Directors Report of Kennametal India Ltd.
Jun 30, 2023
Your Directors are pleased to present the 58th Annual Report along with the Audited Financial Statements for the financial year ended June 30, 2023:
FINANCIAL RESULTS
|
('' In Million) |
||
|
Particulars |
FY23 |
FY22 |
|
Revenue from operations |
10771 |
9907 |
|
Profit before tax |
1176 |
1526 |
|
Less: tax expense |
299 |
385 |
|
Current tax |
286 |
405 |
|
Tax adjustment relating to earlier years |
11 |
(9) |
|
Deferred tax (credit)/charge |
2 |
(11) |
|
Profit after tax |
877 |
1141 |
|
Other comprehensive income/(loss) for the year, net of tax |
(15) |
(12) |
|
Total comprehensive income for the year |
862 |
1129 |
|
Add: balance brought forward from previous year |
6243 |
5637 |
|
Total available for appropriation |
7105 |
6766 |
|
Interim dividend |
(440) |
(527) |
|
Share based compensation adjustment |
(2) |
4 |
|
Balance transferred to balance sheet |
6663 |
6243 |
|
*Previous period figures have been regrouped and/or reclassified wherever necessary to confirm with the current period presentation in compliance with Ind AS requirement. |
||
STATE OF COMPANY''S AFFAIRS Operating results
Profit Before Tax (PBT) for the year was '' 1176 Million, down 22.9% over previous year. The Company''s profit was down in comparison with the previous year on account of one-time expenses incurred towards shifting of manufacturing facilities and movement of machines to a large new modern plant within the factory premises, slower recovery in China which affected the Companyâs exports and under absorption of costs due to lower manufacturing activity to correct the inventory .
Return on capital and cash flows
Return on Capital Employed (ROCE) was 17% in FY23 comparing to 24% in FY22. Return (PAT) on net worth was 13% in FY23 comparing to 18% in FY22. Net operational cash flow generated during the year increased from ''491 million in FY22 to ''1158 Million in FY23. The increase in the operating cash flows is mainly due to working capital improvement.
An Interim Dividend of '' 20/- per Equity Share of ''10/- (Rupees Ten only) each (200% on the Paid-up Share Capital of the Company) was declared by the Board for the financial year ended June 30, 2023 and May 25, 2023 was fixed as Record Date for the said purpose. The said Interim Dividend was paid on June 7, 2023. The Board of Directors has decided to treat the Interim Dividend as Final Dividend for the financial year ended June 30, 2023.
The Company has not transferred any amounts to general reserves for the financial year ended June 30,2023.
Dividend distribution policy
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [hereinafter referred as âSEBI (LODR) Regulations, 2015''], the Board of Directors of the Company had formulated a Dividend Distribution Policy. All the policies of the Company including Dividend Distribution Policy is available on the website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html CHANGES IN SHARE CAPITAL
There were no changes in the Share Capital of the Company during the financial year.
STATEMENT OF DEVIATION(S) OR VARIATION(S) IN SHARE CAPITAL
During the year under review, there was no instance to report Statement of Deviation(s) or Variation(s) in share capital as per Regulation 32 of the SEBI (LODR) Regulations, 2015.
CAPITAL STRUCTURE OF THE COMPANY
The Authorized Share Capital of the Company is ''219,782,400 divided into 21,978,240 (Twenty-One Million, Nine Hundred and Seventy-Eight Thousand, Two Hundred and Forty only) Equity Shares of ''10/- each. The Issued, Subscribed and Paid-up Share Capital of the Company as on date is ''219,782,400 divided into 21,978,240 Equity Shares of ''10/- each.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS
During the financial year under review, the Company has not issued Equity shares with Differential Voting Rights.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS
During the financial year under review, the Company has not issued Shares under Employee Stock Options.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES
During the financial year under review, the Company has not issued Sweat Equity Shares.
MATERIAL CHANGES AND COMMITMENTS
There has been no material changes and commitments, affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (âMD&A'') Report is annexed to this report as "Annexure I" as required under Regulation 34 of SEBI (LODR) Regulations, 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors Retiring by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Franklin Gerardo Cardenas Castro (DIN: 09050884), is due to retire by rotation at the forthcoming Annual General Meeting (âAGM'') and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment at the forthcoming AGM.
A brief profile of Mr. Franklin Gerardo Cardenas Castro as required under Regulation 36(3) of SEBI (LODR) Regulations, 2015 is furnished along with the Notice convening 58th AGM.
Annual Declaration from Independent Directors
The Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence as mentioned under sub-section (6) of Section 149 of the Companies Act, 2013 and as per the SEBI (LODR) Regulations, 2015 and criteria of independence from the Management. The Independent Directors possess the requisite integrity, expertise and experience (including proficiency) necessary for acting as Independent Directors of the Company.
On October 22, 2019, the Ministry of Corporate Affairs (âMCA'') had released the Companies (Accounts) Amendment Rules, 2019, the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. These rules have come into force on December 1, 2019, and your Company has complied with these requirements.
Directors'' appointment and remuneration
The policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director and remuneration for Key Managerial Personnel and other
employees'' forms part of Corporate Governance Report of this Annual Report. The web-link for the said policy is https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
No Director was materially interested in any contracts or arrangements existing during or at the end of the year in relation to the business of the Company.
No Director holds any shares in the Company as on June 30, 2023, except Mr. B. Anjani Kumar, Chairman & Non-Executive Independent Director, who holds 10 Equity Shares of ''10/- each in the Company.
Appointment / Cessation / Resignation of Directors
As detailed in the Corporate Governance report, it is worthwhile here to reiterate some of the changes to the constitution of the Board.
Mr. Devi Parameswar Reddy (DIN: 03450016), who acted as Director of the Company for over 4 years resigned from the Office of Director of the Company effective closing of business hours of February 10, 2023. The Board of Directors places its sincere appreciation for the commendable contribution to the Board by Mr. Devi Parameswar Reddy during his tenure as the Director of the Company.
There were no other changes to the composition to the Board of Directors of the Company during the financial year ending June 30, 2023. However, Ms. Kelly Golden Lynch (DIN: 10270042) was appointed as an Additional Director (Non-Independent, Non-Executive) of the Company effective August 11,2023. Further, her appointment as Director is being proposed to the Shareholders of the Company at the ensuing 58th Annual General Meeting of the Company to be held on November 10, 2023.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years from the date of transfer to unpaid dividend account. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividends to the IEPF. Further, shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF rules, however in one case the shares could not be transferred to IEPF by the depositories, despite the Company''s best endeavour, due to shareholderâs demat account was suspended. Details on the shares transferred to IEPFs are available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/investor-corner.html
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee and Risk Management Committee, the Board is of the opinion
that the Company''s internal financial controls were adequate and effective during FY23.
Accordingly, pursuant to the provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, report that:
⢠The applicable accounting standards have been followed in the preparation of the financial statements, along with proper explanations relating to material departures, if any;
⢠selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of June 30, 2023 and profit of the Company for the year ended on that date;
⢠proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
⢠prepared the annual accounts on a going concern basis;
⢠laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
⢠devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
During the financial year, your Company has not invited / accepted any Public Deposits pursuant to the provisions of Chapter V of the Companies Act, 2013.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES Scheme of Amalgamation
Your Company had a Wholly Owned Subsidiary viz., WIDIA India Tooling Private Limited which was merged with the Company vide the Order of the Hon''ble National Company Law Tribunal (âNCLTâ), Bengaluru bench dated October 17, 2022, which have been duly signed by Deputy / Assistant Registrar NCLT, Bengaluru bench on November 11,2022.
Your Company does not have any subsidiary as on year ended June 30, 2023 pursuant to the approval of the aforementioned Scheme. Hence, the requirement of enclosing financial statement of subsidiary in Form AOC-1 to the Board''s Report and preparation of Consolidated financial statements does not arise for the year ended June 30, 2023. The Company has taken due care of relevant accounting treatment prescribed under the said scheme and the post-merger compliances have been duly adhered.
As at June 30, 2023 there are no joint venture/s and/ or Associate/s of your Company.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statement is not applicable for the financial year ended June 30, 2023 considering the merger of its subsidiary viz., WIDIA India Tooling Private Limited with the Company as mentioned above.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements forming part of Annual Report. The Company has not provided any loans and guarantees during the Financial Year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
There were no changes in the nature of business of the Company during the financial year ended on June 30, 2023.
EVALUATION OF THE BOARD''S PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its performance and that of its Committees and Directors, including the Chairman of the Board. During the financial year, the evaluation exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. A separate exercise was carried out to evaluate the performance of each Director including the Board''s Chairman who were evaluated on parameters such as contribution at the meetings, independent judgment, attendance and other relevant aspects. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the Directors of the Company.
Your Company has laid out the criteria for evaluating the independence of Independent Directors and had in place a robust evaluation of performance of Directors, even before the promulgation of SEBI (LODR) (Amendment) Regulations, 2018.
The Company has a structured familiarization program for Independent Directors of the Company which is also extended to other Non-Executive Directors to ensure that Directors are familiarized with the operations of the Company; the markets where the Company operates; the product lines; strategy of the Company and its implementation status; Enterprise Risk Management and status of mitigation plans; Governance structure; Board protocols including the manner of conducting Board meetings; the roles, responsibilities and duties expected of a Director in India as per the extant Companies Act, 2013 and SEBI (LODR) Regulations, 2015 amongst others.
The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors and to the members of the Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management and understand status of strategy implementation, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.
A document on the familiarization programme is available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/corporate-governance.html
The Company also issues appointment letters to the Independent Directors which, inter-alia, incorporate their roles, duties and responsibilities. The format of the said letter of appointment is available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
Pursuant to Regulation 34(3) read with Schedule V(C) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance along with a certificate from Mr. Vijayakrishna K T, Practising Company Secretary regarding compliance of conditions of Corporate Governance is annexed as "Annexure ll A" and "Annexure ll B" respectively and a Certificate as required under Schedule V Part C(10) (i) of SEBI (LODR) Regulations, 2015 from Mr. Vijayakrishna KT, Practising Company Secretary is annexed as "Annexure lII" which forms part of this report. Further, in compliance with the SEBI (LODR) Regulations, 2015, your Board has adhered to the Corporate Governance requirements / Code.
