The Directors have pleasure in presenting the Forty-Eighth Annual Report on thebusiness and operations of the Company together with the Audited Financial Statements forthe Financial Year ended March 31 2021.
1. Financial Highlights (on stand-alone basis)
| ||2020-21 ||2019-20 |
|Total Income ||12305.29 ||12221.91 |
|Total Expenditure ||9245.71 ||10036.27 |
|Finance Cost ||67.70 ||80.46 |
|Depreciation & amortization expenses ||441.51 ||426.15 |
|Profit before Exceptional Item and Tax ||2550.37 ||1679.03 |
|Exceptional Item || || |
|Profit before Tax ||2550.37 ||1679.03 |
|Tax Expenses : || || |
|- Current Tax ||684.50 ||477.50 |
|- Deferred Tax ||(37.15) ||(165.04) |
|- Taxation for earlier years || ||(4.61) |
|Profit after Tax ||1903.02 ||1371.18 |
2. Dividend & Reserves
The Directors are pleased to recommend a dividend of ` 7.50/- per Equity Shareof ` 5/- each (i.e.150%) for the financial year ended March 31 2021 for approvalof the members. The dividend on Equity Shares if approved by the members would involvecash outflow of ` 327.40 Million.
During the year under review no transfer is made to the General Reserve. An amount of `10840 Million is retained as surplus in the Statement of Profit and Loss.
3. Performance of the Company
The year 2020-21 had been a very difficult year for Indian Economy and particularly forthe manufacturing sector. Outbreak of COVID 19 pandemic impacted most of the countriesincluding India. This resulted in announcing of lockdowns and quarantine measures byGovernment of India that sharply stalled economic activity.
To support the economy post lockdowns Government of India announced various measures.The Reserve Bank of India also announced several measures to ease the financial systemstress including enhancing system liquidity reducing interest rates moratorium on loanrepayments for borrowers etc.
Despite this scenario your Company performed extremely well. During the Financial Yearended March 31 2021 the Company achieved Revenue from Operations of ` 11880Million against ` 11989 Million in the previous year. The Profit before Tax is `2550 Million against ` 1679 Million in the previous year representing growthof 52%.
The market bounced back once the pandemic situation came in control and the nationwidelock down was lifted by the government. From September 2020 onwards there was significantimprovement in demand of Passenger Vehicles Segment Two Wheeler Segment and TractorsSegment. However the Commercial Vehicle Segment did not pick up much due to slowinfrastructure activities in the country post pandemic.
Global positive trends in Automobile Engineering and Bearing Industry which areCompanys main target business
segments also supported for business recovery.
4. Coke Making Facility and Heat Recovery Captive Power Plant
The Company has planned to set up a 200000 TPA Non-recovery / Heat recovery stampcharged Coke Oven with Modified wet Quenching of hot coke and 17 MW captive power plant tobe operated utilizing waste heat energy of flue gas generated from Coke Oven. Theelectrical power so produced shall be used for captive consumption and the surplus ifany will be sold to external agencies. The Broad Specifications are as follows :
l Coke Oven
Annual capacity (Dry coke) 0.2 MT Type of oven Non-recovery / heatrecovery Charging Stamp charged No. of Ovens 72 Quenching system Modified wet quenching l Heat Recovery Captive Power Plant Power generationcapacity 17 MW
Generation voltage 11 KV
Boiler type HRSG with coke oven hot flue gas No. of boilers 2 No. of STG 1 set Type of turbine Condensing Type of Condenser Water cooled
Respecting commitment to the Atmanirbhar Bharat campaign the process technology beingadopted is indigenous coke-making technology with all latest innovations incorporated fora high degree of technological performance and product quality.
The estimated project cost is ` 2110 Million (net of taxes) to be funded by wayof debt and internal accruals. The project has already been rolled out with most of thecritical equipment ordered and construction work at site progressing in full swing andexpected to be commissioned by September 2022.
5. State of Company's Affairs
Discussion on the state of Companys affairs has been covered as part of theManagement Discussion and Analysis (MD&A). MD&A for the year under review asstipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.
6. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance Requirements set out by SEBI.
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 Secretarial Auditors of the Company viz. M/s. SVD &Associates Company Secretaries Pune confirming compliance with conditions of CorporateGovernance is attached to Report on Corporate Governance.
