The Board of Directors hereby submits the report of the business and operations of yourCompany ("the Company") for the Financial Year ended March 31 2019 togetherwith the Auditors' Report on the Annual Financial Statements and Comments on the same bythe Comptroller & Auditor General (C&AG) of India.
During the just concluded Financial Year 2018-19 your Company achieved a recordturnover of Rs. 2013 crores which is highest since inception as against Rs. 1784 croresin the Financial Year 2017-18 registering growth of 12.84%.
Your Company maintained its steady financial performance during the year 2019 despitewide uctuations in Pellet Price coupled with increase in iron ore price and Plant shutdownfor about two months on account of capital repair of furnace and disruption of Iron OreFine supply. During the year your Company could achieve Pellet production of 2.238million tons exceeding the 'Excellent' MOU target of 2.170 million tons resulting intocapacity utilization of 63.94% as compared to production of 2.327 million tons a yearbefore and has achieved Pellet dispatch of 2.206 million tons as compared to 2.301 milliontons during the previous year.
Financial Results and State of Company's Affairs
( Rs. in crores Except EPS)
|Particulars ||FY 2019 ||FY 2018 |
|Total Revenue ||2012.68 ||1784.44 |
|Revenue from Operations ||1887.71 ||1637.18 |
|Other Income ||124.97 ||147.26 |
|Earning Before Interest and Tax (EBIT) ||184.92 ||86.59 |
|Profit Before Tax (PBT) ||184.12 ||86.09 |
|Tax Expense (including deferred taxes) ||72.26 ||4.61 |
|Profit After Tax (PAT) ||111.86 ||81.48 |
|Add : Other Comprehensive Income (Net of Tax) ||10.90 ||3.07 |
|Total Comprehensive Income ||122.76 ||84.55 |
|EPS (Basic & Diluted) ||1.78 ||1.28 |
|Average Networth ||2069.80 ||2123.60 |
|Average Capital Employed ||2204.94 ||2298.93 |
|Book Value per Share ||32.06 ||33.82 |
|Return on Average Capital Employed (%) ||5.07 ||3.54 |
|Return on Average Net Worth (%) ||5.40 ||3.84 |
|Capital expenditure ||17.93 ||0.80 |
During the year your Company achieved an operating income of Rs. 1887.71 crores ascompared to Rs. 1637.18 crores in the previous year a growth of 15.30%. Revenue fromexport sales increased by 30% to Rs. 1246.98 crores from Rs. 959.58 crores and domesticsales decreased from Rs. 610.56 crores to Rs. 581.78 crores in comparison to PreviousFinancial Year.
Your Company achieved export sales of 1.52 Million Tons of Pellets highest afterclosure of Captive Mines at Kudremukh. During the year about 48% of the total exports madewere to markets other than China to Steel Mills in UK Japan South Korea Oman etc. UKalone contributed for 17% of total exports. Your Company achieved 67% of total revenuefrom operations through export surpassing 'Excellent' target of MoU.
Income from Sale of Services (O&M Operations and Mineral Exploration Services)during the year was Rs. 43.49 crores against Rs. 35.26 crores of previous year. OtherIncome comprising of Income from Treasury Operation and other Miscellaneous Income hasdecreased to Rs. 116.92 crores from Rs. 125.03 crores. The Interest Income has come downmainly due to cash out flow of Rs. 214 crores on account of buy back of shares and Rs. 61crores of dividend.
Your Company's Profit Before Tax has substantially increased to Rs. 184.12 crores fromRs. 86.09 crores in the previous year an increase of 113.86%. The increase is primarilydue to higher realisation both in domestic as well as in export market. Your Company hasalso achieved a 37.26% higher Profit After Tax at Rs. 111.86 crores during the currentyear as compared to Rs. 81.48 crores during previous year.
Your Directors are pleased to recommend a nal dividend of Rs. 1.33/- per equity shareon face value of Rs. 10/- each for the year ended March 31 2019 subject to the approvalof Members at the Annual General Meeting (AGM) to be held on 03/09/2019 the nal dividendwill be paid on or before 03/10/2019 to the Members whose names appear in the Register ofMembers as on the Book Closure date i.e. 27/08/2019 to 03/09/2019(both days inclusive).The total dividend for the financial year will absorb Rs. 99.7 crores including dividenddistribution tax of Rs. 17 crores out of the Profit After Tax of Rs. 111.86 crores.
The Register of Members and Share Transfer Books will remain closed from 27/08/2019 to03/09/2019 (both days inclusive) for the purpose of payment of the dividend for theFinancial Year ended March 31 2019 and the AGM.
Your Company continue to maintain pruduent cash flow for its smooth operation. As onMarch 31 2019 there was a net cash surplus of Rs. 1569.18 crores ( Rs. 1863.39 crores ason 31/03/2018). During the year your Company continued to maintain a zero debt statusthereby retaining its full capability for gearing the Balance Sheet as and when needarises.
During the year your Company's credit worthiness for availing Bank Facilities wasevaluated by Credit Analysis and Research Ltd. (CARE Ratings Ltd.) who has assignedfollowing Credit Rating.
|Facilities ||Amount in crores) ||Rating |
|Long-term Bank Facilities ||1 ||CARE AA: Stable (Double A; Outlook: Stable) |
|Long term/ Short term Bank Facilities ||684 (enhanced from 369) ||CARE AA; Stable/ CARE A1+ (Double A; Outlook: Stable/A One Plus) |
|Total facilities ||685 || |
The above rating indicates that your Company enjoys highest short term credit ratingand a notch below the highest for long term borrowing. This credit ratings implies yourCompany's capability to leverage for its operation and capital expenditure as and whenneed arise.
Market Capitalization - Top 500 Companies
Based on Market Capitalization as on March 31 2019 your Company has been includedamongst the top 500 listed Companies at 250 number.
Entry into the Indices NSE NIFTY 500 & BSE S&P 500
For the rst time your Company has become the Index constituent of NSE Nifty 500 Indexand BSE S&P 500 Index. As per the list released by the respective Indices yourCompany stands at 267 in NSE Nifty 500 Index and 274 in BSE S&P 500 Index.
Performance of your Company in terms of the Memorandum of Understanding (MoU) signedwith the Ministry of Steel Government of India was rated as "Good" for theFinancial Year 2017-18. The MoU evaluation for Financial Year 2018-19 is under nalizationand expected to achieve "Very Good" rating.
