As on: Apr 29, 2024 07:49 AM
1.00 The Board hereby presents its Report for the year ended 31st March, 2022.
2.00 FINANCIAL SUMMARY: (STANDALONE)
(Rs in lakhs)
3.00 ANNUAL RETURN:
3.01 The Annual Return, when filed, is placed on the website of the Company at https://www.isgec.com/aboutus- financial-annual-return.php
4.00 NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
4.01 Five Board Meetings were held during the year ended 31st March, 2022.
5.00 DIRECTORS' RESPONSIBILITY STATEMENT:
5.01 Your Directors hereby confirm that:
(a) In the preparation of the Annual Accounts for the financial year 2021-22 the applicable Accounting Standards have been followed and there are no material departures;
(b) The Directors have selected such accounting policies with the concurrence of the Statutory Auditors and applied them consistently and 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 and of the profit of the Company for the financial year;
(c) The Directors have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors have prepared the Annual Accounts on a going concern basis;
(e) The Directors have laid down internal financial controls to be followed by the Company, and these financial controls are adequate and are operating effectively; and
(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
6.00 DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:
6.01 The Auditors have not reported any frauds under sub-section (12) of the section 143 of the Companies Act, 2013 and rules made thereunder to the Audit Committee or to the Board of Directors.
7.00 EXPLANATION OR COMMENTS ON QUALIFICATION ETC., BY THE STATUTORY AUDITORS AND COMPANY SECRETARY IN PRACTICE:
7.01 There is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in the Auditors' Report or by the Company Secretary in Practice in Secretarial Audit Report needing explanation or comments by the Board.
8.00 INDEPENDENT DIRECTORS:
8.01 All the Independent Directors have furnished declaration under sub-section (6) of Section 149 of the Companies Act, 2013.
9.00 POLICY ON DIRECTORS' APPOINTMENT/ REMUNERATIONOF DIRECTORS/KEYMANAGERIAL PERSONNEL AND OTHER EMPLOYEES:
9.01 The Nomination and Remuneration Committee formulated the criteria for determining qualifications, positive attributes and independence of a Director and recommended to the Board, a policy relating to the remuneration for the key managerial personnel and other employees. While formulating the policy, the Committee has taken into account:-
(i) that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
(ii) that relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(iii) that remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
The Nomination and Remuneration Policy is available on the website of the company at https://www.isgec.com/pdf/NRC- policy.pdf
10.00 PARTICULARS OF LOANS, GUARANTEES/ INVESTMENTS:
10.01 Particulars of Loans given, Investments made, or Securities provided under Section 186 of the Companies Act, 2013 are annexed as Annexure-1.
11.00 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
11.01 The Company has formulated a Policy on Materiality of Related Party Transactions and also on dealing with Related Party Transactions as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and amendments thereof. The Policy on Related Party Transactions has been disclosed on the website of the company at https://www.isgec.com/pdf/RPT.pdf
11.02 The particulars of contracts or arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013, are given in the prescribed Form AOC-2, annexed as Annexure-2.
12.00 COVID-19:
12.01 During the year under report, the working and operations were adversely affected, firstly due to the second wave of Covid-19 in the first quarter (April - June 2021), and again due to the third wave of Covid-19 in the last quarter (January - March 2022).
12.02 While all factories were working normally, Engineering, Procurement and Constriction (EPC) business offices at Noida were closed for 6 weeks in the first quarter and for about 10 days in January 2022, besides, Pune and Chennai offices were also closed for few weeks. Before and after the closure, till normalcy returned, offices were working with 50% to 70% attendance while balance employees were working from home.
12.03 During the second wave, as per Government directives, oxygen was diverted for medical purposes causing scarcity of oxygen in our own facilities, vendors' workshops and project sites, resulting in production losses till 31st May, 2021.
12.04 The company took proactive steps to vaccinate its manpower resources. 99.9% of all our manpower - our employees and contractors' workers, have received the second dose of vaccination.
12.05 The situation in India has improved. We continue to take necessary precautions and monitor the situation.
13.00 TECHNOLOGY:
13.01 The Company entered into a strategic collaboration with UCC Environmental, USA, for Dry Sorbent Injection (DSI) Technology. With this collaboration we have increased our Desulphurization (DeSOx) Technology portfolio for Power Plants and now possess all major Flue Gas Desulphurization (FGD) Technologies i.e. Wet FGD, Semi Dry FGD and Dry FGD.
13.02 Technology tie-up agreement for Circulating Fluidized Bed Combustion (CFBC) Boilers, with Sumitomo SHI FW Energia Oy, which was expiring, has been renegotiated and renewed for a further period of 10 years.
13.03 We received a Patent for a Two Drum Feeder Design for our Boilers, and a Certification of Registration of Design from the India Patent office for a Special Design of Entrainment Catcher in Falling Film Evaporators named 'Annular Polybaffle' for Evaporators in Sugar Plants. We also qualified for Procedure Qualification Record (PQR) for (i) Heat Exchangers for Purified Terephthalic Acid (PTA) Plants with B.P Technology, (ii) P91 material with impact testing temperature at 0 degree C and (iii) new metallurgy on Al-Bronze and Ni-Al Bronze.
13.04 Our technologists and engineers continue to make several innovations. Some of these include the introduction of an Online Assembly concept for Low-Capacity Presses to improve productivity; development of a Single Suspension High Speed Press for the automobile industry for Progressive Die application of very small but high strength parts with Coil Line; designing of a 1250T Transfer Press for precise forming of high tensile parts, especially for the European market; and an Operation and Control software package for Servo Presses.
13.05 To facilitate the consumption of Waste Biomass, we created a design to fire a higher concentration of Bagasse Pith in Travelling Grate Boilers and for the first time introduced firing of Blast Furnace Gas (BFG) in CFBC Boilers.
13.06 The Company is embarking on an IT transformation project by the implementation of SAP Enterprise Resource Planning software. This is a major initiative to bring about large-scale improvements in processes and operational excellence for improvement in profitability and building capability to undertake larger scale of business. The project involves the implementation of SAP S/4 HANA ERP System to replace BaaN in the Projects business and up-gradation of the existing SAP system in the Manufacturing Units.