As required by SEBI (LODR) (Amendment) Regulations, 2018, ''Annual Secretarial Compliance Reportâ issued by Mr. Vijayakrishna KT, Practising Company Secretary for the financial year ended June 30, 2023 is annexed as "Annexure IV" which forms part of this report.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Company''s Code of Conduct by your Directors and Senior Management of your Company, for the financial year under review, as required under SEBI (LODR) Regulations, 2015 is annexed as "Annexure V" and forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component of the Kennametal Value Business System (âKVBS''). The Code addresses the importance of fair dealing and compliance in all aspects of your Company''s business and focuses on the concept of doing the right thing every day.
Further details on the Code of Conduct and enforcement of the code are elucidated in the Corporate Governance report. Your Company insists on its employees to embrace the Code of Business Ethics & Conduct to ensure maintenance of strong ethical culture. The Code of Conduct is available on the website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
A Certificate from the Managing Director and the Chief Financial Officer dated August 07, 2023, on the Financial Statements of the Company for the financial year ended June 30, 2023 is annexed as "Annexure- VI" and forms part of this report.
WHISTLE-BLOWER POLICY / VIGIL MECHANISM
Even before the promulgation of Section 177 of the Companies Act, 2013, your Company had a Whistle Blower Policy / mechanism. Pursuant to Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board of Directors have approved and adopted robust Vigil Mechanism / Whistle Blower Policy. The Whistle Blower Policy provides the following avenues for stakeholders including employees to raise complaints freely:
⢠Audit Committee of Kennametal India Limited;
⢠Compliance Officer - Kennametal India Limited;
⢠Ethics Alert Line (toll-free and anonymous): 000-117 1-877781-7319
⢠K-Corp Ethics Mailbox: [email protected]; and
⢠Office of Ethics and Compliance Fax: 1 724-539-3839 Telephone: 1 724-539-4031, Mailing Address: Office of Ethics and Compliance, 1600 Technology Way, Latrobe, Pennsylvania (USA) 15650.
The Complainants duly receive feedback on action taken and this ensures that stakeholders including employees are protected against victimization for any "Whistle Blower" intimation made by them in good faith.
Your Company affirms that no personnel have been denied access to the Audit Committee. Whistle Blower Policy for vigil mechanism is available on website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Kennametal Ethics Helpline
Anyone can make a complaint about the violation of the Code of Conduct of the Company. Reports made to the helpline can be done via the phone or the web on a confidential and anonymous basis, where allowed by local law. The helpline is administered by an independent third-party and is available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.
A report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as "Annexure VII" to this report.
STATUTORY AUDITORS & THEIR REPORT
Messrs. Price Waterhouse & Co. Chartered Accountants LLP, Chartered Accountants (FRN: 304026E / E-300009) were appointed as Statutory Auditors of the Company at the 57th AGM held on November 11,2022, for a period of 5 (Five) years to hold the office until the conclusion of 62nd AGM.
The Independent Auditorsâ Reports to the Members on the Financial Statements of the Company for the financial year ended June 30, 2023 does not contain any qualification, reservation or adverse remarks. The notes on financial statements referred to in the Independent Auditorsâ Report are self-explanatory and do not call for any further comments.
There was no instance of fraud during the financial year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section 143(12) of the Companies Act, 2013 and Rules framed thereunder.
Mr. Vijayakrishna K.T, Practising Company Secretary (FCS: 1788 & COP: 980) carried out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2022-23 and submitted his report, which is annexed to this report as "Annexure VIII".
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company in respect of the products covered under the said rules are required to be audited by a Cost Accountant. Accordingly, the Board of Directors of the Company upon recommendation of the Audit Committee has re-appointed Messrs. K. S. Kamalakara & Co., Cost Accountants (Firm Registration No: 0000296), as the Cost Auditors of the Company for the financial year 2023-24. As required under Section 148 of the Companies Act,2013, the Shareholdersâ approval for the remuneration payable to Messrs K. S. Kamalakara & Co., Cost Auditors is being sought at the ensuing 58th AGM.
The Cost Audit Report for FY23 does not contain any qualification, reservation or adverse remarks.
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is annexed to this Report as "Annexure - I".
INTERNAL AUDITORS OF THE COMPANY
Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of Directors of the Company upon recommendation of the Audit Committee had appointed Messrs. Ernst & Young LLP as the Internal Auditors of the Company for the financial year 2022-23.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Section 188 of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations, 2015, the Related Party Transactions (âRPTs'') that were entered into during the financial year 202223 were at arm''s length basis and were in the ordinary course of business. Further, there were no material related party transactions during the financial year under review with the Directors or Key Managerial Personnel of the Company. All related party transactions were placed before the Audit Committee and the Board for approval as applicable under Section 188 of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations, 2015.
The Policy on RPTs as approved by the Board is uploaded on the Company''s website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html The Particulars of RPTs in Form AOC - 2 is
annexed to the Report as "Annexure IX".
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
Pursuant to Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of the remuneration of each Director to the median employee''s remuneration for the financial year 2022-23 and such other details as prescribed are set out in the "Annexure X" to this report.
A statement showing details of employees of the Company employed throughout the financial year and employees employed for part of the year who were in receipt of remuneration of '' 10.2/- million or more per annum or ''0.85/- million or more per month respectively is annexed herewith as "Annexure XI" to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL}) ACT, 2013
Your Company has an Internal Complaints Committee (âICCâ) as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Company had received 1 (one) complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year under review, which was duly redressed to the satisfaction of the complainant.
REVISION OF FINANCIAL STATEMENT OR THE REPORT
There was no revision of Financial Statements of the Company in the preceding three financial years.
INSOLVENCY AND BANKRUPTCY CODE, 2016
There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the FY 2022-23, there were no Insolvency Proceedings initiated against the Company and hence there were no instances of one-time settlement during the Financial Year.
INAUGURATION OF NEW METAL CUTTING INSERTS MANUFACTURING FACILITY
During the year under review, your Company had inaugurated its new metal cutting inserts manufacturing facility in the existing factory premises. This state-of-the-art facility supports your company to meet growing demand for Kennametal brand and WIDIA brand inserts from customers.
During the year under review, India Ratings & Research (the "Credit Rating Agencyâ), vide their report dated July 18, 2022, have assigned your Company, a Long-Term Issuer Rating of "IND AA-" and the outlook is Stable.
REMUNERATION RECEIVED BY MANAGING DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY
During the year under review, no Commission or Remuneration was paid to the Managing Director from the Holding / Subsidiary Company of your Company.
Your Company has sufficient insurance coverage not only on all its assets but also from most of the anticipated risks. All insurance policies are reviewed and renewed from time to time.
The Research, Development and Engineering (âRD&E''), works on new Product and Process Developments with specific focus on materials, coatings and machining technology. The RD&E, Bangalore works on the market requirements in terms of new products, custom solutions, cost saving projects, process developments, product benchmarking and basic research. It is also recognized by the Ministry of Science & Technology -Department of Scientific and Industrial Research - Government of India.
ENVIRONMENT HEALTH AND SAFETY (EHS)
A cleaner, healthier and safer environment is a value we demand of ourselves and others and is integrated into everything we do. Environmental, Health and Safety (EHS) are fundamental to your Company''s business and its ability to deliver the promise of safety to all the stakeholders, including its employees, customers, shareholders and the public. EHS vision is communicated to all, almost every day. Employees are encouraged and empowered to demonstrate their commitment to Kennametal''s EHS protocols.
Brief on some of the initiatives undertaken by the Company during the financial year under review are as follows:
Protecting Our Planet - Providing sustainable solutions by reducing the total environmental impact of our products and operations. During the year under review, the Company has got Hazardous Waste Authorization by the Karnataka State Pollution Control Board (KSPCB) which is valid for a period of 5 years. Your Company has been working towards protecting our planet by continuously improving the management of energy and natural resources, promoting recycling & recovery of materials and preventing pollution. 73% of the power consumption at your Companyâs premises is from renewable source of energy. Your Company is cognizant of preserving the ground water table and in this regard has been closely working with organized NGOs. ''One Billion Drops'' - 60 Percolation wells in identified parks under Dasarahalli Zone of BBMP (in the vicinity of KIL) are being implemented to improve the ground water table which helps to aid the growth of trees and plants in these parks, this will also help in avoiding water logging or wastage of water due to these rain-water harvesting pits.
⢠Lake Restoration project at Devanahalli - Restoration of quality of water in the lake, free from garbage, effluents & other pollutants:
⢠Revival of eco-system in and around the lake by creating microclimate for aquatic flora & fauna;
⢠Sustained ground water table, water conservation both in quantity & quality;
⢠Flood mitigation and erosion control; improved vegetation & good oxygen.
⢠Urban Afforestation Project - 10,000 saplings were planted to improve Karnatakaâs natural green cover (Miyawaki type plantation in Government approved land/area at S. Bingipura). The plantation will be maintained for 2 years. This urban afforestation project will ensure a diverse and firmly rooted forest cover in the area and will positively impact the ecosystem.
Your Company continued to monitor the hazardous and non-hazardous waste, according to waste stream and disposal route, with performance assessed on the basis of waste intensity. These initiative will add value to the society and cater to the cause of sustainable development.
In addition to the above and as part of its efforts to reduce consumption of paper and thereby protect the environment, your Company has ensured that electronic copies of the Annual Report and the notice of the 58th AGM are being sent to all such Members whose e-mail addresses are registered with the Company / its Registrar and Transfer Agent.
To the other Members, physical copies of the Annual Report and Notice of the 58th AGM are being sent through permitted modes of dispatch. However, Members who have received the said documents in electronic mode but desire to seek physical copies of the same, can send their request to the Company Secretary of the Company at [email protected]
Safety Performance:
100% Safety - Pursuing a goal of zero injuries, illnesses, and incidents by living the belief that all are preventable. Your Company is pursuing the goal of zero incidents through senior leader ownership of safety, preventative actions and processes, and by establishing leadership roles for employees in safety.
As part of continual initiatives in raising the bar of safety performance, your Company has during FY23 brought about considerable improvements in the safety performance:
ISO 14001 & 180 45001: Your Company was re-certified for the ISO 14001 the Environmental Management System and ISO 45001 the Occupational Health and Safety Management system by TUV, a third-party agency without any Non-conformance.
