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KIOCL Ltd.

BSE: 540680 Sector: Metals & Mining
NSE: KIOCL ISIN Code: INE880L01014
BSE LIVE 15:52 | 13 Dec 354.20 -22.50
(-5.97%)
OPEN

376.95

HIGH

376.95

LOW

349.00

NSE 15:53 | 13 Dec 351.75 -24.20
(-6.44%)
OPEN

376.00

HIGH

378.95

LOW

341.55

OPEN 376.95
PREVIOUS CLOSE 376.70
VOLUME 9258
52-Week high 506.45
52-Week low 84.10
P/E 393.56
Mkt Cap.(Rs cr) 22,474
Buy Price 0.00
Buy Qty 0.00
Sell Price 352.75
Sell Qty 4.00
OPEN 376.95
CLOSE 376.70
VOLUME 9258
52-Week high 506.45
52-Week low 84.10
P/E 393.56
Mkt Cap.(Rs cr) 22,474
Buy Price 0.00
Buy Qty 0.00
Sell Price 352.75
Sell Qty 4.00

KIOCL Ltd. (KIOCL) - Chairman Speech

Company chairman speech

On November 29 2016 we successfully listed our equity shares with National StockExchange begining a new chapter in the history of KIOCL. I am extremely proud in the 1styear of our entry to India's largest Stock Exchange; we raised our performance anddelivered improved Financial Results overcoming the gloomy situation of previous year.

Dear Shareholders

When I look back at Fiscal 2017 I am energized by how we worked together as a team tounlock the extraordinary potential and creating a better future for the Company. I wouldcertainly reckon Fiscal 2017 as a historic and memorable year from the Company'sperspective in many senses. Firstly our long standing aspiration for a Captive Iron OreMine for sustained operation was fulfilled with Government of Karnataka's issuance of theGazette Notification on 23.01.2017 by reserving an area of 470.40 ha. in favour of ourCompany for Iron & Manganese ore in Devadari Range Sandur Taluk Bellary DistrictKarnataka under Section 17A (2) of the Mines & Minerals (Development & Regulation)Act 1957. We are striving to operationlize the mine in quickest possible time. A TaskForce has been constituted and a road map has been prepared with specific time scheduleand the same is being monitored closely. Our successful listing on the NSEplatformw. fulfillmentofInvestors' need ..29.11.2016marksthe for creating sustainable value of theirinvestment in Company. In the absence of trading history NSE had listed with initialprice of Rs.10.50. On the date of reporting I am happy to share with you that the pricehas shored up to Rs.75/- per share which is 7.5 fold increase from initial re-listingprice.

Our strategy delivered the results

The business landscape has seen rapid changes in recent years. Winning in today's worldrequires new business models agile ways of working and a fresh strategy. We believe thatgrowth opportunities are vast for those who make a successful transition to the newbusiness models and align harmoniously with the new ways of working. During last fewyears we have adopted strategy which is based on three themes - Optimize Capacity

Utilization - Augmentation of Wage & Means - Invest in CAPEX on New Projects forexpansion and diversification. We believe that above strategies particularly in times ofuncertainty is in the best long-term interest of all our stakeholders. I am delighted toshare with you that some of our strategies have paid off in Fiscal 2017 and contributed toour profitability. Our conventional style of running the Pellet Plant continued to beunder severe strain due to subdued demand in steel capacityworldwidetherefore flexibilityinoperation. warrantsalotof

Pellet Plant which was designed to handle Magnetite Iron Ore from Kudremukh as a feedmaterial has now opened up the wings across the globe with better facilitation throughits in-house

R & D programme Technology Modification/ Upgradation etc. It is noteworthy thatduring the

Fiscal 2017 the plant has processed on Pilot basis successfully seven differentcategories of Iron Ore Fines/Concentrate received from equal number of sources. This givesus a tremendous amount of confidence to overcome any challenge that comes our way inforeseeable future. Today we have fairly open offering to utilize our infrastructure tolarge steel making companies globally in a way also supporting Govt. of India's"Make in India" Policy.

Our Performance

Despite the challenging global economic environment the Company made smart recovery interms of capacity utilization and value creation as compared to last year. With 1.460Million Tonnes of Pellet Production and 1.387 Million Tonnes sales we have grown by 1360%and 239% respectively Y-o-Y basis. The sales includes 0.898 Million Tonnes through exportsrepresenting 65% and 0.489 Million Tonnes in domestic market.