Particulars of Loans Guarantees or Investments
During the year 2018-19 there was no loan guarantee or investment made by your Companyunder 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 with Related Parties asdefined under the Companies Act 2013 and Regulation 53(f) and Para A of Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which attractthe provisions of Section 188 of the Companies Act 2013 as such annexure AOC-2 is notfurnished.
There were no materially significant transactions with related parties which were inconflict with the interest of the Company. The Board had approved a Policy on Materialityof Related Party transactions and dealing with Related
Party transactions which is available on the Company's website.
Material Changes and Commitments if any affecting Financial Position
There was no material change / commitment occurred affecting the financial position ofthe Company subsequent to the financial year ended March 31 2019 till the date of thisreport. Also there was no change in the nature of business of the Company during theyear.
Buyback of Shares
In line with the Department of Investment & Public Asset Management (DIPAM)Ministry of Finance guidelines dated 27 May 2016 on Capital Restructuring of CentralPublic Sector Enterprises (CPSEs) the Board in its Meeting held on 18/09/2018 approvedthe buy back of fully paid-up equity shares of Rs. 10/- each not exceeding 12588235equity shares (representing 1.98% of the total number of equity shares in the paid-upshare capital of the Company) at a price of Rs. 170/- per equity share payable in cash foran aggregate consideration not exceeding Rs. 214 crores being 9.99% of the aggregate ofthe fully paid-up equity share capital and free reserves as per the audited financialstatements of the Company for the financial year ended March 31 2018. This was within thestatutory limits of 10% of the aggregate of the fully paid-up equity share capital andfree reserves under the Board of Directors approval route as per the provisions of theCompanies Act from the equity shareholders of the Company as on the record date on aproportionate basis through the Tender Offer route as prescribed under the BuybackRegulations.
Your Company had completed buyback in accordance with provisions contained in CompaniesAct 2013 and SEBI (Buyback of Securities) Regulations 2018. The President of India actingthrough Ministry of Steel Govt. of India being the Promoter of the Company had tenderedBuy Back offer through Stock Exchange Mechanism and 12092926 Equity Shares wereaccepted in the Buy-back and 495309 Equity Shares were accepted from other non-promotershareholders.
The Company concluded buy-back procedure on 15/11/2018 and 12588235 Equity Shareswere extinguished. The Company had utilized its general reserve for the buy-back of itsshares. In accordance with Section 69 of the Companies Act 2013 the Company had createda Capital Redemption Reserve of Rs. 12.5882 Crore equal to the nominal value of sharesbought back as an appropriation from the general reserve.
Management Discussion and Analysis Report
The Management's discussion and analysis report is set out in this Annual Report interms of the provisions of Regulation 34(2)(e) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015
Business Responsibility Report
During the year your Company continued to be top 500 listed companies in term of marketcapitalization. In compliance to Regulation 34(2)(f) of SEBI (LODR) Regulations 2015 BRRdisclosures have been integrated in the Annual Report.
2. BUSINESS AND OPERATIONAL REVIEW
Your Company produced 2.238 million tons of Pellets during the year 2018-19 incomparison to 2.327 million tons produced in the previous year. The quantity producedsurpassed the "Excellent" Target of 2.170 million tons as set in the MoU. YourCompany had sold 2.206 million tons of Pellets as against 2.301 million tons in theprevious year. Out of the total quantity sold exported quantity was 1.520 million tonswhich is about 69% of the total sales and balance 0.686 million tons was sold to domesticcustomers.
The Blast Furnace Unit (BFU) remained under suspension in view of unviable operation.The Company intended to restart BFU operation but due to uneconomic price of Pig Iron andhigh Coke Price the unit could not be restarted. Steps have been taken to make the unitviable on standalone basis through setting up of backward & forward integrationprojects. The Board of Directors in its 255 Meeting held on 13/11/2018 approved the DPRfor setting up of Coke Oven Plant under backward integration and DISP Plant under forwardintegration projects by the Company and carrying out the necessary modi cations to the BFUto make the unit economically viable at a total estimated capital cost of Rs. 836.90crores. The financial appraisal of the DPR was carried out by M/s IFCI Limited. YourCompany received the Terms of Reference from MoEF on 21/12/2018. Environmental ImpactAssessment (EIA) / Environment Mitigation Plan (EMP) studies are under way for submissionto get Environmental Clearance. M/s MECON the Consultant for the project have started thecollection of baseline data for the EIA/EMP reports.
A snapshot of production target vis-a-vis actual achievement with capacity utilizationand sales performance during last five years including current year are depicted at Table1 & 2.
Table 1: Capital Utilisation
(Qty. In Million Tons)
|Year ||MOU Target ||Actual Production ||Utilization of installed capacity in % |
|2018-19 ||2.170 ||2.238 ||64 |
|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 |
(Installed capacity of Pellet Plant is 3.500 million tons / annum).
(Qty : in Million Tons Value: Rs. In Lakhs)
Table 2: Sales Performance
|Year ||Qty ||Pellets Value ||Qty ||Pig Iron Value ||Qty ||Total Value |
|2018-19 ||2.206 ||1825.97 ||0.002 ||2.78 ||2.208 ||1828.75 |
|2017-18 ||2.300 ||1553.09 ||0.000 ||0.40 ||2.300 ||1553.49 |
|2016-17 ||1.387 ||868.72 ||0.000 ||0.07 ||1.387 ||868.79 |
|2015-16 ||0.409 ||198.45 ||0.001 ||1.35 ||0.410 ||199.80 |
|2014-15 ||0.680 ||626.87 ||0.001 ||1.97 ||0.681 ||628.84 |
(Note: Pig Iron includes Auxiliary)
Mineral Exploration Contracts
Ministry of Mines (MoM) Govt. of India has noti ed your Company under second provisioof sub section (1) of section 4 of the Mines and Minerals (Development and Regulation) Act1957 as Exploration Entity. National Mineral Exploration Trust (NMET) Ministry of MinesGovt. of India has allotted two blocks of NMET approved Mineral Exploration works with atotal value of Rs. 726.15 Lakhs plus GST in favour of your Company for carrying out G4level exploration works:
i. UDBUR GOLD BLOCK (extent - 202sqkm) in Mysore Dist. Karnataka;
ii. TIRUMARANKARADU IRON ORE BLOCK
(extent - 100sqkm) in Tirupur Tamil Nadu.