EHS regulatory compliance: The Company strives to meet all applicable EHS regulatory compliance by regular review mechanism and regular updates are provided to the Management.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 134(3) (o) of the Companies Act,2013 and rules made thereunder, the Corporate Social Responsibility Policy of the Company and initiatives undertaken by the Company on CSR activities during the financial year ended June 30, 2023, are set out in "Annexure XII" to this report. The CSR Policy is available on Company''s website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
Your Company has spent ''19.22 million on the CSR for the year 2022-23 as against the total budget of ''19.21 million, thereby spending an excess of '' 2,628/-.
PERSONNEL / INDUSTRIAL RELATIONS
During the financial year under review, your Company maintained cordial industrial relations at all levels. Your Directors record their appreciation for the contribution made by the employees.
Enterprise Risk Management (ERM) at the Company is driven by the Risk Management Committee and Board of Directors through their routine oversight responsibilities. The Management team plays a primary role in identification, monitoring and minimizing risks as also to identify business opportunities and threats. As a process, any risk associated with the business is identified and prioritized based on severity, occurrence and effectiveness of detection. The Risks are being reviewed by the Management team periodically and reported to the Risk Management Committee at regular intervals for their review. The Department Leaders have the responsibility to monitor and implement the ERM framework approved by the Risk Management Committee.
The Company has formulated a Risk Management Policy and Risk Committee Charter and a mechanism to inform the Risk Management Committee of the Board about the risk assessment activity performed from time to time. The detailed Risk Management mechanism is provided in the
Management Discussion and Analysis (MD&A) Report.
The Risk Management Committee is constituted with the Board of Directors of the Company as its members. The Chairperson of the Committee is Ms. Bhavna Bindra. As an established practice, the Board of Directors are being updated on risks identification and steps taken to mitigate the same. Risk Management Policy and Charter are uploaded on the Company''s website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Company has also been employing the services of Ernst and Young LLP (''EYâ), India as its Internal Auditors and EY India regularly conducts internal audits of various parts of the company''s operations, as per an Annual Audit Plan which is agreed every year with the Audit Committee of the Board.
Pursuant to Section 92(3) of the Companies Act, 2013 read with applicable rules, a copy of the Annual Return for the FY 2022-23 is uploaded on the website of the Company and the same is available at https://www.kennametal.com/in/en/about-us/kN-finandals/corporate-governance.html
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulations, 2015 your Company is required to include Business Responsibility & Sustainability Report (BRSR) in the Annual Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective. The BRSR is enclosed as "Annexure XIII" to the Board''s Report.
The Company has adopted various policies / codes which are reviewed by the Board and its Committees at regular intervals and are amended as and when required. These Policies / Codes are available on the website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Board of Directors met Five (5) times during the financial year 2022- 23. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
The Agenda of the Meeting is circulated to the Directors in advance. The Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal and approval.
COMMITTEES OF THE BOARD OF DIRECTORS
Details of memberships and attendance of various Committee Meetings of the Company including a separate Meeting of the Independent Directors are given in the Corporate Governance Report.
COMPLIANCE WITH THE APPLICABLE SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on the Board Meetings and General Meetings.
Your Directors place on record their appreciation for the untiring efforts and unflinching commitment of the employees of your Company and the vendors who were instrumental in maintaining manufacturing excellence, so as to ensure customer delight. Your Directors also place on record their sincere appreciation for the continued support and cooperation of the investor community, the Companyâs bankers, the regulatory authorities and the Companyâs customers in FY 23.
For and on behalf of the Board of Directors of Kennametal India LimitedB. Anjani Kumar Vijaykrishnan Venkatesan
Chairman & Independent Director Managing Director
DIN:00022417 DIN:07901688
Bengaluru August 30, 2023
Jun 30, 2022
Your Directors are pleased to present the 57th Annual Report along with the Consolidated and Standalone Audited Financial Statements for the financial year ended June 30, 2022:
|
FINANCIAL RESULTS |
('' In Million) |
|||
|
Particulars |
Consolidated |
Standalone |
||
|
FY22 |
FY211 |
FY22 |
FY211 |
|
|
Total revenue |
9,907 |
8,537 |
9,907 |
8,114 |
|
Profit before exceptional items and tax |
1,526 |
995 |
1,530 |
904 |
|
Add/less-exceptional items income/(expense) |
- |
(10) |
- |
(10) |
|
Profit after exceptional items and before tax |
1,526 |
985 |
1,530 |
894 |
|
Less: Tax Expense |
385 |
252 |
385 |
228 |
|
Current tax |
405 |
253 |
405 |
232 |
|
Deferred tax charge/ (credit) |
(11) |
(1) |
(11) |
(4) |
|
Tax adjustment relating to earlier years |
(9) |
- |
(9) |
- |
|
Profit after tax |
1,141 |
733 |
1,145 |
666 |
|
Other comprehensive income for the year, net of tax |
(12) |
1 |
(12) |
1 |
|
Total comprehensive income for the year |
1,130 |
734 |
1,133 |
667 |
|
Add: balance brought forward from previous year |
5,637 |
5,337 |
5,514 |
5,282 |
|
Total available for appropriation |
6,767 |
6,071 |
6,647 |
5,949 |
|
Dividend |
527 |
440 |
527 |
440 |
|
Share based compensation adjustment |
(3) |
(6) |
(4) |
(5) |
|
Balance transferred to balance sheet |
6,243 |
5,637 |
6,124 |
5,514 |
An Interim Dividend of ''24/- per Equity Share of ''10/- (Rupees Ten only) each (240% on the Paid-up Share Capital of the Company) was declared by the Board for the financial year ended June 30, 2022 and May 25, 2022 was fixed as Record Date for the said purpose. The said Interim Dividend was paid on June 8, 2022. The Board of Directors have decided to treat the Interim Dividend as Final Dividend for the financial year ended June 30, 2022.
The Company has not transferred any amounts to general reserves for the financial year ended June 30, 2022.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [hereinafter referred as âSEBI (LODR) Regulationsâ], the Board of Directors of the Company had formulated a Dividend Distribution Policy, said Policy is available on the website of the Company at https:www.kennametal.com/in/en/about-us/kil-financials/policies.html
The consolidated Profit Before Tax and Exceptional items was ''1,526/-million for FY22. The Companyâs performance for the year has shown
substantial improvement in comparison with the previous year on account of sharper focus on initiatives to boost market leadership, cost control measures and higher absorption of costs due to higher manufacturing levels.
There were no changes in the Share Capital of the Company during the financial year.
CAPITAL STRUCTURE OF THE COMPANY
The Authorized Share Capital of the Company as on date is ''219,782,400 divided into 21,978,240 (Twenty One Million, Nine Hundred and Seventy Eight Thousand, Two Hundred and Forty only) Equity Shares of ''10/- each. The Issued, Subscribed and Paid-up Share Capital of the Company as on date is ''219,782,400 divided into 21,978,240 Equity Shares of ''10/- each.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS
During the financial year under review, the Company has not issued Shares with Differential Voting Rights.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS
During the financial year under review, the Company has not issued Shares under Employee Stock Options.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES
During the financial year under review, the Company has not issued Sweat Equity Shares.
MATERIAL CHANGES AND COMMITMENTS
There has been no material changes and commitments, affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MD&A) Report is annexed to this report as "Annexure I" as required under Regulation 34 of SEBI (LODR) Regulations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors Retiring by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Parameswar Reddy, is due to retire by rotation at the forthcoming Annual General Meeting (''AGM'') and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment at the forthcoming AGM.
Annual Declaration from Independent Directors
The Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence as mentioned under sub-section (6) of Section 149 of the Companies Act, 2013 and as per the SEBI (LODR) Regulations, 2015 and criteria of independence from the Management.
On October 22, 2019, the Ministry of Corporate Affairs (''MCA'') had released the Companies (Accounts) Amendment Rules, 2019, the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. These rules have come into force on December 1, 2019, and your Company has complied with these requirements.
The policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director and remuneration for Key Managerial Personnel and other employees'' forms part of Corporate Governance Report of this Annual Report along with the web-link of the policy. The Independent Directors possess the requisite expertise and experience (including proficiency) necessary for acting as Independent Directors of the Company.
No Director was materially interested in any contracts or arrangements existing during or at the end of the year in relation to the business of the Company.
No Director holds any shares in the Company as on June 30, 2022, except Mr. B. Anjani Kumar, Chairman & Non-Executive Independent Director, who holds 10 Equity Shares of ''10/- each in the Company.
Appointment / Cessation / Resignation of Directors:
As detailed in the Corporate Governance report, it is worthwhile here to reiterate some of the changes to the constitution of the Board.
Ms. Colleen Wood Cordova, who acted as Director of the Company for
over 5 years resigned from the Office of Director of the Company effective from November 12, 2021 consequent upon her retirement from Kennametal Inc (Ultimate holding Company). The Board of Directors places its sincere appreciation for the commendable contribution to the Board by Ms. Colleen Wood Cordova during her tenure as the Director of the Company.
Mr. Franklin Gerardo Cardenas Castro, joined as an Additional Director on the Board of the Company effective February 5, 2021. Mr. Franklin is the President of the Infrastructure segment at Kennametal Inc. Mr. Franklin''s appointment had been approved by the Shareholders at the 56th AGM of the Company held on November 10, 2021.
Ms. Kelly Marie Boyer was inducted, as an Additional Director on the Board of the Company effective May 11, 2022. Ms. Kelly Marie Boyer''s appointment was approved by the Shareholders by way of passing resolution through Postal Ballot on June 15, 2022.
A brief profile of the Director being re-appointed as required under Regulation 36(3) of SEBI (LODR) Regulations, 2015 is furnished along with the Notice convening 57th AGM.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years from the date of transfer to unpaid dividend account. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year, the Company has transferred the unclaimed and unpaid dividends to the IEPF. Further, shares on which dividends were unclaimed for seven consecutive years were transferred as per the requirements of the IEPF rules, however in one case the shares could not be transferred to IEPF by the depositories, despite the Companyâs best endeavour, due to shareholders demat account being suspended. Said details are available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/investor-corner.html
DIRECTORS'' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee and Risk Management Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY22.
