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KIC Metaliks Ltd.

BSE: 513693 Sector: Engineering
NSE: N.A. ISIN Code: INE434C01019
BSE LIVE 11:17 | 21 Sep 148.65 2.90
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OPEN 145.75
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VOLUME 24
52-Week high 161.00
52-Week low 110.75
P/E 17.07
Mkt Cap.(Rs cr) 106
Buy Price 145.75
Buy Qty 95.00
Sell Price 0.00
Sell Qty 0.00
OPEN 145.75
CLOSE 145.75
VOLUME 24
52-Week high 161.00
52-Week low 110.75
P/E 17.07
Mkt Cap.(Rs cr) 106
Buy Price 145.75
Buy Qty 95.00
Sell Price 0.00
Sell Qty 0.00

KIC Metaliks Ltd. (KICMETALIKS) - Director Report

Company director report

Your Directors have pleasure in presenting the Twenty Ninth Annual Report on theaffairs of the Company together with the Statement of Accounts for the financial year2015-16. The summarised financial highlights for the financial year vis-a-vis the previousyear are as follows :

1. FINANCIAL HIGHLIGHTS

(Rs in Lakhs)
Particulars 2015-16 2014-15
Earnings before interest (finance cost) depreciation and amortization and taxation 1685.61 1992.39
Less : Finance Costs 751.38 1075.48
Less : Depreciation and amortization expenses 863.39 894.47
Profit Before Taxation 70.84 22.44
Less : Tax expenses [net of deferred tax effect and MAT credit entitlement] (4.32) (154.56)
Profit After Taxation 75.16 177.00
Add : Surplus brought forward 1445.02 1349.58
Less : Adjustment relating to depreciation on Fixed Assets (pursuant to enactment of Schedule II to the Companies Act 2013) 81.54
Net surplus carried to Balance Sheet 1520.18 1445.02

2. PERFORMANCE RESULT OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

During the year under review your Company has produced 128358 MT of Hot Metal ascompared to 122981 MT in the previous year registering an increase of 4.37% over the lastfinancial year. The gross turnover of the Company was Rs 34159 Lakhs in 201516 incomparison to Rs 46171 Lakhs in 2014-15. Although there is a moderate increase inquantitative production of pig iron turnover of your Company has reduced substantiallywhich can be attributed to decline in trade sales and considerable fall in the prices ofthe finished product of the Company during the financial year under review.

The Earning before interest depreciation and taxation has also declined to Rs 1685.61Lakhs in comparison to Rs 1992.39 Lakhs in previous financial year. However due to lowerfinance cost Profit after finance cost and depreciation but before taxation stand to Rs70.84 Lakhs as compared to Rs 22.44 Lakhs in previous year.

3. DIVIDEND

Keeping in view the working capital requirements of the Company your Directors haveploughed back the profits and express their inability to declare any dividend for Equityand Preference shares of the Company for the financial year 2015-16.

4. RESERVE

During the year under the review the Company has not transferred any amount to thegeneral reserve.

5. SHARE CAPITAL

During the financial year 2015-16 there was no change in the issued and subscribedcapital of your Company.

6. CHANGE IN NATURE OF BUSINESS

During the year under review there was no change in the nature of business of theCompany.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

7.1 Retirement by Rotation

Pursuant to the provisions of the Companies Act 2013 Mr. Radhey Shyam Jalan (DIN:00578800) Managing Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offer himself for re-appointment. The information asrequired to be disclosed under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 [hereinafter referred to as "SEBI (LODR) Regulations 2015"]in case of re-appointment of Directors is provided in the Notice of the ensuing AnnualGeneral Meeting.

7.2 Appointment and Resignation

Mr. Barun Kumar Singh Whole Time Director designated as Executive Director of theCompany resigned from the directorship of the Company w.e.f. 3rd September 2015. YourBoard places on record its appreciation for valuable services rendered by him during histenure as a Director of the Company.

7.3 Declaration of Independent Directors

All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation25 of SEBI (LODR) Regulations 2015.

7.4 Key Managerial Personnel

Following officials are appointed as the Key Managerial Personnel ("KMP") ofthe Company :

• Mr. Radhey Shyam Jalan Chairman and Managing Director;

• Mr. Mukesh Bengani Chief Financial Officer; and

• Mrs. Ruchika Fogla Company Secretary and Compliance Officer.

