#MDStart#
Management Discussion and Analysis Report
Dear Shareholders,
Your Directors take pleasure in presenting Statement of Accounts, both
on Consolidated and Standalone basis, for Financial Year (FY) 2022-23 together with Report
of the Auditors forming part thereof.
Financial Results
Financial Results for FY 2022-23 are summarized below : ( Rs. in
Millions)
| Revenue from Operations |
13,865.03 |
8,333.66 |
| Other Income |
131.49 |
122.03 |
| Total Income |
13,996.52 |
8,455.69 |
| Profit before Depreciation, Interest and Tax (PBDIT) |
1,660.94 |
1,341.30 |
| Depreciation and Amortisation |
555.55 |
442.85 |
| Finance Cost |
48.40 |
45.59 |
| Profit before Exceptional Items and Tax |
1,056.99 |
852.86 |
| Exceptional Items |
- |
- |
| Profit before Tax |
1,056.99 |
852.86 |
| Tax Expense |
264.93 |
241.12 |
| Profit for the year after Tax |
792.06 |
611.74 |
| Other Comprehensive Income/(Loss) for the year, Net of Tax |
170.38 |
0.39 |
| Total Comprehensive Income for the year |
962.44 |
612.13 |
| Basic and Diluted Earnings per Share (Rs.) |
21.98 |
16.97 |
| Disclosures under Regulation 34(3) read with Clause B of
Schedule V of Securities |
|
|
| and Exchange Board of India (Listing Obligations and
Disclosure Requirements) |
|
|
| Regulations, 2015 (SEBI LODR, 2015) |
|
|
| i) Debtors Turnover Ratio * |
4.46:1 |
4.38:1 |
| ii) Inventory Turnover Ratio ** |
2.93:1 |
2.85:1 |
| iii) Interest Coverage Ratio |
22.84:1 |
19.71:1 |
| iv) Current Ratio |
2.71:1 |
2.98:1 |
| v) Debt Equity Ratio |
0.16:1 |
0.18:1 |
| vi) Operating Profit Margin (%) |
7.02% |
9.32% |
| vii) Net Profit Margin (%) |
5.71% |
7.34% |
| viii) Return on Net Worth(%) |
7.88% |
9.83% |
* Debtors Turnover Ratio = Revenue from Operations/Average Trade
Receivables ** Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory.
Total Income on Consolidated and Standalone basis, have increased by
9.74% and 5.52% respectively for the year compared to that of preceding year. Profit
before Tax and Profit for the year have however remained more or less similar to that of
preceding year primarily because of increased cost of inputs including raw materials both
indigenous and imported, which has to some extent been offset by price increases
negotiated and received from customers over the year. Full effect of such price increases
will be felt in current Financial Year i.e. FY 2023-24 although such endeavor is
continuing and price of key raw materials have more or less stabilized. Considering market
situation and macro economic factors prevailing in India and abroad and having influence
on producers of Iron and Steel, your Company primarily being supplier to them, performance
of your Company for the year appears to be satisfactory to your Directors. It is however
continued endeavor of your Directors to improve performance of your Company and in this
regard, several measures have been taken and this will continue.
Dividend
Following Dividend Distribution Policy of your Company, copy whereof is
available at https://ifglgroup.com
/wp-content/uploads/2023/04/Dividend-Distribution-Policy.pdf , your Directors are pleased
to recommend payment of Final Dividend of 70% i.e. Rs. 7 per Equity Share for FY 2022-23
subject to your approval at ensuing Annual General Meeting and deduction of Tax at Source.
