1.00 The Board hereby presents its Report for the year ended 31st March2019.
2.00 FINANCIAL SUMMARY:
| || ||(र in lakhs) |
|Particulars ||As at 31.03.2019 ||As at 31.03.2018 |
|I. ASSETS: || || |
|Fixed Assets ||51870.69 ||48475.44 |
|Other Non-current Assets ||24836.40 ||20198.50 |
|Current Assets ||349447.74 ||264204.97 |
|Total ||426154.83 ||332878.91 |
|II. EQUITY AND LIABILITIES: || || |
|Shareholders' Funds ||134717.25 ||122284.30 |
|Non-Current Liabilities ||31646.23 ||30271.06 |
|Current Liabilities ||259791.35 ||180323.55 |
|Total ||426154.83 ||332878.91 |
|Particulars ||For the year ended 31.03.2019 ||For the year ended 31.03.2018 |
|III. Revenue from Operations ||412892.10 ||261536.55 |
|Other Income ||3689.38 ||7234.12 |
|Total Revenue ||416581.48 ||268770.67 |
|IV. Total Expenses ||396273.90 ||251977.31 |
|V. Profit/(Loss) Before Tax ||20307.58 ||16793.36 |
|VI. Tax Expenses including deferred tax ||7475.84 ||4895.36 |
|VII. Profit/(Loss) After Tax ||12831.74 ||11898.00 |
|VIII. Other Comprehensive Income/(Expense) ||18.22 ||115.44 |
|IX. Balance carried to Profit and Loss Account ||12849.96 ||12013.44 |
|X. Basic/Diluted Earning per Share ofर 1/- each. ||17.45 ||16.18 |
3.01 In the month of February 2019 the Company declared an InterimDividend ofर 5/- per equity share ofर 10/- each which has been disbursed. YourDirectors are pleased to recommend a final dividend ofर 1.50 per equity share ofर 1/-each. Total Dividend (inclusive of the interim and final dividend) will beर 2/- on equityshare ofर 1/- each for the current year. The final dividend if approved and declared inthe forthcoming Annual General Meeting will result in a total outflow ofर 1230.48 lakhincluding dividend distribution tax.
4.00 STATE OF COMPANY AFFAIRS AND OPERATIONS INCLUDING MANAGEMENTDISCUSSION & ANALYSIS:
4.01 The Board had reported in last year's Board Report that theCompany was able to book large value orders in the last quarter of the year and the orderbook was at a record level. This has resulted in growth both in turnover as well asprofit in the year under report.
4.02 The turnover and profit before tax isर 4166 crore andर 203 croreas compared withर 2688 crore andर 168 crore in the preceding year. The profit would havehigher but for an unexpected surge in the price of steel by over 25%. The steel priceshave however now stabilized.
4.03 The Company acquired Eagle Press & Equipment Co. Ltd. a pressmanufacturing company in Canada. The acquisition was done by purchasing 100% ownership andis a wholly owned subsidiary of the Company.
4.04 This acquisition was done with a view to expand the market forPresses in North America by having a manufacturing base in Windsor (Canada) and a servicecentre in Kentucky (USA). The erstwhile owners will continue to work for the Canadiancompany for two years.
4.05 We intend to use Eagle's facility for stocking and marketing Isgecmade Standard Mechanical Presses (SMP) and also marketing Isgec made Hydraulic Presses inNorth America.
4.06 The order booking during the year under report was higher by 65%as compared with the preceding year and the Company witnessed an increased market share inboth segments i.e. EPC Projects and Products Segments.
4.07 EPC Projects segment consists of projects and turnkey solutionsfor Boilers Air Pollution Control Equipment Sugar Plants & Machinery DistilleriesPower Plants Construction of Factories for Railways and Material Handling Systems.Products segment consists of manufacture of Presses Process Equipments Liquefied GasContainers Tubing & Piping Iron & Steel Castings and Industrial Machinery.
4.08 As reported in last year's report the Company diversified itsProduct Segment by entering into the business of Construction of Factories for RailwaysMaterial Handling Systems and Air Pollution Control projects. The diversification wassuccessful and the Company could book large value orders for these projects.
4.09 The order book as on the date of the report is aboutर 8000crore which is an all time record. Further in the current year higher investment isexpected in infrastructure which will boost demand in the Cement Steel Fertilizer andPower sectors. The Company is therefore expected to have a higher turnover and profit inthe current year.