Remuneration and other details of the KMP are mentioned in the extract of the AnnualReturn which forms part of this report.

7.5 Meetings of the Board

As required under Section 134(3)(b) of the Companies Act 2013the Board of Directorsmet five times during the financial year 2015-16 the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.

7.6 Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and the SEBI (LODR) Regulations2015 the Board of Directors has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittees. A structured questionnaire was prepared after taking into consideration inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance etc.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board of Directors. The performance evaluation ofthe Chairman and the Non Independent Directors was carried out by the IndependentDirectors who also reviewed the performance of the Secretarial Department. The Directorsexpressed their satisfaction with the evaluation process.

8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

Information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as 'Annexure -A' and forms part of this Report.

9. CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations 2015 aseparate report on corporate Governance is annexed as 'Annexure - B' and forms anintegral part of this Report. A certificate from the Statutory Auditors of the Companyregarding compliance as per SEBI (LODR) Regulations 2015 is annexed to the Report onCorporate Governance. The declaration by the Managing Director stating that all the Boardmembers and Senior Management Personnel have affirmed their compliance with the Company'sCode of Conduct for the year ended 31st March 2016 is forming part of this Annual Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per Regulation 34(3) read with Schedule V of SEBI (LODR) Regulations 2015Management Discussion and Analysis Report is annexed herewith as 'Annexure - C' andforms an integral part of this Report.

11. COMPLIANCE CERTIFICATE

The Board has received the Compaliance Certificate as required to be given by the ChiefExecutive Officer and the Chief Financial Officer under Regulation 17(8) of SEBI (LODR)Regulations 2015.

12. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of AnnualReturn of the Company in Form MGT - 9 is annexed herewith as 'Annexure - D' andforms an integral part of this Report.

13. AUDITORS AND AUDITORS' REPORT

13.1 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 Auditorsof the Company to hold office till the conclusion of the Annual General Meeting to be heldin the calendar year 2017. In terms of the first proviso to Section 139 of the CompaniesAct 2013 read with Rule 3 of the Companies (Audit and Auditors) Rules 2014 madethereunder the appointment of the Auditors shall be placed for ratification at everyAnnual General Meeting. Accordingly the appointment of M/s. Agarwal Maheswari & Co.Chartered Accountants as Statutory Auditors of the Company is placed for ratification bythe shareholders. In this regard the Company has received a certificate from the Auditorsto the effect their appointment if ratified would be in accordance with the provisions ofSection 141 of the Companies Act 2013.

The Auditors' Report does not contain any qualification reservation or adverse remarkand is self-explanatory and do not call for any further comments.

13.2 Cost Auditors

The Board of Directors had appointed M/s. Patangi & Co. (Firm Reg. No. 101919Membership No. 30818) as Cost Auditors of the Company for the financial year 2016-17 inits meeting held on 30th May 2016. Their remuneration is subject to ratification byshareholders at the ensuing Annual General Meeting. Cost Audit Report for the financialyear 2014-15 was filed within due date.

13.3 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 hasappointed M/s. Rakesh Agrawal & Co. Practicing Company Secretaries (Membership No.25326) as Secretarial Auditors of the Company. The Secretarial Audit Report in Form MR - 3is annexed herewith as 'Annexure - E' and forms part of this Report. It does notcontain any qualification reservation or adverse remark.

13.4 Internal Auditors

Your Company has appointed M/s. B. N. Agrawal & Co. Chartered Accountants as theInternal Auditors to carry out the Internal Audit of various operation areas of theCompany. 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 withthe process owners and suitable corrective action is taken on an ongoing basis to improveefficiency in operations.

14. 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 thePolicy on Vigil Mechanism/Whistle Blower and the same has been hosted on the website ofthe Company at the web link http://kicmetaliks.com/wp-content/uploads/2016/01/VIGIL-MECHANISM.pdf.

15. NOMINATION AND REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and Senior ManagementPersonnel. The policy is approved by the Nomination and Remuneration Committee and theBoard of Directors and is annexed herewith as 'Annexure - F' and forms part of thisReport. More details on the same are given in the Corporate Governance Report. The saidpolicy can also be referred to at the Company's website at the web link http://kicmetaliks.com/wp-content/uploads/2016/01/NOMINATION-AND-REMUNERATION-POLICY.pdf

16. POLICY FOR PREVENTION OF SEXUAL HARRASMENT OF WOMEN AT WORKPLACE

The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to providingan environment which is free of discrimination intimidation and abuse. Pursuant toSexual Harassment of Women at Workplace (Prohibition Prevention and Redressal) Act 2013and rules made there under the Company has a Policy for prevention of Sexual Harassmentin the Company. All employees (permanent contractual temporary and trainees) are coveredunder this policy.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prohibition Prevention andRedressal) Act 2013.