Accordingly, pursuant to the provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, report that:
⢠the applicable accounting standards have been followed in the preparation of the financial statements, along with proper explanations relating to material departures, if any;
⢠they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of June 30, 2022 and profit of the Company for the year ended on that date;
⢠they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
⢠they have prepared the annual accounts on a going concern basis;
⢠they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
⢠they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
During the financial year, your Company has not invited / accepted any Public Deposits pursuant to the provisions of Chapter V of the Companies Act, 2013.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company has a Wholly Owned Subsidiary, âWIDIA India Tooling Private Limited" which was incorporated on December 13, 2018. The audited financial statements of the Wholly Owned Subsidiary for the financial year ended June 30, 2022, are consolidated with the financial statements of the Company for the financial year under review. Said financial statements are available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/financial-results.html
The statement containing salient features of the financial statement of subsidiary in Form AOC-1 is enclosed as ''''Annexure II" to the Board''s Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated financial statements of the Company and its subsidiary for FY 2021-22 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the SEBI (LODR) Regulations as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statements together with the Independent Auditorâs Report thereon forms part of this Annual Report.
The Board of Directors at its meeting held on December 4, 2020 had approved a Scheme of Amalgamation (''Scheme'') for the merger of its Wholly Owned Subsidiary, WIDIA India Tooling Private Limited (WITPL'') with the Company. Pursuant to the SEBI (LODR) Regulations, 2015, the Company had furnished the Scheme details to BSE Limited. The appointed date of the Scheme is April 1,2021. The Company had received approval for the said Scheme from the Shareholders and Unsecured Creditors of the Company at their meetings held on April 12, 2021 convened by Hon''ble National Company Law Tribunal (''NCLT''), Bengaluru Bench and the petition to that effect has been filed with NCLT on April 29, 2021. The matter being duly heard by the Honâble NCLT, the Bench has reserved the matter for orders.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements forming part of Annual Report. The Company has not provided any loans and guarantees during the Financial Year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.
CHANGE IN THE NATURE OF BUSINESS
There were no changes in the nature of business of the Company during the financial year ended on June 30, 2022.
EVALUATION OF THE BOARD''S PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its performance and that of its Committees and Directors, including the Chairman of the Board. During the financial year, the evaluation exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. A separate exercise was carried out to evaluate the performance of each Director including the Board''s Chairman who were evaluated on parameters such as contribution at the meetings, independent judgment, attendance and other relevant aspects. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the Directors of the Company.
Your Company has laid out the criteria for evaluating the independence of Independent Directors and had in place a robust evaluation of performance of Directors, even before the promulgation of SEBI (LODR) (Amendment) Regulations, 2018.
The Company has a structured familiarization program for Independent Directors of the Company which is also extended to other Non-Executive Directors to ensure that Directors are familiarized with the operations of the Company; the markets where the Company operates; the product lines; strategy of the Company and its implementation status; Enterprise Risk Management and status of mitigation plans; Governance structure; Board protocols including the manner of conducting Board meetings; the roles, responsibilities and duties expected of a Director in India as per the extant Companies Act, 2013 and SEBI (LODR) Regulations, 2015 amongst others.
The Board of Directors have complete access to the information within the Company. Presentations are regularly made to the Board of Directors and to the members of the Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management and understand status of strategy implementation, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.
During the year, a structured induction program was conducted for the new Director on Board viz., Ms. Kelly Marie Boyer (appointed effective May 11, 2022). The said induction program exhaustively covered the operations of the Company; the markets where the Company operates; the product lines; strategy of the Company and its implementation status; Enterprise Risk Management and status of mitigation plans; Governance structure; Board protocols including the manner of conducting Board meetings; the roles, responsibilities and duties expected of a Director in India as per the extant Companies Act, 2013 and SEBI (LODR) Regulations, 2015, amongst others. A document on the familiarization programme is available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/corporate-governance.html
The Company also issues appointment letters to the Independent Directors which, inter-alia, incorporate their roles, duties and responsibilities. The format of the said letter of appointment is available on our website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
Pursuant to Regulation 34(3) read with Schedule V(C) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance along with a certificate from Mr. Vijayakrishna K T, Practising Company Secretary regarding compliance of conditions of Corporate Governance is annexed as "Annexure Ill Aâ and "Annexure Ill B" respectively and a Certificate as required under Schedule V Part C(10) (i) of SEBI (LODR) Regulations, 2015 from Mr. Vijayakrishna KT, Practising Company Secretary is annexed as "Annexure IV" which forms part of this report. Further, in compliance with the SEBI (LODR) Regulations, 2015, your Board has adhered to the Corporate Governance requirements / Code.
As required by SEBI (LODR) (Amendment) Regulations, 2018, Annual Secretarial Compliance Report'' issued by Mr. Vijayakrishna KT, Practising Company Secretary for the financial year ended June 30, 2022 is annexed as "Annexure V" which forms part of this report.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Company''s Code of Conduct by your Directors and Senior Management of your Company, for the financial year under review, as required under SEBI (LODR) Regulations, 2015 is annexed as ''''Annexure VI" and forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component of the Kennametal Value Business System (''KVBS''). The Code addresses the importance of fair dealing and compliance in all aspects of your Company''s business and focuses on the concept of doing the right thing every day.
Further details on the Code of Conduct and enforcement of the code are elucidated in the Corporate Governance report. Your Company insists on its employees to embrace the Code of Business Ethics & Conduct to ensure maintenance of strong ethical culture. The Code of Conduct is available on the website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
A Certificate from the Managing Director and the Chief Financial Officer dated August 11, 2022, on the Financial Statements of the Company for the financial year ended June 30, 2022 is annexed as "Annexure- VII" and forms part of this report.
WHISTLE-BLOWER POLICY /VIGIL MECHANISM
Even before the promulgation of section 177 of the Companies Act, 2013, your Company had a Whistle Blower Policy / Mechanism. Pursuant to
section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board of Directors have approved and adopted robust Vigil Mechanism'' (Whistle Blower Policy''). The Whistle Blower Policy provides the following avenues for stakeholders including employees to raise complaints freely:
⢠Audit Committee of Kennametal India Limited;
⢠Compliance Officer - Kennametal India Limited;
⢠Ethics Alert Line (toll-free and anonymous): 000-117 1 -877-781 -7319
⢠K-Corp Ethics Mailbox: [email protected]; and
⢠Office of Ethics and Compliance Fax: 1 724-539-3839 Telephone: 1 724-539-4031, Mailing Address: Office of Ethics and Compliance, 1600 Technology Way, Latrobe, Pennsylvania (USA) 15650.
The Complainants duly receive feedback on action taken and this ensures that stakeholders including employees are protected against victimization for any "Whistle Blower" intimation made by them in good faith. Your Company affirms that no personnel have been denied access to the Audit Committee.
Whistle Blower Policy for vigil mechanism is available on website of the Company at https:www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Kennametal Ethics Helpline
Anyone can make a complaint about the violation of the Code of Conduct of the Company. Reports made to the helpline can be done via the phone or the web on a confidential and anonymous basis, where allowed by local law. The helpline is administered by an independent third-party and is available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.
A report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as "Annexure VIII" to this report.
STATUTORY AUDITORS & THEIR REPORT
Messrs Walker Chandiok & Co LLP Chartered Accountants (FRN 001076N/N500013) were appointed as Statutory Auditors of the Company at the 52nd AGM held on November 07, 2017, for a period of 5 (Five) years to hold the office until the conclusion of 57th AGM to be held on November 11,2022.
Further, the Board and the Audit Committee at their respective meetings held on August 12, 2022, recommended the appointment of Messrs Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E / E-300009 as the Statutory Auditors of the Company to hold office from the conclusion of the 57th AGM till conclusion of 62nd AGM for a term of 5 consecutive years. Messrs Price Waterhouse & Co. Chartered Accountants LLP appointment has been recommended for consideration and approval of the Shareholders at the ensuing 57th AGM to be held on November 11,2022.
The Independent Auditors'' Reports to the Members on the Standalone and Consolidated Financial Statements of the Company for the financial year ended June 30, 2022 do not contain any qualification, reservation or adverse remarks. The notes on financial statements referred to in the Independent Auditors'' Report are self-explanatory and do not call for any further comments.
There was no instance of fraud during the financial year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section 143(12) of the Companies Act, 2013 and Rules framed thereunder.
Mr. Vijayakrishna K.T, Practising Company Secretary (FCS: 1788 & COP: 980) carried out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2021-22 and submitted his report, which is annexed to this report as "Annexure IX".
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company in respect of the products covered under the said rules are required to be audited by a Cost Accountant. Accordingly, the Board of Directors of the Company upon recommendation of the Audit Committee has re-appointed Messrs K. S. Kamalakara & Co., Cost Accountants (Firm Registration No: 0000296), as the Cost Auditors of the Company for the financial year 2022-23. As required under Section 148 of the Companies Act,2013, the Shareholders'' approval for the remuneration payable to Messrs K. S. Kamalakara & Co., Cost Auditors is being sought at the ensuing 57th AGM.
The Cost Audit Report for FY22 does not contain any qualification, reservation or adverse remarks.
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is annexed to this Report as Annexure - I.
INTERNAL AUDITOR OF THE COMPANY
Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of Directors of the Company upon recommendation of the Audit Committee had appointed Messrs Ernst & Young LLP as the Internal Auditors of the Company for the financial year 2021-22.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (LODR) Regulations, 2015, the Related Party Transactions (âRPTs'') that were entered into during the financial year 2021 -22 were at arm''s length basis and in the ordinary course of business. Further, there were no material related party transactions during the financial year under review with the Directors or Key Managerial Personnel of the Company. All related party transactions were placed before the Audit Committee and the Board for approval as applicable under Section 188 of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations, 2015.
The Policy on RPTs as approved by the Board is uploaded on the Company''s website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html The Particulars of RPTs in Form AOC - 2 is
annexed to the Report as "Annexure X".
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
Pursuant to Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of the remuneration of each Director to the median employee''s remuneration for the financial year 2022 and such other details as prescribed are set out in the "Annexure XI" to this report.
A statement showing details of employees of the Company employed throughout the financial year and employees employed for part of the year who were in receipt of remuneration of ''10.2/- million or more per annum or ''0.85/- million or more per month respectively is annexed herewith as "Annexure XII" to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has an Internal Complaints Committee (âICC'') as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
There were no complaints lodged to the ICC under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year under review.