4.10 The threat of competition continues which the Company has beenand will be able to withstand by focusing on cost control. The cost control measuresinclude increased automation value engineering and expanding the vendor base.
4.11 The export turnover during the year wasर 1124 crore as against '782 crore in the preceeding year.
4.12 Focus on export continued during the year. The efforts includedparticipation in various industrial exhibitions and conferences in India and overseas. Alarge number of high value enquiries have been received. The Company is poised for an evenhigher export turnover in the coming year.
ENGINEERING PROCUREMENT AND CONSTRUCTION (EPC) SEGMENT:
4.13 This Segment consists of projects and turnkey solutions forBoilers Air Pollution Control Equipment Sugar Plants & Machinery DistilleriesPower Plants Construction of Factories for Railways and Material Handling Systems.
4.14 In accordance with the recommendation of Accenture the Companyhas reorganized the Project Execution activities as under:-
(i) Establishment of centralized Engineering Service Centre. This hasenabled efficient utilization of skills and engineering resources.
(ii) Creation of Project Monitoring Mechanism managed by ProjectProcurement Managers and Project Engineering Managers.This was done to increasecoordination between the Engineering Procurement Construction and Project executionteams to shorten the delivery of projects and to bring in other operational efficiencies.
4.15 The Boiler Division continued to be a dominant player in thedomestic market in its area of operation.
4.16 In a significant development the Boiler Division has startedexecuting of Straw Fired Boiler projects. These Boilers will control air pollution amajor initiative taken by the Government of India. It has already booked orders for twoRice Straw Fired Boilers. The technology and engineering support is by a European company.Zero Liquid Discharge policy for Distilleries continues to ensure increased demand forSlop (highly polluting distillery effluent) Fired Boilers and we have booked severalorders for such Boilers.
AIR POLLUTION CONTROL EQUIPMENTS:
4.17 The Company had concluded technology tie-ups to cover almost theentire range of Air Pollution Control Equipment required for coal based power plants asalso some equipment for other industries such as Steel and Cement.
4.18 The Company secured two large value contracts from NationalThermal Power Corporation (NTPC) for supply of Wet Flue Gas Desulphurization for removalof SOx. These orders will be executed on the basis of technology provided by BabcockPower USA.
4.19 The Company could also win the first order for NOx control from analuminum plant with the support of BHI FW USA.
4.20 The Company continues to do well in the supply of ElectrostaticPrecipitators (ESP) with technology from Envirotherm GmbH Germany.
SUGAR PLANTS & MACHINERY AND DISTILLERIES:
4.21 The Company continues to be the global leader for supply of SugarPlants & Machinery by providing state-of-the-art equipment and systems.
4.22 The Company successfully commissioned two sugar plants of 5000 TCDeach in a record period of 12 months.
4.23 In view of the bio-ethanol policy declared by the Government ofIndia for the Ethanol Sector we are expecting good business for Distillery Plants. A feworders from renowned industrial groups are already under execution.
4.24 The Company was executing contracts to design engineer procureconstruct commission and deliver a Bio-refinery project in the Philippines. Due tomanifestations of latent conditions leading to cost overrun and delay in completion of theproject the Company notified the customer that these risks were to their account.
The customer issued directions to continue with the project and startedpaying the additional cost to the sub-contractors directly. The project is substantiallycomplete. The customer however on 30th January 2018 invoked Bank Guarantees amountingto approximatelyर 134 crore and wrongly terminated the contract and also claimeddamages.
4.25 The Company has referred the dispute to Arbitration under theSingapore International Arbitration Centre (SIAC) as per the terms of the contract withthe customer. Actions required in connection with the arbitration such as filing ofclaims and other documents are being taken on a timely basis.
4.26 The hearing of the case is scheduled for September 2019.
4.27 The legal advice is that the Company has a good prospect ofsuccess in proving its claims against the customer and accordingly no provision has beenmade in the books of accounts.
CONSTRUCTION OF POWER PLANTS FACTORIES MATERIAL HANDLING SYSTEMS:
4.28 The Company successfully executed various projects for CaptivePower Plants and received various orders including repeat orders in India and abroad.
4.29 We successfully completed construction of a Diesel ElectricMultiple Unit (DEMU) workshop for the Indian Railways at Varanasi. Orders have furtherbeen secured for construction of Rail Coach Factories at Sonipat & Latur and an Axlemanufacturing facility at Yelahanka in Karnataka.