As per Work Plan approved by Technical cum Cost Committee (TCC) - NMET MoM yourCompany is carrying out site works of the allotted blocks in three stages:
Stage 1 Large Scale Geological Mapping; Stage 2 Detailed Geological Mapping; and Stage3 Scout Drilling
Status of work at Tirumankaradu Iron Ore Block:
Completed Stage 1 works and Interim Report of Stage 1 approved by NMET. However due toagitation by local villagers against the Mineral Exploration works being carried outStage 2 site works of TIOB is temporarily suspended w.e.f June 19 2018. Noting the sameNMET approved additional period of 6 months w.e.f the date of receipt of consent fromState Govt for carrying out balance approved works. Your Company is in liaison withDepartment of Geology and Mining Govt of Tamil Nadu for re-initiating Stage 2 works.
Status of work at Udbur Gold Block: Completed Stage 1 and 2 works and InterimReports of Stage 1 & 2 (part) submitted by your Company are approved by NMET. Rs.17609852/- inclusive of GST had been reimbursed to your Company by NMET Ministry ofMines Govt. of India towards expenses incurred on Stage 1 and Stage 2 (part) of MineralExploration.
As on the last day of the years the following additional ME Works under NMET fundingare in pipeline:
Neerbudhihal Limestone & Dolomite Block(s) (NLDB):
a. Government of Karnataka vide letter dtd. March 15 2019 have accorded permission toyour Company for carrying out G4 level ME works in two blocks of NLDB (E&W) inBagalkote (Dist) of Karnataka.
b. Technical cum Cost Committee (TCC- NMET) accorded technical consent for the work onApril 4 / 5 2019.
c. Your Company is pursuing with TCC-NMET for Financial approvals.
Your Company is also pursuing with Department of Mines and Geology Karnataka for MEWorks in Iron Ore sector.
Poomedu Iron Ore Block (PIOB)
a. NMET MoM approved G4 level (Stage 1- Large Scale Geological Mapping) of ME worksfor Iron ore in PIOB (extent 87 sqkm.) in Tirupur and Karur (Dists) of Tamil Nadu with atotal value of Rs. 52.61Lakhs plus GST.
b. NMET has accorded 6 months w.e.f. the date of receipt of consent from State Govt forcarrying out Stage 1 works.
c. Your Company is in liaison with Department of Geology and Mining Govt of Tamil Nadufor initiating the site works.
Operation and Maintenance Portal
The Operation and Maintenance Portal was created with primary objective of providingexpertise of your Company to other organizations to improve their ef ciency level and inthe process optimizing the resource utilization of the Company. The services arestructured on a fee based interlinking with the number of engineers and support staffdeployed to the concerned organizations.
M/s NMDC Donimalai: Your Company has taken up the Operation & Maintenance ofNMDC's 1.89 mtpa Bene ciation plant and 1.2 mtpa Pellet Plant at Donimalai Karnataka.Your Company's technical manpower was involved in pre-commissioning activities trial runsof the equipments etc and the plant has been successfully commissioned and is operating.
Modi cation jobs were also carried out by O&M team during the commissioning stageand continuous Pellet production commenced from September 30 2016. The present O & Mcontract is valid till July 2019.
M/s OMC South Kaliapani Mines: - M/s. OMC have awarded the work to your Companyfor taking up and completing the balance works and to get the plant commissioned. Totalawarded contract price for the balance work is Rs. 28.60 crores plus GST.
During 2018 the World steel market remained positive world crude steel productionreached 1808.6 million tons up by 4.6% compared to 2017. Crude steel productionincreased in most of the regions in 2018. Annual production of crude steel in Asia stoodat 1271.1 million tons in 2018 an increase of 5.6% compared to 2017. China's crude steelproduction in 2018 reached 928.3 Mt up by 6.6% on 2017. China's share of global crudesteel production increased from 50.3% in 2017 to 51.3% in 2018. India's crude steelproduction in 2018 was 106.5 Mt up by 4.9% on 2017. India has replaced Japan as theworld's second largest steel producing country. Japan produced 104.3 Mt in 2018 down 0.3%compared to 2017.
Worldsteel forecasts that global steel demand will reach 1735 Mt in 2019 an increaseof 1.3% over 2018. In 2018 global steel demand increased by 2.1%. In 2019 growth isstill expected but in a less favorable economic environment. China's deceleration aslowing global economy uncertainty surrounding trade policies and the political situationin many regions suggest a possible moderation in business con dence and investment.
Chinese steel demand is expected to remain robust flowing to government stimuli. In2019 the government is likely to heighten the level of stimulus which is expected toboost steel demand.
Having overcome the demonetisation and the Goods & Services Tax (GST)implementation issues the Indian economy is now expected to achieve faster growthstarting in the second half of 2019. While the scal de cit might weigh on publicinvestment to an extent with the new stable Govt. the wide range of continuinginfrastructure projects is likely to support growth in steel demand above 7% in both 2019and 2020.
Steel demand in the developed economies grew by 1.8% in 2018 following a resilient 3.1%growth in 2017. Worldsteel expects the demand to further decelerate to 0.3% in 2019 reecting a deteriorating trade environment.
Seaborne iron ore market performed better during 2018-2019 in comparison with previousyear. Average iron ore prices witnessed a jump of about 4.4%. Pellet market also witnessedconsiderable upward movement. Prices of pellets witnessed a robust growth between July'18and 1 week of October 18 due to robust demand in Chinese market in view of implementationof strong environmental pollution control measures on steel mills and rm steel margins.
Domestic iron ore pellet market also moved in tandem with international pellet pricesas pellet producers preferred to sell in overseas market whenever the market was buoyant.Domestic pellet market also witnessed significant jump during the year. The total exportof pellets from India is projected to be above 9 million tons during the year.
KIOCL Pellet sale prices also witnessed an increase over the previous year. The salesrealisation per ton of pellets increased by 22.62% during 2018-19 in comparison to theprevious year.
CAPEX AND GROWTH PLAN
For long term sustainability / viability of your Company in the competitive marketenvironment and forwards consistent steady growth your Board made the following effortsduring the year.
Commencement and Development of Devadari Iron Ore Mine
Govt. of Karnataka vide Gazette Notification dated 23/01/2017 reserved an area of470.40 ha in Devadari Range Sandur Taluk Bellary District for mining lease of Iron andManganese ore for captive utilization at Pellet Plant and Blast Furnace Unit at Mangaluru.Company had initiated actions for obtaining statutory clearances from authorities forexecution of mining lease deed. Mining Plan was approved on 08/03/2018 for production of 2mtpa iron ore and setting up of 2 mtpa crushing conveying & bene ciation plant. MoEF& CC Govt. of India had issued Terms of Reference on 16/05/2018 for conducting baseline study. For Environment clearance draft EIA/EMP along with Executive Summary had beensubmitted to Karnataka State Pollution Control Board (KSPCB) and Regional EnvironmentOffice Bellary for conducting public hearing and the same has been xed on June 25 2019.