REVISION OF FINANCIAL STATEMENT OR THE REPORT
There was no revision of Financial Statements of the Company in the preceding three financial years.
INSOLVENCY AND BANKRUPTCY CODE, 2016
There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the FY-2021-22, there were no Insolvency Proceedings initiated against the Company and hence there were no instances of one-time settlement during the Financial Year.
Your Company has not obtained any rating from credit rating agencies for the securities during the year. However, after the end of the financial year of the Company, India Ratings & Research (the âCredit Rating Agencyâ), vide their report dated July 18, 2022, have assigned the Company, a Long-Term Issuer Rating of âIND AA-'' and the Outlook is Stable.
REMUNERATION RECEIVED BY MANAGING DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY
During the year under review, no Commission or Remuneration was paid to the Managing Director from the Holding / Subsidiary Company of your Company.
Your Company has sufficient insurance coverage not only on all its assets but also from most of the anticipated risks. All insurance policies are reviewed and renewed from time to time.
The Research, Development and Engineering (âRD&E''), works on new Product and Process Developments with specific focus on materials, coatings and machining technology. RD&E, Bangalore works on the market requirements in terms of new products, custom solutions, cost saving projects, process developments, product benchmarking and basic research. It is also recognized by the Ministry of Science & Technology -Department of Scientific and Industrial Research- Government of India.
ENVIRONMENT HEALTH AND SAFETY (EHS)
A cleaner, healthier and safer environment is a value we demand of ourselves and others and is integrated into everything we do. Environmental, Health, and Safety (EHS) are fundamental to your Companyâs business and its ability to deliver the promise of safety to all the stakeholders, including its employees, customers, shareholders and the public. EHS vision is communicated to all, almost every day. Employees are encouraged and empowered to demonstrate their commitment to Kennametalâs EHS protocols.
A brief on some of the initiatives undertaken by the Company during the financial year under review are as follows:
Protecting Our Planet - Providing sustainable solutions by reducing the total environmental impact of our products and operations. During the year under review, your Company has got reclassified as an âorangeâ category industry by the authorities with a validity of 10 years. Your Company has been working towards protecting our planet by continuously improving the management of energy and natural resources, promoting recycling & recovery of materials and preventing pollution. 67.31% of the power consumption at your Companyâs premises is from renewable source of energy. Added to this, the usage of power in the new buildings of the Company has reduced due to the architecture of the structures providing enough ventilation. Your Company is cognizant of preserving the ground water table and has in this regard been closely working with organized NGOs. Your company has completed project named âOne Billion Dropsâ to conserve the rainwater runoff by putting up 86 percolation pits. These percolation pits will improve the ground water table at the identified biodiversity park.
Your Company continued to monitor the hazardous and non-hazardous waste, according to waste stream and disposal route, with performance assessed on the basis of waste intensity.
In addition, as part of its efforts to reduce consumption of paper and thereby protect the environment, your Company has ensured that electronic copies of the Annual Report and the notice of the 57th AGM are being sent to all such Members whose e-mail addresses are registered with the Company / its Registrar and Transfer Agent.
To the other Members, physical copies of the Annual Report and Notice of the 57th AGM are being sent through permitted modes of dispatch. However, Members who have received the said documents in electronic mode but desire to seek physical copies of the same, can send their request to the Company Secretary of the Company at [email protected]
Safety Performance:
100% Safety - Pursuing a goal of zero injuries, illnesses, and incidents by living the belief that all are preventable. Your Company is pursuing the goal
of zero incidents through senior leader ownership of safety, preventative actions and processes, and by establishing leadership roles for employees in safety.
Your Companyâs safety performance is recognised at the CII-South India EHS excellence award in bronze category.
Your Company also was recognised by the National Safety Council -Karnataka Chapter in the category of Unnatha Suraksha Puraskara.
As part of continual initiatives in raising the bar of safety performance, your Company has during FY22 brought about considerable improvements in the safety performance:
COVID-19 Safety Measures:
While there was reduction in covid caseload, your Company stayed the course and carried out all covid appropriate protocols to obviate risks to all stakeholders. During this uncertain times, your Company has ensured that there are zero repercussions on the business continuity management by monitoring the internal as well as external situation (customers, suppliers and other stakeholders).
ISO 14001 & ISO 45001: Your Company was re-certified for the ISO 14001 the Environmental Management System and ISO 45001 the Occupational Health and Safety Management system by TUV, a third-party agency without any Non-conformance.
EHS regulatory compliance: The Company strives to meet all applicable EHS regulatory compliance by regular review mechanism and regular updates are provided to the Management.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 134(3)(o) of the Companies Act,2013 and rules made thereunder, the Corporate Social Responsibility Policy of the Company and initiatives undertaken by the Company on CSR activities during the financial year ended June 30, 2022, are set out in "Annexure XIII" to this report. The CSR Policy is available on Companyâs website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The total CSR budget of the Company for the year 2021-22 was '' 17.10 million, out of which the Company had spent '' 14.76 million on CSR during the year for identified projects. Due to delay in the implementation of one of the approved project, an amount of '' 2.41 million was transferred to the PM National Relief Fund so as to ensure adherence with the provisions of section 135(5) of the Companies Act, 2013, read with rules made thereunder, within the timelines prescribed by law. With this, your Company has spent '' 17.17 million as against the allocated budget of '' 17.10 million thereby, spending an excess amount of '' 0.07 million.
PERSONNEL / INDUSTRIAL RELATIONS
During the financial year under review, your Company maintained cordial industrial relations at all levels. Your Directors record their appreciation for employees'' contribution.
Enterprise Risk Management (ERM) at the Company is driven by the Risk Management Committee and Board of Directors through their routine oversight responsibilities. The Management team plays a primary role in identification, monitoring and minimizing risks as also to identify business opportunities and threats. As a process, any risk associated with the business is identified and prioritized based on severity, occurrence and effectiveness of detection. The Risks are being reviewed by the
Management team periodically and reported to the Risk Management Committee at regular intervals for their review. The Department Leaders have the responsibility to monitor and implement the ERM framework approved by the Risk Management Committee.
The Company has formulated a Risk Management Policy and Risk Committee Charter and a mechanism to inform the Risk Management Committee of the Board about the risk assessment activity performed from time to time. The detailed Risk Management mechanism is provided in the Management Discussion and Analysis (MD&A) Report.
The Risk Management Committee is constituted with the Board of Directors of the Company as its members. The Chairman of the Board, Mr. B Anjani Kumar, is also the Chairman of the said Committee.
As an established practice, the Board of Directors are being updated on risks identification and steps taken to mitigate the same. Risk Management Policy and Charter are uploaded on the Company''s website at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Company has also been employing the services of Ernst and Young LLP (''EY''), India as its Internal Auditors and EY India regularly conducts internal audits of various parts of the company''s operations, as per an Annual Audit Plan which is agreed every year with the Audit Committee of the Board.
Pursuant to Section 92(3) of the Companies Act, 2013 read with applicable rules, a copy of the Annual Return for the FY 2021-22 is uploaded on the website of the Company and the same is available at https://www.kennametal.com/in/en/about-us/kil-financials/corporate-governance.html
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI (LODR) Regulation, your Company is required to include Business Responsibility Report in the Annual Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective. Business Responsibility Report is enclosed as "Annexure XIV" to the Boardâs Report.
The Company has adopted various policies / codes which are reviewed by the Board at regular intervals and are amended as and when required. These Policies / Codes are available on the website of the Company at https://www.kennametal.com/in/en/about-us/kil-financials/policies.html
The Board of Directors met Four (4) times during the financial year 202122. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
The Agenda of the Meeting is circulated to the Directors in advance. Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal and approval.
COMMITTEES OF THE BOARD OF DIRECTORS
Details of memberships and attendance of various Committee Meetings of the Company including a separate Meeting of the Independent Directors are given in the Corporate Governance Report.
COMPLIANCE WITH THE APPLICABLE SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on the Board Meetings and General Meetings.
Your Directors place on record their appreciation for the untiring efforts and unflinching commitment of the employees of your Company and the vendors who were instrumental in maintaining business continuity, so as to ensure least challenges to your Company''s customers. Your Directors also place on record the support of the investor community, bankers, regulatory authorities and the customers for their cooperation and understanding in combating the crisis situation.
For and on behalf of the Board of Directors of Kennametal India LimitedB. Anjani Kumar Vijaykrishnan Venkatesan
Chairman & Independent Director Managing Director
DIN:00022417 DIN:07901688
Bengaluru August 12, 2022
Previous period figures have been regrouped and/or reclassified wherever necessary to confirm with the current period presentation in compliance with Ind AS requirement.
Jun 30, 2018
The Directors are pleased to present the 53rd Annual Report and the Audited Financial Statements for the financial year ended June 30, 2018.
Financial Results (Rs. in Lakhs)
|
Particulars |
Financial Year ended 30-Jun-18 |
Financial Year ended 30-Jun-17 |
|
Total Revenue |
80148 |
70183 |
|
Profit before exceptional items and tax |
8070 |
3586 |
|
Add/Less-Exceptional Items Income/(Expense) |
(770) |
(550) |
|
Profit after exceptional items and before Tax |
7300 |
3036 |
|
Less: provision for tax |
||
|
Current tax |
2044 |
795 |
|
Minimum alternate tax (MAT) entitlement |
||
|
Tax adjustment relating to earlier years |
(460) |
- |
|
Deferred tax (credit)/charge |
490 |
(196) |
|
Profit after Tax |
5226 |
2437 |
|
Other comprehensive income for the year, net of tax |
(206) |
1 |
|
Total comprehensive income for the year |
5020 |
2438 |
|
Add: balance brought forward from previous year |
22268 |
20359 |
|
Total available for appropriation |
27288 |
22797 |
|
Interim dividend |
(440) |
(440) |
|
Dividend distribution tax |
(90) |
(89) |
|
Balance transferred to Balance Sheet |
26758 |
22268 |
* The previous period figures have been regrouped and/or reclassified wherever necessary to confirm with the current period presentation in compliance with Ind AS requirement.
DIVIDEND AND RESERVES
An interim dividend of Rs.2/- per Equity Share of Rs.10/- each (20% on the Paid-up Share Capital of the Company) was declared by the Board for the financial year ended June 30, 2018 and May 21, 2018 was fixed as Record Date for the said purpose. The said Interim Dividend was paid on May 28, 2018. The Board of Directors has decided to treat the same as Final Dividend and therefore, no additional Dividend is recommended for the financial year ended June 30, 2018.