4.30 The Company has secured large value orders for projects for supplyand erection of Material Handling Equipment. One such project involves the erection of 17km of Pipe Conveyor System for transportation of coal between 3 coal mines and 2 powerplants located in Maharashtra. The other project is for Bulk Material Handling andproviding port cranes at Paradip Port.
4.31 An order has been booked for a Waste Water Treatment Plant for a660 MW power plant at Obra Uttar Pradesh for Zero Liquid Discharge.
MANUFACTURING OF MACHINERY & EQUIPMENT SEGMENT:
4.32 This Segment consists of manufacture of Presses ProcessEquipments Liquified Gas Containers Tubing & Piping Iron & Steel Castings andIndustrial Machinery.
4.33 In order to reduce cost of manufacturing operations variousmeasures were taken. Teams were constituted to do critical analysis and reduce non-valueadded activities. Examples of improvements in operations include implementation of CAMsoftware on CNC Machines HP Heater Dish End to Nozzle welding by automatic welding andinstallation of Concerto software for efficient project schedule control. Gas pipelineshave been laid down in all the manufacturing shops at Yamunanagar to reduce the cost ofgases.
4.34 All these measures have resulted in improvement in productivityand this has contributed towards an increased output.
PRESSES AND CONTRACT MANUFACTURING:
4.35 It has been a good year for this business and profit improvedsignificantly.
4.36 As reported in last year's Board Report the year began with arecord order book. The order booking during the year under report was also good. In orderto meet the delivery commitments capacity was increased in a short period of time.
4.37 Export order booking was also good. Orders were booked from USAEurope and South East Asia by adding new customers.
4.38 Due to higher quality requirements of sheet metal components byVehicle Manufacturers some good orders are expected from their ancillaries.
4.39 The technical collaboration with AP&T Sweden for Hot FormingHydraulic Presses will help in securing orders to meet new safety norms (crash testing)issued by the Automotive Research Association of India (ARAI).
4.40 The Company hopes to increase its market share in specializedHydraulic Presses such as Die Spotting high capacity Cold Forging Presses PowderCompacting Presses and specialized Defense Presses.
4.41 Standard Mechanical Presses (Gap Frame and Straight Sided Presses)produced at our Works at Bawal have very successfully penetrated the Auto ComponentAncillaries and the White Goods sector. There is potential to export these Presses toNorth America and South East Asia. Apart from using the Canadian Subsidiary for stockingof these Presses the Company has plans to stock these in Thailand and Indonesia for readydelivery.
4.42 A Gap Frame Press with Servo Controls was exhibited at the world'sleading Machine Tool Trade Show at Hannover Germany.
4.43 The 'Engineering Excellence Centre' set up by the Company wascertified as an R&D Centre by the Department of Scientific & Industrial Research(DSIR) Government of India. A Servo Press with Synchronized Twin Motors developed by theR&D Centre was a path breaking achievement. This Press is currently under shipment toEurope.
4.44 The highlight of the year as far as Contract Manufacturing isconcerned was the manufacture of high precision mechanical portion of a Proton TherapyEquipment to be installed at the Tata Memorial Hospital Mumbai for treatment of Cancer.Similar business is expected from other leading Medical Equipment manufacturers in theyears to come.
4.45 We established an efficient production line for the production ofHigh Precision Engine Blocks for Diesel Locomotives and supplied 26 such units during theyear. As the Indian Railways have planned to discontinue Diesel Locomotives we willexplore the global market for this product.
4.46 The order booking of this Division was good during the year underreport.
4.47 Demand in the domestic refining petrochemical and fertilizersectors continues to see positive movement due to grass-root and expansion projectsrevival of old fertilizer plants and energy saving investments.
4.48 Following are the highlights of the year:> Booked the largestsingle export order from USA for Heat Exchangers.
> Booked the first order for Screw Plug Exchangers with technologyfrom our licensor TEi USA.
> Booked an order for a Heat Exchanger weighing 380 MT - theheaviest Heat Exchanger booked by the Company.
> Booked a breakthrough order for an Incinerator and a Waste HeatBoiler for a Sulphuric Acid Plant to be supplied in modular construction.
> Booked the largest order for site fabricated columns for aRefinery.
In addition orders were also booked for critical equipments forFertilizer plants.