The said policy may be referred to at the Company's website at the web link http://kicmetaliks.com/wp-content/uploads/2016/01/PREVENTION-OF-SEXUAL-HARRASMENT-PQLICY.pdf

17. AUDIT COMMITTEE

Your Company has an Audit Committee in terms of Section 177 of the Companies Act 2013and Regulation 18 of the SEBI (LODR) Regulations 2015. Further details of Audit Committeeare given in the Corporate Governance Report annexed as a part of the Directors' Report.

18. FINANCE

18.1 Public Deposits

The Company has neither accepted nor renewed any deposits during the year under review.

18.2 Particulars of loans guarantees or investments under Section 186 of the CompaniesAct 2013

The Company has not made any investment given any loan or guarantee covered underSection 186 of the Companies Act 2013 during the year under the review.

18.3 Contracts and arrangements with related parties

During the year under review there were no contract and arrangements entered intobetween the Company and related parties except remuneration paid to Key ManagerialPersonnel including Directors of the Company.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board of Directors may be accessed on the Company'swebsite at the web link http://kicmetaliks.com/wp-content/uploads/2016/01/RELATED-PARTY-TRANSACTION-POLICY.pdf. Your Directors drawattention of the shareholders to Note No. 30 to the financial statements which setout related party disclosures.

18.4 Internal Financial Control

The Company has in place adequate internal financial control with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operations of the same were observed.

18.5 Insurance

Adequate insurance cover has been taken for properties of the Company includingbuildings plant and machineries and stocks against fire earthquake and other risks asconsidered necessary.

19. RISK MANAGEMENT

Risk management is an integral part of the strategic management of your Company. Theprocess involves periodic identification of risk likely to affect the business fromoperating smoothly and adoption of appropriate measures to address the concerns. In thisregard your Company has identified inherent risks in its operations and record residualrisk after taking specific risk mitigation steps. The Policy on risk management asapproved by the Board of Directors may be accessed on the Company's website at the weblink http://kicmetaliks.com/wp-content/uploads/2016/01/RISK-MANAGEMENT-POLICY.pdf

Further details regarding the same are given in the Management and Discussion AnalysisReport.

20. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has always given priority to the all-round development of the peopleresiding in and around the Company's area of operations. Company understands that there isa need to strike a balance between the overall objectives of achieving corporateexcellence vis-a-vis the corporate responsibility towards the community. This twinobjective of business and social commitment has prompted your Company to embark uponprogrammes of education health and infrastructural development endeavors; an attempt toinvest technology with a human face.

21. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors would like to inform the shareholders that the audited accountscontaining the financial statements for the year 2015-16 are in conformity with therequirements of the provisions of Section 134(3)(c) read with Section 134(5) and all otherapplicable provisions of the Companies Act 2013 and they believe that the financialstatements reflect fairly the form and substance of transactions carried out during theyear and reasonably present the Company's financial condition and results of operations.The Statutory Auditors M/s. Agarwal Maheswari & Co. Chartered Accountants Kolkatahave audited these financial statements.

Based on the same your Directors further confirm that according to their information:

a) in the preparation of the Annual Accounts for the financial year ended 31st March2016 the applicable Accounting Standards have been followed and there are no materialdepartures from the same;

b) 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 at the end of the financial year 2015-16and of the profit and loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 theCompany and that such internal financial controls are adequate and are operatingeffectively;

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Company had no employee during the financial year ended 31st March 2016 who wasdrawing remuneration in excess of limits set out under Rule 5(2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence nodisclosure is required for the same.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided here below :

i) The ratio of remuneration of each Director/KMP to the median remuneration of theemployees of the Company for the financial year 2015-16 :

