You are here » Home » Companies » Company Overview » KIOCL Ltd

KIOCL Ltd.

BSE: 540680 Sector: Metals & Mining
NSE: KIOCL ISIN Code: INE880L01014
BSE 16:01 | 22 May 133.50 3.45
(2.65%)
OPEN

130.00

HIGH

133.50

LOW

130.00

NSE 15:56 | 22 May 130.20 -0.25
(-0.19%)
OPEN

132.00

HIGH

132.40

LOW

127.15

OPEN 130.00
PREVIOUS CLOSE 130.05
VOLUME 579
52-Week high 258.70
52-Week low 114.55
P/E 65.44
Mkt Cap.(Rs cr) 8,303
Buy Price 131.80
Buy Qty 25.00
Sell Price 143.70
Sell Qty 150.00
OPEN 130.00
CLOSE 130.05
VOLUME 579
52-Week high 258.70
52-Week low 114.55
P/E 65.44
Mkt Cap.(Rs cr) 8,303
Buy Price 131.80
Buy Qty 25.00
Sell Price 143.70
Sell Qty 150.00

KIOCL Ltd. (KIOCL) - Director Report

Company director report

Dear Members

The Board of Directors of your Company ("the Company") ispleased to submit the reports of the business and operations of your Company for theFinancial Year ended March 31 2018 together with the Auditors' Report on the AnnualFinancial Statements and Comments on the same by the Comptroller & Auditor General(C&AG) of India. Your Directors are happy to inform you that the Company had a verysuccessful year in 2017-18.

Your Company could achieve Pellet production of 2.327 million tonsexceeding the excellent MOU target of 1.925 million tons resulting into capacityutilization of 66% as compared to production of 1.460 million tons a year before. Duringthe year your Company has achieved Pellet dispatch of 2.300 million tons as compared to1.387 million tons during the previous year. This is the highest volume of pelletsproduced and dispatched in any single year since the closure of its captive mines.

Financial Results and State of Company's Affairs

(Rs in Crores)

Particulars

FY 2018

FY 2017

Revenue from Operations

1605.41

929.36

Other Income

179.03

156.37

Profit before Exceptional Item and Tax

86.09

32.95

Less : Exceptional Items - Expenses

-

1.73

Profit before Tax

86.09

31.22

Tax Expense (including deferred taxes)

4.61

(16.71)

Profit after Tax

81.48

47.93

Less : Other Comprehensive Income (Net of Tax)

3.07

(0.33)

Total Comprehensive Income

84.55

47.59

EPS (Basic & Diluted)

1.28

0.76

Networth

2145.63

2101.56

Capital Employed

2320.05

2277.81

Book Value per Share

33.82

33.12

Return on Capital Employed

0.04

0.01

Return on Net Worth

0.04

0.02

Capital expenditure

0.80

4.15

Revenues

Your Company's increased volume of production and dispatch resultedinto significant increase in operating income at Rs. 1605.41 Crores as compared to Rs.929.36 Crores in the previous year achieving a growth of 73 %. During the year Revenuefrom export sales increased by 85 % to Rs. 959.58 Crores from Rs. 517.51 Crores anddomestic sales increased from Rs. 351.28 Crores to Rs. 610.56 Crores an increase of 74%.The share of Exports and DTA in operating revenue stood at 60% and 40% respectively.Income from Sale of Services (O&M Operations) during the year was Rs. 35.26 Croresagainst Rs.32.98 Crores of previous year. Other Income comprising of Income from TreasuryOperation and other miscellaneous Income has decreased to Rs. 125.03 Crores from Rs.149.93Crores due to lower yields on fixed deposits.

Profits

Your Company's Profit before Tax has increased to Rs. 86.09 Crores fromRs. 31.22 Crores in the previous year an increase of 176%. Your Company has also achieveda 70% higher Profit after Tax at Rs. 81.48 Crores during the current year as compared toRs. 47.93 crores during previous year.

Dividend

Your Directors are pleased to recommend a nal dividend of Re.0.79/- perequity share on face value of Rs.10/- each for the year ended 31st March 2018. Subject tothe approval of Members at the Annual General Meeting 31.08.2018 the nal dividend will bepaid on or before 29.09.2018 to the Members whose names appear in the Register of Membersas on the Book Closure dates i.e. 25.08.2018 to 31.08.2018 (both days inclusive). Thetotal dividend for the financial year including the interim dividend of Re.0.27 per sharealready paid works to Rs.1.06/- per equity share and will absorb Rs.81.05 croresincluding dividend distribution tax of Rs.13.77 crores.

The Register of Members and Share Transfer Books will remain closedfrom 25.08.2018 to 31.08.2018 (both days inclusive) for the purpose of payment of thedividend for the Financial Year ended March 31 2018 and the AGM.

Liquidity

Your Company manages cash and cash flow processes involving all partsof the business operation quite assiduously. As on 31st March 2018 there was a net cashsurplus of Rs.1863.39 crores (Rs.1845.01 crores as on 31.03.2017). During the year yourCompany maintained a zero debt status thereby retaining its full capability for gearingthe Balance Sheet as and when need arises.

Listing on BSE

To enhance further visibility in the secondary market equity shares ofyour Company got listed on the Bombay Stock Exchange (BSE) and was admitted to dealingsw.e.f. 22.08.2017 under the Scrip Code '540680' Scrip ID on BOLT Plus System 'KIOCL'.

Market Capitalization - Top 500 Companies

Your Board of Directors is very pleased to inform you that based onmarket price traded in the stock exchanges as on March 31 2018 your Company has beenincluded amongst the top five hundred listed Companies on Market Capitalization. As perlist released by NSE your Company is standing at 182 number in top 500 list on that date.

MOU Performance

Performance of your Company in terms of the Memorandum ofUnderstanding (MoU) signed with the Ministry of Steel Government of India was rated as"Good" for the Financial Year 2016-17. The MoU evaluation for 2017-18 is underfinalization.

Particulars of Loans Guarantees or Investments

During the year 2017-18 there was no loan guarantee or investmentmade by your Company under Section 186 of the Companies Act 2013.