4.49 At the Works in Yamunanagar a 720 mm thick tube sheet as well asa titanium clad tube sheet were drilled for the first time. Regasified Liquified NaturalGas (RLNG) was used for cutting of plates to reduce the cost of gases.
4.50 The Works in Yamunanagar was qualified for making Reactor IslandEquipment for Nuclear Power Corporation of India Limited.
LIQUIFIED GAS CONTAINERS:
4.51 The Company continued to be the global leader for supply ofChlorine Ton Containers.
4.52 In order to cater to the increased demand capacity was expandedby 30% during the year under report. On the export front due to a boom in the ChlorAlkali industry in South East Asia the Company booked large orders for containerscertified by US Department of Transportation.
4.53 The first order for Stainless Steel Containers for the domesticmarket was successfully executed.
4.54 Container models were developed for the Russian and CIS markets.
TUBING AND PIPING:
4.55 Tubing and Pipe Spools fabrication shop achieved highest everproduction level in the year under report.
4.56 Some of the prestigious orders executed during the year were SuperHeater Coils for a 660 MW project being executed by an EPC company Tube Bundles forRefineries and Pipe Spools for the Oil & Gas sector.
4.57 The Company started with a heavy order book in the current year.
4.58 The Iron Foundry caters largely to the Soda Ash Tool and Die andPaper industries. These industries exhibited growth during the year under report anddemand for them enabled the Division to achieve record billing.
4.59 Major success was achieved on the export front by booking largevalue orders from the Soda Ash industry from European markets.
4.60 Expansion of capacity is underway in the existing Iron Foundry.However due to space constraints further additional capacity is being created atMuzaffarnagar where Steel Foundry Unit is also located.
4.61 As reported in last year's report there were positive signs inthe market and the unit was able to book good orders.
4.62 The Unit is being expanded in order to meet shorter deliveries ofthe castings.
4.63 The Unit booked its first orders from USA prestigious orders fromJapan and from European markets.
4.64 It successfully executed its first order for Inconel gradeCastings and also received orders for Super Critical Grade P92 material developed lastyear.
4.65 The electrical connection was upgraded from 11 KV to 33 KV. Inaddition to uninterrupted electric supply there would be a 10% saving on cost of power.
4.66 Machine Shop at the unit is being equipped to supply FinishedMachine Castings in the very near future.
4.67 The Unit is expected to do better in the current year and have ahigher turnover.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS ALONG WITHDETAILED EXPLANATIONS:
4.68 Details of significant changes in key Financial Ratios is enclosedas Annexure-1
5.00 REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIESAND JOINT VENTURE COMPANIES:
(A) SARASWATI SUGAR MILLS LIMITED (WHOLLY OWNED SUBSIDIARY COMPANY):
(1) As reported in last year's Board Report the all India sugarproduction during the season 2017-18 was 325 lakh tonnes whereas consumption was 254 lakhtonnes. This resulted in high carryover of stock.
(2) The Central as well as State Governments in order to help theSugar Industry took various measures which improved financial position of the sugarmills.
Measures taken by the Central Government:-
(i) Import Duty on sugar was increased from 50% to 100% with effectfrom 6th February 2018;
(ii) The mills were directed to export 50 lakh tonnes of sugar producedduring season 2018-19 according to the quota allocated to each mill by 30th September2019. The loss resulting to mills from export was proposed to be compensated by way of:-
(a) cane subsidy ofर 13.88 per quintal of cane crushed;
(b) transport subsidy.
The compensation is payable to sugar mills subject to compliance of allthe orders issued by the Food Ministry Government of India.
(iii) Re-introduction of the Release Mechanism on 7th June 2018 underwhich each factory is not allowed to sell more than the released quota of sugar in thedomestic market in a particular month.
(iv) For the first time the Central Government notified Minimum SalePrice (MSP) below which sugar mills are not allowed to sell sugar. The MSP which wasfixed atर 29/- per kg with effect from 7th June 2018 was revised toर 31/- per kg. witheffect from 14th February 2019.
(v) Creation of Buffer Stock of 30 lakh tonnes of sugar for a period ofone year from 15th June 2018. Each sugar mill to get financial assistance on the quantityof Buffer Stock allocated multiplied byर 29 per kg. as under:-
(a) Interest at 12% p.a. or as actual rate payable by each millwhichever is less;
(b) Insurance and storage expenses at 1.5% p.a.
