To the Members,
On behalf of the Board of Directors of your Company, it gives me pleasure in presenting the Thirty Fourth Annual Report together with the Audited Financial Statements for the year ended 31st March, 2023:
1. Financial results
|(Rs. in lakhs)
Profit before interest, depreciation and tax
Depreciation and Amortization expenses
Profit before tax
Provision for tax
Profit after tax
Earnings per share
The Board of Directors recommended a dividend of Rs.10/- per equity share having face value of Rs.10/- each (100%) for the year ended 31st March, 2023 which shall be paid subject to approval of members.
In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors have formulated a Dividend Distribution Policy and the same can be accessed at www.igpetro.com/corporate-governance/
3. Operating and Financial Performance
The Company reported highest ever revenue growth at Rs.2,37,455.66 lakhs for the year, an increase by 24% when compared to Rs.1,89,190.74 lakhs for the year 2021-22 on the back of the optimum operation of all plants including the Advance Plasticizers. The export contributed upto 7% of the total revenue of the Company. The profit before interest, depreciation and tax declined by 22% to Rs.33,994.54 lakhs. The finance cost saw substantial increase which is on account of the additional finance facilities availed by the Company for the expansion of new Phthalic Anhydride plant. The profit after tax fell by apprx. 25% from Rs.26,671.89 lakhs in 2021-22 to Rs.20,032.73 lakhs during 2022-23 on account of softening of the prices of Phthalic Anhydride for part of the year, lower realization from Maleic Anhydride and increased finance cost.
The Directors confirm that no material changes or commitments have occurred between the end of the financial year and the date of this report, which may affect the financial statements of the Company.
The brownfield expansion of Phthalic Anhydride by upto 53,000 MTPA is progressing as per schedule and is expected to commission by FY 2024. With the commission of this plant, the Company also expects to increase its capacity for Maleic Anhydride and other by-products.
5. Contribution to the Exchequer
The Company has contributed Rs.44,785.70 lakhs to the exchequer by way of income tax, customs duty, goods and service tax, etc.
6. Share Capital and Finance
a) Share Capital
The Companys paid-up Equity Share Capital is Rs.3,079.81 lakhs as at 31st March, 2023. The shareholding of the Promoters and Persons Acting in Concert with Promoters are 68.74%.
The borrowing of the Company comprises of external commercial borrowings, term loan and working capital facilities. The debts (including interest) are being serviced regularly.
c) Credit Rating
The Credit Ratings of the Company are "INDAA-/Stable" (term loan and fund based working capital) and "IND A1+" (non-fund based working capital) issued by India Ratings & Research.
During the year, the Company has not accepted or invited any deposits from the Public.
e) Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 ("the Act") are given in the notes to the Financial Statements.
7. Transfer to General Reserves
The Company do not propose to transfer any amount to the General Reserves.
8. Subsidiaries/Associates/Joint Ventures
The Companys wholly owned subsidiary i.e. IGPL International Ltd. is yet to commence its operations and the present activities relates to investments. The consolidated financial statements of the Company are prepared in accordance with the applicable provisions of the Act and the Ind AS. The audited consolidated financial statements together with the Auditors report thereon forms part of this Annual Report.
In accordance with the provision of Section 129 of the Act, a statement containing salient features of the financial statements of the subsidiary in Form AOC-1 is attached with this Annual Report.
The financial statements of the wholly owned subsidiary are placed on the website of the Company and available for inspection by the members of the Company. A copy of the audited accounts shall be made available to the member upon request.
9. Corporate Social Responsibilities (CSR) Initiatives
The Company CSRs activities focused primarily on education, skill development and women empowerment. The Company tied-up with Saraswati Shishu Mandir Trust, Tata Community Initiatives Trust and Saksham Foundation for undertaking various projects on the areas as identified by the CSR Committee. The said projects were classified as on-going projects in accordance with the provisions of the Act and the rules.
For the year 2022-23, the Companys CSR obligation was to the extent of Rs.436.70 lakhs against which the Company had spent Rs.436.99 which includes the transfer of Rs.98.76 lakhs to the special bank account opened by the Company as provided under Section 135(6) of the Act. The details of the various activities carried out during the year is provided in the annual report on CSR and annexed to the Directors Report as "Annexure-I".