Particulars of Contracts or Arrangements made with Related Parties

During the financial year no transactions were entered into withRelated Parties as defined under the Companies Act 2013 and Regulation 53(f) and Para Aof Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 which attract the provisions of Section 188 of the Companies Act 2013 as suchannexure AOC is not furnished. There were no materially significant transactions withrelated parties which were in conPict with the interest of the Company. The Board hasapproved a Policy on Materiality of Related Party transactions and dealing with RelatedParty transactions which is available on the Company website.

Material Changes and Commitments if any affecting Financial Position

1) The Board at its meeting held on May 22 2018 approved the TechnoEconomic Feasibility Report for forward and backward integration projects at Blast FurnaceUnit Mangalore at an estimated project cost of Rs.843.90 crores. The Detailed ProjectReport is under preparation and the same is subject to necessary approval of CentralGovernment.

2) The Board at its meeting held on May 22 2018 approved the TechnoEconomic Feasibility Report for setting up of 2 MTPA pellet plant on Joint Venture basiswith M/s Rashtriya Ispat Nigam Limited at their premises at Vishakhapatnam. The projectinvolved capital investment of Rs.996 crores and is subject to necessary approval ofCentral Government.

Management Discussion and Analysis

In terms of the provisions of Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Management's discussion and analysis is set out in this Annual Report.

Business Responsibility Report

Regulation 34 (2)(f) of SEBI (Listing Obligations & DisclosureRequirements); Regulations 2015 specified that top five hundred listed entities based onmarket capitalization as on March 31 of every financial year) is required to publishBusiness Responsibility Report describing the initiatives taken from an environmentalsocial and governance perspective. Your Company is amongst the top 500 listed companies inthe country based on market capitalization have therefore integrated BRR disclosures inthe Annual Report.

2. BUSINESS AND OPERATIONAL REVIEW

During the year under review your Company produced 2.327 million tonsof Pellets in comparison to 1.460 million tons produced in the previous year therebyrecorded a quantum jump of 59% on Y-o-Y basis. The quantity produced also surpassed the"Excellent" Target of 1.925 million tons as set in the MoU signed with Govt. ofIndia for the year 2017-18. The Company had also utilized its expertise of handlingdifferent types of ore to produce pellets because of its locational advantage by enteringinto back to back contracts to the tune of about 0.6 million tons.

Hon'ble Steel Minister reviewed the performance of KIOCL at

Mangaluru on 06.01.2018 in presence of Secretary Ministry of Steel

Similarly Your Company had sold 2.30 million tons of Pellets in FY2017-18 as against 1.387 million tons in the previous year a jump of 66% on Y-o-Y basis.Out of the total quantity sold exported quantity was 1.460 million tons which is almost63% and balance 0.840 million tons was sold to domestic customers.

As regards Blast Furnace Unit the Company intended to restart BFUoperation but due to uneconomic price of Pig Iron and high Coke Price the unit could notbe operated. Steps have been taken to make the unit viable on standalone basis throughsetting up backward & forward integration projects. The Company appointed consultantto carry out assessment of the plant and to submit Techno-Economic Feasibility Report. TheBoard of Directors in their 251 Meeting held on 22.05.2018 accepted the TEFR outliningCAPEX of Rs.843.90 crores. Detailed Project Report is under preparation.

A snapshot of production target vis-a-vis actual achievement withcapacity utilization and sales performance during last five years including current yearare depicted at Table 1 & 2.

Table: 1

(Qty. In Million Tons)

Year

MOU Target

Actual Production

Utilization of installed capacity in %

2017-18

1.925

2.327

66

2016-17

1.300

1.460

42

2015-16

1.800

0.100

3

2014-15

1.800

0.785

22

2013-14

1.700

1.710

49

(Installed capacity of Pellet Plant is 3.500 million tons/annum).

Table: 2

Qty : in Million Tons Value: Rs. In Lakhs

Year

Pellets

Pig Iron

Qty

Value

Qty

Value

Qty

Total Value

2017-18

2.300

1553.09

0.000

40

2.300

155349

2016-17

1.387

86872

0.000

7

1.387

86879

2015-16

0.409

19845

0.001

135

0.410

19980

2014-15

0.680

62687

0.001

197

0.681

62884

2013-14

1.615

153007

0.002

230

1.617

153237

(Note: Pig Iron includes Auxiliary)

Mineral Exploration Contracts

On 16 February 2015 Ministry of Mines Govt of India noti ed yourCompany as Mineral Exploration entity under second proviso of sub section (1) of Section 4of the Mines and Minerals (Development and Regulation) Act 1957. This has qualiBed theCompany to take up prospecting and exploration works of various minerals across theCountry as "NotiPed Exploration Agency". Ministry of Mines allotted followingtwo blocks for G4 level mineral exploration works to the Company: -

l Tirumankaradu Iron Ore Block (TIOB) (SR-TN-04) situated in Tirupur(Dist) of Tamil Nadu - Investigation of Iron ore over an extent of 100 Sq. kms.

l Udbur Gold Block (UGB)(SR-KAR-07) situated in Mysore (Dist) ofKarnataka - Investigation of Gold and Associated elements over an extent of 202 Sq. kms.

As per work Plan approved by National Mineral Exploration Trust (NMET)Ministry of Mines your Company is presently carrying out site works of the allottedblocks in three stages i.e. Stage 01 Large scale geological mapping Stage 02 Detailedgeological mapping and Stage 03 - Scout drilling.

Status of work at Tirumankaradu Iron Ore Block: Stage 01 eld worksof TIOB were initiated on

06 December 2017 and completed on 08 February 2018. The large scale(1:12500) geological mapping works are completed to an extent of on eld traversinggeological mapping of 100 Sq. kms.and collection of Bedrock samples. Additionallyreconnaissance works in the adjacent blocks were undertaken with on eld traversegeological mapping and collection of representative surface samples for ascertaining theextension of mineral bands beyond the exploration block or otherwise. The Company preparedthe Stage 01 Report and submitted to Technical Cum Cost Committee (TCC) of NMET Ministryof Mines for necessary consideration of works executed and consent for Stage 02 works.

