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IP Rings Ltd.

BSE: 523638 Sector: Auto
NSE: IPRINGLTD ISIN Code: INE558A01019
BSE 00:00 | 28 Jan 141.15 0.85
(0.61%)
OPEN

140.30

HIGH

144.45

LOW

137.00

NSE 05:30 | 01 Jan IP Rings Ltd
OPEN 140.30
PREVIOUS CLOSE 140.30
VOLUME 1977
52-Week high 187.00
52-Week low 65.00
P/E 14.21
Mkt Cap.(Rs cr) 179
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 140.30
CLOSE 140.30
VOLUME 1977
52-Week high 187.00
52-Week low 65.00
P/E 14.21
Mkt Cap.(Rs cr) 179
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IP Rings Ltd. (IPRINGLTD) - Director Report

Company director report

The Directors have pleasure in presenting the Thirtieth Annual Reporttogether with the Audited Financial Statements for the year ended March 31 2021 and theAuditor's Report thereon.

1. COMPANY PERFORMANCE & COVID IMPACT

Total Revenue of the Company including other income was 19946.01 Lakhsin the Current Year as against 19858.88 Lakhs in the previous year. Profit before Tax(PBT) was 654.01 Lakhs as against 173.91 Lakhs in the previous year.

Towards the beginning of 2020-21 the Company's operations werehampered due to the CoVID-19 pandemic. A nationwide lockdown was announced to contain thespread of the virus. Understanding the severity of the crisis the Company took lot ofmeasures to help and support its customers employees dealers suppliers and society.The Company also set-up a Business Continuity Task Force and pro-actively rolled-out aslew of measures to ensure health & safety of its employees suppliers and dealers.Work from home was implemented for almost all executives & managers well on time.

Your Company took initiatives to combat the ill effects of COVID byfollowing stringent protocols of people movement inside the factory premises providingsupplements like masks gloves sanitizers to employees and others who are associated withthe day to day operations of the factory.

2. FINANCIAL RESULTS

(Rs. in Lakhs)

2020-2021 2019-2020
Profit before Finance charges Depreciation and Tax 2551.70 2222.91
Finance charges 743.41 943.55
Depreciation 1154.28 1105.45
Profit / (Loss) before Tax 654.01 173.91
Provision for Taxation (Net) 157.20 63.80
Profit / (Loss) after Tax 496.81 110.11
Other Comprehensive Income -62.59 -14.61
Profit/(loss) attributable to Equity Share holders 434.22 95.50

3. DIVIDEND

Your Directors recommend a Dividend of Re.1.50/- per Equity Share offace value of Rs. 10/- each for the year ended March 31 2021.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT THE ECONOMY

The year 2020 witnessed an unwelcome surprise in the form of the COVID19 pandemic and has brought about an inescapable ‘new reality' for many of us asindividuals and companies. Both the Global and Indian economies have been reeling underthe impact of successive waves of the pandemic. Rating agencies expect a de growth ofbetween 4.7 and 4.1% in the global economy while the Indian economy is expected to degrow by 7.3% in FY 21 primarily caused by the pandemic induced lackluster Q1 and Q2.Timely fiscal and monetary interventions by Central Governments around the world and theperseverance of businesses and people helped with a sharp V shaped recovery in the 2ndhalf of the year.

THE INDIAN AUTO INDUSTRY

The Indian Auto Industry already reeling from the sharp slow-downwitnessed in 2019 was further affected by the nationwide and the non-uniform state wiseCOVID induced lockdowns. Restrictions on movement of people and goods created labour andsupply chain shortages. By H2 government restrictions eased and supply chain issuesresolved. The favorable monsoons pent-up demand festive season and customers changingrelationship with personal mobility caused demand to return. The year ended with thedomestic passenger car segment recovering satisfactorily and reaching almost the samelevels (- 2.3%) as FY 20. The 2-Wheeler industry reached 85% of FY 20 sales while thealready heavily impacted CV segment registered about 80% of PY sales. The Tractor segmentlargely unaffected due to the good monsoon and relative low impact of the pandemic inrural India registered a healthy growth. The 3- Wheeler segment continued to be affecteddue to changing mobility trends and subdued passenger and goods segment demand.