In respect of the ongoing project of the 2020-21 in respect of which the Company had transferred Rs.99.47 lakhs to a special bank account, the entire amount has been utilized for the said project.
The CSR Policy of the Company can be accessed at www.igpetro.com/csr/
10. Annual Return
Pursuant to the provisions of Section 92(3) and 134(3)(a) of the Act, the Annual Return of the Company as at 31st March, 2023 is uploaded on the website of the Company at www.igpetro.com/corporate- announcement/
11. Vigil Mechanism Policy
The Vigil Mechanism Policy of the Company deals with the instances of actual or suspected unethical behavior, fraud, etc. The Audit Committee reviews the functioning of the Policy. The details of the Vigil Mechanism has been elaborated in the Corporate Governance Report and posted on the Companys website www. igpetro.com/corporate-governance/
12. Transfer of shares to IEPF Authority
In accordance with the provisions of Sections 124, 125 of the Act, read with the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as "IEPF Rules") the amount of dividend or any other amount remaining unclaimed or unpaid for a period of seven years is required to be transferred to the IEPF Authority. The shares in respect of which dividend remained unclaimed or unpaid for seven consecutive years or more, shall also be liable for transfer to the IEPF Authority.
In terms of Section 124(6) of the Act read with the IEPF Rules, the Company had, during the financial year 2022-23, transferred 254,363 shares to IEPF Authority in respect of shares on which dividend has not been paid or claimed for seven consecutive years. The Company also transferred the unpaid/unclaimed dividend amount of Rs.15,25,808/- pertaining to FY 2014-15 to the Investor Education and Protection Fund.
The shareholders may note that the dividend declared by the Company for the financial year 2015-16 and remaining unclaimed shall be liable to be transferred to IEPF on 6th October, 2023. Further if the shareholders have not claimed dividend for seven consecutive financial years i.e. between FY 2015-16 to FY 2021-22, the underlying shares related to the dividend of FY 2015-16 shall also be transferred to IEPF. The shareholders are advised to forthwith claim their dividend by writing to the Company/RTA.
The Company has uploaded the details of unclaimed dividend on the Companys website at www.igpetro.com/investor-information
Members whose shares have been transferred to the IEPF can claim their shares and dividend from the IEPF Authority by filing an online web based Form IEPF-5 available at www.iepf.gov. in/ IEPF/corporates.html The application for the claiming of shares along with the supporting documents are required to be submitted in an online mode only as required under the IEPF Rules. Members may contact the Company for further guidance.
The Company Secretary of the Company has been designated as the Nodal Officer who can be contacted for any guidance/ assistance to claim the dividend and shares from IEPF Authority.
13. Board of Directors and Key Managerial Personnel
Shri Nikunj Dhanuka retires by rotation and being eligible has offered himself for re-appointment.
All Independent Directors of the Company have furnished declarations under Section 149(7) of the Act confirming that they meet the criteria of independence laid down in Section 149(6) of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).
In the opinion of the Board of Directors of the Company, all Independent Directors possess high integrity, expertise and experience including the proficiency to discharge their respective duties and responsibilities.
The Key Managerial Personnel (KMP) of the Company are Shri Nikunj Dhanuka, Managing Director & CEO, Shri Pramod Bhandari, Chief Financial Officer and Shri Sudhir R Singh, Company Secretary and there is no change in KMP during the year.
None of the Directors have attained the age of seventy five years except Shri M M Dhanuka in respect of whom the shareholders had approved the holding of office.
13.1. Meetings of Board and Committees
In accordance with the regulatory requirements, the Board of Directors has constituted committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee.
During the year, four meetings of the Board of Directors were held. The details with respect to the composition, terms of reference, number of meetings held, etc. of the Board and that of the Committees are disclosed in the attached Report on Corporate Governance, which forms part of the Annual Report.
13.2. Board Evaluation
The annual evaluation of the performance of the Board of Directors, Committee and of the Directors individually has been made as more particularly specified in the Corporate Governance Report.
13.3. Remuneration Policy
The details of the Remuneration Policy forms part of the Corporate Governance Report.