Status of work at Udbur Gold Block: Stage 01

Field works of UGB were initiated on 14 December

2017 and completed on 16 February 2018. The large scale (1:12500)geological mapping works are completed to an extent of on field traversing geologicalmapping of 202 Sq. kms. collection of 300 nos of bedrock samples and 150 nos of streamsediment samples.

Status of proposed acquisition of Equity Stake in M/s IDCOL Odisha

The Company had submitted a conditional Financial Bid for acquisitionof 51% stake with management control in IDCOL. The bid was extended twice and was valid upto 24.08.2017. Subsequently IDCOL had requested your Company to extend the bid validityby another 6 months. The Board of Directors of your Company reviewed status and in view ofthe slow progress of the conditions as stipulated in the financial bid the Board decidednot to accede to the request for further extension of financial bid validity. The same wascommunicated to IDCOL on 24.08.2017.

Operation and Maintenance Portal

In order to gainfully utilize its expertise in mining and mineralprocessing the company has entered into Operation and Maintenance contracts with otherCPSUs/ State Govt. PSUs. Performance of the portals are given below.

M/s NMDC Donimalai: - The Company entered into Contract Agreement on7 January 2015 for Operation and Maintenance of their 1.89 MTPA capacity Bene ciationPlant and Pellet Plant of 1.2 MTPA at Donimalai for a period of three years till31.07.2018 and extendable by additional 2 years with mutual consent. The Company deployedaround 170 of its skilled manpower at Donimalai who are working to make the venturesuccessful right from the day of handing over the plant. The Company has successivelycommissioned the plant conducted performance guarantee test and stabilized the operationsof the plant. Your Company is recovering the salary of its manpower deployed at the NMDCwith average revenue of Rs. 30 crores per annum.

KIOCL signed agreement with OMC Limited on 26.07.2018 for commissioningof Chrome Ore Bene ciation Plant in picture Shri MV Subbarao CMD and Shri N VidyanandaDirector (P&P) KIOCL and Shri Sanjeev Chopra Chairman and Shri Ramnath PraharajDirector (P&P) OMC Limited M/s OMC South Kaliapani Mines: - The Companyentered into O&M contract with M/s Odisha Mining Corporation Limited a PSU of Govt.of Odisha for Operation and Maintenance of their Chrome Ore Bene ciation Plant (COBP) atSouth Kaliapani Mines Odisha. Company has signed a Contract with M/s OMC on 01.04.2015for 2 years period with an option for extension for further one year. Your Company hassuccessfully completed the 2 years contract on 31.03.2017. However due to environmentalissues connected to tailing disposal the COBP was shutdown till the tailing pond was madeready. Accordingly the contract with your Company was terminated by M/s OMC on31.03.2017.

EPC Portal: M/s. OMC has offered the Company to take up and completethe balance works of their second Chrome Ore Bene ciation plant at Kaliapani (the plantwas under construction and jobs were abandoned midway by the contractor and pending forcompletion for more than 5 years) and also to take over Operation and Maintenance of thesame plant after commissioning. Your Company has since accepted this offer with anestimated contract value of Rs.27.21 crores. On completion of this project the companylooks forward to gain expertise of constructing Mineral Processing Plant.

MARKET SCENARIO

During 2017 the World steel market looked positive. World crude steelproduction reached 1691.2 million tons for the year 2017 up by 5.3% compared to 2016.Crude steel production increased in most of the regions in 2017.

Annual production of crude steel in Asia was 1162.5 million tons in2017 an increase of 5.4% compared to 2016. World's largest steel producer China accountedfor 49.2% of the total steel produces. China's crude steel production reached 831.7million tons up by 5.7% on 2016. Japan produced 104.7 million tons in 2017 down by -

0.1% compared to 2016. India became the third largest steel producerwith a production of 101.4 million tons up by 6.2% on 2016.

During 2017 in order to deal with this long standing issues ofovercapacity tepid demand and also phase out low-ef cient steel plants and crack downillegal production Chinese Government succeeded reduction in capacity by more than 50million tons. To control pollution sintering plant operations were halted and encouragedmerger of steel companies to upgrade technologies to achieve higher productivity. Thesemeasures improved demand for pellets during 2017.

Government of India initiated measures to encourage domestic steelmanufacturers to increase domestic steel production and consumption through National SteelPolicy 2017- DMI & SP to encourage use of domestic steel products. Government alsoimposed anti dumping duty on some of the products. All these measures buttressed Indiansteel industry. As a result while steel exports was doubled imports decreased by 1%.

The IMF has predicted that the momentum seen in 2017 may prop up globaleconomy in 2018. Steel industry is also expected to benefit from such momentum. Howeveras China accounts for about 50% of global steel production performance of Chinese Steelindustry is extremely important. It is reported that due to moderate domestic demand frominfrastructure and industrial sector coupled with closure of illegal steel mills growthin China's crude steel output in 2018 is expected to be very much low.

While positive impulses to steel demand is seen coming from developedand developing economies the reality is that steel demand in China is close to peaking.The above development enables your companies to be guardedly optimistic about 2018.

3. CAPEX AND GROWTH PLAN

The Company is in the process of strategic expansion and diversi cationaiming at higher growth level for long term sustainability/viability in the competitivemarket environment. Consequent upon the closure of mining activities at Kudremukh theCompany has been exploring options for mining at different locations within Karnataka andalso in other States. Following efforts have been made to get iron ore mining leasesetting up of value added plants etc. for diversication :-

Development of Devadari Iron Ore Block

Govt. of Karnataka issued Gazette Noti cation on 23.01.2017 reservingan area of 470.40 ha in Devadari Range Sandur Taluk Bellary District for mining lease ofiron and Manganese ore. DMG Govt. of Karnataka directed the Company to submit Mine PlanForest Clearance and Environment Clearance for execution of Mining Lease deed. The Companyhas initiated action for obtaining statutory clearances from authorities for execution ofmining lease deed. Regional Controller of Mines

Bangalore Indian Bureau of Mines has approved the Mining Plan on08.03.2018 for production of 2 mtpa iron ore and setting up of 2 mtpa crushing conveying& beneficiation plant. The Company has submitted Form-I through online portal ofMoEF&CC GoI on 18.01.2018 to obtain Terms of Reference (ToR) for conducting base linestudy and EIA/EMP for Environmental Clearance. The Company made project presentationbefore Expert Appraisal Committee on 24.04.2018 for issue of TOR for EC. Company hassubmitted Forest Diversion Proposal (Stage 1 forest clearance) through online portal ofMoEF&CC GoI on 16.03.2018. Forest Diversion Proposal is being examined in the officeof Nodal Of cer Forest Dept. GoK.