On completion of Public Hearing Final EIA/EMP report including Public HearingProceedings will be submitted to MoEF & CC GoI for Environment Clearance. Companysubmitted Forest Clearance application in Form "A" on 16/03/2018 through onlineportal of MoEF&CC GoI for forest clearance. On acceptance of FC application by NodalOfficer GoK Company has submitted hard copy of forest clearance application on28/08/2018 to DCF Bellary for processing further. Tree enumeration and DGPS survey workhas been completed and soon DCF Bellary will forward the proposal to Nodal Officer GoK.
Company will undertake development of iron ore mines commissioning of bene ciationplant along with infrastructure development viz railway siding water pipeline powertransmission line conveyor corridor with capital investment of around Rs. 1500 - 2000crores. The iron ore produced from this mine will be utilized in the existing pellet andpig iron ore plants at Mangaluru. Setting up of pellet plant at site is envisaged at laterstage.
Backward and Forward Integration Projects at BFU
In order to make the Blast Furnace Unit viable on standalone basis your Company hasenvisaged projects for setting up of 1.8 Lakh TPA capacity Non-Recovery Coke Oven Plantwith 10 MW Cogeneration power plant as Backward Integration and a 2 Lakh TPA capacityDuctile Iron Spun Pipe (DISP) plant as forward Integration along with Pulverized CoalInjection System at the existing Blast Furnace Unit (BFU).
The Board of your Company in its 255 Meeting held on 13/11/2018 has approved theDetailed Project Report (DPR) for setting up these Forward Integration and BackwardIntegration projects and also for carrying out the necessary modi cations to the BlastFurnace Unit at an estimated total capital cost of Rs. 836.90 crores.
Your Company had submitted applications to MoEF for obtaining Terms of Reference (ToR)and the same had been received on 21/12/2018. M/s MECON Ltd. engaged as the TechnicalConsultant for obtaining the Environmental Clearance from MoEF and Consent forEstablishment from KSPCB for the project have commenced the collection of the baselinedata for preparation of EIA/EMP report in line with the ToR. The report is expected to beready by end of May 2019 and thereafter the same would be submitted to KSPCB forconducting the public hearing.
Setting up a 1 MWac Solar Plant at BFU premises Mangaluru
In order to support the Govt. of India's National Solar Mission your Company hascommitted to the Government of India to develop Renewable Energy Projects during the fiveyear period of 2015-19. It has since set up a 1.3MWp capacity Solar power plant at the BFUpremises Mangaluru which has been completed and the plant was inaugurated on January 302019 by Hon'ble Steel Minister in the presence of Senior Officials from Ministry of Steel.
M/s Infrastructure Development Corporation (Karnataka) Limited (M/s iDECK) haveprovided the Technical Consultancy for implementation of the project. M/s Enerparc EnergyPvt. Ltd the EPC contractor have carried out the Design Engineering ProcurementSupply Erection Testing Installation and Commissioning of a 1 MWac Solar PV Power Plantin the premises of Blast Furnace Unit Mangaluru. Power generation from the projectstarted from February 2019.
Setting up of a 5 MWac (6.5 MWp) Solar Power Plant in Karnataka State.
A consortium led by M/s. Aishwaryagiri Constructions Pvt. Ltd. Bengaluru have beenengaged as EPC Contractor for carrying out the "Design Engineering ManufactureInspection at supplier's works Supply Transport Procurement of land Storage of supplyitems Erection Testing Commissioning External transmission lines and right of way BayExtensions Power Evacuation System" for the development of 5MWac (6.5mwp) CaptiveSolar Power Plant in Karnataka. The EPC contractor has identified a land and has forwardedthe land documents which are being scrutinized from the legal perspective. As a parallelaction Application has been submitted for obtaining the necessary Govt. approvals /orders for the project.
JOINT VENTURE / MOU
Setting up 2 MTPA Pellet Plant on JV basis between KIOCL & RINL
Your Company had signed a MoU with M/s RINL Visakhapatnam for setting up a 2 MTPAcapacity Pellet Plant at RINL premises Visakhapatnam on Joint Venture. The Board of yourCompany at its 254 Meeting held on 05/10/2018 had approved the Detailed Project Report(DPR) prepared by M/s MECON for setting up of a 2 mtpa capacity Pellet Plant at the RINLpremises Visakhapatnam at a total capital cost of Rs. 1032.8 crores. The financialappraisal of the DPR was carried out by M/s IFCI Limited. The draft Share Holder'sAgreement has been approved by Boards of both the Companies. As a parallel action yourCompany have submitted the necessary application to MoEF for obtaining Terms of Reference.M/s MECON have been engaged as the Technical Consultant for obtaining the EnvironmentalClearance from MoEF and Consent for Establishment from Andhra Pradesh S t a t the P o l lu t i o n C o n t r o l B o a r d . For the aforesaid project M/s RINL have earmarked anarea measuring 112 acres and have engaged M/s UTI Infrastructure Tech and Services Ltd.Mumbai for carrying out the Valuation of the land which would form a part of their equityfor the project.
MoU with M/s SAIL
M/s KIOCL and M/s SAIL have entered into an agreement on 30/01/2019 to cooperate witheach other for exploring the Techno-economic feasibility for consideration of settting upof a pellet plant of suitable capacity under a Joint Venture. Both the parties intend toundertake joint TEFR for consideration of setting up of a pellet plant of suitablecapacity at the premises of SAIL's Bokaro Steel Plant (BSP) or at any other suitablelocation at SAIL's Integrated Steel Plants. A Task Force Team (TFT) has been constitutedby KIOCL and SAIL's Management to nalize the way forward. Task Force Team members havedeliberated for engaging a consultant for preparation of TEFR.
MODERNIZATION OF PELLET PLANT UNIT
Installation of a Barrel Type Blender Reclaimer of 1000 tph capacity
Your Company has placed an order for Rs. 17.60 crores exclusive of GST for DesignEngineering Manufacture Supply Transportation Unloading Handling at Site StorageErection Testing Integrating with the existing system Commissioning & carrying outthe Performance Guarantee Test of Barrel type blender Reclaimer of 1000 tph capacityincluding associated systems & facilities and Civil & Structural Works complete tobe accommodated at the existing shed no. 2 of the Pellet Plant Unit to integrate with theexisting system like the conveyor CB-86 using the same rails for long travel etc. Theadjacent equipment and plant will be in operation during the installation of thisequipment except during the integration period with the existing system.