14.00 EXPORTS:
14.01 Export revenue during the year was '411 crore against '645 crore in the preceding year. This is because of low backlog of live export orders in the beginning of the year under report.
14.02 Export order booking during the year was also low as international travel restrictions continued. The sentiment to invest was low and customers were not willing to risk purchasing capital equipment or ordering projects due to logistic related concerns.
14.03 In spite of these limitations, Digital Marketing interventions continued to generate business leads. Videos and emails were sent to prospective customers and virtual meetings and webinars were held.
14.04 With the removal of travel restrictions by most of the countries, our executives have started traveling and export orders have started coming in. Lately, we have booked good orders. Details of important orders are given in para 17(c) of the Management Discussion & Analysis.
14.05 The enquiry position, as on date, is also good.
15.00 BUSINESS DEVELOPMENT:
15.01 There is a global thrust on Decarburization and the promotion of Green Energy. The initiatives in Green Energy value chain which were started during the last year were taken forward. We began a dialogue with an international firm of repute for developing a solution for long duration energy storage. As the component of renewables (wind & solar) is increasing in the total electricity production, such solutions are the need of the hour for mitigating the intermittency of renewable energy. We are in an advanced stage of discussions with the said firm.
15.02 I n addition, we have also studied the possibility of supplying and constructing Bio Methane (compressed Bio CNG) Plants for developers. We will participate in such projects subject to the size & value of such plants.
15.03 Cylinder Drier, a new product for our Iron Casting division, has been identified for development. It finds extensive application in the paper industry. We are in an advanced stage of discussions with a multinational firm of repute supplying paper plants.
15.04 During the year, we identified Skid Mounted Plants & Modules as another area of diversification and have since started bidding for such projects.
15.05 Our business development efforts during the preceding year have resulted in orders for the supply of Gun Mounting Bodies for the Defence sector, and 25 Nos. Medical Oxygen Plants during the year under report.
16.00 STATE OF COMPANY AFFAIRS AND OPERATIONS, INCLUDING MANAGEMENT DISCUSSION & ANALYSIS:
16.01 Despite the adverse effect of the second and third waves of the Covid-19 pandemic, which seriously affected businesses around the world, the total income was almost the same as last year. The total income was '4,470.50 crore against '4,345.22 crore in the previous year.
16.02 Profitability, however, has been lower due to the adverse impact of commodity price increase, particularly of steel and other metals, as shown in the graphs below.
Profitability was also adversely impacted by Covid-19 related disruptions - time and cost overruns on projects, shortage of skilled manpower and the sharp increase in freight cost. Employee cost was also higher as compared to last year as we had salary cuts last year.
16.03 We always keep a contingency margin for an increase in commodity prices, however, this time the price rise was unprecedented. There are various strategy measures we are looking at to mitigate the effect, such as keeping higher contingency margins, entering into back-to-back arrangements for steel purchases and keeping an escalation clause in sales orders. We are also examining the possibility of hedging steel and other metals on the commodity exchanges in India, USA and the UK.
16.04 Further details are given in paragraph 12.01 under the heading Covid-19 and in para 17(c) under the heading Management Discussion & Analysis.
17.00 MANAGEMENT DISCUSSION AND ANALYSIS:
In this section, the Management discusses the performance of the Company on the following matters, within the limits set by the Company's competitive market position:
(a) Industry Structure and Development:
Industrial activity and investments, especially in the Capital Goods industry, have been adversely impacted over the last two years due to the Covid-19 pandemic. Gradual unlocking of the economy, record vaccinations, improvement in consumer demand, and continued policy support towards industry by the Government, have now led to an upturn in the prospects of the industrial sector. Introduction of the production linked incentive scheme (PLI) for boosting local manufacturing of 14 champion sectors, and the major boost provided to infrastructure by the Government have been welcome steps taken to propel investment. With over 35% Y-O-Y increase in CAPEX and a proposed infrastructure spend of over '10 lakh crore in Budget 2022-23, the Government of India has reinforced its commitment to infrastructure with the expectation that it will have a multiplier effect on economic growth.
(b) Opportunities and Threats:
Opportunities:
? Increased focus on the infrastructure sector, affordable housing, road networks, railway station and airport projects, will contribute to the growth of the Cement and Steel sectors. This will help us with our Air Pollution Control Equipment, Castings, Contract Manufacturing, Boilers, Boiler Manufacturing & Piping, and Civil Construction businesses;
? The enforcement of stringent emission norms on Thermal Power Plants will lead to investments in Air Pollution Control Equipment, where we are well positioned.
? Expansion in the Oil & Gas sector with an expected CAPEX of '1.5 lakh crore will open up the market for our Boilers, Boiler Manufacturing & Piping, EPC Process Plants, and Process Equipment businesses;
? Under the Ethanol Blending Programme (EBP), being promoted by the Government, Sugar and Distillery projects are likely to come up in a big way and this will help us strengthen our Boilers and Sugar Plants & Distilleries businesses;
? Major expansion plans announced in the Chemical, Pharma, and Health sectors are likely to benefit our Process Equipment, Boilers and Air Pollution Control Equipment businesses.
Threats:
? High Crude Oil and Commodity prices have raised input costs, impacting our competitiveness across business verticals, especially in the international market;
? Rising cost of logistics is also adding to our problems;
? The on-going Russia-Ukraine conflict has caused supply chain disruptions resulting in a shortage of microchips at a global level. This is likely to continue adversely affecting the Automobile sector and have an impact on our Presses business.
(c), (d) and (e) Segment-wise or Product-wise Performance, Outlook and Risk & Concerns:
(c) Segment-wise or Product-wise Performance:
A. Engineering, Procurement and Construction Segment:
A.01 EPC Segment covers the setting up of Projects for Boilers, Air Pollution Control Equipment, Sugar & Distillery Plants & Machinery, Power Plant Solutions, Bulk Material Handling Systems, Process Plants, Civil Construction including Factories and Workshops and Wastewater Treatment Plants. Each of these segments is discussed in the subsequent paragraphs.
A.02 The total revenue from the EPC segment, in spite of Covid-19 related disruptions, was at '3,361.49 crore against '3,402.36 crore last year. The profits have, however, been lower due to the following reasons:-
? I ncrease in the prices of commodities such as steel, copper, aluminium and nickel;
? Time and cost overrun in EPC projects due to the impact of Covid-19 related disruptions, coupled with some shortage of skilled manpower;
? Sharp increase in freight cost, both for the purchase of material and supply of goods to customers;
? Normal employee cost and increments (there was salary cut last year).