It is expected that Company will obtain necessary statutory clearancesby end of 2019 to execute the mining lease deed with Govt. of Karnataka. Company willundertake development of iron ore mines setting up of Bene ciation and Pellet Plant withcapital investment of around Rs. 1500-2000 Crores.

Backward and Forward Integration Projects at BFU

In order to make Blast Furnace Unit viable on standalone basis theCompany has envisaged setting up of Coke Oven Plant as Backward integration projectDuctile Iron Spun Pipe project as forward integration project along with 10MW Cogen PowerPlant and Pulverized Coal Injection system and modi cation to the existing Blast FurnaceUnit. To take these projects forward KIOCL has appointed M/s MECON as TechnicalConsultant for preparing Techno-Economic Feasibility Report (TEFR) for the project.

At its 251 Meeting held on 22.05.2018 the Board approved the TEFR forsetting up of the identified forward and backward integration projects i.e. DISP plant inthe forward and Coke Oven Plant with Cogen Power Plant of 10MW in the backward integrationand carrying out the necessary modi cations to the Blast Furnace Unit such as introductionof a PCI system new Stave Coolers & Recirculating Water Cooling

System to make the unit economically viable at a total estimatedcapital cost of Rs. 843.90 crores.

Setting up a 1 MWac Solar Plant at BFU premises Mangalore

The Company has committed to the Government of India to developRenewable Energy Projects during the five year period of 2015-19. Towards this purposethe Company has engaged an EPC contractor for setting up of 1MW solar power plant in itsexisting land available at Blast Furnace Unit Mangaluru with capital cost of Rs. 6.10Crores. This project also supports Govt. of India's National Solar Mission. The Companyappointed M/s Infrastructure Development Corporation (Karnataka) Limited (M/s iDECK) asTechnical Consultant for implementation of the project. M/s Enerparc Energy Pvt. Ltd hasbeen identified as EPC contractor for carrying out the Design Engineering ProcurementSupply Erection Testing Installation and Commissioning of a 1 MWac Solar PV Power Plantwith fixed tilt in the premises of Blast Furnace Unit Mangaluru and to undertakecomprehensive maintenance services for next five years. The work is progressing and isexpected to be commissioned by the 1st half of 2018-19.

JOINT VENTURE / MOU

MoU with M/s RINL for setting up 2 MTPA Pellet Plant at Vishakhapatnam

Keeping in view of the expansion of the operations of the companythrough investment the Board of your Company at its 251 Meeting held on 22.05.2018 hasapproved the Techno-Economic Feasibility Report for setting up of 2 MTPA capacity PelletPlant on JV basis with RINL at Vishakhapatnam at a total estimated capital cost of Rs. 996crores.

MoU with MECON

Your Company signed a MoU with MECON on 08.01.2018 a sister CPSU underMinistry of Steel to co-operate with each other on non-exclusive basis in order toparticipate in tenders bids and Contracts related to Engineering / EPC / Turnkey/BOO/BOT/BOOT basis for new installation or upgrading / revamping repair of Bene ciationand

Pelletisation Plants & coal washery plants in India. This MoU shallinitially remain valid for a period of 03 years from the date of signing and shallthereafter be extended on mutual consent of both the parties.

KIOCL signed an MoU with MECON for joint participation of tender forsetting up of Bene ciation & Pelletisation Plant in India on 8.1.2018 at Mangaluru

Development of Nemakal Iron Ore Deposit in Ananthapuram Dist. AndhraPradesh

A MoU was signed among KIOCL APMDC and RINL on 22 June 2013 atHyderabad for exploration and exploitation of Nemkal iron ore deposit in Ananthapur Dist.of Andhra Pradesh. Govt. of Andhra Pradesh issued noti cation dated 30 Nov 2015 reservingarea over an extent of 1327 hectares for iron ore in Comp. Nos.692 693 694 in MincheryR.F. of Kalyandurg Range Ananthapur District in favour of M/s A.P.Mineral DevelopmentCorporation Limited (APMDC) under Section 17A(2) of the Mines and Minerals (D&R) Act1957. APMDC submitted proposal for forest clearance on 14.12.2017 through online in theForest Clearance Portal of MoEF&CC GoI to undertake exploratory drilling at MincheryReserve Forest Nemakal Project. On receiving the forest clearance for exploratorydrilling work will be undertaken jointly by KIOCL and APMDC. TEFR for the setting up ofbeneficiation plant and pellet plant will be prepared based on the outcome of theexploratory drilling.

4. DIGITAL INDIA

Towards fulVllment of the "Digital India" initiative of theGovernment of India and digital transformation of your Company by leveraging with latestInformation and Communication Technology (ICT) towards building a competitive edge in themarket place your Company has embarked on the path of having Single IntegratedInformation System/ERP along with up gradation of ICT infrastructure to position thecompany as efficient and competitive in the eld of Pellet and Bene ciation segment ofSteel Industry

Currently certain application developed in-house by Systems departmentand also a few applications outsourced for online accessibility in departmental level arerunning in standalone mode and these systems are not integrated with other applicationsthereby having a scope for optimization through integration.

Towards this objective your Company has engaged M/s. Ernst &Young LLP as an IT consultant to assess the existing IT infrastructure includinghardware software organizational structure etc. and recommend a futuristic ITinfrastructure with state of the art technology to take care of the needs of theorganization.

M/s. Ernst & Young have made a detailed study by conducting seriesof workshops at Mangalore and Bangalore locations involving all the departments andassessed the existing IT infrastructure including hardware software organizationalstructure etc. and submitted the draft report recommending a futuristic IT infrastructurewith state of the art technology to take care of the needs of the organization includingcosting for proposed modules. The Implementation of ERP will be taken through a systemintegrator once it is approved by Board.

5. HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONS

Manpower Profile

As on March 31 2018 the Company had 888 employees on its rollscomprising of 283 Executives including Non-unionized Supervisors (32%) and 605 NonExecutive Employees (68%).

Table: 3 show the breakup of employees under different categories onrolls of the Company as on March 31 2018.

Table: 3
Group

Total No. of employees on rolls

SC

ST

Women employees

Ex- servicemen

PwD

A

244

45

12

11

--

05

B

39

02

02

06

--

C

567

84

30

09

--

05

D

38

07

06

01

--

03

Total

888

138

50

27

--

13

Compliance under the Persons with Disabilities Act 1995

Your Company ensures compliance under the Persons with DisabilitiesAct 1995. Suitable provisions/ modifications are made in the workplace to meet therequirements of such persons with disability.

Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013

Your Company is following Sexual Harassment prevention procedures inline with the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Your Company has constituted Internal ComplaintCommittees in two major locations i.e. Corporate Office Bangalore and Plant level atMangalore to redress sexual harassment complaints. All employees (permanent contractualtemporary trainees) are covered under this policy. During the year no complaint wasreported. To build awareness in this area your Company has been conducting consellingseession/ induction / refresher programmes in the organization on a continuous basis.

Empowerment of Women

A Women's Forum KIOCL is a Corporate Life Member for Forum of Women InPublic Sector [WIPS] under the aegis of SCOPE. All women employees are Life Members of thesaid Forum. Co-ordinators are being nominated on rotation basis from KIOCL to liaison withWIPS Apex Body & Southern Region. Every year the Company nominates women employees toattend Annual meet & Regional meet of Forum of WIPS. International Women's Day wascelebrated on 8th March 2018 in a be tting manner.

KIOCL bagged Recognition of WIPS Activities Award for the year 2017.Hon'ble Chief Minister of Assam Shri Sarbananda Sonowal presented the award on 12thFeb 2018 at Guwahati Assam.

During the year 2017-18 apart from participating in Swachh BharatAbhiyan WIPS Cell has actively undertaken various activities such as organizing MedicalCamps distribution of Education kits to girl students from financially backward familyfor pursuing higher studies awareness classes on health & hygiene extended domesticsupport to orphanages self defense workshop for women employees and other CSR activities.

KIOCL has bagged "Recognition for WIPS Activities Award" forthe year 2017 during 28th National Convention of Forum of Women in Public Sector [WIPS]held on 12th & 13th February 2018 at Srimanta Sankaradev Kalakshetra Guwahati Assam.The award was presented by Shri Sarbananda Sonowal Hon'ble Chief Minister of Assam. Thewinning streak continues with the third award in succession.

Industrial Relations and Employees Welfare

During the year your Company continued to maintain harmoniousindustrial relations co-operation between the elected representative bodies of employeesand management ensuring no loss of man-days during the year. Personnel policies andwelfare schemes were continuously aligned with the Company's goals and objectives.

The Company has implemented wage revision for Unionized Workers w.e.f.01.01.2012 in line with DPE OM NO.2 (110)/11-DPE (WC)-GL-XVI/13

DATED 13.06.2013 through Tri-partite Agreement in the presence ofDy.Chief Labour Commissioner (C) on 27.02.2017.

Human Resource Development

A series of initiatives were taken towards human resource developmentby your Company which includes in-house training programmes to enhance skills nominationto various seminars and conferences. During the year 6341 man-days of training wereimparted to its employees.

Public/Staff Grievance Redressal

Your Company has framed a well defined grievance procedure evolvedunder the Code of Discipline since its inception. Grievances received are being redressedto the satisfaction of the aggrieved employees. With respect to public grievance as andwhen any complaints are received necessary remedial action if any is taken promptly.Complaints/grievances other than the staff grievance are categorized intocustomer/consumer complaints/grievances from the Contractors NGOs/General Public etc. Therespective project heads are empowered to dispose off the grievances concerning theirareas. Linkage has been provided to Centralized Public Grievances Redressal &Monitoring System (CPGRAMS) with effect from May 01 2011.

The grievances received and disposed off by the Company are reported tothe administrative Ministry on monthly and quarterly basis. The guidelines laid down bythe Government of India in this regard are being strictly followed. A Public ServiceDelivery (SEVOTTAM) portal has been created for assessing and improving the quality ofservices delivered to the citizens. The system also involves the identification of theservices delivered quality of service its objective improvement of quality usinginnovative methods for developing business processes and being more informative with thehelp of advanced information technology. The same is also available in the Company'swebsite.

During the year 9 (Nine) grievances from public / ex-employees werereceived directly/ CPGRAM portal and all of them were disposed off.

Particulars of Employees

Ministry of Corporate Affairs vide its noti cation dated June 05 2015has exempted Government Company with the applicability of section 197 of the CompaniesAct 2013. However the remuneration received by the employees of the Company has notexceeded the limit prescribed under section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 during the FinancialYear 2017-18.

6. CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governancealong with certi cate from Practicing Company Secretary con rming the level of complianceis attached and forms a part of the Board's Report.

Directors and Key Managerial Personnel

The Board consists of seven members three of whom are executive orwhole-time Directors two are non-executive Directors representing Ministry of Steel andtwo are Independent Directors. Remuneration and other details of the KMP's are mentionedin the extract of the Annual Return which forms part of this Report.

Independent and Non-Independent Non-Executive Directors

Your Company has received necessary declaration under section 149(7) ofthe Companies Act 2013 from each Independent Director that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Board ofDirectors at its 251 Meeting held on 22.05.2018 has noted the declaration as made by theIndependent Directors.

Woman Director

In terms of the provisions of Section 149 of the Companies Act 2013and Regulation 17(1)(a) of SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 for the year ended

March 31 2018 your Company has one Women Independent Director on itsBoard.

Changes in the Composition of the Board of Directors

Inductions

The President of India appointed Sri M V Subba Rao Director(Commercial) as the Chairman-cum-Managing Director of KIOCL who assumed the charge on30.01.2018.

Retirement/Cessation

During the year under review consequent upon completion of his 5 yearsterm Sri Malay Chatterjee Chairman-cum-Managing Director ceased to be the member of theBoard w.e.f. 30.06.2017. The Board places on record its deep appreciation for the valuablecontribution made by Shri Chatterjee.

