I G Petrochemicals Ltd Directors Report.

To the Members,

On behalf of the Board of Directors of your Company, it gives me pleasure in presenting the Thirty Second Annual Report together with the Audited Financial Statements for the year ended 31st March, 2021:

1. Financials

(Rs. in lakhs)

2020-21 2019-20
Total Revenue 112,835.52 106,511.19
Profit before interest, depreciation and tax 30,333.11 7,822.53
Finance Cost 1,455.70 1,595.43
Depreciation and 3,410.37 2,990.01
Amortization expenses
Profit before tax 25,467.04 3,237.09
Provision for tax 6,453.73 1,103.24
Profit for the year 18,951.67 2,104.40
Balance brought forward from previous year 51,113.93 50,529.68
Profit available for Appropriations 18,951.67 2,104.40
Earnings per share 61.54 6.83

2. Dividend

The Board of Directors have recommended a dividend of Rs. 7.50/- per equity share having face value of Rs. 10/- each (75%) for the year ended 31st March, 2021 aggregating to Rs. 2,309.61 lakhs.

3. Operating & financial performance

During the year under review, the Phthalic Anhydride market (both domestic and international) recovered sharply from its low during the previous years. The Company generated a total revenue of Rs. 1,12,835.52 lakhs as compared to Rs. 1,06,511.19 lakhs in the year 2019-20, marginal increase by 6%. The increase in sales is attributed to the commencement of commercial production for its new plant in December 2020. EBITDA increased by almost three fold from Rs. 7,822.53 lakhs in 2019-20 to Rs. 30,333.11 lakhs in 2020-21. As compared to the overall increase in the sales and profitability, the finance cost, on the contrary, decreased from Rs. 1,595.43 lakhs to Rs. 1,455.70 lakhs on account of the prudent management of its borrowings and the early repayment of term loan. The tax expenses for the year stood at Rs. 6,453.73 lakhs vis--vis Rs. 1,103.24 lakhs in the previous year. After taking into account the above, the Company recorded a substantial increase in profit after tax by eight fold from Rs. 2,104.40 lakhs in 2019-20 to Rs. 18,951.67 lakhs.

The Directors confirmthat 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.

4. Covid-19 pandemic

During the year, the operations at Plant remained almost unaffected baring mandatory closure by the government on account of Covid-19 during April/May 2020 for few days. The Company has been able to maintain its momentum in the production with all necessary safety measures despite the threat of the pandemic disease not being subsided. For the overall protection of the employees, work from home were initiated to the extent possible. A separate task force was formed and SOP was put in place for implementation. The Company had put in place adequate infrastructure and safety guidelines to sustain and grow its operations thereby negating any adverse effect of the pandemic on all stakeholders vis--vis the business of the Company.

5. Expansion

During the year under review, the Company successfully commissioned the expansion of its plant by 53,000 MTPA including MA and BA plants. Your Company is now one of the largest producer of PAN at a single location.

Due to the augmentation of the end user industries viz. plasticizers, PVC, UPR, etc. the PAN industry witnessed a strong recovery in demand in the second half of the year.

The downstream product i.e. Advance Plasticizer with a capacity of 8,400 MTPA is expected to come on stream by June, 2021 at the total cost of Rs. 3,000 lakhs.

The Company has also initiated a Greenfield Expansion of Phthalic Anhydride & its Derivatives up to 80,000 MTPA. The total cost of the project is estimated to be Rs. 60,000 lakhs.

6. Contribution to the Exchequer

The Company has contributed Rs. 26,433.99 lakhs to the exchequer by way of income tax, customs duty, goods and service tax, etc.

7. Share Capital & Finance

a. Share Capital

The Companys paid-up Equity Share Capital remained unchanged at Rs. 3,079.81 lakhs as at 31st March, 2021. The shareholdings of the Promoters and Persons Acting in Concert with Promoters are 68.74%.

b. Finance

The borrowings of the Company comprises of external commercial borrowings, rupee term loan and working capital facilities. During the year, the Company repaid the entire term loan of Cosmos Bank. The debts (including interest) are being serviced regularly.

c. Credit Rating

The Credit Ratings of the Company are "IND A+" (long term) and "IND A1+" (short term) issued by India Ratings & Research.

d. Deposits

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 are given in the notes to the Financial Statements.

8. Transfer to General Reserves

The Company do not propose to transfer any amount to the General Reserves.

9. 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.

10. Corporate Social Responsibility (CSR) initiatives

During the year, the Ministry of Corporate Affairs introduced major amendments in the provisions relating to the CSR viz. manner of spending, introduction of the concept of ‘ongoing project, transfer of unspent amount to Funds specified under Schedule VII or to a bank account (in the case of ongoing project), as the case may be, monitoring of implementation of the Project by the Board of Directors of the Company, registration of the entity undertaking the CSR projects with MCA, etc.

The CSR Committee proposes and plans the allocation of its budget in accordance with the CSR Policy as approved by the Board of Directors of the Company. The CSR Policy of the Company dwells upon betterment of the underprivileged community, catering to issue of fundamental importance, sustainable development, etc. The CSR obligation of the Company for the year 2020-21 was Rs. 299.49 lakhs against which the Company has spent Rs. 302.24 lakhs (including the transfer of Rs. 99.47 lakhs to a special bank account opened by the Company as provided under Section 135(6) of the Companies Act, 2013) towards the various CSR activities as more specifically outlined in "Annexure-I". During the previous years, the Company had through Saraswati Shishu Mandir Trust undertaken to construct a school, an ‘ongoing project as considered and approved by the Board of Directors of the Company. The said amount of Rs. 99.47 lakhs so transferred to a special bank account shall be utilized solely towards the above referred ongoing project.