A.03 Lower profitability in EPC segment is likely to continue for some more time as the fixed price, longer duration orders presently under execution were booked before the increase in commodity prices. For the newer orders, we have budgeted higher contingency and margins on costs. As we progress, the proportion of the older orders will keep on reducing and the newer orders, taken at better margins, will be under execution.
Boilers:
A.04 Projects for Boilers include Circulating Fluidized Bed Combustion Boilers (CFBC); Atmospheric Fluidized Bed Combustion Boilers (AFBC); Waste Heat Recovery Boilers (WHRB), including Cement Waste Heat Recovery Boilers (CWHRB); Waste to Energy (WTE) Boilers; Travelling Grate (TG) Boilers for burning clean biomass, e.g. Bagasse; Vibrating Grate Boilers (VG) for burning critical biomass, e.g. Straw; Oil & Gas (O&G) Fired Boilers, including Heat Recovery Steam Generators; and Slop (Distillery Waste) Fired Boilers.
A.05 As a result of remote (online) commissioning of many Boilers in India and abroad, we commissioned 54 Boilers, the highest in a year. Important Boilers commissioned during the year include:
? Two Boilers burning 100% paddy straw in Haryana, in partnership with BWE (Burmeister & Wain Energy, erstwhile BWSC), Denmark. This is a big step towards preventing stubble burning & providing Green Energy;
? Our Largest Biomass Boiler (2x230 TPH) in Thailand;
? 2 sets of 100 TPH Heat Recovery Steam Generators (HRSG) at Barauni and Sindhri Fertilizer Plants, with technology from Siemens, Netherlands;
? A 210 TPH Boiler for Process Power generation for a 10000 TCD Sugar Plant;
? A 60 TPH Boiler for firing Distillery Waste at a Sugar Complex in Karnataka in a record 10 months' time.
A.06 Important orders received during the year include:
? A Repeat Order for a CWHR Boiler from a Cement Plant customer. An Order for the world's largest CWHR Boiler, booked last year from the same customer, is in an advanced stage of completion;
? A Repeat Order for a Sponge Iron WHR Boiler.
? An Order for the Largest Oil & Gas Fired Boiler (380 TPH) from the Oil & Gas sector;
? An Order for the Large O&M Contract for a 100 MW Power Plant at an Aluminum Plant.
A.07 Air Pollution Control Equipment include Wet and Semi-Dry Desulfurization System (FGD), Flue Gas Conditioning System (FGC) for removal of SOx,
Combustion Modification System to control NOx, Dry Sorbent Injection System, Bag Filters and Electrostatic Precipitators for control of Dust Particles.
A.08 The Government has introduced penalties on Thermal Power Stations for not complying with emission norms by December 2024. This is likely to lead to an increased demand for Air Pollution Control Equipment and your Company is well equipped for this.
A.09 During the year, we received a Notice to Proceed (NTP) for a Wet Flue Gas Desulphurization (FGD) System for a 2x660 MW Thermal Power Station from a State Utility. Apart from this, we are also executing orders for Wet FGD Projects for 5x800 MW Units and 2x660 MW Units from different Utilities.
A.10 The Company further consolidated its position in the Desulphurization (DeSOx) Market through a strategic collaboration with UCC Environmental, USA for Dry Sorbent Injection (DSI) Technology, and received a breakthrough Order for 2x210 MW Units from a State Power Utility.
A.11 We also booked the second order for Combustion Modification for NOx Control for 3 Coal Fired Boiler Units from a Private Sector Utility.
A.12 With regard to Particulate Matter Emissions from Thermal Power Plants and for other Industrial Applications, we started bidding for Projects requiring Retrofit of Electrostatic Precipitators in order to comply with stringent Particulate Emission norms and we have also started offering Particulate Matter Control Solutions such as Electrostatic Precipitators for Copper Smelter Plants.
A.13 Sugar & Distillery Plants and Machinery include Complete Sugar Plants, Sugar Refineries, and Distilleries for manufacture of Ethanol based on molasses and food-grains.
A.14 The Company continues to be a market leader in the Indian Sugar Machinery market. The progress was also satisfactory in the Distillery business.
A.15 Major projects commissioned include:
? 10000 TCD Sugar Plant with 40 MW (single turbine) Cogeneration Plant producing sulphur-less sugar;
? 5000 TCD Sugar Plant having modern equipment such as Vertical Continuous Pans, Falling Film Evaporators, and SRI Clarifiers;
? 100 KLPD Ethanol plant with 42 TPH Incineration Boiler and 5.6 MW Power Plant.
A.16 Major orders received included:
? An Order for a Complete Sugar Bio-Ethanol Project consisting of a 7500 TCD Sugar Plant, 15 MW Cogeneration Plant and a 120 KLPD Ethanol Plant;
? Repeat Order for a 175 KLPD Multi-feed Distillery.
A.17 Crude oil prices have risen steeply due to the Russia- Ukraine war. In a recent notification, the Government has extended financial assistance for applications received till 22.10.2022 for establishing Ethanol Plants based on multiple feedstocks, such as sugarcane, sugar beet, etc. The outlook for receiving more orders for Distilleries is bright in the Financial Year 2022-23.
Power Plants, Bulk Material Handling Systems, Process
Plants, Civil Construction including Factories and
Workshops and Wastewater Treatment Plants:
A.18 In Power Plants of less than 100 MW capacity, we provide solutions that can handle a diverse range of fuels such as Municipal Waste, Waste Heat, Biomass and Fossil Fuel. Projects under execution include Municipal Waste based Power Plants for the Bengaluru Municipal Corporation and the Pune-Chinchwad Municipal Corporation.
A.19 Bulk Material Handling projects involve comprehensive solutions for Ports that range from Ship Unloading till Automated Wagon/Rake Loading, and for Mines and Power Plants by providing Conveying, Crushing & Reloading solutions through Pipe Conveyors. Presently we are executing a Bauxite Handling Facility which includes Wagon Tippler, Civil Works, Stacker/Reclaimers, Crushing, Conveying, and Storage, as well as a 16 Km Long Piped Conveyor connecting 3 Coal Mines to 2 Power Plants.