Sl. No. Name of Directors/ KMP and Designation Remuneration for financial year 2015-16 ('in Lakhs) % increase in remuneration in the financial year 2015-16 Ratio of remuneration of each Director/KMP to median remuneration of employees
1. Mr. Radhey Shyam Jalan (Chairman and Managing Director) 18.00 - 13.04x
2. Mr. Barun Kumar Singh1 (Whole Time Director) 7.66 - -
3. Mr. Suresh Kumar Singhal (Non-Executive Independent Director) - - -
4. Mr. Laxmi Narayan Sharma (Non-Executive Independent Director) - - -
5. Ms. Sayantony Banerjee (Non-Executive Independent Director) - - -
6. Mr. Mukesh Bengani (Chief Financial Officer) 8.30 4.80% 6.01x
7. Mrs. Ruchika Fogla (Company Secretary) 5.25 2.94% 3.80x

Note :

1 Resigned from the Board w.e.f 3rd September 2015.

ii) The median remuneration of employees of the Company during the financial year2015-16 was Rs 1.38 Lakhs.

iii) In the financial year 2015-16 there was an increase of 5.19 % in the medianremuneration of employees.

iv) There were 258 permanent employees on the rolls of Company as on 31st March2016.

v) Relationship between average increase in remuneration and Company performance :

The Profit Before Tax for the financial year ended 31st March 2016 is Rs 70.84 Lakhsas compared to Rs 22.44 Lakhs in the previous financial year 2014-15. The average increasein median remuneration is 5.19 % which was based on parameters such as individualperformance of concerned employee comparative compensation as per the market scenarioinflation and performance of the Company.

vi) Comparison of remuneration of the Key Managerial Personnel against the performanceof the Company :

The total remuneration of Key Managerial Personnel increased from Rs 31.02 Lakhs in thefinancial year 2014-15 to Rs 31.55 Lakhs in the financial year 2015-16 an increase of1.71%.**

Note : ** Remuneration of Mr. Barun Kumar Singh is not taken into considerationboth for this financial year and the previous financial year as he has resigned from theBoard w.e.f 3rd September 2015.

The increase in the total remuneration of Key Managerial Personnel was based onindividual performance of the concerned personnel their roles and responsibilities.

vii) Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year :

Sl. No. Particulars 31st March 2016 31st March 2015 % Change
a) Market Capitalisation (Rs in Lakhs) 12423.60 28765.96 (-)56.81%
b) Price Earnings Ratio 165.09 162.73 1.43%

viii) Percentage increase or decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer:

The Company had come out with Initial Public Offer in 1994 at a price of Rs 10 pershare which is worth of Rs 175.00 per shares as on 31st March 2016 which indicates anincrease of 1650% over last Initial Public Offer in 1994.

ix) Average percentage increase made in the salaries of employees other than theManagerial Personnel in the financial year under review i.e. 2015-16 was 2.36% whereas theincrease in the managerial remuneration for the same period was 1.71%.

x) The key parameters for variable component of remuneration availed by the Directors -Not Applicable.

xi) The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year - Not Applicable; and

xii) It is hereby affirmed that the remuneration paid is as per the RemunerationPolicy for Directors Key Managerial Personnel and other Employees.

23. MATERIAL ORDERS

There have been no significant and material orders passed by the court or regulators ortribunals impacting the going concern status and Company's operations. Your attention isdrawn to the Contingent Liabilities and commitments shown in the Notes to FinancialStatements forming part of this Annual Report.

24. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

No material changes and commitments have occurred after the close of the financial yeartill the date of this Report which affect the financial position of the Company.

25. ACKNOWLEGEMENT

Your Directors take this opportunity to place on record their appreciation on thededication and commitment of employees at all levels resulting in the successfulperformance of the Company during the year under review. Your Directors would also like tothank and express their gratitude for the support and co-operation received from employeesof the Company shareholders customers agents suppliers bankers Governmentauthorities and all the other business associates and also for the confidence reposed inits management.

ANNEXURESTO THIS REPORT

A brief summary of the annexures accompanying this Report are given as below :

Annexure Particulars

A Conservation of Energy Technology Absorption And Foreign Exchange Earnings andOutgo.

B Corporate Governance Report.

C Management and Discussion and Analysis Report.

D Extract of Annual Return in Form MGT - 9.

E Secretarial Audit Report in Form MR - 3.

F Nomination And Remuneration Policy.

For and on behalf of the Board of Directors
Place : Kolkata Radhey Shyam Jalan
Dated : The 30th day of May 2016 Chairman and Managing Director