We have registered Revenue from Operation of Rs.929.36 Crores as compared to justRs.205.57 crores during previous year achieving a growth of 353%. The Company has achievedProfit before Tax of Rs.31.22 crores and Profit after Tax of Rs.47.93 crores compared tolast crores.

As a result of improved financial performance the Board of Directors has proposed afinal dividend of Re. 0.26 per share subject to the approval of the shareholders at theAnnual General Meeting.

Together with an interim dividend of Re. 0.11 per share the total dividend for thefinancial year ended March 31 2017 amounts to Re. 0.37 per share. The Dividend amount asproposed by the Board would be the highest in terms of cash outgo from the Company sincethe closure of captive mine way back in 2006.

Global Steel Industry

Global economy is projected to grow by 3.5% in Calendar Year 17. The overallmacro-economic situation looks far better than previous year. While Global steel industrycontinue to grapple with over capacity weak demand growth dumping of steel and Iron OreLumps at predatory prices by some countries and volatile input prices; improving growthmomentum in advanced and key emerging markets and broad-basing of trade remedial measureswill provide stability to steel industry.

Collaborating with Indian National Steel Policy

Under the strong leadership of Hon'ble Prime Minister Shri Narendra Modi India hasachieved stability of governance giving strong push to reforms rising infrastructurespend and robust consumption demand will provide a platform to reach per capita steelconsumption of 160 Kg and total steel capacity of 300 Million Tonnes by 2030 as envisagedby National Steel Policy 2017. Also trade remedial measures taken by the Government ofIndia will provide level playing field to this strategic industry to revive investmentcycle and create employment opportunities. The budgetary allocation of Rs.4 trillion forinfrastructure water and gas pipelines renewable energy and road sector should fuelenhanced economic activity and as a result steel demand. Together with this a normalmonsoon will also augur well for the economy. Therefore we expect the steel industry togrow at 5-6% over the medium term.

At KIOCL we will play a key role in supporting the above policy initiatives includingthe `Make in India' initiative. Considering our vast experience in setting up operation& maintenance of Iron Ore Beneficiation & Pelletisation plant we have alreadyrequested Ministry of Steel to extend support to KIOCL for partnering alongwith Steelmaking companies in various iron ore Beneficiation and Pelletisation capacities requiredfor each of the CPSE till the year 2030 in phases through various models like JV/SPV/BOOetc. The above said approach will facilitate structural support for the CPSEs tochannelize their technical / financial resources in the areas of their core competenciesand not to duplicate the work being carried out by some other CPSE.

Looking Ahead

To match growing demand and increase the footprint the Company also has outlined anambitious Capex Plan of Rs.5000-7000 crores which will be achieved through investment inGreenfield and Brownfield projects along with a few other strategic investments in theform of JVs /SPVs. We also scouting for organic and inorganic growth opportunities toexpand our footprint in Pan-India.

Social Responsibility

Our Corporate Social Responsibility is designed to ensure positive impact on the peopleand communities. We firmly believe that demonstrating good practice in all aspects of CSRcreates long-term value for our shareholders. In fiscal 2017 we continued to work in theareas of providing pure and safe drinking water promoting education healthcare. Keyprojects included Installation of Reverse Osmosis Plants in Kumbarwada village & Ulvivillage at Uttara Kannada District

Puri Jagannath Temple Odisha Educational Assistance to Economically backwardchildren

Construction/ Upgradation of College building at Govt. PU College Kavoor Mangaluruetc. We also actively contributed in Swachh Bharat Swachh Vidyalaya Abhiyan withconstructions of several toilets at various Government Schools/Colleges. All-out effortshave been made to improve awareness among the children on the importance of cleanlinessand to involve them in its implementation.

In conclusion

I would like to take this opportunity to acknowledge the many contributions dedicationand commitment of all our team members which make our Company thriving and successful. Mydeep appreciation to all our business partners vendors and other business associates forall their contributions. To the various Central and State Government Authorities I extendmy sincere thanks for their support. Finally let me end by thanking you and all ourstakeholders for the trust and faith that you repose in us. We look forward to yourcontinued support in the years ahead.

Very Sincerely
MV Subba Rao
August 01 2017 Chairman-cum-Managing Director (Addl. Charge)
and Director (Commercial)