The Directors have pleasure in presenting the Forty-Fourth Annual Report on thebusiness and operations of the Company and the Audited Financial Statements for the yearended 31st March 2017.
|1. Financial Highlights (on stand-alone basis) : || ||(Rsin Million) |
| ||2016-17 ||2015-16 |
|Sales Gross ||17215.329 ||14542.437 |
|Excise Duty ||3006.690 ||2750.571 |
|Sales Net ||14208.639 ||11791.866 |
|Other Operating Revenue ||14.377 ||12.796 |
|Other Income ||131.113 ||26.573 |
|Total Revenue ||14354.129 ||11831.235 |
|Total Expenditure ||11356.469 ||9451.775 |
|Finance Cost ||96.312 ||120.290 |
|Depreciation & amortisation expenses ||519.723 ||517.279 |
|Profit before Tax ||2381.625 ||1741.891 |
|Tax Expenses || || |
|- Current Tax ||902.000 ||508.500 |
|- Deferred Tax ||(81.275) ||97.066 |
|- Add / (Less) : Short Provision for Taxation || || |
|in earlier years ||1.716 ||0.532 |
|Profit after Tax ||1559.184 ||1135.793 |
2. Dividend & Reserves
The Directors are pleased to recommend a dividend of Rs5/- per Equity Share ofRs5/-each (i.e. 100%) for the financial year ended 31st March 2017.
During the year under review no transfer is proposed to the General Reserve. An amountof Rs6816.505 Million is proposed to be retained as surplus in the Statement of Profitand Loss.
3. The Year in Retrospect :
During the Financial Year ended 31st March 2017 the Company achieved gross sales ofRs17215 Million against Rs14542 Million in the previous year representing growth of18%. The Profits before Tax increased to Rs2382 Million against Rs1742 Million in theprevious year representing growth of37%.
4. State of Company's Affairs
Discussion on the state of Company's affairs has been covered as part of the ManagementDiscussion and Analysis (MD&A). MD&A for the year under review as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ispresented in a separate section forming part of the Annual Report.
5. Corporate Governance
The Report on Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in a separate section formingpart of the Annual Report.
The requisite certificate from Auditors of the Company viz. M/s. P. G. BhagwatChartered Accountants Pune confirming compliance with conditions of Corporate Governanceis attached to Report on Corporate Governance.
6. Fixed Deposits
The Company has not accepted any deposits from the public during the year.
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mrs.Sunita B. Kalyani and Mr.Amit B. Kalyani Directors of the Companyare retiring by rotation at the ensuing Annual General Meeting and being eligible haveoffered themselves for re-appointment.
These re-appointments form part of the Notice of the Annual General Meeting and theResolutions are recommended for your approval. Profiles of these Directors are given inthe Report on Corporate Governance.
The Company has received declarations from all Independent Directors that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
7.1 Board Evaluation
Pursuant to provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Committees. Performance evaluation has been carried outas per the Board Diversity and Remuneration Policy.
7.2 Board Diversity and Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Board Diversity and Remuneration Policy is available on the website ofthe Company. (Web-link : http ://www.kalyanisteels.com/profile/code-of-conduct/board-diversity-remuneration-policy/)
7.3 Meetings of the Board
During the Financial Year 2016-17 five Board Meetings were convened and held thedetails of which are given in the Corporate Governance Report.
8. Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that :
i) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed and that there are no materialdepartures;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and of the profitof the Company for that period;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the Directors have prepared the annual accounts for the year ended 31st March2017 on a going concern basis;
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
9. Conservation of Energy Technology Absorption and Foreign Exchange Earnings& Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required to be disclosed under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith asAnnexure "A".
10. Corporate Social Responsibility
As a part of its initiatives under "Corporate Social Responsibility (CSR)'' theCompany has undertaken various activities in the areas of education health water andsanitation. These activities are carried out in terms of Section 135 read with ScheduleVII of the Companies Act 2013 and Companies (Corporate Social Responsibility Policy)Rules 2014.
The details of CSR Activities undertaken by the Company are annexed herewith asAnnexure"B". The CSR Policy is available on Company's website. (Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/corporate-social-responsibility-csr/)
11. Related Party Transactions
All Related Party Transactions entered into by the Company during the financial yearwere in the ordinary course of business and on an arm's length basis. Particulars ofmaterial contracts / arrangements entered into by the Company with related partiesreferred to Section 188(1) of the Companies Act 2013 are provided in Form AOC-2 whichis annexed herewith as Annexure "C". Related party disclosures as per AccountingStandard 18 have been provided in Note '36' to the Financial Statements.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
(Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/related-party-transactions-policy/)
12. Risk Management
The Company recognises that risk is an integral and unavoidable component of businessand is committed to managing the risk in a proactive and efficient manner. The Company aspart of business strategy has in place a mechanism to identify assess monitor risks andmitigate various risks with timely action. Risks are discussed at the meetings of theAudit Committee and the Board of Directors of the Company.