Appointments/Resignations of the Key Managerial Personnel

Sri M V Subba Rao Director (Commercial) was appointed asChairman-cum-Managing Director and Chief Executive Of cer during the year under review.

Directors Retiring by Rotation

In terms of Section 152 (6) of the Companies Act 2013 Sri. T.Srinivas and Sri S.K. Gorai being longest in the office shall retire by rotation at theensuing AGM and being eligible for re-appointment offers themselves for re-appointment.The Board recommends their re-appointment.

Number of Meetings of the Board

The Board met six times during the Financial Year the details of whichare given in the Corporate Governance Report. As prescribed in the Act the maximuminterval between any two meetings did not exceed 120 days. The Meetings were conducted incompliance with relevant regulations of the SEBI (LODR) Regulations 2015 and SecretarialStandard on Meetings of the Board of Directors (SS-2) issued by The Institute of CompanySecretaries of India (ICSI).

Directors' Responsibility Statement

The Financial Statements are prepared in accordance with IndianAccounting Standards (Ind AS) under the historical cost convention on accrual basis exceptfor certain instruments which are measured at fair values. The Ind AS is prescribed underSection 133 of the Companies Act 2013 read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015 and Companies (Indian Accounting Standards) AmendmentRules 2016. Effective April 1 2016 the Company has adopted all the Ind AS standards andadoption was carried out in accordance with applicable transition guidance. AccountingPolicies have been consistently applied except where a newly issued Accounting Standard isinitially adopted or a revision to an existing Accounting Standard requires a change inthe Accounting Policy hitherto in use.

Your Directors confirm that:

a) In the preparation of the Annual Accounts for the Financial Yearended March 31 2018 the applicable Accounting Standards had been followed.

b) The Company has selected such Accounting Policies and applied themconsistently and made judgments & estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of theFinancial Year and of the Profit & Loss of the Company for that period.

c) The Company has taken proper and sufVcient care towards themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

d) The Company have prepared the Annual Accounts on a going concernbasis.

e) The Company has laid down Internal Financial Controls which areadequate and are operating effectively.

f) The Company has devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Extract of Annual Return

The details forming part of the extract of the Annual Return in formMGT-9 is annexed to this Report.

7. AUDITORS

Statutory Auditors

Pursuant to Section 139 of the Companies Act 2013 the Comptroller andAuditor General of India shall appoint the Statutory Auditors of the Company for the year2018-19. The Statutory Auditors Report on the Accounts of the Company for the FinancialYear ended March 31 2018 is annexed.

The Notes on financial statement referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. The Auditors' Report doesnot contain any qualification reservation adverse remark or disclaimer.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Amendment Rules 2014 the Cost Audit records of thePellet Plant Unit of the Company is required to be audited. The Board on therecommendations of the Audit and Risk Management Committee has appointed M/s PKR &Associates LLP Cost Accountants Hyderabad to audit the cost accounts of the Company forthe Financial Year 2018-19 at a remuneration of Rs.5000/- plus applicable taxes.

As required under the Companies Act 2013 the remuneration payable tothe Cost Auditor is required to be placed before the Members in an Annual General Meetingfor their ratification. Accordingly a Resolution seeking Member's rati cation for theremuneration payable to M/s PKR & Associates LLP Cost Auditors is included at ItemNo.6 of the Notice convening the Annual General Meeting.

The Cost Audit Report for the Financial Year 2016-17 was led with theMinistry of Corporate Affairs on 19.09.2017. The Cost Audit Report for Financial Year2017-18 is under finalization and will be submitted to the Ministry of Corporate Affairswithin the prescribed period.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial

Personnel) Rules 2014 the Company has appointed Sri S. ViswanathanPractising Company Secretary to undertake the Secretarial Audit of the Company for theFinancial Year 2017-18.

The Secretarial Auditor had observed that the company is not havingadequate number of independent directors. The remarks of the directors on the same arethat the independent directors in the company are appointed by President of India throughMinistry of Steel Government of India. The Company has requested Ministry of SteelGovernment of India for appointment of requisite number of independent directors on itsBoard.

The Secretarial Auditors also pointed out that present publicshareholding is 1.0039% against the minimum public shareholding of 25% to be achieved onor before 21.08.2018. The Board remarks that this being a policy issue of Government ofIndia has requested Ministry of Steel to take up with DIPAM for diluation of Governmentholding to achive the same within the stipulated period.

C&AG Audit

The Comptroller & Auditor General of India (C&AG) vide itsletter dated 11.06.2018 has conveyed "NIL" comments on the accounts of theCompany for the year ended March 31 2018. Copy of the same is annexed to this Report.

8. CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility (CSR) Committee. A Board approved Corporate SocialResponsibility Policy is in existence in the Company which is available under the linkhttps:// www.kioclltd.in/user/cms/344. The statutory disclosures with respect to the CSRCommittee and an Annual Report on CSR activities form a part of this Report as Annexure.

9. Awards & Recognitions

During FY'18 the Company has received following Awards &Recognitions:

Received "Governance Now PSU Award" during the 5th Editionof Governance for its contribution towards turnaround in business.

KIOCL bagged first prize in recognition of its outstanding performancein implementation of the Official Language on 17.05.2017

Received "Substantial Growth in Exports" from CustomCommissionerate Mangalore for achieving highest exports & best business performancefor FY 2017-18.

Received First prize in recognition of its outstanding performancein implementation of Official Language for Mangalore Region.

Received "Recognition for WIPS Activities Award"for theyear 2017 at 28 International Convention of Forum of WIPSs held at Guwhati.

10. Key Initiatives

Environmental Management and Pollution Control Measures

Your Company is committed towards preservation of ecology andprevention of pollution in its production activity. Company's Environmental ManagementSystem is certi ed with ISO 14001:2004 Standards. Some of the initiatives taken at plantlevel during the year 2017-18 are as under:

Additional number of Mist type water sprinklers for dust suppressionalong the approach road adjacent to MSDS has been installed.

The Composting facility has been created for disposal of canteenwaste to prevent pollution in the premises and the same is used as manure.