During the year under review the Company has not accepted any deposit under Chapter Vof the Companies Act 2013.
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.
Based on the recommendation of the Nomination and Remuneration Committee of theCompany the Board of Directors at its meeting held on November 9 2020 had re-appointedMr.R.K. Goyal as Managing Director of the Company for the period of 5 (Five) years i.e.from January 17 2021 to January 16 2026.
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 for reference of the members.
The Company has received declarations from all Independent Directors that they meet thecriteria of independence as prescribed under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
8.1 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. The performance of the Board was evaluated bythe Board after seeking inputs from all the directors on the basis of criteria such as theboard composition and structure effectiveness of board processes information andfunctioning.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of criteria such as composition of the committeeeffectiveness of the committee meetings information and functioning.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of criteria such as contribution of individual directorto the Board and committee meetings like preparedness on the issues to be discussed andinputs in meetings etc.
In a separate meeting of independent directors the performance of the non-independentdirectors the Chairman of the Company and the Board as a whole was evaluated taking intoaccount the views of the executive and non-executive directors.
8.2 Policy on Board Diversity and Nomination & 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 Policy on Board Diversity and Nomination & Remuneration Policy isavailable on the website of the Company. (Web-link :http://www.kalyanisteels.com/profile/policies/).
8.3 Meetings of the Board
During the Financial Year 2020-21 four Board Meetings were convened and held. Also aseparate meeting of Independent Directors as prescribed under Schedule IV of the CompaniesAct 2013 was held. The details of meetings of Board of Directors are provided in theReport on Corporate Governance that forms part of this Annual Report.
9. 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 March 31 2021 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 March 31 2021 and of the profit ofthe 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 March 31 2021on 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.
10. 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.
11. Corporate Social Responsibility
The Company has been carrying out various Corporate Social Responsibility (CSR)activities in the areas of education health water sanitation etc. These activities arecarried out in terms of Section 135 read with Schedule VII of the Companies Act 2013 andCompanies (Corporate Social Responsibility Policy) Rules 2014.
The Annual Report on CSR Activities undertaken by the Company is annexed herewith asAnnexure B. The CSR Policy is available on Companys website. (Web-link :http://www.kalyanisteels.com/profile/policies/)
12. Related Party Transactions
All contracts or arrangements entered into by the Company with Related Parties duringthe financial year were in the ordinary course of business and on an arms length basis.
Pursuant to Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 the particulars of transactions with related parties are providedin Form AOC-2 which is annexed herewith as Annexure C. Related partydisclosures as per Ind AS have been provided in Note 39 to the Financial Statements.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website. (Web-link : http://www.kalyanisteels.com/profile/policies/)
13. Risk Management
The Company recognizes 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.
14. Audit Committee
As on March 31 2021 the Audit Committee comprises of Mr.S.K. Adivarekar Chairman ofthe Committee and Independent Director Mr.B.N. Kalyani Promoter Non-Executive DirectorMr.B.B. Hattarki Independent Director and Mr.M.U. Takale Independent Director.
All the recommendations made by the Audit Committee were deliberated and accepted bythe Board during the Financial Year 2020-21.
15. Auditors and Auditor's Report
During the year the Companys Auditors viz. P. G. Bhagwat Chartered Accountants aPartnership Firm was converted and incorporated as Limited Liability Partnership (LLP). PG Bhagwat LLP (Firm Registration No.101118W / W100682) holds the office till theconclusion of the Forty-Ninth Annual General Meeting to be held in 2022.
The Notes on Financial Statements referred to in the Auditors Report areself-explanatory and hence do not call for any further comments. The Auditors Reportdoes not contain any qualification reservation adverse remark or disclaimer.
During the year under review the Auditors of the Company have not reported any fraudas specified under Section 143(12) of the Companies Act 2013 to the Audit Committee.
16. Cost Auditors
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Rules 2014 the cost record maintained by the Company is required tobe audited. The Board of Directors had on the recommendation of the Audit Committeeappointed M/s S.R. Bhargave & Co. Cost Accountants Pune for conducting the costaudit of the Company for Financial Year 2021-22.
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.
