloys Limited (the Company) and their respective shareholdersand creditors (‘'Scheme") under Sections 230 to 232 of the Companies Act 2013read with the relevant rules and has become effective on 30th April 2019 consequent uponfiling of a certified copy of the Order with the Registrar of Companies Cuttack by IMCLBPCO and the Company.

Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 the Company has placed a copy ofAnnual Return of the Company on its website athttp://www.imfa.in/pdfs/Annual-Return-2017-18.pdf

Number of Meetings of the Board

The Board met five times in financial year 2018-19 viz. on 21st May 2018 17th July2018 23rd October 2018 3rd January 2019 and 12th February 2019. The maximum intervalbetween any two meetings did not exceed 120 days. The details of the composition of theBoard and its Committees and of the Meetings held and attendance of the Directors at suchMeetings are provided in the Corporate Governance Report.

Directors' Responsibility Statement

Pursuant to provisions under section 134(5) of the Companies Act 2013 your Directorshereby confirm:

(i) that in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards read with requirements set out underSchedule III of the Companies Act 2013 have been followed and there are no materialdepartures from the same;

(ii) that they have selected such accounting policies and applied them consistently andmade judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit for the year under consideration;

(iii) that they have taken 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 and detecting frauds and otherirregularities;

(iv) that they have prepared the annual accounts of the Company for the financial yearended 31st March 2019 on a going concern basis;

(v) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and

(vi) that they had devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Declaration Given by Independent Directors

The Independent Directors have given declaration that they meet the criteria specifiedunder section 149(6) of the Companies Act 2013 and regulation 25(8) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations).

Policy on Directors' Appointment and Remuneration

The Company has in place a policy for remuneration of Directors Key ManagerialPersonnel and Senior Management Personnel as well as well defined criteria for theselection of candidates for appointment to the said positions which has been approved bythe Board. The Policy broadly lays down the guiding principles for determiningqualifications positive attributes independence of a Director and other matters providedunder sub-section (3) of section 178 of Companies Act 2013.

During the year under review no changes were made in the above policy. Salientfeatures of this policy are enumerated in the Corporate Governance Report which forms partof the Annual Report. The above policy is available at the website of the Company at :http://www.imfa.in/pdfs/Nomination-Remuneration-Policy.pdf

Auditors and Auditors' Report

Statutory Auditors

M/s Haribhakti & Co LLP Chartered Accountants (Firm Registration No.103523W/W100048) were appointed as Statutory Auditors of the Company to hold office tillthe conclusion of the ensuing 57th Annual General Meeting (AGM). Based on therecommendation of the Audit Committee the Board of Directors have recommended to theshareholders the appointment of M/s SCV & Co LLP Chartered Accountants (FirmRegistration No.000235N/N500089) as Auditors of the Company with effect from conclusion ofensuing 57th AGM till conclusion of 62nd AGM in place of M/s Haribhakti & Co LLP theretiring Auditors. M/s SCV & Co LLP Chartered Accountants have given their consent toact as Auditors and also certified that they are free from any disqualifications specifiedunder Section 141 of the Companies Act 2013.

There are no qualifications reservations or adverse remarks or disclaimers made intheir audit report.

Secretarial Auditor

The Company has appointed M/s Sunita Mohanty & Associates Company Secretaries toconduct secretarial audit and their Report is appended to this Report as Annexure-1

There are no qualifications reservations or adverse remarks or disclaimers made intheir secretarial audit report.

Cost Auditor

Pursuant to section 148 of the Companies Act 2013 the Board of Directors on therecommendation of Audit Committee appointed M/s S.S. Sonthalia & Co. Cost Accountantsas the Cost Auditors of the Company for the Financial Year 2019-20 and has recommendedtheir remuneration to the Shareholders for their ratification at the ensuing AnnualGeneral Meeting. M/s S. S. Sonthalia & Co. have given their consent to act as CostAuditors and also certified that they are free from any disqualifications specified underSection 141 of the Companies Act 2013. Pursuant to Companies (Cost Records and Audit)Rules 2014 the Cost Audit Report for the financial year 2018 was filed with the Ministryof Corporate Affairs on 14th August 2018.

Particulars of Loans Guarantees or Investments Under Section 186

The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statementsforming part of Annual Report.

Particulars of Contracts or Arrangements with Related Parties

There are no contracts/arrangements/transactions which are not at arm's length basisand there are no material contracts/arrangements/transactions which are at arm's lengthbasis. Accordingly particulars of contracts or arrangements with related parties referredto in Section 188(1) along with the justification for entering into such contract orarrangement in Form AOC-2 does not form part of the report.

Material Changes and Commitments Affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year to which the financialstatements relate and the date of the report.

Energy Conservation Etc.

The information required under section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are set out in Annexure-2 hereto forming part ofthis report.