13. Statutory Auditors and Auditor's Report
M/s P.G. Bhagwat Chartered Accountants Pune Statutory Auditors of the Company willbe completing tenure of five years on the conclusion of the ensuing Annual GeneralMeeting.
In terms of Section 139 of the Companies Act 2013 read with Companies (Audit andAuditors) Rules 2014 it is proposed to re-appoint them for the term of further fiveyears i.e. from the conclusion of the ensuing Annual General Meeting till the conclusionof the Forty-Ninth Annual General Meeting to be held in 2022 subject to ratification bymembers at every Annual General Meeting.
The Company has received letter from M/s P.G. Bhagwat Chartered Accountants to theeffect that their re-appointment if made would be within the prescribed limits underSection 141(3)(g) of the Companies Act 2013 and that they are not disqualified forre-appointment.
The Directors recommend re-appointment of Statutory Auditors from the conclusion ofensuing Annual General
Meeting till the conclusion of the Forty-Ninth Annual General Meeting to be held in2022.
The Notes on Financial Statements referred to in the Auditor's Report areself-explanatory and hence do not call for any further comments. The Auditor's Report doesnot contain any qualification reservation adverse remark or disclaimer.
14. Cost Auditors
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit record maintained by the Companyis required to be audited. Your Directors had on the recommendation of the AuditCommittee appointed M/s S.R. Bhargave & Co. Cost Accountants Pune for conductingthe cost audit of the Company for Financial Year 2017-18.
As required under the Companies Act 2013 the remuneration payable to the CostAuditors is required to be ratified by the members of the Company. Accordingly resolutionseeking members' ratification for remuneration to be paid to Cost Auditors is included atItem No. 6 of the Notice convening Annual General Meeting.
15. Secretarial Audit
Pursuant to provisions of Section 204 of the Companies Act 2013 the Board hadappointed M/s SVD & Associates Company Secretaries Pune to undertake SecretarialAudit of the Company for the Financial Year 2016-17. The Secretarial Audit Report for theFinancial Year ended 31st March 2017 is annexed herewith as Annexure "D". TheSecretarial Audit Report does not contain any qualification reservation adverse remarkor disclaimer.
16. Particulars of Employees and related Disclosures
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended has been provided in Annexure "E".
17. Extract of the Annual Return
An extract of the Annual Return of the Company pursuant to the Section 92(3) of theCompanies Act 2013 in Form MGT-9 is annexed hereto as Annexure "F".
18. Whistle Blower Policy
The Company has vigil mechanism named 'Whistle Blower Policy' wherein the employees /directors can report the instances of unethical behavior actual or suspected fraud or anyviolation of the Code of Conduct and / or laws applicable to the Company and seekredressal. This mechanism provides appropriate protection to the genuine Whistle Blowerwho avail of the mechanism. During the year under review the Company has not received anycomplaint under the said mechanism. The 'Whistle Blower Policy' as approved by the Boardis uploaded on the Company's website. (Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/whistle-blower/)
19. Particulars of Loans Guarantees or Investments
Particulars of Loans Guarantees and Investments covered under Section 186 of theCompanies Act 2013 form part of the notes to the Financial Statements provided in thisAnnual Report.
20. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to theFinancial Statements. During the year such controls were tested and no reportablematerial weakness was observed in the design or implementation.
21. Material Changes and Commitments if any affecting Financial Position of theCompany
There are no adverse material changes or commitments occurring after 31st March 2017which may affect the financial position of the Company or may require disclosure.
22. Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
23. Familiarisation Programme
The details of programmes for familiarisation of Independent Directors with the Companyare put up on website of the Company. (Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/terms-of-the-appointment-of-independent-directors-of-kalyani-steels-limited/)
24. Names of companies which have become / ceased to be Subsidiaries Joint Ventures orAssociate Companies during the year
A statement containing the salient features of the financial statement of thesubsidiaries and associates / joint ventures in the prescribed format AOC-1 is annexedhereto as Annexure "G".
The Policy for determining 'Material' subsidiaries has been displayed on the Company'swebsite. (Web-link :http://www.kalyanisteels.com/profile/code-of-conduct/policy-on-material-subsidiary/)
25. Consolidated Financial Statements
The Consolidated Financial Statements pursuant to Section 129 of the Companies Act2013 are attached to the Standalone Financial Statements of the Company.
26. Obligation of Company under The Sexual Harassment of Women at Workplace(Prevention Prohibition And Redressal) Act 2013
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Directors would like to express their sincere appreciation of the co-operationreceived from the Central Government Government of Maharashtra Government of KarnatakaKarnataka Industrial Area Development Board Financial Institutions and the Bankers. TheDirectors also wish to place on record its appreciation for the commitment displayed byall employees at all levels resulting in the successful performance of the Company duringthe year.
The Directors also take this opportunity to express its deep gratitude for thecontinued co-operation and support received from its valued shareholders.
The Directors express their special thanks to Mr.B.N. Kalyani Chairman of the Companyfor his untiring efforts for the progress of the Company.
| ||For and on behalf of the Board of Directors |
|Place : Pune ||B.N. Kalyani |
|Date : 25th May 2017 ||Chairman |