A.20 In Process Plants we provide turnkey solutions to the Oil & Gas, Refineries Fertilizers and Chemicals sectors. Presently we are executing a Sulphur Recovery Unit for a major Refinery in India.
A.21 We have been focusing on Construction in the Railways and Metros business and the work includes Civil Works, Plant & Machinery, Electrical work, Track work, Signaling & Telecommunications. Presently we are executing a Coach Manufacturing Facility and an Axle Manufacturing Facility for the Indian Railways.
A.22 Wastewater Treatment projects involve solutions for treating River/Ground Water, Industrial Wastewater Treatment, Leachate Treatment and Zero Liquid Discharge. Presently we are executing a Zero Liquid Discharge Unit for a 660MW Thermal Power Plant, and a Ganga Water Treatment Plant for a large Utility Power Plant operator.
A.23 The key projects completed were:
? Railway Coach manufacturing facilities at Latur & Sonepat;
? Ship unloading, conveying, stacking/reclaiming and wagon loading facility at the Paradip Port;
? Cogeneration Plants and other Power related work, e.g. Balance of Plant Solutions, for our Air Pollution Control Equipment, Boilers and Sugar Plants & Distilleries businesses.
A. 24 Major orders secured include:
? Order for Bauxite Handling facility in Central India;
? Order for Sulphur Recovery unit from a major Refinery.
B. MANUFACTURING OF MACHINERY & EQUIPMENT SEGMENT:
B.01 This Segment consists of the manufacture of Presses, Process Equipment, Liquified Gas Containers, Tubing & Piping, Iron & Steel Castings and Industrial Machinery. Each of these segments is discussed in the subsequent paragraphs.
B.02 The total revenue from the Manufacturing segment was '1,298 crore against '1,137 crore in the preceding year. The profit was, however, lower due to less orders for Presses, rising cost of material, disruption in supplies resulting in delay and overrun and less export orders (export orders have higher margins).
PRESSES AND CONTRACT MANUFACTURING:
B.03 The Automotive sector, the main user industry for our Presses, remained slow and there was no major expansion during the year under report. In addition, the opening of tenders for Presses required by Government departments such as Defence also did not materialize. This has adversely affected order booking during the year. As we could not visit overseas customers for enquiry generation and techno-commercial discussions due to travel restrictions, export orders were also adversely affected.
B.04 With the reopening of our office in Thailand in October 2021 and lifting of travel restrictions, we could book good orders from South-East Asia and Europe in the later part of the year. Major orders received include:
? Orders from Original Equipment Manufacturer (OEM) from Vietnam for 1250T Tandem Press Line, with Robotic Automation, to be used for sheet metal stamping of high tensile steel and aluminium for Passenger Vehicles;
? Repeat Order for a 800T Mechanical Press from a customer in Spain.
B.05 Inflow of enquiries from the South East Asia market is now picking up. We have received a Repeat Order for a 1250T Tandem Press Line with Robotic Automation from a customer in Vietnam.
B.06 Order booking and production of Standard Mechanical Presses increased by almost 100% over the last year.
B.07 This year we launched CNC Hydraulic Press Brakes to add to the product basket.
B.08 As for Contract Manufacturing, we could book good orders from all sectors - Steel, Hydro Power, Thermal Power and Mining. Major orders booked include:
? Repeat Orders for Drive & Tipping Station and High Wall Mining equipment;
? Orders for Mounting Body from the Defence sector;
? Orders for Bowl Cleaning Mechanical & Hydraulic Press Structures from the Nuclear sector.
B.09 There was a good inflow of enquiries for Process Equipment from the domestic Refinery and Petrochemical sector, as also, we had a good backlog of orders from the preceding financial year. Consequently, we could achieve higher billing.
B.10 We successfully manufactured and despatched:
? The first Process Gas Waste Heat Boiler to a Fertilizer unit in India. This was the first such Waste Heat Boiler supplied under the licence agreement with TEi, Inc., USA;
? The heaviest High Pressure Heat Exchanger for export to Air Products, USA with a total approx. weight of more than 320 MT.
B.11 We have been targeting Modification and Revamp related jobs in operating Process Plants. We are pleased to report that we have booked our first major Order from the largest Indian Refinery, for Modification of a Reactor and Regenerator Section of a Fluidized Catalytic Cracking unit.
B.12 During the financial year we were amongst the two Indian companies qualified for the manufacture of Loop Reactors and Catofin Heat Exchangers for Process Plants. We have since booked an order for a Catofin Heat Exchanger. An order for a Loop Reactor is under evaluation.
B.13 The Company continued to be the global leader for supply of Chlorine Ton Containers.
B.14 Due to the second wave of Covid-19, projects were put on hold. The market recovered in the latter half of the year on account of pent-up demand and we had good order booking.
B.15 We achieved the highest billing in the year under report.
TUBING AND PIPING:
B.16 The order booking has been good. Apart from captive orders (for Boiler projects supplied by the Company), we could book good orders from the non-Captive market.
B.17 We received two major Orders for Pipe Spools from a Refinery and another from a reputed Indian EPC company.
B.18 In the year under report, with technical know-how from Defence Research and Development Organization (DRDO), we manufactured and supplied 25 Nos. Oxygen Generator Plants to various Hospitals and Community Health Centres (CHC).
B.19 Our Iron Casting Foundry has been a pioneer in manufacturing the best quality Grey and Ductile Iron Castings in the global market, particularly for Soda Ash Plants, and is considered amongst the three top Casting manufacturers in the world.
B.20 Order booking as well as billing were higher than the preceding year.
B.21 I n order to meet the targeted orders, the capacity of the Iron Foundry was increased by 500 Tonnes per month to 1575 Tonnes per month and the enhanced capacity started operations in January 2022.
(d) & (e) Outlook, Risk & Concerns:
(d) Outlook:
In addition to the position explained in paragraphs (a) & (b) of paragraph 9, the current year has started with a large backlog of orders. The enquiry level is also high. With the easing of Covid-19 restrictions, most of the countries are permitting travel. We, therefore, expect to book good orders, both domestic as well as exports. Increase in revenue is also expected.