REVIEW OF BUSINESS OPERATIONS

Demand for your company's products picked up in Q3 and Q4 of FY20. The Piston Ring Division benefitted from the Auto Industry's transition to BS VIEmission norms. The more stringent emission norms required increasingly higher cost andsophisticated surface treatment like Physical Vapor Deposition (PVD) of special Cr-Nalloys on Piston Rings thus improving the utilization of the expensive PVD furnaces. Thecontraction in OE volumes therefore translated to a 13.5% reduction in sales turnover forthis division. The Precision Forgings Machined Steel products and Specialty toolingdivisions fared better registering a growth of 7.5 % over PY. This was primarily fuelledby increased demand for the company's near net shaped cold forged products from NAand the domestic passenger car industry. As a result your company as a whole was able toachieve the same level of sales revenue as the previous year despite ‘near zero'activity levels for the first 4 months of the financial year. However the variousausterity measures adopted and efficiency improvement initiatives undertaken helped yourcompany improve its profitability thus recording a Profit after Tax of Rs 496.81 Lakhswhile continuing to invest in technology capabilities capacities and modernization.

OPPORTUNITIES AND THREATS

OPPORTUNITIES:

Stringent Emission norms will necessitate the usage of increasinglysophisticated coating technologies on Piston Rings. Your company's access to globaltechnologies through its relationship with NPR of Japan and its locally developedinnovative design solutions augur well for the future.

With increasing NVH (Noise Vibration and Harshness) standards anddemand for light-weighting the necessity for near net shaped precision forged componentscontinue to grow in the rapidly changing automotive world. Your company's innovativeuse of the unique Orbital Cold Forming technology places it in a strong position toleverage these opportunities.

Your company's fully integrated design engineering andmanufacturing capabilities can be further leveraged to make strategic entries into thegrowing global opportunities for precision engineered products in the automotive defenseand aerospace segments.

THREATS:

Global health crisis: COVID 19 its repeated reoccurrence in waves andother similar potential out breaks makes planning and forecasting very challenging in adynamic business environment.

Economic Uncertainty caused by fluctuating commodity prices exchangerates freight availability and supply chain disruptions add to the challenge.

Fast changing Government regulations and Customer sentiment pertainingto safety and emissions can jeopardize some of the existing businesses while providingseveral opportunities for new generation components.

FUTURE PROSPECTS

The Indian Automotive Industry continues to be the engine for theGovernments ‘Make in India' program. The sector is expected to contribute 12% tothe country's GDP and over 40% to India's manufacturing sector. The automotiveindustry in India is expected to grow at a CAGR of between 12 and 14%. In addition theGovernment's PLI schemes to promote exports will further enhance the company'scompetitive position in the global automotive markets.

Continuous focus on technology and business development while keeping arelentless focus on value engineering and customer partnerships will enable your companyto meet the shareholders expectations of sustained growth and profitability.

5. FINANCIAL PERFORMANCE

Your Company has achieved a turnover for the year 2020-21 of 198.46Crores which was higher than the previous year turnover of 197.93 Crores and ended thesame with a Profit after Tax of 496.81 lakhs while compared to Profit after tax of 110.11Lakhs recorded in the previous year.

6. HUMAN RESOURCE

Health Safety Security and environment is a core value of yourCompany. The health safety and security of everyone who works for your Company iscritical to the success of its business. Employee training is continuing to receive toppriority in the Management's efforts to reach World Class Standards. Systematictraining is given at all levels to improve the knowledge and skill level of all employees.

7. INDUSTRIAL RELATIONS

Industrial relations during the year were cordial during the financialyear.

8. 10 YEAR RECORD

A chart showing 10 years' performance is appended forming part ofthis Report under the heading “Financial highlights”.

9. DIRECTORS

In accordance with the provisions of the Companies Act 2013 Dr RMahadevan retires by rotation and is eligible for reappointment. However he is notseeking re-election.

Mr. Yoshitaka Ogawa [DIN: 08949781] was appointed as an AdditionalDirector by the Board on November 09 2020 and he will hold office till this AnnualGeneral Meeting. By virtue of Sections 149 152 161 and other applicable provisions ifany of the Companies Act 2013 your Directors are seeking Members' approval forappointment of Mr. Yoshitaka Ogawa as Director [Non Executive] of the Company who isliable to retire by rotation.

All the Independent Directors of the Company have affirmed that theymeet the criteria for independence as provided in Section 149(6) of the Companies Act2013. They have also complied with the Code for Independent Directors prescribed inSchedule IV to the Companies Act 2013. Formal Annual Evaluation of Directors was done asper the requirements of the Companies Act 2013.

10. AUDITORS

M/s Krishnasamy & Rajan Chartered Accountants (Firm Regn. No.:01554S) are the Statutory Auditors of the Company for the period of 5 years from theconclusion of 26th Annual General Meeting until the conclusion of the 31stAnnual General Meeting. The Company has obtained necessary certificate under Section 141of the Act conveying their eligibility for being statutory auditors of the Company for theyear 2021-22.

