DIRECTORS’ REPORT Dear Shareholders Your Directors have pleasure in presenting the Twenty Eighth Annual Report on the affairs of the Company together with the Statement of Accounts for the financial year ended on 31st March, 2015. The summarised financial highlights for the financial year vis-s-vis the previous year are as follows : 2. PERFORMANCE, RESULT OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS During the year under review your Company has produced 122,981 MT of Hot Metal as compared to 62,833 MT in the previous year. Due to modernization cum expansion of the Mini Blast Furnace of the Company in second half of the financial year 201314, the production has almost doubled in the current year as compared to previous year. The gross turnover of the Company was Rs. 46,171 Lakhs in 2014-15 in comparison to Rs. 49,357 Lakhs in 2013-14. The Company has earned a Profit Before Tax of Rs. 22.44 Lakhs as compared to a Loss of Rs. 433.16 Lakhs in the previous year. 3. DIVIDEND Keeping in view the working capital requirements of the Company, your Directors have ploughed back the profits and express their inability to declare any dividend for Equity and Preference shares of the Company for the financial year ended 31st March, 2015. 4. RESERVE During the year under the review the Company has not transferred any amount to the general reserve. 5. SHARE CAPITAL As on 31st March, 2015, the paid up Equity Share Capital of your Company was Rs. 709 Lakhs and paid up Preference Share Capital of your Company was Rs. 4,510 Lakhs. During the year under review the Company has not raised any form of Share Capital. 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL 6.1 Retirement by Rotation Pursuant to the provisions of the Companies Act, 2013, Mr. R. S. Jalan (DIN: 00578800) Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The information as required to be disclosed under Clause 49 of the Listing Agreement in case of re-appointment of Directors 13 is provided in the Notice of the ensuing Annual General Meeting. ^ 6.2 Appointment The tenure of Mr. B. K. Singh, Executive Director designated as Whole Time Director of the Company expired on 29th May, 2015. Looking to the valuable contributions being made by him for development of the Company, the Board of Directors on the recommendation of the Nomination and Remuneration Committee has re-appointed him for a period of 3 years with effect from 30th May, 2015 subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting. Further details about the above Director are given in the Corporate Governance Report as well as in the Notice of the ensuing Annual General Meeting. 6.3 Independent Directors During the year under review, the shareholders approved the appointment of Ms. S. Banerjee, Mr. S. K. Singhal and Mr. L. N. Sharma as Non Executive Independent Directors of the Company who are not liable to retire by rotation. All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 6.4 Key Managerial Personnel At the Board Meeting held on 28th May, 2014, Mr. M. Bengani, Chief Financial Officer and Mrs. R. Fogla (Dhanuka), Company Secretary were designated as 'Key Managerial Personnel' of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 6.5 Meetings of the Board The Board of Directors met five times during the financial year 2014-15, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. 6.6 Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance, etc. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board of Directors. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process. 7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as 'Annexure - A' and forms part of this Report. 8. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Report on Corporate Governance is annexed as 'Annexure - B' and forms an integral part of this Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is also annexed to the Report on Corporate Governance. The Company has paid the requisite Annual Listing Fees to the Stock Exchanges. 9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT In accordance with the requirement of Clause 49 of the Listing Agreement, Management Discussion and Analysis Report is annexed herewith as 'Annexure - C' and forms an integral part of this Report. 10. CEO/CFO CERTIFICATION 1 The Managing Director/Chief Financial Officer certification as required under Clause 49 of the Listing Agreement is annexed to 14 the Corporate Governance Report and forms part of this Report. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013 an extract of Annual Return of the Company in Form MGT - 9 is annexed herewith as 'Annexure - D' and forms an integral part of this Report. AUDITORS AND AUDITORS' REPORT 12.1 Statutory Auditors At the Annual General Meeting held on 9th September, 2014, M/s. Agarwal Maheswari & Co., Chartered Accountants (Firm Reg. No. 314030E), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013 read with Rule 3 of the Companies (Audit and Auditors) Rules, 2014 made thereunder, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Agarwal Maheswari & Co., Chartered Accountants (Firm Reg. No. 314030E) as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the Auditors to the effect their appointment if ratified, would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark and is self-explanatory and do not call for any further comments. 12.2 Cost Auditors The Board of Directors had appointed M/s. Sohan Lal Jalan & Associates (Firm Reg. No. 101620, Membership No. 7442) as Cost Auditors of the Company for the financial year 2015-16 in its meeting held on 30th May, 2015. Their remuneration is subject to ratification by shareholders at the ensuing Annual General Meeting. Cost Audit Report for the financial year 2013-14 was filed on 26th September, 2014 (due date - 30th September, 2014). 