(vi) Announcement of scheme of soft loan equivalent to 10.55% of thevalue of sugar atर 31 per kg. produced in season 2017-18. Your factory will get loan of' 66.66 crore on which interest subvention @ 7% p.a. will be given for a period of oneyear from the date of disbursement.
Measures taken by the State Government:
(i) The Haryana State Government to enable payment of sugarcane pricegave subsidy ofर 28.31 crore for the season 2017-18 andर 35 crore (approximately) forthe season 2018-19 to your factory.
(ii) The revenue from operation wasर 624 crore againstर 819 crore inthe preceding year due to less quantity of sugar sold as well as low prices of sugar andits by-products i.e. molasses and bagasse as a result of higher availability ofsugarcane.
(3) The cane availability was affected due to lower yield because ofagro climatic reasons such as excessive and late rains and reduction in the area undersugarcane.
(4) Haryana Government increased the sugarcane prices byर 10 perquintal for the season 2018-19. With the result like earlier years Sugar Mills inHaryana paid the highest cane price in India. The comparative sugarcane prices in Haryanaand Uttar Pradesh are as under:-
|Variety || |
| ||Season ||Season ||Season ||Season |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
| ||(' per Quintal) ||(' per Quintal) ||(' per Quintal) ||(' per Quintal) |
|Early ||340 ||330 ||325 ||325 |
|Mid ||335 ||325 ||315 ||315 |
|Late ||335 ||320 ||315 ||315 |
(5) The working of the sugar factory has been very good. There was animprovement in the average crushing rate. The stoppages and steam consumption were alsoless as compared with the preceding year. The sugar recovery is marginally lower than thepreceding season due to lodging (falling) of cane as a result of excessive late rainsaccompanied by high velocity winds and hailstorms.
(6) The Statistical position is given below:-
|Particulars || |
Sugar Season (October to September)
|Saraswati Sugar Mills (SSM) ||2018-19 ||2017-18 |
|Date of Start of Crushing Operations by SSM ||20.11.2018 ||21.11.2017 |
|Date of Close of Crushing Operations by SSM ||13.05.2019 ||27.05.2018 |
|Cane Crush by SSM (Lakh Tonnes) ||16.60 ||17.69 |
|Recovery (%) ||11.49 ||11.50 |
|Production of sugar by SSM (Lakh Tonnes) ||1.91 ||2.03 |
| || || |
|All India || |
Sugar Season (October to September)
|Production of Sugar (Lakh Tonnes) ||330* ||325 |
|Consumption of Sugar (Lakh Tonnes) ||260* ||250 |
*These are estimated as the sugar season is yet to close.
(7) In addition to the aforesaid measures announced by the CentralGovernment to take care of the increased sugar production the Government announced ascheme for extending loans for the expansion of existing and setting up of newDistilleries to produce Ethanol. The scheme involves subvention of interest at the rate of6% p.a. on the loan sanctioned for a period of five years. Your Company has decided to setup a Distillery and has taken preliminary steps such as submitting of an application forenvironment clearance.
(8) Subject to the normal vagaries of agriculture we expect to have thesame quantity of cane next year.
(9) The closing stock of sugar at the end of the season 2018-19 aftertaking into account the quantity likely to be exported will be at an all time record. Inview of this sugar prices are not likely to improve.
(B) ISGEC HITACHI ZOSEN LIMITED (SUBSIDIARY AND TOINT VENTURE COMPANY):
(1) The revenue from operations is less during the year as comparedwith the preceding year. This is due to low order backlog at the start of the year as aresult of adverse market conditions. The situation improved substantially during the yearand the company has booked orders for more thanर 500 Crore which is a record. The orderbook includes prestigious order for overseas projects for Vanadium Modified Steel Reactorsfor ExxonMobil Antwerp Refinery Project and crude column vacuum column and Productfractionator of Thai Oil Project.
(2) In spite of lower revenue the company could make a little profitagainst loss which was expected at the beginning of the year.
(3) Our on-time delivery performance during the year was good and thecustomers have appreciated the same.
(4) During the year the Company has also undertaken repair andmaintenance work during the Shut downs of key equipment at customer's site. We havesuccessfully completed such work for Chambal Fertilizers & Chemical Ltd. and KanpurFertilizer & Cement Ltd.