Installation of pressure lters at Filter Plant
The existing Vacuum disc lters are not suitable to lter the iron ore sourced fromOdisha which has a high Alumina content high Blaine and is slimy in nature. The ltrationrate drops to as low as 20 tons per hour per lter as against the designed capacity of 120tons per hour. With this rate the total output of lter plant drops below the requirementof input to Pellet Plant i.e. 400 to 500 T/Hr. and the moisture level in the concentrategoes beyond 12 % as against the requirement of 9% to 10 % which adversely affects thepelletisation process in terms of physical quality of the Pellet and results in reducedproductivity with higher specific consumption of burnt lime bentonite furnace oil andelectric energy.
The Board of your Company in its 257 Meeting held on 26/03/2019 accepted theTechno-Economic Feasibility Report (TEFR) prepared by M/s MECON and accorded itsin-principle approval for oating tender for procurement and installation of PressureFilters at a total Capital Investment of Rs. 158.6 crores.
The ltration through the Vertical Pressure Filters gives the desired moisture level inthe lter cake and improvement in the Pellet quality. Further the Company would be able toincrease the percentage of Odisha ore for Pellet making thereby reducing the OPEX coupledwith the exibility of operating the Plant with ore sourced from any part of the country atlower cost providing the Company operational exibility and reduction of specific energyconsumption for ltration by around 50%. The Company would be in a position to achieve therated level of production capacity by processing the iron ore nes sourced from variouslocations and various clients including off-shore customers.
Your Company is taking needful action for procurement of the Vertical Pressure Filtersand also for nalizing a technical consultant for providing the necessary detailengineering services.
3. DIGITAL INDIA - SINGLE INTEGRATED
INFORMATION SYSTEM / ERP
To fulfill the "Digital India" initiative of Govt. of India and to leveragelatest Information and Communication Technology to build Company's competitive edge in themarket your Company is in the way of having a Single Integrated Information System / ERPapproach along with the up-gradation of existing IT infrastructure. The process ofselection of Project Management Consultants is currently in progress.
4. HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONS
Your Company believes in building positive employee-employer relationship by nurturinginitiatives innovations and aspirations of the employees as an integrated approach ofHuman Resource Management focusing on people to manage change and strive for continuedexcellence. Hence the human resource policies and practices of your Company are designedto be always sensitive to employees' needs. As on March 31 2019 the Company had 841employees on its rolls comprising of 261 Executives including Non-unionized Supervisors(31%) and 580 Non- Executive Employees (69%).
Table: 3 Show the breakup of employees under different categories on rolls of theCompany as on March 31 2019.
|Group ||Total ||SC ||ST ||Ex- service -men ||PwD ||No. of Women Employees |
|A ||225 ||43 ||12 ||-- ||5 ||11 |
|B ||36 ||2 ||2 ||-- ||- ||5 |
|C ||543 ||83 ||30 ||-- ||5 ||9 |
|D ||37 ||6 ||6 ||-- ||3 ||1 |
|Total ||841 ||134 ||50 ||-- ||13 ||26 |
Enhanced Productivity and Rationalized Manpower
Your Company had achieved the Labour Productivity (LP) of 21.80 MT/MD during 2018-19.The enhanced productivity and rationalized manpower could be achieved as a result ofjudicious recruitments building competencies and infusing a sense of commitment andpassion among employees. Trend of enhanced productivity and manpower rationalization since2016-17 onwards.
Compliance under the Persons with Disabilities Act 1995
Your Company ensures compliance under the Persons with Disabilities Act 1995. Suitableprovisions/modi cations are made in the workplace to meet the requirements of such personswith disability.
Prevention of Sexual Harassment of Women at Workplace
Your Company is committed towards prevention of sexual harassment of women at workplaceand takes prompt action in the event of reporting of any such incidents. Your Company'sSexual Harassment prevention procedures are in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013.It has duly constituted an Internal Complaint Committees (ICC) to redress SexualHarassment Complaints. All employees (permanent contractual temporary trainees) arecovered under this policy. The details of number of cases led and disposed off during theyear as required under the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013 are as follows:
(i) number of complaints led during the financial year: NIL
(ii) number of complaints disposed off during the financial year: NIL
(iii) number of complaints pending as at the end of the financial year: NIL
Empowerment of Women
Your Company is a Corporate life member of the Forum of Women in Public Sector (WIPS)a professional body functioning under the aegis of Standing Conference of PublicEnterprises (SCOPE). All women employees are life members of the said Forum. Co-ordinatorsare being nominated on rotation basis from the Company to liaison with WIPS Apex Body andSouthern Region. The Company nominates women employees to attend Annual Meet &Regional Meet of FORUM of WIPS every year. International women's day was celebrated on 8March 2019 in a be tting manner.
Industrial Relations and Employees Welfare
Your Company continued to maintain harmonious industrial relations co-operationbetween the elected representative bodies of employees and management ensuring no loss ofmandays. Human Resource policies and welfare schemes were continuously aligned with theCompany's goals and objectives and suitable amendments were carried out as per therequirement changed business conditions etc.
Recruitment & VRS
During the year Company had recruited 5 executives in different levels and 4 employeeswere separated under Voluntary Retirement Scheme.
Human Resource Development
Your Company believes in continous updation of knowledge and skills of it's HumanResource. Various Training Programmes including in-house training progammes nominationsfor external seminars conferences participation in training programs organized by DPEetc. were carried out towards this objectives. Performance Appraisal System for Executives& Supervisors was made online from the year 2018. HR Department has undertaken thecurrent state assessment to benchmark its people related practices to the PeopleCapability Maturity Model (PCMM) based on the MoU target for the year 2018-19. This studywas carried out through external agency QAI India Limited. As part of MoU target for theyear 2018-19 Human Resource Information System (HRMIS) is also implemented withinstipulated time thus action has been initiated to make complete employee related dataavailable online.
Particulars of Employees
Ministry of Corporate Affairs vide its notification dated June 5 2015 has exemptedGovernment Company with the applicability of Section 197 of the Companies Act 2013.However the remuneration received by the employees of the Company has not exceeded thelimit prescribed under Section 197 read with Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 during the Financial Year 2018-19.