Industry Review, Future Outlook and Expansion Plans
In general, Refractory Industry is performing well. Barring weakness in
Europe because of Macro Economic factors and Russia-Ukraine war affecting them, overall
demand for Iron and Steel continues to persist. In fact, Steel Industry in India is on
expansion mode to cater to ever increasing demand because of Governments initiatives
for bolstering infrastructure building and capital goods manufacturing. India has emerged
as the 5th largest Economy in the World. It is also projected that India will become 20
trillion USD Economy by 2047, if it manages to achieve a sustained growth of 7 to 7.5
percent over the next 25 years. India is most populous country in the world with
demographics of young people. All these have led and leading to increased demand for
products and services of your Company and to meet the same, your Company has taken several
steps for expanding capacity at its manufacturing facilities. For this purpose, your
Company has also acquired few plots of land neighboring its Kalunga (Odisha) and Kandla
(Gujarat) manufacturing facilities, construction work whereat is going on. Capacity at
your Companys manufacturing facility at Vizag (Andhra Pradesh) has been/is being
enhanced. On 24th February 2023, your Companys UK Step Down Subsidiary, Monocon
International Refractories Limited acquired 100% shareholding of Sheffield Refractories
Ltd (SRL), UK engaged in manufacture and installation of Monolithic Refractory products
with a specific interest in Blast Furnace Cast House products, Shotcreting Materials and
an extensive range of other specialist Monolithic Product for use in the Iron and Steel,
Cement, Incineration and Waste to Energy Industries. Acquisition of SRL will enable your
Company and its Subsidiaries to offer bigger basket of products to Customers.
New state-of-art Technology Center at your Companys Kalunga
(Rourkela) facility is going to be operational during Current Financial Year. Such
Technology Center will bring efficiencies, both direct and indirect, to your Company.
Yours Directors are of the view that your Company has an extremely
bright and prosperous future going forward barring unforeseen circumstances.
Subsidiaries
Performance of your companys Subsidiaries have been excellent in
as much as Consolidated Revenue of your Companys immediate Subsidiary, IFGL
Worldwide Holdings Limited, for the Year has increased by 23% over that of preceding FY
2021-22. Profit before Tax and Profit for the Year also increased by 45% and 51%
respectively. The recent acquisition of SRL will further fuel performance of your
Companys Subsidiaries.
Business Responsibility and Sustainability Report
Provisions relating to Business Responsibility and Sustainability
brought in by Securities and Exchange Board of India (hereon ‘SEBI) are
applicable from FY 2022-23 as the Company was one of the top 1000 Companies by Market
Capitalization as on 1st April 2022. Your Companys Business Responsibility and
Sustainability Report for FY 2022-23 following guidance being received from one of the top
four consulting firms with regard to matters relating to Environment Sustainability and
Governance (ESG), as per provisions of Regulation 34(2)(f) of SEBI LODR, 2015 is annexed
hereto as Annexure‘A. A copy of such Report is also appearing at
https://ifglgroup.com/investor/ meetings-reports/
Corporate Governance/Vigil Mechanism etc
Corporate Governance Report (CG Report) conforming provisions of
Regulation 34 of the SEBI LODR, 2015, amended to date and notifications, circulars,
clarifications etc issued by SEBI from time to time form part of this Report and is
annexed as Annexure ‘B. Your Company has in place Policies including
Vigil Mechanism (Whistle Blower), Prevention of Sexual Harassment, Insider Trading and
Risks Management etc commensurate to nature and size of business of the Company. Said
Policies are also appearing at https://ifglgroup. com/investor/policy/. No complaint
and/or alert was received under said Policies. Internal Complaints Committee following
provision of Sexual Harassment of Women at Work Place (Prevention, Prohibition and
Redressal) Act, 2013 are also in place and functioning.
Disclosures
As required by Section 92(3) read with Section 134(3)(a) of the Act,
Annual Return has been hosted at https://ifglgroup.com/wp-content/
uploads/2023/07/Annual_Return.pdf. Information relating to Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure
‘C. During FY 2022-23, your Company entered into transactions with related
parties in ordinary course of business at arms length. Accordingly, Form AOC-2 has not
been annexed hereto with particulars of such transactions. Your Company has neither given
loans or guarantees or made investments under Section 186 of the Act. Your Company also
did not accept deposits. Evaluation of performance of your Companys Board of
Directors and its Committees and individual Directors including Independent Directors and
Chairman of Board has been carried out. Outcome is that the Board and its Committees have
been functioning satisfactorily and flow of information has been commensurate to the
nature of business and size of your Company. Your Directors received briefings on key
matters including regulatory, which went on their performance. Following announcement of
Quarterly and Annual Results, your Company made presentations, did conference calls and
interacted with investors at large for enhanced confidence. 9.91% of your Companys
Equity Shares as on 31st March 2023, was held by Mutual Funds. A statement in Form AOC-1
having financial information of Subsidiary Companies form part of this Report as Annexure
‘D. Your Company does not have any Indian Subsidiary. Shareholders of the
Company who are desirous of having complete Statement of Accounts and related detailed
information of Subsidiary Companies, may send their request therefor to the Companys
Registered Office. They are available for inspection electronically to the members during
working hours on working days (excluding Saturday) provided prior request therefor is sent
at investorcomplaints@ifgl.in and are also available on Companys website :
www.ifglgroup.com.