The standard norms as prescribed by KSPCB in respect of air noiseand water quality is being monitored and adhered to in all the areas of work.

The Company has complied with requirement of Battery managementHazardous waste management Bio-medical waste management water act air act and EP Acts.

Environmental friendly and pollution free Roof Top Solar PowerPlants at Pellet Plant unit and Blast Furnace unit were installed and commissioned duringthis year.

World Environment Day was celebrated the greener way on 05.06.2017and several rare varieties of plant saplings totaling to 20 Nos were planted in thefactory premises.

Safety

All the Departments have Standard Operating Procedures and the same ismade available in their departmental Integrated Management System (IMS) Manuals foradherence. The Onsite emergency plan approved by the Director of Factories is in existencefor both Pellet plant and Blast furnace unit. The Onsite Emergency Mock drills are beingconducted once in 6 months to check the ef cacy of preparedness for handling any Majoraccidents. Safety Inspections are carried out regularly by the Safety officer along withconcerned Department Engineers and Safety Committee members.

National Safety Week was observed from 4 March 2018 to 10 March 2018.Suitable Personal Protective equipments such as Safety helmets Shoes Gloves SafetyGoggles Face shields Aprons Ear plugs/muffs have been issued to all employees includingcontract labours to protect them against work place hazards. Various training programmesare being conducted to inculcate Safety consciousness among employees and labourers.

ISO Certi cation

Your Company is certi ed with Environment Management System - ISO14001: 2004 Quality Management System - ISO 9001: 2008 and Occupational Health &Safety Management System OHSAS - 18001: 2007. All certi cations are valid up to08-11-2018.

Implementation of Official Language Policy

Your Company follows and implements the directives issued from time totime by the Department of Official Language Ministry of Home Affairs and Ministry ofSteel Government of India for the progressive use of Official Language Hindi. Employeesof the Company are encouraged to work in Hindi with regular training cash awards andincrements as per the Government directives. Hindi Workshops Orientation programmes areconducted regularly to create awareness impart knowledge and encourage the employees todo their Official work in Hindi. OfGcial Language Implementation Committee Meetings takeplace at all the locations regularly and the progress during the previous quarters isreviewed in such Meetings. Hindi Fortnight was celebrated at all locations of the Companyduring September 2017.

KIOCL Limited has been awarded 'Rajbhasha Excellence Award' - Firstprize for the year 2017-18

Hindi Programmes and several Hindi Competitions were held and prizesdistributed to the winners. A valedictory function was organized on October 27 2017.

Your Company is the Convener of Bangalore Town Official LanguageImplementation Committee (Undertakings) (TOLIC) and conducts regular meetings and JointHindi Month programmes for all Central PSUs in Bangalore. During the Year 04 HindiWorkshops were conducted to impart training to the employees for doing their official workin Hindi.

Vigilance

The Company is having an independent Vigilance Department headed by theChief Vigilance Officer.

Preventive vigilance has been the thrust area of Vigilance Departmentall these years and the same has received focused attention during the year. A climate ofpreventive vigilance is generated to sensitize of cials at all levels about the illeffects of corruption and malpractices. Regular Structured Meeting of Vigilance with themanagement is being conducted and issues related to e-governance Leveraging TechnologyTender Management Award of Works Recruitment Policy have been discussed. VigilanceAwareness Week was observed from 30 October 2017 to 4 November 2017 at all thelocations/offices of the Company and workshops & seminars were conducted during theweek. Procurement by tendering-cum-e-reverse auction is in vogue from September 2010. Thethreshold value for this is fixed at Rs. 5 lakhs and above. During 2017 98.80% of casesby value are covered under this. All payments are being made through electronic mode.During the year 153 work/purchase/sale orders have been issued incorporating IntegrityPact clause covering 98.75% of contracts by value. No complaints was received under IP.58 scrutiny/examinations 71 checks/inspections are carried out during the year andcorrective actions if any are suggested. Necessary action is taken with regard to thecomplaints received during the year. Vigilance Department conducted 8 training programmesat three different locations covering 1030 man hours. Topics such as Good governance-Vigilance & other developments Vigilance Awareness & Preventive Vigilance PublicProcurement etc. were covered.

Compliance of recommendations made by the Committee on Papers Laid onthe Table

(Rajya Sabha) in its 150 Report

Details of cases initiated/disposed off during:

1. No. of cases pending as on 31.03.2018

NIL

2. No. of cases initiated during 2017-18

1

3. No. of cases pending

1

The pending case is regarding wrong acceptance and release of paymenttowards supply of 6 numbers of 1.5 ton split air conditioners along with stabilizer.

Of cers involved:- 2

Charge sheet issued on 21.10.2017.

Disciplinary proceedings started on 24.04.2018 and is yet to conclude.

Pending Audit Paras: -

Ref. to Para No./ Audit Status
Audit Report/title Observation
1 Para no.3.7.2.2 of Report no.2 of 2009-10. KIOCL has not xed the level for all the items of stores and spares. Inventory holding norms were xed for Raw materials and major stores and spares in April 2014 and the same was intimated to MOS on 21st April 2014. The non-moving stores & spares stood at Rs.4.76 crores including surplus stores of Rs.1.48 crores as on 31.03.2018.
Inventory holding - Stores & Spares. Further it was having Rs.55 crores as Non-moving stores and spares as on 31.03.2009.
2 Para no.19.1.1 of Audit Report No.9 of 2009-10. Failure of the Company to get its railway siding declared as "other than stations/ sidings serving port" immediately on starting the operations resulted in payment of higher tariff of Rs.6.05 crore and surcharge of Rs.73.15 crore on transporta-tion of iron ore. The Company has made claims for refund before Railway Claims Tribunal (RCT) at Bangalore and Bhubaneswar. As the claim lodged with RCT Bhubaneswar was dismissed; the Company has Fled a case in the High Court Bhubaneswar during January 2018. The claim before RCT Bangalore is pending.
Extra expenditure due to payment of higher tariff & congestion surcharge on transportation of iron ore.