(5) The market condition continues to be good due to new refinerypetrochemical and fertilizer projects in India South East Asia and Middle East Asia.
(C) ISGEC TITAN METAL FABRICATORS PRIVATE LIMITED (SUBSIDIARY AND TOINTVENTURE COMPANY):
(1) The Company did well during the year under report. The revenue fromoperations more than doubled as compared to the preceding year.
(2) The Company could book good orders. These included orders forequipment made of Inconel Titanium and Zirconium domestic as well as for export.
(3) With the strong backing of Titan Metal Fabricators USA the JointVenture Partner and training provided by them we qualified to bid for a Zirconium CladReactor Zirconium Column and Zirconium Coiled Vessel for a Formic Acid Plant.
(D) ISGEC FOSTER WHEELER BOILERS PRIVATE LIMITED (SUBSIDIARY AND TOINTVENTURE COMPANY):
(1) The Company continue to do well and expanded its capacity.
(2) In the coming year the Company is likely to be awarded morebusiness as compared with the previous year. The Company is therefore planning tofurther expand its engineering capacity by increasing the manpower as well as purchasingmore hardware and software.
(3) The Company is also enhancing its engineering capability to handleadditional work in new disciplines like Process Engineering Electrical InstrumentationControl and Civil Structural Steel Engineering and to also perform Basic Engineering inaddition to Detail Engineering in many of these Engineering disciplines.
(E) ISGEC REDECAM ENVIRO SOLUTIONS PRIVATE LIMITED (SUBSIDIARY ANDTOINT VENTURE COMPANY):
(1) This is the second year of operation of the Company.
(2) As mentioned in the Report for the last year the Company offeredsolutions for pollution control viz. Bag Filters Hybrid Filters ElectrostaticPrecipitators (non fossil fuel) Dry Flue-Gas desulfurization units for DeNOx applicationsin the industrial segment.
(3) With training and knowledge sharing by Redecam Group S.p.A Italythe Joint Venture Partner in the Company the Company could execute its ordersefficiently.
(4) In the coming years the products are likely to have more demand asair pollution norms are likely to get tightened. The Company is preparing itself to dealwith it and is poised for further growth during the current year.
(F) OTHER WHOLLY OWNED SUBSIDIARY COMPANIES:
(i) Free Look Software Private Limited Isgec Export Limited and IsgecCovema Limited:
There was no commercial activity during the year.
(ii) Isgec Engineering & Projects Limited:
There was no commercial activity during the year except letting out of property atKasauli.
6.00 NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
6.01 Four Board Meetings were held during the year ended 31st March 2019.
7.00 DIRECTORS' RESPONSIBILITY STATEMENT:
7.01 Your Directors hereby confirm that:
(a) In the preparation of the Annual Accounts for the financial year2018-19 the applicable Accounting Standards have been followed and there are no materialdepartures;
(b) The Directors have selected such accounting policies with theconcurrence of the Statutory Auditors and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of theCompany for the financial year;
(c) The Directors have taken proper and sufficient care to the best oftheir knowledge and ability for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013. They confirm that there areadequate systems and controls for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
(d) The Directors have prepared the Annual Accounts on a going concernbasis;
(e) The Directors have laid down internal financial controls to befollowed by the Company and these financial controls are adequate and are operatingeffectively; and
(f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
8.00 INDEPENDENT DIRECTORS:
8.01 All the Independent Directors have furnished declarations thateach of them meets the criteria of independence as provided in Sub-section (6) of Section149 of the Companies Act 2013.
9.00 POLICY ON DIRECTOR'S APPOINTMENT/ REMUNERATION OF DIRECTORS / KEYMANAGERIAL PERSONNEL AND OTHER EMPLOYEES:
9.01 The Nomination and Remuneration Committee shall formulate thecriteria for determining qualifications positive attributes and independence of adirector and recommend to the Board a policy relating to the remuneration for the keymanagerial personnel and other employees. While formulating the policy the Committee willensure that:-
(i) the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run theCompany successfully;
(ii) relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and
(iii) remuneration to directors key managerial personnel and seniormanagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
The Nomination and Remuneration Committee policy is available on thewebsite of the Companyhttp://www.isgec.com/pdf/The-Nomination-and-Remuneration-Committee-Policy.pdf
10.00 EXPLANATION OR COMMENTS ON QUALIFICATION ETC. BY AUDITORS ANDCOMPANY SECRETARY IN PRACTICE:
10.01 There is no qualification reservation or adverse remark ordisclaimer made by the Auditors in the Auditor's Report or by the Company Secretary inPractice in Secretarial Audit Report needing explanation or comments by the Board.