Internal Control System with the help of external and internal auditors
functioned well and effectively. It continued to be commensurate with size and nature of
Companys Business. Said System was periodically reviewed and changes were made
wherever and whenever necessary. Internal Financial Controls were also adequate.
Other disclosures including those to be made as per Section 134(3) of
the Act read with Rules framed for the purposes thereof and those in SEBI LODR, 2015 have
been included in Annexures forming part of this Report and also in audited Statement of
Accounts and Notes thereto. For the sake of brevity they have not been reproduced again.
CG Report contained details of meetings of the Board of Directors and Committees thereof
held during FY 2022-23 and attendance thereat. There has not been any material change
and/or commitment affecting financial position of your Company between end of FY 2022-23
and date of this Report. None of the regulators or courts or tribunals passed any Order
likely to impact going concern, status or operations in future of your Company. Following
Regulation 17(8) read with Part B of Schedule II of SEBI LODR, 2015, Certificate on
Financial Statements has been received from Director and Chief Executive Officer and Chief
Financial Officer of the Company.
Your Company placed utmost importance to IT security and have
strengthened the same including by introducing checks and balances.
Directors Responsibility Statement
Your Directors state that : a) in preparation of Annual Accounts,
applicable Accounting Standards have been followed. b) Accounting Policies selected and
applied are consistent and judgments and estimates made 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 FY
and of the Profit and Loss of the Company for that period. c) proper and sufficient care
has been taken for the maintenance of adequate accounting records in accordance with
provisions of the Act for safeguarding the Assets of the Company and for preventing and
detecting fraud and other irregularities. d) the Annual Accounts have been prepared on a
Going Concern basis. e) Internal Financial Controls i.e. policies and procedures for
ensuring orderly and efficient conduct of business, including adherence to Companys
Policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy
and completeness of the accounting records and timely preparation of reliable financial
information, have been laid down and that such controls are adequate and operating
effectively. f) Proper systems to ensure compliance with provisions of all applicable laws
have been devised and that such systems are adequate and operating effectively.
Financial Statements for FY 2022-23 have been audited in accordance
with Accounting Principles Generally Accepted in India as indicated in Report of the
Statutory Auditors.
CSR, Human Resource and Industrial Relations
Annual Report in compliance of Rule 8 of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 form part of this Report as Annexure
‘E. Other details relating to Companys CSR are forming part of CG
Report.
Similarly, particulars of Nomination and Remuneration Committee (NRC)
are also existing in CG Report. Nomination and Remuneration Policy adopted by your
Directors based on recommendation of NRC is available at
https://ifglgroup.com/wp-content/uploads/2023/04/
nomination_anfiremuneration_policy2018.pdf. Said Policy inter-alia provide for matters
concerning Directors appointment and remuneration including criteria for determining
qualifications, positive attributes, Independence of Directors and those provided in
Section 178(3) of the Act. An Annexure having information following provisions of Section
197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 form part of this Report as Annexure ‘F.
During FY 2022-23, 5 (five) persons (including Executive Directors)
employed with the Company received remuneration of Rs. 102 lakhs per annum or more or Rs.
8.5 lakhs per month or more. As on 31st March 2023, the Company had employed 1275 people
worldwide including 948 in India.
Industrial Relations continued to remain cordial in your Company.
Conducive working environment was provided to employees and trainings imparted thereby
helping the employees to increase their skills and productivity. Compensation and benefits
provided to the employees have also been no lesser than and comparable with those of the
peers. This continued to motivate employees at large resulting in low attrition.
Consolidated Financial Statements
In accordance with IND AS 110 and other relevant provisions
particularly Section 129(3) of the Act, Consolidated Financial Statements duly audited by
Statutory Auditors, M/s S R Batliboi & Co. LLP (Regd No. 301003E/E300005) form part of
this Annual Report. Consolidated Financial Statements have been prepared considering
Financial Statements of Subsidiary Companies and Reports of Auditors relating thereto.