17. Secretarial Audit and Secretarial Standards
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 2020-21. The Secretarial Audit Report for theFinancial Year ended March 31 2021 is annexed herewith as Annexure D. TheSecretarial Audit Report does not contain any qualification reservation adverse remarkor disclaimer.
The Company is compliant with the Secretarial Standards issued by the Institute ofCompany Secretaries of India and approved by Central Government under Section 118(10) ofthe Companies Act 2013.
18. 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.
19. Annual Return
The Company shall upload a copy of Annual Return for FY 2020-21 on its Web-site viz.www.kalyanisteels.com as soon as it has been filed with Registrar of Companies.
20. 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 orany violation 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 Companys website. (Web-link :http://www.kalyanisteels.com/profile/policies/)
21. 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.
22. Internal Financial Controls
The Company has in place adequate internal financial controls with reference to theFinancial Statements commensurate with size scale and complexity of its operations. Theinternal control system has been designed to ensure that financial and other records arereliable for preparing financial and other statements and for maintaining accountabilityof assets. During the year such controls were tested and no reportable materialweaknesses were observed in the design or implementation.
23. Material Changes and Commitments if any affecting Financial Position of theCompany
There are no adverse material changes or commitments occurred after March 31 2021which may affect the financial position of the Company or may require disclosure.
24. Signi! cant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Companys operations in future.
25. Familiarization Programme
The Company on a regular basis makes detailed presentation to the entire Boardincluding Independent Directors on the Companys operations and business plans strategyglobal and domestic business environment. Such presentations are made by the seniormanagement so that the Independent Directors can have direct interaction with them. TheBoard members are provided with necessary documents / brochures reports and internalpolicies to enable them to familiarize with the Companys procedures and practices.
The details of programmes for familiarization of Independent Directors with the Companyare put up on website of the Company. (Web-link :http://www.kalyanisteels.com/profile/policies/)
26. Subsidiaries Joint Ventures or Associate Companies
As on March 31 2021 the Company has one Subsidiary and two associates / joint venturecompanies. A statement containing the salient features of the financial statement of thesubsidiary and associates / joint ventures in the prescribed format AOC1 is annexedhereto as Annexure F.
The Policy for determining Material subsidiaries has been displayed on theCompanys website. (Web-link : http:// www.kalyanisteels.com/profile/policies/)
27. Business Responsibility Report
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(Regulations) mandates inclusion of the Business Responsibility Report (BRR)as a part of Annual Report for top 1000 Listed entities based on market capitalization.In compliance with the Regulations BRR is annexed hereto as Annexure G.
28. 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.
29. Transfer to Investor Education and Protection Fund (IEPF)
Pursuant to provisions of the Companies Act 2013 read with the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (IEPFRules) the declared dividends which are unpaid or unclaimed for a period of seven (7)years and the shares thereof shall be transferred by the Company to the InvestorEducation and Protection Fund (IEPF) established by the Central Government. Accordinglyduring the year the Company has transferred the unpaid or unclaimed dividend for a periodof seven (7) years from the date they became due for payment along with the sharesthereof to IEPF. No claim shall be entertained against the Company for the amounts andshares so transferred.
30. Obligation of Company under The Sexual Harassment of Women at Workplace(Prevention Prohibition And Redressal) Act 2013
The Company has zero tolerance for sexual harassment of women at workplace and hasadopted a Policy for prevention prohibition and redressal of sexual harassment of womenat workplace in terms of provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. Allwomen employees (permanent temporary contractual and trainees) as well as any womenvisiting the Companys office premises are covered under the Policy. During the yearunder review no complaint was filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
The Directors would like to express their sincere appreciation of the co-operationreceived from the Central Government the Government of Maharashtra the Government ofKarnataka Karnataka Industrial Area Development Board Financial Institutions and theBankers. The Directors also wish to place on record its appreciation for the commitmentdisplayed by all employees at all levels resulting in the successful performance of theCompany during the year. The Directors also take this opportunity to express its deepgratitude for the continued co-operation and support received from its valuedshareholders. The Directors express their special thanks to Mr.B.N. Kalyani Chairman ofthe Company for his untiring efforts for the progress of the Company.
| ||for and on behalf of the Board of Directors |
|Place : Pune ||B.N. Kalyani |
|Date : May 18 2021 ||Chairman |