10.02 The Statutory Auditors have not reported any incident of fraud tothe Audit Committee of the Company in the year under review.
11.00 PARTICULARS OF LOANS / GUARANTEES / INVESTMENTS:
11.01 Particulars of Loans given Investments made or Securitiesprovided under Section 186 of the Companies Act are annexed as Annexure-2.
12.00 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
12.01 The Company has formulated a Policy on Materiality of RelatedParty transactions and also on dealing with Related Party transactions as required underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Policy onRelated Party transactions has been disclosed on the website of the Company.
12.02 All contracts arrangements and transactions entered by theCompany during the financial year with related parties were in its ordinary course ofbusiness and were on arm's length basis.
12.03 Members may refer to note 47: Related Party Disclosures pursuantto Indian Accounting Standard to the Standalone financial statement for particulars ofcontracts or arrangements with related parties.
13.00 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITIONOF THE COMPANY AFTER THE CLOSE OF THE YEAR:
13.01 There have been no material changes and commitments if anyaffecting the financial position of the Company which have occurred between the end of thefinancial year of the Company to which the financial statements relate and the date of thereport.
14.00 CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS & OUTGO:
14.01 The required information regarding Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo is annexed hereto asAnnexure-3.
15.00 RISK MANAGEMENT POLICY:
15.01 The Board has developed and implemented a Risk Management Policyfor the Company including for identifying elements of risk which in the opinion of theBoard may threaten the existence of the Company. In terms of the Policy a detailed riskreview is done by Unit Level Committee or Corporate Level Committee (depending upon valueof the order) before accepting any order. All the terms and conditions both financial andtechnical are reviewed. All steps are taken to mitigate risks.
15.02 In addition the Board has laid down a Foreign Exchange RiskManagement Policy which is implemented for hedging Forex risk.
15.03 The Company also takes adequate insurance to protect its assets.
16.00 CORPORATE SOCIAL RESPONSIBILITY:
16.01 The Company has a Corporate Social Responsibility Committee ofthe Board of Directors as under:-
S.No Name of the Committee Member
|1. Mr. Ranjit Puri ||(DIN: 00052459) ||Chairman |
|2. Mr. Aditya Puri ||(DIN: 00052534) ||Member |
|3. Mr. Vinod Kumar Sachdeva ||(DIN: 00454458) ||Member |
16.02 In addition to the amount ofर 19.59 lakhs pertaining to theprevious year the Company was required to spend a further amount ofर 437.30 lakhs forthe year ended 31st March 2019 i.e. an aggregate amount ofर 456.89 lakhs.
16.03 The Company has spentर 445.88 lakhs as under:-
|a) On Social Projects including expenditure in areas around Yamunanagar ||Delhi :र 410.88 lakhs |
|b) Contribution to Prime Minister's National Relief Fund ||:र 35.00 lakhs |
|Total ||:र 445.88 lakhs |
16.04 Balance amount ofर 11.01 lakhs will be spent during the currentyear in accordance with the CSR Policy of the Company.
16.05 The annual report on Corporate Social Responsibility is given inthe prescribed format annexed as Annexure-4.
17.00 ANNUAL EVALUATION BY THE BOARD:
17.01 On the recommendation of the Nomination and RemunerationCommittee the Board has finalized the Evaluation Process to evaluate the entire BoardCommittees Executive Directors and Non-Executive Directors.
17.02 The method of evaluation as per the Evaluation Process is to bedone by internal assessment through a detailed questionnaire to be completed by individualDirectors.
17.03 In accordance with the Companies Act and the ListingRequirements the evaluation is done once in a year after close of the year and beforethe Annual General Meeting.
18.00 ANNUAL RETURN:
18.01 The Annual Return is available on the website of the company at www.isgec.com .
19.00 DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL:
19.01 Mrs. Shivani Hazari (DIN: 00694121) was appointed as anAdditional Independent Director on the Board as on February 9 2019 and her appointment asan Independent Director was approved by members of the company by way of ordinaryresolution passed through postal ballot on March 16 2019.
