Annual Report 2020-21 Read Through the Pages
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26th Annual Report 2020-21 Read through the pages Corporate Overview PAGE 02 Solar at a Glance 04 Chairman’s Message 08 Managing Director’s Message 10 Our Value Creation Model 14 Financial Capital 16 Manufactured Capital About cover 20 Intellectual Capital The elements, colors and concept 22 Human Capital of the cover design depicts vibrancy and new beginnings. This 26 Natural Capital philosophy truly represents how 28 Social & Relationship Capital Solar Industries is placed to write 30 Engaging with Stakeholders a new chapter of growth in its illustrious journey. 32 Risk Management BSE scrip code: 36 Our ESG Focus 532725 44 Board of Directors 46 Corporate Information NSE Trading Symbol: “SOLARINDS” Statutory Reports PAGE 47 Management Discussion & Analysis 59 Board’s Report 80 Report on Corporate Governance To know more about us in 109 Business Responsibility Report digital mode, scan this QR code in your QR mobile application. Financial Statements PAGE 119 Standalone Financial Statements 176 Consolidated Financial Statements Forward-looking statements th Some information in this report may contain forward-looking statements which include statements 26 Annual General regarding Company’s expected financial position and results of operations, business plans and prospects etc. and are generally identified by forward-looking words such as “believe,” “plan,” Meeting “anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or other similar words. Forward-looking statements are dependent on assumptions or basis underlying such statements. We have chosen these PAGE assumptions or basis in good faith, and we believe that they are reasonable in all material respects. However, we caution that actual results, performances or achievements could differ materially from 246 Notice those expressed or implied in such forward-looking statements. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Today, Solar Industries stands at yet another cusp of growth story. We continue to move up our value chain by expanding our product offerings for mining, defence and space applications. Moving forward, we remain pivotal to nation’s aspiration for building a self-reliant (Aatmanirbhar Bharat) model of economic growth. Our integrated business model, talented people and continuous innovation form an important part of our future growth story, setting us on course for New Trails with New Beginnings. Solar Industries India Limited 26th Annual Report 2020-21 Solar at a Glance Solar Industries India Limited (SIIL) is one of the leading global manufacturers of industrial explosives for mining and infrastructure sector. Leveraging our deep domain expertise and experience, we have taken rapid strides to emerge as a leading private sector ammunition player in the country. Our Products Defence Industrial Explosives Read more about our business on Read more about our business on page 17 of the Annual Report page 16 of the Annual Report Capital-wise highlights Financial Manufactured Intellectual Capital Capital Capital J2515.63 crore J1910.75 crore J77.5 crore Turnover Gross block R&D spent in last 5 years J276.35 crore* Profit after Tax Human Social & Natural Capital Relationship Capital Capital 7249 55+ 10206 KL Employee strength Countries of presence Water Recycled 77479 J25.25 crore 2.7% Total man hours of safety training CSR spent in last 5 years Reduction in water consumption 02 NEW TRAILS. NEW BEGINNINGS. Corporate Overview Corporate Our Strengths Diverse sectoral presence Financial discipline Our products and business portfolio find applications across Modest gearing of 0.48 (as on March 31, 2021) with several downstream industries such as infrastructure, mining, balanced financing through debt and accruals defence, space. Statutory Reports Statutory Global footprint State-of-the-art manufacturing facilities Our aim is to widen our market presence across the globe with our manufacturing units at strategic locations. Our manufacturing facilities across the world are equipped with state-of-the-art technologies. Responsibility Our ESG-compliant business model is focused on creating Our People enhanced value for stakeholders The relentless dedication of our people continues to drive us forward towards our goals. The diversity and inclusiveness in our workforce remain a strong fundamental to our sustained growth. Financial Statements Financial Our commitment to ESG At Solar, we are committed to improving our approach towards building a strong triple bottom line structure. We continue to strengthen our societal bonds to create a positive impact within the communities we operate, while also stepping up our efforts towards protecting the environment. In addition, we maintain highest standards of ethics and integrity, reflecting our strong governance framework. 