(e) Risk & Concerns:
Though the Covid-19 situation has eased, the threat of a possible fourth wave continues. The rising prices of steel and other commodities is a major concern and may affect our margins. With the Ukraine-Russia war and other factors, prices have become volatile. We are stocking some raw material, wherever possible and exploring methods to hedge these costs.
(f) Internal Control Systems & their Adequacy:
The Internal Control Systems are adequate. The systems and processes are being continuously reviewed to improve working efficiency thereby reducing costs and timelines.
(g) Discussion on financial performance with respect to operational performance:
Financial performance and operational performance have been discussed segment-wise as well as product- wise under paragraph 17 (c). Financial summary and key financial ratios have been given in paragraph 2 of this report as well as in paragraph 17 (i) of this report.
(h) Material Developments in Human Resources/ Industrial Relations front, including number of people employed:
Industrial relations were good and cordial at all the locations of the Company and there were no material developments except loss of working due to the Covid-19 pandemic.
The company introduced a 5-day working week at the Corporate Office and Project businesses in order to attract and retain talent. This was done by restructuring leaves and working hours without impacting productivity.
Skill up-gradation trainings continued to be organized, mostly in on-line mode, at regular intervals.
As part of the recruitment process for junior management, the company introduced psychometric testing tools to understand the profile of the candidate with respect to their adaptability to company culture as well as their job requirements. This tool was also used while recruiting people at a senior level to elicit their leadership and managerial capabilities.
While employee attrition, mostly at the junior cadre level, was 9.1%, as against 5.56% in the previous year 2020-21, there was no major change in the number of people employed by the Company.
(i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof enclosed as Annexure - 3.
(j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof enclosed as Annexure - 3.
18.00 REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES AND JOINT VENTURE COMPANIES:
(A) Saraswati Sugar Mills Limited (Wholly Owned Subsidiary Company):
(1) The Shareholders will be happy to note that the Ethanol Plant was commissioned during the year. As mentioned in the last year's report, completion was delayed due to disruption as a result of Covid-19. It commenced commercial production with effect from 22nd December 2021.
(2) The total income was '661.92 crore against '820.78 crore last year and the profit before tax was '54.43 crore against '87.95 crore last year. The profits were less due to the following reasons:-
(i) Lower sales in absence of export sale during the year under report;
(ii) Higher depreciation on account of investment in the Ethanol Plant.
Sugar Scenario:
(3) In spite of increased sugar production, the all-India closing stock of sugar decreased at the close of the last two seasons and is also likely to decrease further at the close of the current season 2021-22 on 30.09.2022, due to the following reasons:-
(i) Large export in the last few seasons as a result of export subsidy. In the current season, export is higher despite there being no export subsidy as International sugar prices have risen;
(ii) Diversion of B-Heavy Molasses and Sugarcane Juice from production of Sugar to production of Ethanol. While an estimated 21 lakh tonnes of less sugar was produced last year because of ethanol production, the corresponding figure likely for this year is 34 lakh tonnes;
(iii) I ncrease in internal consumption in season 202021 and 2021-22 (expected).
(4) The comparative figures (All India) are given below:-
Ms per estimates from the Indian Sugar Mills Association
(5) The Central Government continued with the policy of Monthly Release Mechanism under which Mills are not allowed to sell more than the released quantity for that month.
(6) The Central Government also continued with the policy of Minimum Sale Price (MSP), below which the Sugar Mills are not allowed to sell. MSP applicable during the year under report was '3100/- per quintal. There has been no increase in MSP since February 2019 seasons in spite of repeated representations by the Industry and also recommendations by the Commission for Agricultural Costs and Prices (CACP) and NITI Aayog. The domestic prices are, however, prevailing at a reasonable level due to increased consumption and decline in the closing stock of sugar, as explained above.
OPERATIONS:
Sugar Factory:
(7) Sugar factory commenced crushing on 16.11.2021. The working of the plant & machinery was satisfactory, though there is a considerable fall in recovery.
(8) The recovery during the season was lower at 9.51% against 11.49% in the preceding season. The sugar recovery was lower by an estimated 1.60% due to production of B-Heavy Molasses for the Ethanol Plant (as explained in paragraph 4.15). The balance reduction in recovery was about 0.38% because of agro-climatic reasons. During the current season, lower recovery has been experienced in most sugar mills in Haryana and West U.P. due to these reasons.
(9) The quantity of cane crushed, in spite of an increase in the cane area, was marginally higher than expected as the cane yield was lower by 10 - 12%. Cane yield was lower due to:
(i) Higher incidence of insects/pests mainly Top Borer and Pokkah Boeing;
(ii) Comparatively more precipitation in early part during tillering and ratoon sprouting phase of sugarcane (May-June) and lower rainfall during Grand Growth Phase (July-August);
(iii) I ncreased Poplar plantation along with sugarcane from 9% to 15% during 2020-21 also affected average cane yield.
The cane supply was also disrupted for few days due to unusually heavy rains in the month of January and February making cane harvesting difficult.
(10) The Central Government increased the Fair & Remunerative Price (FRP) of sugarcane by '5/- per quintal to '290/- per quintal linked to a recovery of 10%. FRP applicable to each factory is increased by '2.90 per quintal for every 0.1% increase in the recovery over 10%. FRP applicable to our factory was '333/- per quintal.
(11) The Haryana Government also increased the State Advised Price (SAP) by '12/- per quintal from '350/- per quintal to '362/- per quintal, and accordingly, we are paying this price to the farmers, which is the highest in the country. The Haryana Government, as in the last few years, continued to give a subsidy to compensate for the difference between SAP & FRP.
(12) The Statistical position is given below: -
Sugar Export:
(13) There was no subsidy towards freight, etc., for export of sugar during the year under report and export was uneconomical. However, after the Russia-Ukraine
conflict because of diversion of sugarcane in the last few months towards Ethanol in Brazil, the largest exporter of raw sugar, the International sugar prices have risen. We took this opportunity to contract 10,800 MT of sugar for export of which a very small quantity was shipped up to March 2022.
Ethanol Plant:
(14) As mentioned above, the Ethanol Plant commenced commercial production with effect from 22.12.2021. The capacity of the Plant is 100 KLPD.