20.00 NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BESUBSIDIARIES JOINT VENTURES AND ASSOCIATES:
20.01 Isgec Canada Inc. was incorporated as a wholly owned SubsidiaryCompany in Ontario Canada on March 20 2017. Equity capital was contributed to thiscompany on September 4 2019. This company acquired Eagle Press & Equipment Co. Ltd.and its group company and amalgamated itself on 18.09.2018
21.00 DETAILS OF SIGNIFICANT & MATERIAL ORDERS:
21.01 There is no significant or material order passed by theregulators or courts or tribunals impacting the going concern status and Company'soperations in future.
22.00 INTERNAL FINANCIAL CONTROLS:
22.01 The Company has adequate internal financial controls withreference to financial statements and these are working effectively.
23.00 COMPOSITION OF AUDIT COMMITTEE:
23.01 The composition of Audit Committee is as below:-
|S.No Name of the Committee Member ||Position |
|1. Mr. Vinod K. Nagpal (DIN: 00147777) ||Chairman |
|2. Mr. Arun Kathpalia (DIN: 00177320) ||Member |
|3. Mr. Aditya Puri (DIN: 00052534) ||Member |
23.02 There is no recommendation by the Audit Committee which has notbeen accepted by the Board.
24.00 REPORT ON CORPORATE GOVERNANCE:
24.01 Report on Corporate Governance for the year under review asstipulated under the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 is annexed as Annexure-5.
25.00 CONSOLIDATED FINANCIAL STATEMENTS:
25.01 In accordance with Section 129(3) of the Companies Act 2013 theCompany has prepared a consolidated financial statement of the Company and all itssubsidiary companies which is forming part of the Annual Report.
25.02 Further as required under Rule 5 of the Companies (Accounts)Rules 2014 a statement in form AOC-1 containing salient features of the financialstatements of the subsidiary companies is attached as Annexure-6.
26.00 DISCLOSURE REGARDING REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013:
26.01 Disclosures regarding remuneration as required under Section 197(12) of the Companies Act 2013 are annexed as Annexure-7.
26.02 Annexure giving certain details about the employees in receiptof remuneration of not less than one core and two lakh rupees throughout the financialyear or eight lakh and fifty thousand rupees per month during any part of the year is notannexed with the Boards' Report. In accordance with Section 136 (1) of the Companies Act2013 the Annexure is available for inspection by any member at the registered office ofthe Company during working hours 21 days before the date of the AGM.
27.00 VIGIL MECHANISM:
27.01 The Company has established a Vigil Mechanism for Directors andEmployees in accordance with Subsection (9) and (10) of Section 177 of the Companies Act2013. Details of Vigil Mechanism are given in the Corporate Governance Report. The VigilMechanism has been disclosed on the website of the Company.
28.00 MAINTENANCE OF COST RECORDS:
28.01 Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 the provision of maintenance of costrecords is applicable on the Company accordingly the cost accounts and records are madeand maintained by the Company.
29.00 PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
29.01 The Company has in place a Policy of Prevention on SexualHarassment in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. An Internal Complaint Committee hasbeen set up to redress complaints received regarding sexual harassment.
30.00 SECRETARIAL AUDIT REPORT:
30.01 The Board of Directors of the Company has appointed M/s. PramodKothari & Co. Company Secretaries to conduct the Secretarial Audit.
30.02 Pursuant to Section 204 of the Companies Act 2013 a SecretarialAudit Report given by Mr. Pramod Kothari of M/s. Pramod Kothari &Co CompanySecretaries is annexed as Annexure-8.
31.00 SECRETARIAL STANDARDS
31.01 The Company complies with all applicable secretarial standards.
32.01 The Board wishes to express its appreciation to all the employeesof the Company for their contribution to the operations of the Company during the year.
33.00 INDUSTRIAL RELATIONS:
33.01 Industrial relations remained peaceful.
34.01 Your Directors take this opportunity to thank the FinancialInstitutions Banks Government Authorities Regulatory Authorities and the Shareholdersfor their continued co-operation and support to the Company.
34.02 With these remarks we present the Accounts for the year endedMarch 31 2019.
| || ||BY ORDER OF THE BOARD |
|Vinod K. Nagpal ||Aditya Puri ||Sidharth Prasad |
|Director ||Managing Director ||Director |
|DIN: 00147777 ||DIN: 00052534 ||DIN: 00074194 |
Date: May 29 2019