Welfare of Retired Employees
During the year your Company has implemented Retired Employees Pension Scheme andRetired Employees Medical Schemes for the benefit of retired employees. Around 3000retired employees (including spouse) have already availed this scheme.
Public/Staff Grievance Redressal
Since inception Your Company has framed a well defined grievance procedure evolvedunder the 'Code of Discipline' Staff Grievances received are redressed to thesatisfaction of the aggrieved. With respect to public grievance as and when anycomplaints are received necessary remedial action is taken promptly. Complaints/grievances other than the staff grievance are categorized into customer/ consumercomplaints/grievances from the Contractors NGOs/General Public etc. The respectiveproject heads are empowered to dispose off the grievances concerning their areas. Linkagehas been provided to Centralized Public Grievances Redressal & Monitoring System(CPGRAMS) with effect from May 1 2011. The grievances received and disposed off by theCompany are reported to the administrative Ministry on monthly and quarterly basis. Theguidelines laid down by the Government of India in this regard are being strictlyfollowed. A Public Service Delivery (SEVOTTAM) portal has been created by Govt. of Indiafor assessing and improving the quality of services delivered to the citizens. The systemalso involves the identi cation of the services delivered quality of service itsobjective improvement of quality using innovative methods for developing businessprocesses and being more informative with the help of advanced information technology. Thesame is also available on the Company's website.
Trademark & Logo Registration
In pursuance to Section 23 (2) of the Trade Marks Act 1999 read with Rule 56 (1) ofthe Trade Mark Rules 2002 the trademark 'KUDREMUKH' and 'KUDREMUKH WITH HORSE FACEDLOGO' had been registered by the Trade Marks Registry in the name of your
Company under Class 16 of the Trade Marks Act 1999 vide its Certificate dated11/07/2018 and 05/09/2018 respectively. Registration is valid for 10 years from the dateof application i.e. 07/05/2013 and may then be renewed for a period of 10 years and alsoat the expiration of each period of 10 years.
5. CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) of SEBI (LODR) Regulations 2015 a separate section onCorporate Governance along with Certificate from Practising Company Secretary con rmingthe level of compliance is attached and forms a part of the Board's Report.
Directors and Other Key Managerial Personnel
The Board consists of nine members four of whom are executive or whole-time Directorstwo are non-executive Directors representing Ministry of Steel and three are IndependentDirectors. Remuneration and other details of the KMP's are mentioned in the extract of theAnnual Return.
Declaration of Independence by Independent Directors
Your Company has received necessary declaration under Section 149(7) of the CompaniesAct 2013 from each Independent Director that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (LODR)Regulations 2015. The Board of Directors at its 258 Meeting held on 21/05/2019 noted thedeclaration as made by the Independent Directors.
In terms of the provisions of Section 149 of the Companies Act 2013 and Regulation17(1)(a) of SEBI (LODR) Regulation 2015 for the year ended March 31 2019 your Companyhas one Independent Woman Director on its Board.
Changes in the Composition of the Board of Directors
In terms of Article 91 of the Articles of Association of the Company the President ofIndia is vested with the power to appoint the Directors of the Company from time to timeand also shall determine the term of office of such Directors. Accordingly the followingappointments on the Board of your Company were effected as per the directives of thePresident of India: -
Sri T. Saminathan was appointed as an Additional Director designated as Director(Commercial) with effect from 09/01/2019. Having so appointed Sri T. Saminathan holdsoffice till the date of ensuing Annual General Meeting by virtue of Section 160 of theCompanies Act 2013 read with Article 114 (xxxii) of the Articles of Association.
Sri Jagdish P. Joshi was appointed as an Additional Director designated as anIndependent Director of KIOCL with effect from 14/12/2018. Having so appointed SriJagdish P. Joshi holds office till the date of ensuing Annual General Meeting by virtue ofSection 160 of the Companies Act 2013 read with Article 114 (xxxii) of the Articles ofAssociation.
Appointments / Resignations of the Key Managerial Personnel
The Board accepted the resignation tendered by Sri S K Padhi Company Secretary and wasrelieved from sevices of the Company w.e.f. 26/11/2018. Further Sri P K Mishra had beenappointed as Company Secretary and Compliance Officer by the Board of Directors w.e.f.08/02/2019 and 27/11/2018 respectively.
Directors Retiring by Rotation
In terms of Section 152 (6) of the Companies Act 2013 Sri M.V. Subba Rao and SriSaraswati Prasad being longest in office shall retire by rotation at the ensuing AGM andbeing eligible for re-appointment offers themselves for re-appointment. The Boardrecommends their re-appointment.
Number of Meetings of the Board
The Board met 7 times during the year under review the details of which are given inthe Corporate Governance Report. The maximum interval between any two meetings did notexceed 120 days. The meetings were conducted in compliance with relevant regulations ofthe SEBI (LODR) Regulations 2015 and Secretarial Standard on Meetings of the Board ofDirectors (SS-1) issued by The Institute of Company Secretaries of India (ICSI).
Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 (5) of the Companies Act 2013 that:
a) In the preparation of the Annual Accounts for the Financial Year ended March 312019 the applicable Accounting Standards had been followed alongwith proper explanationrelating to material departure.
b) The Company has selected such Accounting Policies and applied them consistently andmade judgments & 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 and ofthe Profit & Loss of the Company for that period.
c) The Company has taken proper and sufficient care towards 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 Company have prepared the Annual Accounts on a going concern basis.
e) The Company has laid down Internal Financial Controls which are adequate and areoperating effectively.
f) The Company has devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedto this Report.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the Cost Audit records of the Pellet Plant Unitof the Company is required to be audited. The Board on the recommendations of the AuditCommittee has appointed M/s. PKR & Associates LLP Cost Accountants to audit the costaccounts of the Company for the Financial Year 2019-20.
As required under the Companies Act 2013 the remuneration payable to the Cost Auditoris required to be placed before the members' in the Annual General Meeting for their ratication. Accordingly a Resolution seeking members' rati cation for the remunerationpayable to M/s. PKR & Associates Cost Auditors is included at Item No. 9 of the Noticeconvening the Annual General Meeting.
The Cost Audit Report for the Financial Year 2017-18 was led with the Ministry ofCorporate Affairs on 13/08/2018. The Cost Audit Report for Financial Year 2018-19 is undernalization and will be submitted to the Ministry of Corporate Affairs within theprescribed period.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the
Company has appointed Sri S. Viswanathan Practicing Company Secretary for conductingthe Secretarial Audit of the Company for the Financial Year 2018-19 to 2020-21. TheSecretarial Auditor Report for the Financial Year 2018-19 forms part of the DirectorsReport.