The Company has not transferred any amounts to reserves for the financial year ended June 30, 2018.
The Paid-up Share Capital of the Company is Rs.219782400/- divided into 21978240 Equity Shares of Rs.10/- each.
OPERATING RESULTS
Profit before Exceptional items and Tax was Rs.8070/- Lakhs as compared to Rs.3586/- Lakhs in the previous financial year. The Companyâs performance for the year has shown substantial improvement in comparison with the previous year.
Your Company does not have any subsidiaries.
CHANGES IN SHARE CAPITAL
There were no changes in the Share Capital of the Company during the financial year.
Capital Structure of the Company
The Authorized Share Capital of the Company as on date is Rs.219782400 (Rupees Twenty One Crores Ninety Seven Lakhs Eighty Two Thousand and Four hundred only) divided into 21978240 (Two Crores Nineteen Lakhs Seventy Eight Thousand Two Hundred and Forty only) Equity Shares of Rs.10/- (Rupees Ten only) each.
The Issued, Subscribed and Paid up Share Capital of the Company as on date is Rs.219782400 (Rupees Twenty One Crores Ninety Seven Lakhs Eighty Two Thousand and Four Hundred only) divided into 21978240 (Two Crores Nineteen Lakhs Seventy Eight Thousand Two Hundred and Forty only) Equity Shares of Rs.10/- (Rupees Ten only) each.
Disclosure regarding Issue of Equity Shares with Differential Voting Rights
During the financial year under review, the Company has not issued Shares with Differential Voting Rights.
Disclosure regarding issue of Employee Stock Options
During the financial year under review, the Company has not issued Employee Stock Options.
Disclosure regarding issue of Sweat Equity Shares
During the financial year under review, the Company has not issued Sweat Equity Shares.
Disclosure regarding Buy Back of Shares
During the financial year under review, the Company has not done Buy Back of Shares.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments, affecting the financial performance of the Company, which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
During FY18, the total revenue of the Company was Rs.80148/- Lakhs compared with Rs.70183/- Lakhs in the previous financial year.
A Management Discussion and Analysis (MD&A) Report is annexed to this report as âAnnexure Iâ as required under Regulation 34 of SEBI [Listing Obligations and Disclosure Requirements (LODR)] Regulations, 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Shareholders at the 52nd Annual General Meeting held on November 7, 2017 approved the appointment of Mr. Alexander Broetz (DIN: 07568713) filling the casual vacancy caused by the resignation of Mr. John H. Jacko Jr. He retires by rotation and being eligible, offers himself for reappointment as Director liable to retire by rotation in the ensuing Annual General Meeting. Your Directors recommend the same for your approval. A notice has been received from a member along with the prescribed deposit of Rs.1 Lakh proposing his appointment as a Director at the ensuing Annual General Meeting of the Company.
The Board at its Meeting held on August 23, 2018 has also approved the appointment of Mr. D Parameswara Reddy (DIN: 03450016) to fill the casual vacancy caused by the resignation of Mr. David Lee (DIN: 07175442). Your Directors recommend the same for your approval. A notice has been received from a member along with the prescribed deposit of Rs.1 Lakh proposing his appointment as a Director at the ensuing Annual General Meeting of the Company. Your Directors take this opportunity to place on record the Boardâs appreciation for the valuable contribution of Mr. David Lee during his term as Director of the Company.
Declarations from the Independent Directors
The Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence as mentioned under sub-section (6) of Section 149 of the Companies Act, 2013.
The Policy on Directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director, and also remuneration for Key Managerial Personnel and other employeesâ forms part of Corporate Governance Report of this Annual Report.
A brief profile of the Directors being appointed / re-appointed as required under Regulation 36(3) of SEBI (LODR) Regulations, 2015 is furnished along with the Notice convening 53rd Annual General Meeting.
DIRECTORSâ INTERESTS
No Director was materially interested in any contracts or arrangements existing during or at the end of the year in relation to the business of the Company; however, Mr. David Lee, Mr. Alexander Broetz, Mr. D. Parameswar Reddy and Ms. Colleen Wood Cordova, being Nominees of Kennametal Inc. on the Board of the Company may be deemed to be interested in some of the contracts with Related Parties though not personally. No Director holds any shares in the Company as on June 30, 2018 except Mr. Prakash M. Telang, Chairman & Non-Executive Independent Director, who holds 2,000 Equity Shares of Rs.10/- each, Mr. B. Anjani Kumar, Non-Executive Independent Director, who holds 10 Equity Shares of Rs.10/- each and Mr. Bhagya Chandra Rao, Managing Director, who holds 300 Equity Shares of Rs.10/- each in the Company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee and Risk Management Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the FY18.
Accordingly, pursuant to the provisions of Section 134(3)(c) and Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, report that:
- the applicable accounting standards have been followed in the preparation of the financial statements, along with proper explanations relating to material departures, if any;
- they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 2018 and of the profit of the Company for the year ended on that date;
- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- they have prepared the annual accounts on a going concern basis;
- they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DEPOSITS
During the financial year, your Company has not invited / accepted any Public Deposits pursuant to the provisions of Chapter V of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements forming part of Annual Report. The Company has not provided any loans and guarantees during the Financial Year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.
EVALUATION OF THE BOARDâS PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its performance and that of its Committees and Directors, including the Chairman of the Board. During the financial year, the evaluation exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. A separate exercise was carried out to evaluate the performance of each individual Director including the Boardâs Chairman who were evaluated on parameters such as contribution at the meetings, independent judgement, attendance and other relevant aspects. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the Directors of the Company.
FAMILIARIZATION PROGRAMME
The Company has a structured familiarization program for Independent Directors of the Company which is also extended to other Non-Executive Directors to ensure that Directors are familiarized with their function, role, rights, responsibilities and the nature of the Business.
The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors and all Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management. Presentations made by the Senior Management of the Company, inter alia, cover the Companyâs strategy, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.
The Independent Directors of the Company are associated with the Company for many years and are very familiar with the Company. During the financial year, the Management provided various documents, background notes, presentations etc. to have a better insight of the Company.
The Company also issues appointment letters to the Independent Directors which incorporate their role, duties and responsibilities.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 (3) read with Schedule V(C) of SEBI (LODR) Regulations, 2015, a report on Corporate Governance and the Certificate as required under Schedule V (E) of SEBI (LODR) Regulations, 2015 from Mr. Vijayakrishna K. T., Practising Company Secretary, regarding compliance of conditions of Corporate Governance is annexed as âAnnexure IIâ which forms part of this report. Further, in compliance with the Listing Regulations, your Board has adhered to the Corporate Governance Code.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Companyâs Code of Conduct by your Directors and Senior Management of your Company, for the financial year under review, as required under SEBI (LODR) Regulations, 2015 is annexed as âAnnexure IIAâ and forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component of the Kennametal Value Business System (KVBS). The Code addresses the importance of fair dealing and compliance in all aspects of your Companyâs business and focuses on the concept of doing the right thing every day.
Your Company insists on its employees to embrace the Code of Business Ethics & Conduct to ensure maintenance of strong ethical culture. The code of conduct is available on the website of the Company at https://www. kennametal.com/content/dam/kennametal/kennametal/hi/About%20Us/ Company%20Profile/code of conduct director.pdf
CEO/CFO CERTIFICATE
A Certificate from the Chief Executive Officer and the Chief Financial Officer dated August 23, 2018 on the Financial Statements and the Cash Flow Statement of the Company for the financial year ended June 30, 2018 is annexed as âAnnexure IIBâ and forms part of this report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
Your Company was following a Whistle Blower Policy / mechanism even prior to requirements of the Companies Act, 2013. However, pursuant to the provisions of Section 177 of the Companies Act, 2013 and the provisions of SEBI Listing Regulations, your Company had taken on record the Vigil Mechanism (Whistle Blower Policy) of the Company subsequent to the approval of the Board of Directors. The Whistle Blower Policy provides avenues for employees to raise complaints and to receive feedback on action taken and seeks to reassure the employees that they will be protected against victimization and for any âWhistle Blowerâ action taken by them in good faith. Your Company affirms that no personnel have been denied access to the Audit Committee.
The Kennametal Ethics Helpline
A dedicated helpline is made available where any person can make a complaint about the violation of the Code of Conduct of the Company. Reports made to the helpline can be done via the phone or the web on a confidential and anonymous basis, where allowed by local law. The helpline is administered by an independent third-party and is available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3) (m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as âAnnexure IIIâ to this report.
AUDITORS & REPORT OF STATUTORY AUDITORS
As per the provisions of Section 139 of the Companies Act, 2013 read with the Rules made there under, no Listed Company and such other Companies as prescribed under the Companies Act, 2013 can appoint or re-appoint any audit firm as Auditors for more than two terms of five consecutive years.
In view of the same, the Company has appointed Messrs Walker Chandiok & Co. LLP, Chartered Accountants (FRN: 001076N/N500013) who were appointed as Statutory Auditors at the 52nd Annual General Meeting held on November 07, 2017 for a period of 5 (Five) years to hold the office until the conclusion of 57th Annual General Meeting.
As per the Companies (Audit and Auditors) Second Amendments Rules, 2018, with effect from May 7, 2018, the Central Government has notified the omission of the requirement related to ratification of appointment of Statutory Auditors by members at every Annual General Meeting. Accordingly, the resolution for ratification has not been placed before the members.
The Independent Auditorsâ Report to the Members on the Accounts of the Company for the financial year ended June 30, 2018 does not contain any qualification, reservation or adverse remarks. The notes on financial statements referred to in the Independent Auditorsâ Report are self-explanatory and do not call for any further comments.
REPORTING OF FRAUDS
There was no instance of fraud during the financial year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section 143(12) of the Act and Rules framed thereunder.
SECRETARIAL AUDITOR
Mr. Vijayakrishna K. T., Practising Company Secretary (FCS 1788 & CP 980) carried out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2017-18 and submitted his report, which is annexed to this report as âAnnexure IVâ.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 201 4, the Board of Directors of the Company upon recommendation of the Audit Committee has appointed Messrs K. S. Kamalakara & Co., Cost Accountants (Firm Registration No.: 0000296), as the Cost Auditors of the Company for the financial year 2018-19. As required under Section 148 of the Companies Act, 2013, the Shareholdersâ approval for the remuneration payable to Messrs K. S. Kamalakara & Co., Cost Auditors is being sought at the ensuing Annual General Meeting.