Risk Management Policy

The Company has a Risk Management framework in place which is designed to identifyassess and monitor various risks related to key business and strategic objectives and leadto the formulation of a mitigation plan. All identified risks are categorised based on amatrix of likelihood of occurrence and impact thereof and a mitigation plan is worked outto the extent possible. Major risks in particular are monitored regularly at meetings ofthe Executive Risk Committee and the Board of Directors of the Company is kept abreast ofsuch issues.

Corporate Social Responsibility (CSR)

The details about the development of CSR Policy and initiatives taken by the Company onCorporate Social Responsibility during the year as per Companies (Corporate SocialResponsibility Policy) Rules 2014 have been appended as Annexure - 3 to thisReport.

The CSR Policy of the Company is hosted on the Company's website athttp://www.imfa.in/pdfs/CSR-Policy.pdf

Annual Evaluation by the Board

The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:

i) Attendance of Board and Committee Meetings

ii) Quality of contribution to Board deliberations

iii) Strategic perspectives or inputs regarding future growth of Company and itsperformance

iv) Providing perspectives and feedback going beyond information provided by themanagement

v) Commitment to shareholder and other stakeholder interests The evaluation involvesSelf-Evaluation by the Board Member and subsequently assessment by the Board of Directors.A member of the Board will not participate in the discussion of his/her evaluation.

Disclosure Under Section 197(12) of the Companies Act 2013

Pursuant to Section 197(12) of the Companies Act 2013 read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the ratio of remuneration of eachdirector to the median employee's remuneration and such other details are furnished below:

i) the ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:

Name of the Director Ratio Name of the Director Ratio
Mr Baijayant Panda 44:1 General Shankar Roychowdhury(Retd) 0.82:1
Mr Subhrakant Panda 52:1 Major R N Misra (Retd) 0.94:1
Mr J K Misra 25:1 Mr S P Mathur 0.93:1
Mr C R Ray 15:1 Mr S Nautiyal ** 0.78:1
Mrs Paramita Mahapatra 0.24:1 Mr Bijoy Kumar Das 0.89:1
Mr D Bandyopadhyay* 0.78:1 Mr Stefan Georg Amrein 0.71:1
Mr N R Mohanty 0.95:1

*Ceased to be a Director w.e.f 26th July 2018

**Ceased to be a Director w.e.f 1st December 2018

ii) the percentage increase in remuneration of each Director Chief Financial Officer& Company Secretary and Chief Executive Officer in the financial year:

Name of the Director % increase Name of the Director % increase
Mr Baijayant Panda (66.84) General Shankar Roychowdhury (Retd) (72.25)
Mr Subhrakant Panda (62.38) Major R N Misra (Retd) (69.66)
Mr J K Misra 8.60 Mr S P Mathur (70.11)
Mr C R Ray 0.86 Mr S Nautiyal** (73.92)
Mrs Paramita Mahapatra (15.38) Mr Stefan Georg Amrein 50.00
Mr D Bandyopadhyay* (73.73) Mr Bijoy Kumar Das (70.48)
Mr N R Mohanty (69.63) Mr Prem Khandelwal CFO & CS 0.93

*Ceased to be a Director w.e.f 26th July 2018

**Ceased to be a Director w.e.f 1st December 2018

iii) the percentage increase in the median remuneration of employees in the financialyear: 9.27

iv) the number of permanent employees on the rolls of company:2228

v) average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Averagepercentile increase in the salaries of employees other than the managerial personnel :47th Percentile increase in the managerial remuneration : NIL

vi) The Nomination and Remuneration Committee of the Company has affirmed that theremuneration is as per the Nomination and Remuneration Policy of the Company.

Particulars of Employees

The information on top ten employees who were in receipt of remuneration of not lessthan Rs.10200000/- (Rupees One Crore and Two Lakhs only) during the financial year orRs.850000/- (Rupees Eight Lakh Fifty Thousand only) per month during any part of the saidyear as required under Section 197 (12) of the Act read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in theAnnexure forming part of the Report. In terms of proviso to Section 136(1) of the Act theReport and Accounts are being sent to the shareholders excluding the aforesaid Annexure.The said statement is also open for inspection at the Registered Office of the Company.Any member interested in obtaining a copy of the same may write to the Company Secretary.

Public Deposits

The Company has not accepted/renewed any public deposits during the year under reviewunder Section 73 of the Act read with Companies (Acceptance of Deposits) Rules 2014.There are no deposits that remain unclaimed.

Whistle Blower Policy

The Company has formulated a Whistle Blower Policy for Directors and employees toreport their genuine concerns details of which have been given in the CorporateGovernance Report annexed to this Report.

Directors and Key Managerial Personnel

Mr Debabrata Bandyopadhya (DIN:00144440) ceased to be a Director of the Company witheffect from 26th July 2018 consequent upon completion of his term and Mr Santosh Nautiyal(DIN: 01127740) ceased to be a Director of the Company w.e.f 1st December 2018 consequentto resignation due to personal reasons.