26 th Annual General Meeting Annual General Environment Social Governance Key focus areas: Key focus areas: Key focus areas Managing Environmental Health & Safety Code of Conduct Impacts Opportunity and Diversity Whistle Blower Policy Clean Energy Customer Satisfaction Vigil Mechanism Waste Management Supply Chain Management Robust Risk Management Water Management Supporting communities Asset Utilisation Product Stewardship 03 Solar Industries India Limited 26th Annual Report 2020-21 Chairman’s Message DEAR SHAREHOLDERS, My sincere greetings to all of you on behalf of Solar an unintended consequence i.e. a price surge in Industries India Limited. I hope you and your family are commodities. A super cycle event, usually lasting for in good health and staying safe. a decade has the potential to transform economies. However, the caveat is to prevent the aggregate It’s an honour and privilege to share the Company’s demand from falling further. performance highlights for the year, and our future plans. The Indian economy shrank by -7.3% during the fiscal year 2020-21, despite of seeing sequential quarterly Our Operating Environment jumps during the second half of the fiscal. This was propelled by pent up demand and spurt in economic The global economy was placed in a precarious activities since the economy unlocked after the June condition as the world GDP contracted by -3.5% in quarter. The policy support and reforms initiated 2020. The near zero policy rates and Government during the period eased supply constraints and injected spending to stimulate consumption demand had liquidity into the economy. I am thankful for the great The Government accelerated its process of structural reforms. These reforms had a clearly defined vision contribution of Solar Team, who have of building a USD 5 trillion Indian economy by 2025. been the backbone of the company, Accordingly, a slew of economic packages and policy support were provided for the manufacturing sector and the source of our strength. They under the arch of the Aatmanirbhar Bharat Abhiyaan. overcame these trying times during The Production Linked Subsidy (PLI) scheme for the pandemic and yet assured incentivising domestic manufacturing has now been extended to 13 sectors and has received significant optimum results. traction till date. 04 NEW TRAILS. NEW BEGINNINGS. Corporate Overview Corporate The Budget for FY 22 also reiterated the Government’s infrastructure sector during the first half of the fiscal year commitment towards infrastructure led development 2020-21. The decline during first half was marginally through a substantial increase in capex expenditure, compensated by increased traction in the housing and provision for asset monetisation and creation of infrastructure sector owing to policy support from the Development Financial Institutions. Government and availability of cheaper credit in the second half of the year. Reports Statutory To facilitate economic activity, the steps towards rationalisation in labour laws , a strong push towards The Company performed quite well in the international digitisation and creation of a robust banking system, markets and its expansion in overseas markets will connect, integrate and standardise tangible and contributed significantly to revenue realisation in fiscal intangible transactions within the economy. The year 2020-21. The overseas market has been a major cumulative effect of the interplay between various destination for the Company’s capex investment for converging forces and structural reforms augurs well for some years. The Company has a strong presence in 6 a long-term positive outlook for infrastructure spending countries including India and is expected to expand and a consequent increase in economic growth. its footprint in Tanzania in the initial months of FY 2021-22. The Company is also planning to enter Overcoming Obstacles three to four new countries in the next five years. With the improvement of economic conditions in these The Company recorded lower sales during April- markets, we anticipate further increase in sales volume May 2020 due to severe demand contraction in the in the near future. Statements Financial economy and unscheduled production stoppages imposed by lockdown. However, the Company gained traction post the unlocking of the economy as demand Opportunities for Growth. picked up, and along with it a spurt in economic activities. Our consolidated revenues grew to H 2515.63 The Company has built a strong order book for the crore in FY 21 from H 2,237.30 crore in FY 20, a growth upcoming year with orders worth H 1,510 crore signed of 12.44%. The sustained performance across major during