Your Directors are pleased to present the 56th Annual Report and the Audited FinancialStatements of the Company for the financial year ended 31st March 2018.
| || || |
Amount in Rs. crores
| || ||FY18 ||FY17 |
|1 ||Revenue from operations ||1769.26 ||1697.04 |
|2 ||Other Income ||37.33 ||49.35 |
|3 ||Total Revenue ||1806.59 ||1746.39 |
|4 ||Profit before finance cost depreciation taxation prior period income and exceptional items ||461.39 ||564.68 |
|5 ||Finance Cost ||78.23 ||86.33 |
|6 ||Depreciation ||100.80 ||108.69 |
|7 ||Profit before Tax ||282.36 ||369.66 |
|8 ||Tax including Deferred Tax ||95.43 ||119.83 |
|9 ||Profit after Tax ||186.93 ||249.83 |
|10 ||Other Comprehensive Income/ (Expenses) ||(2.35) ||0.17 |
|11 ||Total Comprehensive Income/ (Expenses) for the year ||184.58 ||250.00 |
|12 ||Dividend (including Tax on Dividend) ||32.19 ||32.19 |
|13 ||Balance carried forward ||1168.61 ||1016.22 |
Your Company's revenue from operations reached a new high of Rs.1769.26 crores(previous year: Rs.1697.04 crores) including highest ever foreign exchange earnings ofRs.1506.87 crores (previous year: Rs.1447.37 crores). However EBITDA before exceptionalitems decreased to Rs.461.39 crores (previous year: Rs.564.68 crores) and profit after taxstood at Rs.186.93 crores (previous year: profit of Rs.249.83 crores) mainly on account ofincrease in raw material cost.
The Board of Directors in its meeting held on 21st March 2018 had approved payment ofinterim dividend of Rs.5/- per Equity Share (@ 50%) on 26977053 Equity Shares of theCompany of face value of Rs.10/- each fully paid-up out of the profits for FY 2017-18.Interim dividend was paid to the shareholders as per their shareholding in the Company ason 3rd April 2018 (Record Date).
In view of the excellent performance during the year under review in addition tointerim dividend your Directors are pleased to recommend a final dividend of Rs.10/- perequity share (@ 100%) of face value of Rs.10/- each for the year ended 31st March 2018subject to approval of shareholders at the forthcoming Annual General Meeting of theCompany. Final dividend if approved by the shareholders taken together with the interimdividend will amount to total dividend of Rs.15/- per equity share for FY 2017-18.
State of Company's Affairs
The production of ferro chrome during the year under review was 234443 tonnes(previous year: 235460 tonnes).
During the year under review your Company generated 946.05 MU's of electricityincluding 3.32 MU's from Solar Power (previous year: 1036.88 MU's) in accordance withcaptive requirement.
The Company's first major initiative in renewable energy is now a reality with the 3 MWsolar power facility at Therubali being successfully commissioned in June 2017. Work onanother 1.5 MW at the same location has already commenced and the Company is alsoexploring greenfield sites. Given its leading position in the Indian ferro chrome industryand being globally recognised the Company is conscious of its responsibility towardssustainability and accords highest priority to health safety and environment.
During the year under review the State Pollution Control Board (SPCB) had issuednotice pointing out certain non-compliances at Sukinda & Mahagiri Mines andsubsequently Rs.Consent to Operate' (CTO) for both the mines had been withdrawn videletter dated 10th April 2017. The Company has addressed all the issues pointed out bySPCB and CTO has been reinstated vide letter dated 22nd June 2017. The additionalpollution control measures including system for mechanised wheel washing of lorriesimproved storm water management etc have set a new benchmark for the Sukinda chromitezone.
Despite the above interruption chrome ore production was highest ever at 550670tonnes as compared to 545111 tonnes during the previous 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 used only for captiveconsumption thus maximising contribution to the exchequer.
Scheme of Amalgamation
During the year under review the Board of Directors of the Company at its meeting heldon 28th September 2017 approved a Scheme of Amalgamation in terms of Sections 230-232 ofCompanies Act 2013 involving amalgamation of Indian Metals & Carbide Limited and BPanda and Company Private Limited with Indian Metals & Ferro Alloys Limited. The saidscheme is conditional upon approval of the respective shareholders & creditorsconcerned National Company Law Tribunal and other regulatory and statutory approvals asapplicable.