The Report on CSR activities containing prescribed details are annexed to the Directors Report as "Annexure-A".

11. Annual Return

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act, the Annual Return of the Company as at 31st March, 2021 is uploaded on the Companys website www.igpetro.com/corporate-announcement/

12. Vigil Mechanism Policy

The Vigil Mechanism Policy of the Company deals with the instances of actual or suspected unethical behavior, fraud, etc. which is being reviewed by the Audit Committee. 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/

13. Transfer of shares to IEPF Authority

There will be no shares due for transfer to the IEPF Authority during the year 2021-22. 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.mca.gov.in. 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 Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Members may contact the Company for further guidance.

14. Directors & Key Managerial Personnel

Shri M M Dhanuka retires by rotation and being eligible offered himself for re-appointment.

Shri J K Saboo was re-appointed as Executive Director of the Company for a period of one year effective 1st April, 2021 as per the terms, conditions and remuneration more particularly set out in the Notice. The Directors proposes to reappoint him.

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.

In the opinion of the Board of Directors of the Company, all Independent Directors possess high integrity, expertise and experience including the proficiency and responsibilities.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31st March, 2021 are: Shri Nikunj Dhanuka, Managing Director & CEO, Shri Pramod Bhandari, Chief Financial Officer and Shri Sudhir R Singh, Company Secretary.

14.1.Meetings

During the year, four meetings of the Board of Directors and six Audit Committee meetings were held as more particularly disclosed in the attached Report on Corporate Governance.

14.2.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.

14.3.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 2020-21

Shri Nikunj Dhanuka, Managing Director & CEO – 44:1 Shri J K Saboo, Executive Director – 7:1 b. The percentage increase in the remuneration of Managing Director,

Chief Financial Officer and Company Secretary for the financial year - Nil c. The percentage increase in the median remuneration of employees in the financial year Nil d. Number of permanent employees on to discharge their respective duties the rolls of the Company – 380 e. Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year and the managerial remuneration – Nil Since no increment was given in the financial year 2020-21, the data pertaining to the percentage increase in the remuneration of KMP, median remuneration of employees and average percentage increase in salaries of employees other than the managerial personnel are not applicable.

It is hereby affirmed that the remuneration paid during the year is as per the Remuneration Policy of the Company.

15. Particulars of Employees

The disclosures pertaining to remuneration and other details under Section 197(12) of the Act read with 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 list pertaining to 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 registered office of the Company and the report and accounts as set out therein are being sent to all the members of the Company. The said information will be provided to the members upon receipt of the request.

16. Directors Responsibility 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 Companies Act, 2013, we state:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2021, 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, 2021 and of the profit of the Company for that year;

c. that proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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.

17. Related Party transactions

The 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.

18. Internal Control

The Audit Committee defines the framework for the audit based on the areas identified in discussion with the Internal Auditors. The Internal Audit function is designed to cover all the major areas of operations. The Internal Auditor participates in all meetings of and reports directly to the Audit Committee.

The Internal Audit strives to evaluate the efficacy and adequacy of internal control system and processes, accounting policies and procedures, compliance with laws and regulations concerning the operations of the Company.

The Companys internal financial control systems commensurate with its nature of business, size and operations.

19. Risk Management

The internal control mechanism of the Company enables it to identify, assess and mitigate the risk related to its business. Risks are evaluated on various parameters, which are reviewed, as and when needed.

The risk management framework enables the management to identify and analyze the risks faced by the Company and implements risk management practices thereby ensuring that all activities are conducted in accordance with the principles as outlined by it. It also helps in setting appropriate risk limits and controls and hasbeentaken to monitor the risks and adherence to limits. The Companys risk management practices aims to limit the business risk through its operations and finance activities.

The Board of Directors reviews the risk assessment and management program.

20. Auditors

20.1.Statutory Auditors

M/s Uday & Co. and M/s SMMP & Associates are the Statutory Auditors of the Company appointed by the members of the Company at the annual general meetings.

20.2.Cost Auditor

The cost accounts and records are required to be maintained under Section 148(1) of the Act. 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 appointed M/s Krishna S & Associates, Cost Accountants as the Cost Auditor to conduct an audit of the cost records of the Company for the year 2021-22.

A resolution seeking members ratification for the remuneration payable to M/s Krishna S & Associates is included in the Notice convening the AGM.

20.3.Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Makarand M Joshi & Co., Practicing Company Secretaries to conduct the Secretarial Audit and their Report on the Secretarial Audit for the year 2020-21 is annexed herewith as "Annexure-II".

21. Material changes and commitment affecting financial position of the Company

There are no material changes and commitments, affecting the financial position of the Company, which has occurred between the end of the financial year and the date of the Boards Report.

22. Energy Reservation, 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".

23. Business Responsibility Report

Pursuant to the Regulation 34 of the SEBI Listing Regulations, Business Responsibility Report for the year ended 31st March, 2021 is provided separately and annexed to the Directors Report as "Annexure-IV".

24. Corporate Governance

The Company has complied with the requirements of Corporate Governance and a report on the same along with the Auditors Certificate compliance is attached with and forms part of this report.

A report on Management Discussion and Analysis forms an integral part of this report.

25. Prevention of sexual harassment

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.

26. 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.

27. Acknowledgements

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
Chairman
Mumbai, 24th May, 2021 DIN: 00193456