The report of Comptroller & Auditor General of India (C&AG) under section143(6)(b) of the Companies Act 2013 along with reply of the Company is annexed to thisreport.
6. CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee. A Board approved Corporate Social ResponsibilityPolicy 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 anAnnexure.
7. AWARDS & RECOGNITIONS
During Financial Year 2018-19 the Company had received following Awards &Recoginitions:
1. "Best PSU Award in Value Growth Category" by "Governance Now".
2. First prize for the year 2017-18 "Rajbhasha Excellence Award".
3. "Outstanding Export Performance Award" for the year 2018-19 from"Mangaluru Customs Commissionerate".
8. KEY INITIATIVES
Environmental Management and Pollution Control Measures
Your Company is committed to preservation of ecology and prevention of pollution in itsmanufacturing activity. Company's Environmental Management System is certi ed to14001:2015 Standards. Some of the initiatives taken at plant level during the year are asunder:
Environmental friendly and pollution free Roof Top Solar Power Plants one atPellet Plant unit with a capacity of 83 Kwp and other at Blast Furnace Unit with acapacity of 294 Kwp are operational since year 2018. Additionally erection of solarpanels with a generation capacity of 1 MW in Blast Furnace Unit is commissioned in Nov2018 and is in operation since then.
The formation of concrete pavement for a length of 200 Metres adjacent Shed No.2is in Progress. The concrete haul road will reduce the fugitive dust emissions due tocontinuous movement of trucks transporting raw material from NMPT berth area.
Under Swachhata Abhiyan and to create awareness on clean environment variousclasses talks discourses are being conducted by inside and outside faculties /experts onupkeeping clean and hygienic environment for employees their dependents students; publicand related activities are being taken up in this regard on regular basis during thecurrent year. The topics considered are "No Plastic Zone" "WasteSegregation and Disposal" "General Hygiene" "Best out of waste"etc. This is besides taking up cleaning activities in and around plant as well as attownship and planting tree saplings in and around plant premises and public areas forcreating green belt.
The existing consent issued by KSPCB for air and water and hazardous waste isvalid till June 2021 and June 2020 respectively. The Environment Cell is meeting regularlyto deal with the issues concerning environmental pollution control EMPs KSPCBsuggestions etc.
Additional number of Mist type water sprinklers for dust suppression along theapproach road adjacent to MSDS has been commissioned. It is proposed to install watersprinkling systems along the road in OBL area.
The standard norms as prescribed by KSPCB in respect of air water quality isbeing monitored and adhered to in all the areas of work. The Company has complied withrequirement of Battery Management Hazardous Waste
Management Bio-medical Waste Management Water Act Air Act and EP Acts.
The Composting facility has been created for disposal of canteen waste toprevent the pollution in the premises and the same is being maintained and small gardenshave been created at the Township by planting flower and decorative plants.
Several varieties of plant saplings totaling to 30 Nos were planted on theoccasion of World Environment Day at the plant premises. Well known environmentalist Sri.Sammilan Shetty apprised the employees of KIOCL on "Role of Butter ies in TheEnvironment" by conducting a awareness programme at the Resource Centre.
The Onsite emergency plan approved by Directorate of Factories is in existence for bothPellet Plant and Blast Furnace Unit. The Company has formed area wise safety committeesand workers participation in these Safety Committees are ensured. The Safety CommitteeMeetings were conducted and Safety Inspections were carried out at regular intervals. Theobservations during inspection were reported to concerned departmental heads forcompliance. Suitable Personal Protective Equipments (PPE) issued to all employeesincluding Contract labors to protect them against work place hazards. Various trainingprogrammes were conducted to inculcate safety consciousness and to develop the humanresources. The onsite emergency mock drills are conducted once in 6 months in Pellet Plantand Blast Furnace Unit to check the emergency preparedness for any major accident. Inaddition to the National Safety Week the Company had also conducted Steel Safety Day onMarch 28 2019 as per the instruction of Ministry of Steel.
Your Company is certi ed with Environmental Management System - ISO 14001: 2015Quality Management System - ISO 9001: 2015 and Occupational Health & Safety ManagementSystem OHSAS - 18001: 2007. All Certifications are valid up to 12/03/2021.
Implementation of Official Language Policy
Your Company is the Convener of Bengaluru Town Official Language ImplementationCommittee (Undertakings) (TOLIC) and conducts regular Meetings and Joint Hindi Monthprogrammes for all Central PSUs in Bengaluru. During the Year 4 Hindi Workshops wereconducted to impart training to the employees for doing their official work in Hindi.
In addition to the above Your Company follows and implements the directives issuedfrom time to time by the Department of Official Language Ministry of Home Affairs andMinistry of Steel Government of India for the progressive use of Official Language.Employees of the Company are encouraged to work in Hindi with regular training cashawards and increments as per the Government directives. Hindi Workshops OrientationProgrammes are conducted regularly to create awareness impart knowledge and encourage theemployees to do their official work in Hindi. Official Language Implementation CommitteeMeetings take place at all the locations regularly and the progress during the previousquarters is reviewed in such Meetings. Hindi Fortnight was celebrated at all locations ofthe Company during September 2018. Hindi Programmes and several Hindi Competitions wereheld and prizes distributed to the winners. A valedictory function was organized on18/12/2018.
The Company is having an independent Vigilance Department headed by the Chief VigilanceOfficer. Preventive vigilance has been the thrust area of Vigilance Department all theseyears and the same has received focused attention during the year. A climate of preventivevigilance is generated to sensitize Officials at all levels about the ill effects ofcorruption and malpractices. Regular Structured Meeting of Vigilance with the managementis being conducted and issues related to e-governance Leveraging Technology TenderManagement Award of Works Recruitment Policy have been discussed. The department iscerti ed for compliance to
ISO Certification 9001:2015 standards to ensure continous improvement in QualityManagement System. The Certificate is valid upto 29/01/2022. Vigilance AwarenessWeek' was observed from 29/10/2018 to 03/11/2018 at all the locations / offices of theCompany and workshops & seminars were conducted during the week. Procurement bytendering-cum-e-reverse auction is in vogue from September 2010. The threshold value forthis is xed at Rs. . 5 Lakhs and above. During 2018-19 99.27% of cases by value arecovered under this. All payments are being made through electronic mode.