3 Para no. 15.2 of Audit Report No. 8 of 2012- 13. Irregularities in procurement & inventory management of Lam Coke. The decision of not procuring a third shipment of LAM Coke at the lower rates offered during the Empowered Joint Committee (EJC) meeting held in February 2008 resulted in extra expenditure of Rs.54.85 crore. Writing off of stock shortage of 9144.153 MT Coke valued at Rs.32.41 crore was for reasons not justiTable. The Company procured two shipments with
different lay cans to avoid overlapping and
logistic issues. Also the decision to procure
two shipments only was based on market
report 'STEELGURU' dated 27.01.2008
which indicated that there was a possibility of
reduction in the price of Coke beyond March
2008.
Difference of 9144.153 MT of LAM Coke
had arisen as a cumulative effect since the
inception of the Company while handling
1008308 MT of LAM Coke receipt and the
this difference is 0.906% of quantity
received. The shortage was attributable to (a)
Moisture adjustment (b) Difference due to
transit loss (c) Difference due to handling loss
and difference due to less accountal of nes
generated. The transit loss was 0.356% of
total receipts and handling loss was 0.173%
of total quantity handled. The total shortage
of 9144 MT constitutes 0.906% of total
receipts since inception which is also much
below the norm of 3% followed by RINL
other PSY of Ministry of Steel.
4 Para no. 17.1 of Audit Despite knowing that Blast In order to improve the productivity of BFU
Report No. 13 of 2014. Injudicious expenditure on Pig Casting Machine in Blast Furnace Unit. Furnace Unit (BFU) was not viable on standalone basis and having closed its operations KIOCL ordered for setting up a third Pig M/s MECON have suggested several modifications. Installation of 3rd PCM and introduction of pulverizing coal injection system were two prominent proposals. As the system of injection of coal requires high investment only installation of 3rd PCM was undertaken in the 1st Phase modi cation. However by the time the installation was completed the same could not be put to use due to suspension of operations of BFU because of commercial non-viability. The machine will be put to use as and when the plant starts its operation. The benefits/ improvements are:
Casting Machine (PCM) which has been idle for the past 26 months and would remain idle for a minimum of another 24 months from the issue of letter of intent which has also not been issued so far (September 2013). This has resulted in idling of funds and injudicious expenditure of Rs. 4.20 crore.
(a) Safe working environment for maintenance personnel (b) Shorter waiting period for Hot Metal collected in ladles. This avoids solidi fication of top layer of metal in the ladle (reduced skull formation) (c) Better surface finish of Pig Iron Cubes/Blocks
(enhances marketability) and (d) Reduced interruption in tapping of metal from Blast Furnace. Higher productivity under constant blast volume and smoother furnace operation. The BFU is shut down due to economical non-viability from August 2009. As and when the BFU operations resume the PCM3 will be put to use.

Implementation of new Public Procurement Policy for MSEs

The Company has adopted a Micro & Small Enterprises (MSEs) Policyfor MSEs Sector in line with the Govt. of India guidelines as per MSMED Act 2006 andkeeping in view the effective implementation of Public Procurement Policy for Micro andSmall Enterprises (MSEs) Order 2012 following steps have been taken:

List of item components that could be sourced from MSEs are postedon the Company's web-site at www.kioclltd.in. for the information of MSE vendors.

Communication has been sent to all the registered vendors regardingthe said policy with the objective of achieving an overall procurement of 20% from MSEs.Further for enhancing the procurement from MSEs owned by SC/ST all the vendors areapproached for capturing necessary details and updated the data bank.

During 2017-18 your Company placed orders for goods and services tothe extent of Rs.6.97 Crores from MSEs which constituted 23.11% of the total procurementvalue of Rs.30.17 Crores.

Shri T Saminathan GM (Materials) addressing on the occasion of StateConclave of MSME (SC/ST) on 14.12.2017

Right to Information

Under the Right to Information Act 2005 the Company has set up anexclusive Right to Information Act out t to provide information and bring in transparency.As per the requirement of section 4(1) (b) of the Act general information required to beprovided to citizens are displayed on Company's website The Company has nominated PublicInformation Of cers and Appellate Authorities in all its 3 locations (Corporate Office& Pellet Plant / Project Site) to provide information to the applicants. Allapplications and queries received under RTI were disposed off as per the provisions of theAct.

During the year 2017-18 the Company received 25 RTI applications andone first appeal and the same were disposed off. Apart from above the Company hasreceived RTI applications and first appeals from web Portal RTI Online with URL https://rtionline.gov.in launched by DoP&T. This is a facility for the Indian citizens to leonline application RTI applications and first appeals and also to make payment of RTIFees. Your Company has provided the link of above portal on its website.

Energy Conservation R&D Technology Absorption and ForeignExchange Earnings and Outgo

Details of Energy Conservation R&D technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed to thisreport.

Dividend Distribution Policy

In terms of the Regulation 43A of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors of your Company hasadopted Dividend Distribution Policy. The Policy is available on the website of theCompany under link https://www.kioclltd.in/user/ cms/344. The Dividend Distribution Policyforms a part of this Report.

Updation of PAN and Bank Particulars

Shareholders are requested to update the bank particulars and PANdetails with Registrar and Transfer Agent (RTA) if not already updated.

Green Initiatives

Electronic copies of the Annual Report 2017-18 and the Notice of the 42Annual General Meeting are sent to all members whose email addresses are registered withthe Company / depository participants(s). For members who have not registered their emailaddresses physical copies are sent in the permitted mode.

Appreciations and Acknowledgment

Your Directors gratefully acknowledge the support co-operation andguidance received from the Hon'ble Minister for Steel Hon'ble Minister of State forSteel Hon'ble Chief Minister of Karnataka the Secretary Ministry of Steel and other ofcials of the Ministry of Steel as well as other Ministries of the Government of IndiaGovernment of Karnataka Andhra Pradesh Odisha and all other departments / agencies ofCentral and State Government in all the endeavors of the Company.

Your Directors acknowledge the support extended by the valued andesteemed customers shareholders stakeholders bankers and suppliers for their supportand co-operation.

The Directors also appreciate the continued and dedicated efforts putin by all the employees to overcome challenges faced during the year.

For and on behalf of the Board of Directors

(MV Subba Rao)

Chairman-cum-Managing Director

Date : New Delhi

Place: 31.07.2018