INTERNAL FINANCIAL CONTROL
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is annexed as and which forms part of this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (LODR) Regulations, 2015, the Related Party Transactions (RPTs) that were entered into during the financial year 201718 were at armâs length basis and in the ordinary course of business. Further, there were no material related party transactions during the financial year under review with the Directors or Key Managerial Personnel. All related party transactions were placed before the Audit Committee and the Board for approval as applicable under Section 188 of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations, 2015.
The Policy on RPTs as approved by the Board is uploaded on the Companyâs website at https://www.kennametal.com/content/dam/ kennametal/kennametal/hi/About%20Us/Company%20Profile/Related%20Party%20Transaction%20Policy%20.pdf
The Particulars of RPTs in Form AOC 2 is annexed to the Report as âAnnexure Vâ.
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
Pursuant to Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of the remuneration of each Director to the median employeeâs remuneration for the financial year and such other details as prescribed are set out in the âAnnexure VIâ.
A statement showing details of employees of the Company throughout the financial year and employees employed for part of the year who were in receipt of remuneration of Rs.102/- Lakhs or more per annum or Rs.8.5/- Lakhs or more per month is annexed herewith as âAnnexure VIIâ.
PREVENTION OF SEXUAL HARASSMENT
Your Company has an Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
There was no complaint lodged by any employee to the Internal Complaints Committee or Ethics helpline under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, with the Company during the year under report.
INSURANCE
Your Company has sufficient insurance coverage on all its assets which are renewed in time.
RESEARCH & DEVELOPMENT (R&D)
The Research, Development and Engineering (RD&E), works on new Product and Process Developments with specific focus on materials, coatings and design.
RD&E, Bangalore works on the market requirements in terms of new products, custom solutions, cost saving projects and basic research. It is also recognized by the Ministry of Science & Technology - Department of Scientific and Industrial Research - Government of India.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
A cleaner, healthier and safer environment is a value we demand of ourselves and others and is integrated into everything we do. Environmental, Health, and Safety (EHS) are fundamentals to your Companyâs business and its ability to Deliver The Promise of Safety to all the stakeholders, including its employees, customers, shareholders, and the public. EHS Vision is communicated to all and every day, employees are empowered to demonstrate Kennametal EHS commitment by striving for:
100% Safety - pursuing a goal of zero injuries, illnesses, and incidents by living the belief that all are preventable. Your Company is pursuing the goal of zero incidents through senior leader ownership of safety, preventative actions and processes, and by establishing leadership roles for employees in safety.
Protecting Our Planet - providing sustainable solutions by reducing the total environmental impact of our products and operations. Your Company has been working towards protecting our planet by continuously improving the management of energy and natural resources, promoting recycling and recovery of materials, and preventing pollution. Among other things, the following EHS activities/improvements were undertaken during the financial year:
Safety Performance:
- Safety performance in FY18 in terms of the Total Recordable Incident Rate (TRIR) is 0.35 compared to 0.36 in FY17.
- Competence, Training and Awareness: A total 3,676 hours were spent on EHS training by employees of your Company.
- Wellness Awareness programme was conducted covering 250 man-hours to create awareness and improve good health of the employees of the Company.
- 606 Find and Fix completed by employees compared to 540 Find and Fix in FY17. This shows employee involvement which helped in eliminating hazards, create a safe working environment.
- Annual medical examination of employees was conducted to assess the health status and improve employee health.
- Your Company continued to monitor the hazardous and non-hazardous waste, according to waste stream and disposal route, with performance assessed on the basis of waste intensity.
- Your Company continued the Management Based Safety (MBS) programme, a standard global safety process that has been the cornerstone of great improvement in safety culture.
- A Risk Finder Tool and an improved Daily Safety Checklist are designed to strengthen every employeeâs ability to identify, document and eliminate hazards at their workplace.
- STOP WORK AUTHORITY process implemented enabling any employee to stop work upon coming across any unsafe situation.
- EHS improvement in Coating plant is focused in line with Global Standard.
- Arc Flash Analysis conducted to improve Electrical Safety. Improvements:
- The Company received Certification to ISO 14001 and OHSAS 18001 in November 2017
- To minimize risk and further improve safe working environment through the Hazard identification and Risk assessment tool, the following EHS Improvements were completed in FY18:
- Fire Sprinkler system was installed for Painting booth in MSG.
- Fire Alarm system was upgraded by installing Smoke detector in Hazardous waste storage area.
- Effluent Treatment Plant was set up in-house to treat the effluent generated from various process and ensure compliance under Water Act.
- Thermography survey conducted for electrical system by an external agency and corrective actions are taken to minimize the electrical fire incidents.
- Installation of Two Stage Cooling system in PU 2 Sintering Dept.
- Conducted Hazard and Operability Study (HAZOP) in PU 1 for Spray Drier - Based on HAZOP study we are reviewing the recommendations made to take necessary actions.
- Fire Detection and alarm system Improvement - Graphical display
- Upgraded the Existing Gas detection system by installing HMI control panel with SCADA system. PU 1, PU 2, PU 5, CVD and all UPS rooms are connected in to SCADA system to improve emergency preparedness any time.
- Installed Gas cabinet which has all required safety features to ensure safe working environment.
- Installed Interlock guarding on Surface grinding machine in PU 6.
- Modified the vertical lathe in PU 2 to collect the powder after machining directly in to the collecting drum instead of cleaning and manual removing powder collected in the machine to minimize the exposure to dust and also ergonomics concern.
- Existing Electrical power distribution board does not meet Safety standard. Replaced with Block set panels confirming to Internal arc protection as per IEC TR 64641 to protect against electrical hazard.
- 100% Regulatory compliance resulted in No Violation notices from Authority.
Recognition to employees
- KIL was awarded the âBest Safe Practices in the Industryâ for the year 2017 by the Department of Factories, Government of Karnataka.
- Mr. Rajesh B of PU1 was awarded the âBest Safe Workerâ for the year 2017 by Department of Factories Government of Karnataka.
- Mr. Sadiksaheb Badiger - Senior Manager EHS was honored with an award of âAudyogika Surakshata Ratnaâ (âOccupational Safety Starâ) by the Department of Factories, Government of Karnataka.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135(3)(a) of the Companies Act, 2013 and rules made thereunder, the Corporate Social Responsibility Policy of the Company and initiatives undertaken by the Company on CSR activities during the financial year ended June 30, 2018 are set out in âAnnexure VIIIâ to this report in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
PERSONNEL / INDUSTRIAL RELATIONS
During the financial year under review, your Company maintained cordial industrial relations at all levels. Your Directors record their appreciation for employeesâ contribution.
RISK MANAGEMENT
Enterprise Risk Management (ERM) at the Company is driven by the Risk Management Committee and Board of Directors through its routine oversight responsibilities. The Management team plays a primary role in identification, monitoring and minimizing risks as also to identify business opportunities and threats. As a process, the risk associated with the business is identified and prioritized based on severity, occurrence and effectiveness of detection. The Risks are being reviewed by the Management team periodically and reported to the Risk Management Committee bi-annually for their review. The department leaders have the responsibility to monitor and implement the ERM framework approved by the Risk Management Committee.
The Company has formulated a Risk Management Charter and a mechanism to inform the Risk Management Committee of the Board about risk assessment. The detailed Risk Management mechanism is provided in the Management Discussion and Analysis (MD&A) Report.
The Risk Management Committee is constituted with the Directors and senior executives as its members. Mr. Prakash M. Telang is the Chairman of the Committee.
As an established practice, the Board of Directors are being updated on risks identification and steps taken to mitigate the same. Risk Management Charter is uploaded on the Companyâs website at https://www. kennametal.com/content/dam/kennametal/kennametal/hi/About%20Us/ Company%20Profile/Risk%20management%20committee%20charter. pdf
EXTRACT OF THE ANNUAL RETURN
An extract of the annual return as per Form MGT - 9 is enclosed in âAnnexure IXâ to the Boardâs Report.
NUMBER OF BOARD MEETINGS
The Board of Directors met Four (4) times during the financial year 2017-18. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
The Agenda of the Meeting is circulated to the Directors in advance. Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal.
COMMITTEES OF BOARD OF DIRECTORS
Details of memberships and attendance of various Committee Meetings of the Company are given in Corporate Governance Report.
GREEN INITIATIVES
As a significant Green Initiative to contribute towards a cleaner environment, your Company has initiated steps to become a Green Company soon. Towards this end the process of evaluating and applying for Green Company certification encompassing the entire operations of the Company have started.
In addition, as part of its efforts to reduce consumption of paper and thereby protect the environment, your Company has ensured that Electronic copies of the Annual Report and the Notice of the Fifty-Third AGM are being sent to all such Members whose e-mail addresses are registered with the Company/ its Registrar and Share Transfer Agent.
To the other Members physical copies of the Annual Report and Notice of the Fifty- third AGM are being sent through the permitted modes of dispatch. However, Members who have received the said documents in electronic mode but seek physical copies of the same, can send their requests to the Company Secretary. The remote e-voting facility is being provided to the Members to enable them to cast their votes electronically on all resolutions set forth in the notice, pursuant to the provisions of Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration) Amendment Rules, 2015. The instructions for the remote e-voting are provided in the Notice.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and assistance received from customers, investors, business associates, bankers, vendors, regulatory and governmental authorities. Your Directors also wish to place on record their gratitude to the Members for their continued trust, confidence and express their sincere appreciation to all employees for their teamwork and contributions during the financial year.
For and on behalf of the Board of Directors of
Kennametal India Limited
Bhagya Chandra Rao B. Anjani Kumar
Managing Director Independent Director
DIN: 00211127 DIN: 00022417
Bengaluru August 23, 2018
Jun 30, 2017
BOARD''S REPORT
The Directors are pleased to present the 52nd Annual Report and the Audited Financial Statements for the financial year ended June 30, 2017 (FYI7).