Directors and Key Managerial Personnel (KMPs)
Ms Anita Gupta and Mr Gaurav Swarup were appointed Independent
Directors of your Company on and from 12th October 2022, for a period of 5 (five) years.
Your Directors are of the opinion that both of them possess adequate integrity, expertise
and experience to function as Independent Directors of the Company. Mr Rajesh Agarwal, who
was holding the office of Company Secretary, was elevated and appointed as Director –
General Counsel on 12th November 2022, for a period of 3 (three) years. Effective 12th
November 2022, Mrs Mansi Damani was appointed as Company Secretary.
Mr K S B Sanyal, who tendered resignation and ceased to hold the office
of Independent Director of your Company on and from 28th May 2022, due to age and health
related issue, passed away on 13th February 2023.Your Directors placed on record deepest
condolences and pray that his departed soul remain in peace. Your Directors following
recommendation of the Nomination and Remuneration Committee and subject to your approval
have re-appointed Mr Kamal Sarda (DIN - 03151258) as Whole-time Director of the
Company for the period 1st June 2023 to 30th November 2024, both days inclusive, on terms
and conditions including remuneration, perquisites and other entitlements similar to that
of his appointment in place as on 27th May 2023, and ending on 30th September 2023, which
will stand superseded on and from 1st June 2023. Mr Sarda will also retire by
rotation at forthcoming Annual General Meeting (AGM) and being eligible, has offered
himself for re-appointment for further period liable to retire by rotation. Accordingly a
Special Resolution has been included in the Notice of forthcoming AGM for your approval
for re-appointment of Mr Kamal Sarda as Whole-time Director of the Company on and from 1st
June 2023. Your Directors recommend passing of said Special Resolution being in the
interest of your Company. Since the Company has operations in multiple locations,
effective 1st June 2023, Mr Sarda has been designated as Director and CEO India.
Particulars of the Companys Key Managerial Personnel, are
appearing at Note 36 of Audited Statement of Accounts as per Section 203 of the Act. All
Independent Directors have given their Statement of Declaration under Section 149(7) of
the Act and continue to fulfil independence criteria and other conditions specified in the
Act and SEBI LODR, 2015. All of the Directors and Senior Management Personnel as on 31st
March 2023, have confirmed compliance of Code of Conduct for Board of Directors including
Independent Directors and Senior Management Personnel of the Company. This Code continues
to help the Company maintain standard of ethics and ensure compliance of legal
requirements applicable.
Cost Auditor
To the extent provisions of Section 148 of the Act are applicable, your
Company maintained accounts and records during FY 2022-23. M/s Mani & Co., Practicing
Cost Accountant have been re-appointed as Cost Auditors of the Company for FY 2023-24.
Your approval for payment of remuneration not exceeding Rs. 5 lakhs to them is being
sought inasmuch as Ordinary Resolution has been included in Notice of forthcoming AGM.
Secretarial Auditor
Secretarial Audit Report in Form MR-3 following provisions of Section
204 of the Act of M/s S M Gupta & Co., Practicing Company Secretaries form part hereof
as Annexure G. Following Regulation 24A of SEBI LODR, 2015, Secretarial
Auditor have also carried out Secretarial Compliance Audit for FY 2022-23. Both Report and
Certificate are free of qualification, reservation or adverse remark.
Auditors Report and Auditors
Report of the Statutory Auditors, M/s S R Batliboi & Co. LLP (Regd
No. 301003E/E300005), Chartered Accountants on Statement of Accounts for FY 2022-23 on
Standalone and Consolidated basis are self-explanatory. Their Reports have no
qualification, reservation, adverse remark or disclaimer except 2 (two) Emphasis of
Matters. They have also not reported any fraud under Section 143(12) of the Act. Their
appointment will come to an end on conclusion of 17th AGM and have confirmed that they
continue to comply with all requirements and criteria specified and are qualified to act
as Auditors of the Company.
Acknowledgement
Your Directors thank all concerned particularly you the Shareholders
for your continued support.
|
On behalf of the Board of Directors |
|
S K Bajoria |
James L McIntosh |
| Kolkata |
Chairman |
Managing Director |
| 27th May 2023 |
(DIN - 00084004) |
(DIN - 09287829) |
#MDEnd#
+91-9892691696