(15) The Ethanol Plant can work on a variety of feedstock including Sugarcane Syrup, C-Heavy Molasses/Final Molasses as well as on B-Heavy Molasses. In case of high sugar prices, the Plant can operate on C-Heavy/ Final Molasses, but if sugar prices are low, then we can choose to operate on B-Heavy Molasses (B-Heavy Molasses is an intermediate product, it gets produced while opting for the two stage sugar boiling process to produce white sugar, instead of the three stage sugar boiling process). B-Heavy Molasses involves a sacrifice of some Sugar production to produce more Ethanol.
(16) The working of the Plant has been good. It is operating at 100% capacity.
(17) All the parameters, viz. energy consumption, efficiencies etc., are being achieved as per the norms. The effluent generated from the plant is being utilized in the Incineration Boiler with the support fuel, to generate steam and power in the Turbine. A complete scheme of Water Treatment is being operated to successfully achieve Zero Liquid Discharge (ZLD).
(18) We have entered into contracts for supply of 34000 kilo liters of Ethanol during the Year 2021-22 (December 2021 to November 2022). The despatch of Ethanol was started from the 1st week of January 2022.
(19) The by-products, namely CO2 (carbon dioxide) gas, fusel oil, and potash rich boiler ash are also being sold.
Enhanced Working Capital Facility:
(20) The Working Capital facility has been enhanced by '100 crore to support the operations of the new Ethanol Plant.
(21) The Credit Rating Agency, ICRA, has reaffirmed the credit rating of A- for Fund based Working Capital limits and Fund based Term Loan.
Next Season:
(22) We expect to have a comparatively higher quantity of cane crush in the next season due to an increase in cane planting by about 10%.
(23) Domestic sugar prices are likely to be at a reasonable level because of:-
(1) Increased domestic consumption;
(2) Decline in the closing stock of sugar;
(3) Increased focus on Ethanol production as a result of increase in crude prices. It is estimated that sugar production in season 2022-23 will be lower by about 50 lakh tonnes because of Ethanol production;
(4) Increase in International Sugar Prices.
(24) Financial results for the next year are expected to be satisfactory due to the reasons mentioned above as well as due to an expected increase in the price of Ethanol.
(B) Isgec Hitachi Zosen Limited (Subsidiary and Joint Venture Company):
(1) The total revenue for the year was '324.35 crore as compared to '338.48 crore in the preceding year. The revenue was lower as a major order of '89 crore, for the supply to Russia, was ready for shipment but could not be shipped due to the war in Ukrain.
(2) The profit before tax was '5.61 crore against '9.66 crore last year. The reason for the lower profit is because of the additional cost incurred on transportation of equipment to the HPCL Rajasthan Refinery, Barmer, due to non-availability of a barge as a result of a cyclone.
(3) Important supplies made during the year were:-
[a) Surface Condenser for Toshiba, Japan for supply to Bangladesh. This was the first job with Titanium Clad Tube Sheets & Titanium Tubes;
[b) Vacuum Gas Oil Reactor, weighing approx. 1200 Tonnes, for the Rajasthan Refinery. This is the heaviest Reactor manufactured by us so far;
[c) Four Coke Drums for the Rajasthan Refinery as per the proprietary design of Chevron Lummus Global LLC.
(4) The order booking during the year was good. Some of the prestigious orders booked during the year were:-
(a) An LC Fining Reactor for the Residue Upgradation facility of the Numaligarh Refinery with a thickness of 220 mm and weighing 1200 Tonnes;
(b) Two Duplex Stainless Steel Clad Columns for a 2G Ethanol Project in Numaligarh;
(c) First order from JGC, Japan for the Basrah Refinery Project for Reactors & Columns;
(d) The first order for a Tube Bundle for a Reformer Exchanger for KBR, which is their proprietary equipment.
(5) The inflow of enquiries continues to be good and we are being selective in booking orders as per our manufacturing & financial capacities.
(6) As for financial year 2022-23, profitability will be adversely impacted due to a steep rise in material cost for items ordered after March 2022.
(C) Isgec Titan Metal Fabricators Private Limited (Subsidary and Joint Venture Company):
(1) The total income and profit of your Company, before tax, were marginally higher than last year, in spite of the disruption caused by the Covid-19 pandemic. The total income was '4,030 lakh against '3,642 lakh in the preceding year and the profit before tax was '664 lakh against '599 lakh last year. The turnover and profit would have been higher but for the deferment of various projects due to Covid-19, which adversely affected the order booking.
(2) The Company has established its credibility in the market and was able to secure good orders. The orders secured for the first time include an order for 12 nos. BP Licensed Titanium Heat Exchangers from an Oil Refinery, another order for 1 no. KVT Licensed Ti Clad Oxidation Reactor, as well as an order for an Inconel Tubular Reactor for a Chemical Plant. Other important orders include those received for a Titanium Heat Exchanger from a Refinery, and Titanium Vessels and KVT licensed Titanium & Zirconium Exchanger from Chemical Plant.
(3) With regard to Operations, the Company successfully supplied 3 nos. Photochlorination Reactors, 4 nos. Titanium Exchangers and Niobium Exchangers to Chemical Plants. The Company also successfully executed an export order for Hastelloy Exchangers.
(4) The Company continues to focus on new processes to improve productivity and cycle time.
(5) The Company could save cost and time by developing a new methodology for profile cutting and drilling operations on a water jet cutting machine. Machining operations earlier done on time consuming traditional machines are now being managed on the more advanced water jet cutting machines.
(6) As for the next year ending 31st March, 2023, various projects in the Steel and Chemical sectors are likely to be revived and the Company is expected to secure good business and do well.
(D) ISGEC SFW BOILERS PRIVATE LIMITED:
(1) The total income and profits before tax were higher than last year. The total income was '1,050 lakh against '983 lakh in the preceding year and the profit before tax was '304 lakh against '208 lakh last year. The capacity utilization was also higher.
(2) In spite of lockdown full and partial during the year due to Covid pandemic, the capacity utilization was higher as the employees worked from home with the help of various measures taken by the Company.
(3) Capability enhancement:
As a result of training received from the Joint Venture Partner SFW over the years, the company is now involved in basic design for multiple projects. Finite element Analysis capability has been established in the company during the year, and work on engineering of complex plated structure was also performed.