Extract of the Annual Return
An extract of annual return for the financial year ended on 31st March 2018 in FormMGT-9 pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014 is attached as Annexure-1.
Number of Meetings of the Board
The Board met six times in FY 2017-18 viz. on 18th May 2017 17th July 2017 28thSeptember 2017 24th October 2017 29th January 2018 and 21st March 2018. The maximuminterval between any two meetings did not exceed 120 days. The details of the compositionof the Board and its Committees and of the Meetings held and attendance of the Directorsat such Meetings 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 2018 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 2018 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 SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations).
Policy on Directors' Appointment and Remuneration
The Company's Policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of section 178 is attached as Annexure-2 tothis Report.
Auditors and Auditors' Report
M/s Haribhakti & Co.LLP. Chartered Accountants (Firm RegistrationNo.103523W/W100048) were appointed as Statutory Auditors of the Company to hold officetill the conclusion of the 57th Annual General Meeting to be held in the calendar year2019. In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the appointment of M/s Haribhakti & Co. LLP. CharteredAccountants as Statutory Auditors of the Company is placed for ratification by theshareholders.
There are no qualifications reservations or adverse remarks or disclaimers made intheir audit report.
The Company has appointed M/s Sunita Mohanty & Associates Company Secretaries toconduct secretarial audit and their Report is appended to this Report as Annexure-3.
There are no qualifications reservations or adverse remarks or disclaimers made intheir secretarial audit report.
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.
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-4 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-5 to this Report.
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 involves Self-Evaluation by the Board Member and subsequently assessmentby the Board of Directors. A member of the Board will not participate in the discussion ofhis/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 |
|Dr B Panda* ||143:01 |
|Mr Baijayant Panda ||142:1 |
|Mr Subhrakant Panda ||149:1 |
|Mr J K Misra ||25:1 |
|Mr C R Ray ||16:1 |
|Mrs Paramita Mahapatra ||0.3:1 |
|Mr D Bandyopadhyay ||3:1 |
|Mr N R Mohanty ||3:1 |
|General Shankar Roychowdhury (Retd) ||3:1 |
|Name of the Director ||Ratio |
|Major R N Misra (Retd) ||3:1 |
|Mr S P Mathur ||3:1 |
|Mr S Nautiyal ||3:1 |
|Mr Stefan Georg Amrein ||0.05:1 |
|Mr Bijoy Kumar Das ||3:1 |
Ceased to be a Director w.e.f 17th Juty 2017
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 |
|Dr B Panda* ||(19.46) |
|Mr Baijayant Panda ||(21) |
|Mr Subhrakant Panda ||(20) |
|Mr J K Misra ||(8.64) |
|Mr C R Ray ||(4.53) |
|Mrs Paramita Mahapatra ||30 |
|Mr D Bandyopadhyay ||107.52 |
|Mr N R Mohanty ||113.23 |
|General Shankar Roychowdhury (Retd) ||112.39 |
|Major R N Misra (Retd) ||107.92 |
|Name of the Director/CFO&CS ||% increase |
|Mr S P Mathur ||113.33 |
|Mr S Nautiyal ||113.95 |
|Mr Stefan Georg Amrein ||0 |
|Mr Bijoy Kumar Das ||10741 |
|Mr Prem Khandelwal CFO & CS ||42.47 |
| || |
| || |
Ceased to be a Director w.e.f 17th July2017
iii) the percentage increase in the median remuneration of employees in the financialyear: 8.39
iv) the number of permanent employees on the rolls of company: 2404
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:
Average percentile increase in the salaries of employees other than the managerialpersonnel : 56th Percentile increase in the managerial remuneration : 42nd
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 employees who were in receipt of remuneration of not less thanRupees One Crore and Two Lakh during the financial year or Rupees Eight Lakh FiftyThousand per month during any part of the said year as required under Section 197 (12) ofthe Act read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in the Annexure forming part of the Report. In terms ofproviso to Section 136(1) of the Act the Report and Accounts are being sent to theshareholders excluding the aforesaid Annexure. The said statement is also open forinspection at the Registered Office of the Company. Any member interested in obtaining acopy of the same may write to the Company Secretary.