12.3 Secretarial Auditors Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the Company has appointed M/s. Rakesh Agrawal & Co., Practicing Company Secretaries (Membership No. 25326) as Secretarial Auditors of the Company. The Secretarial Audit Report in Form MR - 3 is annexed herewith as 'Annexure - E' and forms part of this Report. It does not contain any qualification, reservation or adverse remark. 12.4 Internal Auditors Your Company has appointed M/s. B. N. Agrawal & Co., Chartered Accountants as the Internal Auditors to carry out the Internal Audit of various operation areas of the Company. Their scope of work and the plan for audit is approved by the Audit Committee. The Report submitted by them is regularly reviewed and their findings are discussed with the process owners and suitable corrective action is taken on an ongoing basis to improve efficiency in operations. VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website of the Company at <http://kicmetaliks.com/images/Vigil_Mechanism.pdf>. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. NOMINATION AND REMUNERATION POLICY The Company follows a policy on remuneration of Directors and Senior Management Personnel. The policy is approved by the Nomination and Remuneration Committee and the Board of Directors and is annexed herewith as 'Annexure - H' and forms part of this Report. More details on the same are given in the Corporate Governance Report. AUDIT COMMITTEE Your Company has an Audit Committee in terms of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Further details of Audit Committee are given in the Corporate Governance Report annexed as a part of the Directors' Report. 16.1 Public Deposits The Company has neither accepted nor renewed any deposits during the year under review. 16.2 Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013 The Company has not made any investment, given any loan or guarantee covered under Section 186 of the Companies Act, 2013, during the year under the review. 16.3 Contracts and arrangements with related parties During the year under review there were no contract and arrangements entered into between the Company and related parties except remuneration paid to Key Managerial Personnel including Directors of the Company. The Policy on materiality of related party transactions and dealing with related party transactions, as approved by the Board of Directors may be accessed on the Company's website at <http://kicmetaliks.com/images/Related_party_transaction_> policy.pdf. Your Directors draw attention of the shareholders to Note No. 31 to the financial statements which sets out related party disclosures. 16.4 Internal Financial Control The Company has in place adequate internal financial control with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations of the same were observed. 16.5 Insurance Adequate insurance cover has been taken for properties of the Company including buildings, plant and machineries and stocks against fire, earthquake and other risks as considered necessary. 17. RISK MANAGEMENT Risk management is an integral part of the strategic management of your Company. The process involves periodic identification of risk likely to affect the business from operating smoothly and adoption of appropriate measures to address the concerns. In this regard, your Company has identified inherent risks in its operations and records residual risk after taking specific risk mitigation steps. Further details regarding the same are given in the Management and Discussion Analysis Report. 18. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company has always given priority to the all-round development of the people residing in and around the Company's area of operations. Company understands that there is a need to strike a balance between the overall objectives of achieving corporate excellence vis-a-vis the corporate responsibility towards the community. This twin objective of business and social commitment has prompted your Company to embark upon programmes of education, health and infrastructural development endeavors; an attempt to invest technology with a human face. 19. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, and based upon the representations received from the management, the Board of Directors of the Company hereby confirm that : a) in the preparation of the Annual Accounts for the financial year ended 31st March, 2015, the applicable Accounting Standards have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies 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 2014-15 and of the profit and loss of the Company for that period; c) the Directors have taken 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 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 that such internal financial controls are adequate and are operating effectively; f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 21. MATERIAL ORDERS No material orders were passed by any Regulators or Courts or Tribunals that will impact the going concern status and Company's operations in future. 22. MATERIAL CHANGES No material changes and commitments have occurred after the close of the financial year till the date of this Report, which affect the financial position of the Company. 24. ACKNOWLEGEMENT Your Directors wish to convey their appreciation to all the Company's employees for their enormous efforts as well as their collective contribution to the Company's performance. Your Directors acknowledge with gratitude the co-operation and support extended by the Company's Bankers and valued customers. We also take this opportunity to thank the shareholders, suppliers, and all the other business associates for the continuous support given by them to the Company and their confidence reposed in the management. For and on behalf of the Board of Directors R. S. Jalan Chairman and Managing Director Place : Kolkata Dated : The 30th day of May, 2015 |