(4) Manpower, Hardware & Software:
Due to increased workload, both manpower, hardware & software were added. In the context of emerging market conditions, the company has initiated various measures to improve retention of trained and talented employees.
(5) As for the next year ending 31st March, 2023, the Company is expecting new project work assignment from the Joint Venture Partner. The Company is, therefore, expected to do well in the coming year.
(E) ISGEC REDECAM ENVIRO SOLUTIONS PRIVATE LIMITED (SUBSIDIARY AND JOINT VENTURE COMPANY):
(1) In spite of Covid-19 pandemic, the total income and profits before tax were higher than last year. The total income was '37,12,88,212 against '26,25,39,390 in the preceding year and the profit before tax was '1,45,72,089 against loss of '(3,87,60,311) last year.
(2) The Company got opportunity to execute orders on De-Dusting Systems for a steel plant and Semi dry Fuel Gas Desulfurization System. The second wave of Covid impacted the completion and commissioning of these projects and the performance could not be established. This has affected our order booking.
(3) Based on our previous learning, our execution at site has improved a lot and we have been able to overcome the initial teething troubles. This resulted in reducing the costs and improving the margins.
(4) As for the year ending March 31, 2023, we continue to focus, along with our Joint Venture Partner, Redecam-Italy, in providing solutions to flue gas cleaning system for Sox Removal (for power plants & Municipal Solid Waste) and De-Dusting of large capacity in steel and other plants. With the performance getting established in the DeDusting project being executed for a Steel Plant, we are confident of receiving more orders for these applications during the year.
(5) Focus is given to make standard modular bag filter designs, which shall help us in addressing cement and other nuisance filter applications. The exercise is on-going.
(F) EAGLE PRESS & EQUIPMENT CO. LIMITED (WHOLLY OWNED SUBSIDIARY COMPANY):
(1) Operations at Eagle Press seem to be recovering after the adverse impact of Covid-19 as well as Chip Shortages which severely affected majority of Eagle Press customers in the Automobile Sector, resulting in reduced sales and workload. There were also major issues in supply chain which adversely affected the targeted revenues in FY-22.
(2) After a dip in sales for three consecutive years (FY- 19, 20 & 21), order booking in FY-22 was better at CAD 21 Million. In a depressed market, most of the new orders booked and executed in FY-22 were at very tight margins under stiff competition.
An abnormal hike in steel prices and other inputs further adversely affected value addition.
(3) In view of the current strong pipeline of sales leads, we expect order booking to further improve as the US economy is likely to grow. An increase of about 30% in sales is targeted for FY-23.
(4) Steps to take-up value engineering, control purchase costs, as well as operational costs have been taken. We are hopeful that next year will be much better, however, this will depend mostly on booking of fresh orders.
(G) CAVITE BIOFUEL PRODUCERS INC. (CBPI):
(1) Philippines was affected by Covid-19 for the last two years. In view of this we could neither start the construction to complete the CBPI Plant nor we could interact with potential buyers to sell the Plant. The situation in the Philippines is now normal.
(2) Based on our interaction with potential buyers, it is understood that a better valuation will be available if the Plant construction is restarted or when the Plant is completed.
(3) We are, therefore, starting the construction to complete the CBPI Plant and hope to complete the construction by June 2023.
(4) To meet the construction cost, a loan of Philippine Pesos 1152 million (about '172 crore) has been sanctioned by Standard Chartered Bank- Philippines. Apart from security of assets of CBPI, the loan is secured by Standby Letter of Credit to be issued by Standard Chartered Bank-India out of our Non-Fund Based limits.
(5) Although, we feel that we can run the Plant and the operations are viable, but in case any potential buyer is found at reasonable price, we will consider selling the Plant.
(H) Other Wholly Owned Subsidiary Companies:
(i) Free Look Software Private Limited and Isgec Exports 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 at Kasauli.
(iii) Isgec Covema Limited:
The Company continued to execute orders for Erection and Commissioning of Boilers. Financial results were satisfactory. Turnover was '1,214.85 lakh against '2,887.02 lakh. Profit before tax was '310.59 lakh against '374.36 lakh last year.
19.00 AMOUNTS TRANSFERRED TO RESERVES, IF ANY:
19.01 No amount was transferred to the Reserves during the year ended 31st March, 2022.
20.00 DIVIDEND:
20.01 Your Directors are pleased to recommend a dividend of '2/- (Rupees Two only) per equity share of the Company. The dividend, if approved and declared in the forthcoming Annual General Meeting, would result in a total outflow of '14,70,59,020/- (Rupees Fourteen Crore Seventy Lakh Fifty Nine Thousand Twenty only).
21.00 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER THE CLOSE OF THE YEAR:
21.01 There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
22.00 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO:
22.01 The required information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is annexed hereto as Annexure-4.
23.00 RISK MANAGEMENT POLICY:
23.01 The Board has developed and implemented a Risk Management Policy for the Company including identification therein of elements of risk, which in the opinion of the Board may threaten the existence of the Company. Risk Management Policy is available on the website of the Company at https://www. isgec.com/pdf/RiskManagementpolicynew1.pdf
24.00 CORPORATE SOCIAL RESPONSIBILITY:
24.01 The Company has a Corporate Social Responsibility Committee of the Board of Directors as under:-
24.02 The Company has developed and implemented a policy on Corporate Social Responsibility in accordance with Section 135 read with rules made thereunder. Details of initiatives and activities undertaken by the Company and Corporate Social Responsibility amount spent during the financial year are given under annual report on Corporate Social Responsibility as Annexure-5.
24.03 The Corporate Social Responsibility Policy is available on the website of the Company at https://www.isgec. com/aboutus-csr-policy.php
25.00 ANNUAL EVALUATION BY THE BOARD:
25.01 On the recommendation of the Nomination and Remuneration Committee, the Board has finalized the Evaluation Process to evaluate the entire Board, Committees, Executive Directors and Non-Executive Directors.
25.02 The method of evaluation, as per the Evaluation Process, is to be done by internal assessment through a detailed questionnaire to be completed by individual Directors.
25.03 In accordance with the Companies Act and the Listing Requirements, the evaluation is done once in a year, after close of the year and before the Annual General Meeting.