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
Dr Bansidhar Panda expressed his desire to step down as a Director and consequentlyfrom the post of Executive Chairman with effect from the conclusion of 55th Annual GeneralMeeting of the Company held on 17th July 2017 and thereafter was designated as Founder& Chairman Emeritus and to act as an Advisor to the Company.
Mr Baijayant Panda Vice Chairman and Mr Stefan Georg Amrein Director retire byrotation at the forthcoming Annual General Meeting of the Company and are eligible forre-appointment.
Resolutions seeking approval of the members have been incorporated in the notice of theforthcoming Annual General Meeting. Brief resume/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 2018 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 2017 ||7009 ||108933 |
|(ii) ||Number of shareholders who approached the Company for transfer of shares from unclaimed suspense account during the year 2017-18 ||24 ||196 |
|(iii) ||Number of shareholders to whom shares were transferred from unclaimed suspense account during the year 2017-2018 ||24 ||196 |
|(iv) ||Aggregate number of shareholders and the outstanding shares in the unclaimed suspense account lying as on 31st March 2018 ||6985* |
* Pursuant to IEPF Fund Authority (Accounting Audit Transfer & Refund) Rutes 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.
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-6.
During the year under review industrial relations at the Company's manufacturing/operational complexes located at different sites remained cordial.
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) ||(Jayant Kumar Misra) |
|Date : 21st May 2018 ||Managing Director ||Director (Corporate) & COO |
| ||DIN:00171845 ||DIN:00146526 |
Particulars required under section 134 of the Companies Act 2013 read with Companies(Accounts) Rules 2014:
A. Conservation of Energy
(i) Steps taken or impact on Conservation of Energy
(a) 34 Nos of 42 watt LED lamps fitting & 186 Nos of 9 Watt LED Lamps fittings wereused in place of 70 watt HPSV lamp in 30 MW Power Plant (PP) & 120 MW PP. 7 Nos of 100Watt & 3 Nos of 150 Watt LED lamp fittings were used in place of 250W MH Lamp in 30 MWPP & 120 MW PP. 21 Nos of 25 Watt LED Lamps fitting were used in place of 70 Watt HPSVLamp in 120 MW PP. 6 Nos of 72 Watt LED Lamps fitting were used in place of 150 Wattstreet light fittings in 120 MW PP. 8 no's of 33 Watt and 10 nos of 42 Watt LED lightfittings used replacing 2x28 Watt and 2x40 Watt tube light fittings in 108 MW PP & 120MW PP. Energy Saving: 73 361 Kwh/ Year.
Blow down pit pumps of 30MW PP were replaced by energy efficient pumps meeting therequirement which resulted in energy saving. Energy Saving: 95040 Kwh/Year.
Water supply line from guard pond (waste water pond) pump to ash conditioner in 120 MWPP was rerouted with higher size pipe to increase flow rate which enabled to stop oneguard pond pump. Energy Saving: 52800 Kwh/Year.
(b) Total 1008 nos. of different wattage light fittings replaced with LED fittings atUnit-I & Unit-II. Energy Saving: 610 MWh/Year.
Replacement of Conventional light like Metal halide mercury vapor lamp with LED lightin the crane bay 1 to 5. Calculated Energy Saving in 2017-18 is 51 MWh.
(a) Continuous replacement of conventional high wattage lights with suitable lowwattage LED lights to reduce power consumption.
(b) Maintaining power factor upto 0.98 by using APFCR panel.
(c) Installation & commissioning of new 3.5 Core 240 Sq.mm Cu. Power cable to 1000Amp PCC panel at +55 mRL of Mahagiri Mines (Chromite) underground for stable power supplyand reduce losses due to voltage drop.
(d) Installation & commissioning of 250 KVA DG at Sukinda Mines (Chromite) SubStation-2 for power back up instead of drawing power from Mahagiri Mines (Chromite) over1.5 kms overhead line. This reduces losses due to voltage drop and power failure time dueto fault in overhead line.
(e) Installation of VFD for Vibrating Feeders of Screening Plant-2 in place of DOLstarter to avoid frequent start/stop of feeder and to have controlled flow of ore. Thiseliminates the crusher jam which in turn improves plant efficiency and saving of energy.