The information relating to remuneration as required pursuant to Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("the Rules") are given below:
a. Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2022-23-
Shri Nikunj Dhanuka, Managing Director & CEO - 61:1
Shri J K Saboo, Executive Director 8:1
b. The percentage increase in the remuneration of Managing Director, Chief Financial Officer and Company Secretary for the financial year-
Shri Nikunj Dhanuka, Managing Director & CEO - (14.13%)
Shri Pramod Bhandari, Chief Financial Officer - (9.46%)
Shri Sudhir R Singh, Company Secretary - 10%
c. The percentage increase in the median remuneration of employees in the financial year - median remuneration decreased by 11%
d. Number of permanent employees on the rolls of the Company - 498
e. Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year was 10% whereas the percentile increase in the managerial remuneration was 11%.
It is hereby affirmed that the remuneration paid during the year is as per the Nomination and Remuneration Policy of the Company.
14. Particulars of Employees
The disclosures pertaining to remuneration and other details under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given above.
In accordance with the provisions of Sections 197(12) and 136(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules is kept open for inspection during working hours at the corporate office of the Company. The said information will be provided to the members upon receipt of the request.
15. Directors Responsibilities Statement
To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Act, we state:
a. that in the preparation of the annual financial statements for the year ended 31st March 2023, all the applicable accounting standards have been followed and no material departures have been made from the same;
b. that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2023 and of the profit of the Company for that year;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
16. Related Party Transactions
In compliance with the provisions of the SEBI Listing Regulations and the Act, the transactions with related parties are entered into with the approval of the Audit Committee and the Board of Directors. The omnibus approval of the Audit Committee are obtained for transaction which are repetitive in nature.
The Policy on Related Party Transactions can be accessed at www.igpetro.com/corporate-governance/
All transactions with related parties were on arms length basis and in the ordinary course of business and necessary approvals were obtained, wherever required. There were no material related party transactions. The necessary disclosures regarding the transactions are given in the notes to accounts.
None of the Directors and the KMP has any pecuniary relationships or transactions vis-a-vis the Company other than those disclosed in the financial statements.
17.1. Statutory Auditors
M/s S M M P & Company and M/s M S K A & Associates are the Statutory Auditors of the Company appointed by the members of the Company at the annual general meetings.
The Statutory Audit Report does not contain any qualification, reservation or adverse remark and is selfexplanatory. The Statutory Auditors have not reported any incident of fraud to the Audit Committee pursuant to Section 143(12) of the Act.
17.2. Cost Auditor
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of the Company has, on the recommendation of the Audit Committee, appointed M/s Krishna S & Associates, Cost Accountants (Firm Registration No. 100939) as the Cost Auditor to conduct an audit of
the cost records of the Company for the year 2023-24.
A resolution seeking members ratification for the remuneration payable to M/s Krishna S & Associates is included in the Notice convening the AGM.
17.3. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s Makarand M Joshi & Associates, Practicing Company Secretaries (Membership No. 5533) as Secretarial Auditor to conduct the Secretarial Audit for the year 2022-23.
The report of the Secretarial Auditor is given in "Annexure-II". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
18. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure-III".
19. Business Responsibility and Sustainability Report
Pursuant to Regulation 34 of the SEBI Listing Regulations, Business
Responsibility and Sustainability Report for the year ended 31st March, 2023 is provided separately and annexed to the Directors Report as "Annexure-IV".
20. Corporate Governance
During the year under review, the Company has complied with the requirements of Corporate Governance and a report on the same along with the Auditors Certificate confirming compliance is annexed to this report as "Annexure-V".
A report on Management Discussion and Analysis for the year under review is presented in a separate section and forms an integral part of this report.
21. Prevention of Sexual Harrassment
The Company is an equal opportunity provider and has zero tolerance in any form or manner towards the sexual harassment of women at work place. In accordance with the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a policy on prevention, prohibition and redressal of sexual harassment of women at work place.
The Company has constituted Internal Complaints Committee which meets as and when required.
No complaints pertaining to sexual harassment of women employees were received during the year
22. Details of significant and material orders
No significant and material orders were passed by the regulators or court or tribunal impacting the going concern status and your Companys observations in future.
23. ISO 9001:2015 AND ISO 14001:2015 Certification
Your Company is certified under ISO 9001:2015 for quality management systems and ISO 14001:2015 for environment management systems by Bureau Veritas.
Your Directors convey their sincere appreciation to the business partners for their unstinted support and contribution and thank the customers, members, dealers, employees, bankers and all stakeholders for their co-operation and confidence reposed in the Company.
For and on behalf of the Board of Directors
M M Dhanuka
Mumbai, 18th May, 2023