26.00 CHANGES IN NATURE OF BUSINESS, IF ANY:
26.01 There is no change in the business of the Company during the year under report.
27.00 DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED:
27.01 Mrs. Nina Puri, Whole-time Director (DIN: 01316769) resigned from the position of Whole-time Director with effect from close of business hours on March 31, 2021 and continued to act as a Non-Executive Non Independent Director thereafter. Mrs. Nina Puri, resigned from the Board of the Company with effect from the conclusion of the Board Meeting held on June 28, 2021.
The Directors place on record the appreciation of services rendered by Mrs. Nina Puri as Whole-time Director and Director of the Company.
27.02 Mr. Arvind Sagar (DIN: 09210612) was appointed as an Additional Independent Director on the Board from the conclusion of the Board Meeting held on June 28, 2021 and his appointment as an Independent Director was approved by the members for a term of five (5) years with effect from the conclusion of the Board Meeting held on June 28, 2021 upto and including June 27, 2026.
27.03 Mr. Kishore Chatnani (DIN: 07805465) was appointed as an Additional Director on the Board from the conclusion of the Board Meeting held on June 28, 2021 and his appointment as a Whole-time Director was approved by the members for a period of five (5) years beginning from the conclusion of the Board Meeting held on June 28, 2021 upto and including June 27, 2026.
27.04 Mr. Sanjay Gulati (DIN: 05201178) was appointed as an Additional Director on the Board from the conclusion of the Board Meeting held on June 28, 2021 and his appointment as a Whole-time Director was approved by the members for a period of five (5) years beginning from the conclusion of the Board Meeting held on June 28, 2021 upto and including June 27, 2026.
27.05 Mr. Ranjit Puri (DIN: 00052459), who retired by rotation and was appointed as a Non-Executive Director.
27.06 Mrs. Shivani Hazari (DIN: 00694121), Independent Director, resigned from the Board of the Company with effect from March 12, 2022. The Directors place on record the appreciation of services rendered by Mrs. Shivani Hazari as Independent Director of the Company.
28.00 STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE OF THE INDEPENDENT DIRECTORS APPOINTED:
28.01 Statement regarding the opinion of the Board with regard to integrity, expertise and experience (including the online proficiency self-assessment test) of the Independent Directors appointed during the year is annexed hereto as Annexure-6.
29.00 NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATES:
29.01 No new company has become or ceased to be a subsidiary, joint venture and associate company during the year.
30.00 DEPOSITS:
30.01 The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits was outstanding as on the date of close of the financial year.
31.00 DETAILS OF SIGNIFICANT & MATERIAL ORDERS:
31.01 There is no significant or material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
32.00 INTERNAL FINANCIAL CONTROLS:
32.01 The Company has adequate internal financial controls with reference to financial statements and these are working effectively.
33.00 MAINTENANCE OF COST RECORDS:
33.01 The Company is maintaining Cost Records as per provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.
34.00 PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
34.01 The Company has in place a Policy of Prevention on Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received regarding sexual harassment.
34.02 The Company has not received any complaint during the year under report and none is pending.
35.00 COMPOSITION OF AUDIT COMMITTEE:
35.01 The composition of Audit Committee is as below:-
* Mr. Arvind Sagar, Non-Executive Independent Director, was inducted as member of the Audit Committee on January 24, 2022.
35.02 There is no recommendation by the Audit Committee
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36.00 REPORT ON CORPORATE GOVERNANCE:
36.01 Report on Corporate Governance for the year under review, as stipulated under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed as Annexure- 7.
37.00 CONSOLIDATED FINANCIAL STATEMENTS:
37.01 I n accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies, which is forming part of the Annual Report.
37.02 Further, as required under Rule 5 of the Companies (Accounts) Rules, 2014, a statement in Form AOC-1 containing salient features of the financial statements of the subsidiary companies is annexed as Annexure-8.
38.00 DISCLOSURE REGARDING REMUNERATION AS REQUIRED UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013:
38.01 Disclosures regarding remuneration as required under Section 197 (12) of the Companies Act, 2013, are annexed as Annexures-9.
38.02 Annexure giving certain details about the employees, in receipt of remuneration of not less than one crore and two lakh rupees throughout the financial year or eight lakh and fifty thousand rupees per month during any part of the year, is not annexed with the Board's Report. In accordance with Section 136 (1) of the Companies Act, 2013 the Annexure is available for inspection by any member at the registered office of the Company during working hours, 21 days before the date of the AGM.
39.00 VIGIL MECHANISM:
39.01 The Board has framed Vigil Mechanism/Whistle Blower Policy for Director, Stakeholders, Individual Employees and their Representative Bodies in accordance with Section 177 (9) of the Companies Act, 2013 read with Rules made thereunder, Regulation 4 (2) (d) and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 and Regulation 9A (6) of the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time. The Vigil Mechanism Policy has been disclosed on the website of the Company at https://www.isgec.com/ pdf/VigilMechanismWhistleBlowerPolicy-10.06.2021.pdf
40.00 DIVIDEND DISTRIBUTION POLICY:
40.01 Company's Dividend Distribution Policy approved by the Board has been disclosed on the website of the Company at https://www.isgec.com/pdf/Dividend- Distribution-Policy-1219.pdf
41.00 SECRETARIAL AUDIT REPORT:
41.01 The Board of Directors of the Company has appointed M/s. Pramod Kothari & Co., Company Secretaries, to conduct the Secretarial Audit.
41.02 Pursuant to Section 204 of the Companies Act, 2013, a Secretarial Audit Report given by Mr. Pramod Kothari of M/s. Pramod Kothari & Co., Company Secretaries, is annexed as Annexure-10.
42.00 SECRETARIAL STANDARDS:
42.01 The Company complies with all applicable secretarial standards.
43.00 PERSONNEL:
43.01 The Board wishes to express its appreciation to all the employees of the Company for their contribution to the operations of the Company during the year.
44.00 ACKNOWLEDGEMENTS:
44.01 Your Directors take this opportunity to thank the Financial Institutions, Banks, Government Authorities, Regulatory Authorities and the Shareholders for their continued co-operation and support to the Company.
44.02 With these remarks, we present the Accounts for the year ended March 31, 2022.