11. RELATED PARTY TRANSACTIONS

All transactions entered by the Company with Related Parties were inthe ordinary course of business and at arm's length pricing basis. The Audit Committeegranted prior approval for the transactions and the same are being reviewed by the AuditCommittee and the Board of Directors at regular intervals. There were no materiallysignificant transactions with related parties during the financial year 2020-21 which werein conflict with the interest of the Company. The details of the transactions with relatedparties are given in Note No. 36 of the financial statements.

12. BOARD MEETINGS HELD DURING THE YEAR

During the year ended 31st March 2021 5 meetings of theBoard of Directors were held. The details of the meetings composition of the Board itscommittees and the attendance by the Directors are furnished in the Corporate GovernanceReport which is attached as Annexure-III to this Report.

13. POLICIES

In accordance with the requirements of the Companies Act 2013 theListing Agreement and SEBI (LODR) Regulations 2015 the Board of Directors of the Companyhas framed the required policies and the policies wherever mandated are uploaded on thecompany's website under the web-link www.iprings.com. The brief list of the links is asfollows:-

TERMS OF APPOINTMENT OF IDs DIRECTORS FAMILIARIZATION PROGRAM
https://iprings.com/investors/code-of-conduct/ https://iprings.com/investors/code-of-conduct/
POLICY ON VIGIL MECHANISM / WHISTLE BLOWER POLICY CODE OF BUSINESS CONDUCT AND ETHICS
https://iprings.com/investors/code-of-conduct/ https://iprings.com/investors/code-of-conduct/
ANNUAL REPORTS RELATED PARTY TRANSACTION POLICY
https://iprings.com/investors/annual-reports/ https://iprings.com/investors/code-of-conduct/
CSR POLICY NOMINATION AND REMUNERATION POLICY
https://iprings.com/investors/code-of-conduct/ https://iprings.com/investors/code-of-conduct/
GENERAL UPDATES
https://iprings.com/investors/

14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186OF THE COMPANIES ACT 2013

The Company has not either given / taken any loans guarantees underSection 186 of the Companies Act 2013 and the details of investments are provided underNote Number 2A [NON-CURRENT FINANCIAL ASSETS INVESTMENTS] in the Financial Statements.

15. ANNUAL RETURN

The Annual Return as on 31st March 2021 has been uploaded inthe company's website i.e. www.iprings.com

16. BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 Independent Directors at their meeting held on 17th March2021 considered / evaluated the Board's performance Committees and performance of theChairman and other non-independent Directors. The Board has undergone a formal reviewwhich comprised Board effectiveness and allied subjects. The Board also reviewed theworkings of the various committees and sub-committees without participation of theconcerned Directors / Members.

17. VIGIL MECHANISM

Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7of the Companies (Meetings of Board and its Powers) Rules 2014 and SEBI (LODR)Regulations 2015 the Board of Directors had approved the Policy on Vigil Mechanism whichinter-alia provides a direct access to the Chairman of the Audit Committee. Your Companyhereby affirms that no Director / employee have been denied access to the Chairman of theAudit Committee and that no complaints were received during the year.

18. INTERNAL COMPLAINTS COMMITTEE

The Company has put in place a policy for prevention prohibition andRedressal against sexual harassment of women at the work place to protect women employeesand enable them to report sexual harassment at the work place. No complaints were receivedfrom any employee during the year ended 31st March 2021.

19. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 with respect to Directors' Responsibility statement it is hereby stated-

i. that in the preparation of the annual accounts for the year ended 31stMarch 2021 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;

ii. that the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit of the Company for year under review;

iii. the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts for the year ended31st March 2021 on a “going concern” basis;

v. the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and

vi. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

20. CORPORATE SOCIAL RESPONSIBILITY [CSR]

Pursuant to Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 and its subsequentamendments your Company framed a Policy on Corporate Social Responsibility and an amountof Rs 9 Lakhs was spent towards Corporate Social Responsibility obligations and therelevant details are provided in Annexure-II to this Report.

21. ACKNOWLEDGEMENT

The Directors wish to express their appreciation for the continuedco-operation of the Central and State Governments Bankers customers dealers suppliersand share-holders

Your Directors wish to place on record their appreciation of theTechnical Assistance and also the support extended by M/s Nippon Piston Ring Co. Ltd.Japan and M/s. India Pistons Limited Chennai respectively.

Your Directors also wish to place on record their appreciation of thecontribution made by the employees at all levels.

For and on behalf of the Board For and on behalf of the Board
Dr R Mahadevan A Venkataramani
(DIN 00001690) (DIN 00277816)
Director Managing Director
Chennai Chennai
June 21 2021 June 21 2021

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