During the year 130 work/purchase/sale orders have been issued incorporating IntegrityPact clause covering 98.84% of contracts by value. No complaints were received under IP.62 scrutiny/examinations 46 checks/inspections were carried out during the year andcorrective actions if any were suggested. Necessary action is taken with regard to thecomplaints received during the year. Vigilance Department conducted 6 training programmesat three different locations covering 720 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 on the Table (RajyaSabha) in its 150 Report
Details of cases initiated / disposed off during 2018-19: -
1. No. of cases pending as on 31/03/2018: 1*
2. No. of cases initiated during 2018-19: NIL
3. No. of cases pending: NIL
* Difference of opinion exits between Disciplinary Authority & CVO. Matter referredto Administrtative Ministry.
Pending Audit Paras :
| ||Ref. to Para No./ ||Audit Observation ||Status |
| ||Audit Report/title || || |
|1 ||Para no.18.104.22.168 of Report no.2 of 2009-10. Inventory holding - Stores & Spares. ||KIOCL has not xed the level for all the items of stores and spares. Further it was having Rs. 55 crores as Non-moving stores and spares as on 31/03/2009. ||Inventory holding norms were xed for Raw materials and major stores and spares in April 2014 and the same was intimated to MoS on April 21 2014. The non-moving stores & spares stood at Rs. 4.59 crores including surplus stores of Rs. 1.48 crores as on 31/03/2019. |
|2 ||Para no.19.1.1 of Audit Report No.9 of 2009-10. Extra expenditure due to payment of higher tariff & congestion surchargeon transportation of iron ore. ||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 transportation of iron ore. ||The Company has made claims for refund before Railway Claims Tribunal (RCT) at Bengaluru and Bhubaneshwar. As the claim lodged with RCT Bhubaneshwar was dismissed the Company has led a case in the High Court Bhubaneshwar during January 2018. The Tribunal at Bengaluru allowed the application led by the Company by its order dated 07/12/2018 and directed SWR to compute the amount and pay with interest @ 6 % p.a. and in case SWR fails to comply with the order interest @ 9 % p.a is payable w.e.f 01/04/2019. |
|3 ||Para no. 15.2 of Audit Report No. 8 of 2012-13. Irregularities in procurement &i nventory 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 resultedinextra 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 justiable. ||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 PSU of Ministry of Steel. |
|4 ||Para no. 17.1 of Audit Report No. 13 of 2014. Injudicious expenditure on Pig Casting Machine in Blast Furnace Unit. ||Despite knowing that Blast Furnace Unit (BFU) was not viable on standalone basis and having closed its operations KIOCL ordered for setting up a third Pig 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. ||In order to improve the productivity of BFU M/s. MECON have suggested rd several modi cations. Installation of 3 PCM and introduction of pulverizing coal injection system were two prominent proposals. As the system of injection of coal requires high rd investment only installation of 3 PCM st was undertaken in the 1 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: (a) Safe working environment for maintenance personnel |
| || || ||(b) Shorter waiting period for Hot Metal collected in ladles. This avoids solidi cation of top layer of metal in the ladle (reduced skull formation) (c) Better surface nish of Pig Iron Cubes/Blocks (enhances market- ability) 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. The cost of raw materials in particular LAM Coke has increased abnormally and making negative contribution for producing Pig Iron. KIOCL constantly monitoring the price movement of all the raw materials especially LAM Coke for positive contribution. As and when the BFU operations resume the PCM3 will be put to use. |
Implementation of Public Procurement Policy for MSEs
In line with the Govt. of India guidelines as per MSMED Act 2006 and keeping in viewthe effective implementation of Public Procurement Policy for Micro and Small Enterprises(MSEs) Order 2012 following steps have been taken:
List of item components that could be sourced from MSEs are posted on theCompany's web-site at www.kioclltd.in for the information of MSE vendors.
Communication has been sent to all the registered vendors regarding the saidpolicy with the objective of achieving an overall procurement from MSEs. Further forenhancing the procurement from MSEs owned by SC/ST all the vendors are approached forcapturing necessary details and update the data bank.
During 2018-19 your Company placed orders for Goods & Services to theextent of Rs. 10.29 crores from MSE's which constituted 27.19% of the total procurementvalue of Rs. 37.85 crores.
Government e- Market (GeM)
During the Financial Year 2018-19 your Company had placed 34 orders on Governmente-Market (GeM) amounting to Rs. 5259262.50/-
Right to Information
Your Company has implemented Right to Information Act 2005 in order to provideinformation to citizens and to maintain accountability and transparency. The Company hashosted RTI manual on its website for providing access to all citizens of India and hasdesignated Central Public Information Officers (CPIOs) Assistant Public InformationOfficers (APIOs) and Appellate Authorities to provide informations to the applicants.During the year your Company received 52 applications and all applications were disposedoff as per the provisions of the Act.
Energy Conservation R&D Technology Absorption and Foreign Exchange Earnings andOutgo
Details of Energy Conservation R&D technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed to this report.
Dividend Distribution Policy
In terms of the Regulation 43A of SEBI (LODR) Regulations 2015 the Board of Directorsof your Company have adopted Dividend Distribution Policy. The Policy is available on thewebsite of the Company under link https://www.kioclltd.in/ user/cms/344.
The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in CorporateGovernance" by allowing paperless compliances by Companies through electronic mode.The Company has already embarked on this initiative. Members are requested to opt forreceipt of notices / documents through electronic mode by registering their e-mail ID withtheir respective Depository Participant or with the Company's Registrar and Transfer Agenti.e. M/s. Integrated Registry Management Services Private Limited. Please note that thesedocuments will also be available on the Company's website www.kioclltd.in.
Appreciations and Acknowledgement
Your Directors gratefully acknowledge the support co-operation and guidance receivedfrom the Hon'ble Minister for Steel Hon'ble Minister of State for Steel Hon'ble ChiefMinister of Karnataka the Secretary Ministry of Steel and other Officials of theMinistry of Steel as well as other Ministries of the Government of India Government ofKarnataka Andhra Pradesh Odisha Tamil Nadu 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 and esteemed customersshareholders stakeholders bankers and suppliers for their support and co-operation.
The performance is re ective of the hard work and perseverance of 841 dedicatedemployees working relentlessly for your Company's success. The Directors also appreciatethe continued and dedicated efforts put in by all the employees to overcome challengesfaced during the year.
|For and on behalf of the Board of Directors ||Sd/- |
| ||(MV Subba Rao) |
| ||Chairman-cum-Managing Director |
|Date : ||02/07/2019 |
|Place: ||New Delhi |