The Board placed on record its appreciation for the valuable services rendered by Mr DBandyopadhyay and Mr Santosh Nautiyal.

Mr Baijayant Panda (DIN:00297862) Mr Subhrakant Panda (DIN: 00171845) and Mr JayantKumar Misra (DIN: 00146526) were re-appointed as Vice Chairman Managing Director andDirector (Corporate) & COO respectively for a further period of three years witheffect from 28th October 2018. Further Mr C R Ray (DIN: 00241059) was re-appointed asWholetime Director for a further period of 3 years with effect from 31st January 2019.Their terms of appointment were approved by the members on 3rd December 2018 throughe-voting/postal ballot.

In terms of Section 149 and other applicable provisions of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Mr S P Mathur(DIN: 00173775)) and General Shankar Roy Chowdhury (DIN:01921688) were re-appointed asIndependent director for second term of five years and two years respectively with effectfrom 1st April 2019. Their terms of appointment were approved by the members on 27thMarch 2019 through e-voting/postal ballot. Further as required under Regulation 17(1A) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the continuationof Major R N Misra (DIN :00146138) and Mr N R Mohanty (DIN:00237732) as IndependentDirectors till the expiry of their existing term were approved by the members on 27thMarch 2019 through e-voting/postal ballot.

Mr Chitta Ranjan Ray (DIN 00241059) Whole-time Director and Mrs Paramita Mahapatra(DIN: 00143058) Director retire by rotation at the forthcoming Annual General Meeting ofthe Company and are eligible for re-appointment.

Resolutions seeking approval of the members have been incorporated in the notice of theforthcoming Annual General Meeting. Brief resum/details relating to Directors who are tobe appointed/re-appointed are furnished in the Explanatory Statement to the Notice of theensuing Annual General Meeting as required under the Code of Corporate Governance.

Disclosure with Respect to Unclaimed Suspense Account

Pursuant to Listing Regulations details in respect of the shares lying in the IndianMetals & Ferro Alloys Limited – Unclaimed Suspense Account (Promoter group &Non-promoter group) till 31st March 2019 are as under:

Sl.No. Description No of shareholders No. of shares
(i) Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying as on 1st April 2018 0* 0*
(ii) Number of shareholders who approached the Company for transfer of shares from unclaimed suspense account during the year 2018-19 0*
(iii) Number of shareholders to whom shares were transferred from unclaimed suspense account during the year 2018-2019 0* 0*
(iv) Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying as on 31st March 2019 0* 0*

* Pursuant to IEPF Fund Authority (Accounting Audit Transfer & Refund) Rules 2016all unclaimed shares were transferred to IEPF Authority.

All the corporate benefits in terms of securities accruing to on these unclaimed sharesshall be credited to the aforesaid account. Voting rights on these shares shall remainfrozen till the rightful owner of such shares claims the shares.

Internal Financial Control Systems and their Adequacy

The Company has a comprehensive system of internal controls that enables efficientoperations optimal resource utilisation and compliance with all applicable laws andregulations. Each of these internal controls strengthens the Company and protects loss orunauthorised use of assets by providing adequate checks and balances. The Companyauthorises records and reports all transactions. An independent firm of CharteredAccountants serves as the internal auditor to execute the internal audit functions. TheManagement and Audit Committee of the Board observes and then recommends correctivemeasures following such audits to improve business operations.

Corporate Governance

Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015a report on the Corporate Governance Management Discussion and Analysis Certificate fromPracticing Company Secretary regarding compliance of conditions of Corporate Governancehave been made a part of the Annual Report.

Significant and Material Orders Passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.

Subsidiary/Joint Venture Companies

A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies included in the consolidated financial statement isattached as Annexure-4.

Disclosures Under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013

The Company has zero tolerance policy towards sexual harassment at the workplace andduring the year the Company has not received any complaints of sexual harassment. TheCompany has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

Compliance with Secretarial Standards

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Company Secretaries of India (SS1 andSS2) respectively relating to Meetings of the Board and its Committees which havemandatory application.

Industrial Relations

During the year under review industrial relations at the Company's manufacturing/operational complexes located at different sites remained cordial.

Acknowledgement

Your Directors would like to place on record their sincere appreciation of theexemplary service rendered by the entire workforce during the year under review. Furtheryour Directors would also like to appreciate the support received from Term Lenders andWorking Capital Bankers. Last but certainly by no means least your Directors would liketo thank shareholders customers Government and the public at large for their continuedsupport and confidence.

For and on behalf of the Board
Place: Bhubaneswar (Subhrakant Panda) (Chitta Ranjan Ray)
Date : 18th May 2019 Managing Director Whole-time Director
DIN: 00171845 DIN: 00241059

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