FINANCIAL RESULTS & in Lakhs)
|
Particulars |
FYI7 Year ended June 30,2017 |
FYI 6 Year ended June 30,2016 |
|
Total Revenue |
65771 |
579I9 |
|
Profit before Exc optional Items and Tax |
3557 |
307I |
|
Add/Less-Exceptional items Income/(Expense) |
(550) |
- |
|
Profit After Exceptional Items and Before Tax |
3027 |
307I |
|
Less: Provision for Tax |
||
|
Current Tax |
791 |
I085 |
|
Minimum Alternate Tax (MAT) Entitlement |
(446) |
- |
|
Tax adjustments relating to earlier years |
- |
67 |
|
Deferred Tax (credit)/charge |
472 |
(I55) |
|
Profit after T ac |
2210 |
2074 |
|
Add: Balance brought forward from previous year |
20617 |
19072 |
|
Total available for appropriation |
22827 |
2II46 |
|
Interim Dividend |
(440) |
(440) |
|
Dividend Distribution Tac |
(89) |
(89) |
|
Balance transferred to Balance Sheet |
22298 |
20617 |
DIVIDEND AND RESERVES
An interim dividend of Rs, 2/- per Equity Share of Rs,10/- each (20%) on the paid up share capital of the Company was declared by the Board for the financial year ended June 30, 2017 and May 19, 2017 was fixed as âRecord Date'' for the said purpose. The said interim dividend was paid on May 25, 2017. The Board of Directors has decided to treat the same as final dividend and therefore, no additional dividend is recommended for the financial year ended June 30, 2017.
The Company has not transferred any amounts to reserves for the financial year ended June 30,2017.
The paid up share capital of the Company is Rs, 21,97,82,400/divided into 2,19,78,240 Equity Shares of Z10/- each. Your Company has not come out with any issue (public, rights or preferential) during the Financial Year.
OPERATING RESULTS
Profit before Tax and before Exceptional items was RS, 3557
Lakhs as compared to RS, 3071 Lakhs in the previous year. The Company''s performance for the year has improved to some extent compared to the previous year. Your Company does not have any subsidiaries.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments, affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
During FYI7, the total revenue of the Company was RS, 65771 Lakhs compared with RS, 579I9 Lakhs in the previous financial year.
A Management Discussion and Analysis (MD&A) report is annexed to this report as âAnnexure Iâ as required under Regulation 34 of the SEBI [Listing Obligations and Disclosure Requirements (LODR)] Regulations, 20I5.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board at its meeting held on August 09, 20I6 approved the appointment of Mr. Alexander Broetz (DIN: 07568713) filling the casual vacancy caused by the resignation of Mr. John H. Jacko Jr. He is eligible for appointment as Director liable to retire by rotation in the ensuing Annual General Meeting. Your Directors recommend the same for your approval. A notice has been received from a member along with the prescribed deposit of RS, I Lakh proposing his appointment as a Director at the ensuing Annual General Meeting of the Company.
The Board at its meeting held on August 09, 20I6 has also approved the appointment of Ms. Colleen Wood Cordova (DIN: 07568701) filling the casual vacancy caused by the resignation of Ms. Michelle R. Keating. She is eligible for appointment as Director liable to retire by rotation in the ensuing Annual General Meeting. Your Directors recommend the same for your approval.A notice has been received from a member along with the prescribed deposit of RS, I Lakh proposing her appointment as a Director at the ensuing Annual General Meeting of the Company.
Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence as mentioned under sub-section (6) of Section I49 of the Companies Act, 20I3.
The policy on Director''s appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director, and also remuneration for Key Managerial Personnel and other employees forms part of Corporate Governance Report of this Annual Report.
A brief profile of the Director being appointed / reappointed as required under Regulation 36(3) of SEBI (LODR) Regulations, 20I5 is furnished along with the Notice convening 52nd Annual General Meeting.
DIRECTORSâ INTEREST
No Director was materially interested in any contracts or arrangements existing during or at the end of the year in relation to the business of the Company. No Director holds any shares in the Company as on June 30, 20I7 except Mr. Prakash M. Telang, Chairman & Non-Executive Independent Director, who holds I000 Equity Shares of RS, I0/- each in the Company and Mr. B. Anjani Kumar, Non-Executive Independent Director, who holds I0 Equity Shares of RS, I0/-each in the Company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee and Risk Management Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the FYI7.
Accordingly, pursuant to the provisions of Section I34 (3) (c) and Section I34 (5) of the Companies Act, 20I3, the Board of Directors, to the best of its knowledge and ability, report that:
- the applicable accounting standards have been followed in the preparation of the financial statements, along with proper explanations relating to material departures, if any;
- they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 20I7 and of the profit of the Company for the year ended on that date;
- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- they have prepared the annual accounts on a going concern basis;
- they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DEPOSITS
During the financial year, your Company has not invited/ accepted any Public Deposits under Chapter V of the Companies Act, 20I3.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans and Investments covered under the provisions of Section I86 of the Companies Act, 20I3 are given in the Notes to the Financial Statements forming part of Annual Report. During the year, your Company has granted unsecured loan to Kennametal Shared Services Private Limited, a fellow Subsidiary. The Company has not provided any guarantees during the Financial Year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the financial year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.
EVALUATION OF THE BOARD''S PERFORMANCE
Pursuant to the provisions of the Companies Act, 20I3 and the SEBI (LODR) Regulations, 20I5, the Board had adopted a formal mechanism for evaluating its performance and that of its Committees and Directors, including the Chairman of the Board. During the financial year, the evaluation exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. A separate exercise was carried out to evaluate the performance of each individual Director including the Board''s Chairman who were evaluated on parameters such as contribution at the meetings, independent judgment, attendance and other relevant aspects. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the Directors of the Company.
FAMILIARIZATION PROGRAMME
The Company has a structured familiarization programme for Independent Directors of the Company which is also extended to other Non-Executive Directors to ensure that Directors are familiarized with their function, role, rights, responsibilities and the nature of the Business.
The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors and all Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management. Presentations made by the Senior Management of the Company, inter alia, cover the Company''s strategy, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.
The Independent Directors of the Company are associated with the Company for many years and are very familiar with the Company. During the year, the Management provided various documents, background notes, presentations etc. to have a better insight of the Company.
The Company also issue appointment letters to the Independent Directors which incorporates their role, duties and responsibilities.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 (3) read with ScheduleV (c) of the SEBI (LODR) Regulations, 20I5, a report on Corporate Governance and the certificate as required under Schedule V (E) of the SEBI (LODR) Regulations, 20I5 from Mr. Vijayakrishna K T, Practicing Company Secretary, regarding compliance of conditions of Corporate Governance are annexed as âAnnexure IIâ which forms part of this report. Further, in compliance with the Listing Regulations, your Board has adhered to the Corporate Governance Code.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Company''s Code of Conduct by your Directors and Senior Management of your Company, for the financial year under review, as required under SEBI (LODR) Regulations, 20I5 is annexed as âAnnexure IIAâ and forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component of the Kennametal Value Business System (KVBS). The Code addresses the importance of fair dealing and compliance in all aspects of your Company''s business and focuses on the concept of doing the right thing every day.
Your Company insists on its employees to embrace the Code of Business Ethics & Conduct to ensure maintenance of strong ethical culture. The code of conduct is available on the website of the Company at https://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%20Profile/code of co nduct director.pdf
CEO/CFO CERTIFICATE
A certificate from the Chief Executive Officer and the Chief Financial Officer dated August 24, 20I7 on the financial statements and the cash flow statement of the Company for the financial year ended June 30, 20I7 is annexed as Annexure-IIB and forms part of this report.
WHISTLE-BLOWER POLICY/VIGIL MECHANISM
Your Company was following a Whistle Blower Policy/ mechanism even prior to requirements of the Companies Act, 20I3. However, pursuant to the provisions of Section I77 of the Companies Act, 20I3 and the provisions of SEBI Listing Regulations, your Company had taken on record the Vigil Mechanism (Whistle Blower Policy) of the Company subsequent to the approval of the Board of Directors at its meeting. The Whistle Blower Policy provides avenues for employees to raise complaints and to receive feedback on action taken and seeks to reassure the employees that they will be protected against victimization and for any âWhistle Blowerâ action taken by them in good faith. Your Company affirms that no personnel has been denied access to the Audit Committee.
The Kennametal Ethics Helpline
Anyone can make a complaint about the violation of the Code of Conduct of the Company. Reports made to the helpline can be done via the phone or the web on a confidential and anonymous basis, were allowed by local law. The helpline is administered by an independent third-party and is available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section I34(3)(m) of the Companies Act, 20I3 read with the Rule 8(3) of the Companies (Accounts) Rules, 20I4, is annexed as âAnnexure IIIâ to this report.
AUDITORS & AUDITORSâ REPORT STATUTORY AUDITORS:
As per the provisions of Section I39 of the Companies Act, 20I3 read with the rules made there under, no listed Company and such other companies as prescribed under the Companies Act, 20I3 can appoint or re-appoint an audit firm as auditors for more than two terms of five consecutive years. In view of the same Messrs. Price Waterhouse & Co. Bangalore LLP, Chartered Accountants (FRN: 007567S/S-2000I2) who were appointed as Statutory Auditors at the Annual General Meeting held on November 04, 20I4 for a period of 3 (three) years from conclusion of the forty-ninth Annual General Meeting until the conclusion of the fifty-second Annual General Meeting, subject to ratification at every Annual General Meeting of the Company, retire as the statutory auditors of the Company at this 52nd annual general meeting.
The Board upon recommendation of the Audit Committee, recommends the appointment of Messrs Walker Chandiok & Co LLP, bearing firm registration no. 00I076N/N5000I3, as the Statutory Auditors of the Company to hold office from the conclusion of ensuing (52nd) Annual General Meeting up to the conclusion of the 57th Annual General Meeting of the Company subject to the approval of the members in the ensuing Annual General Meeting. The requisite certificate in writing U/s I39 (I) read with section I4I and rule 4 of Chapter X of the Companies Act, 20I3 has received from the Statutory Auditors to the effect that they would be eligible for such appointment.
The Independent Auditors'' Report to the Members on the Accounts of the Company for the financial year ended June 30, 20I7 does not contain any qualification, reservation or adverse remarks. The notes on financial statements referred to in the Independent Auditors'' Report are self-explanatory and do not call for any further comments.
REPORTING OF FRAUDS
There was no instance of fraud during the financial year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section I43(I2) of the Act and Rules framed there under.
SECRETARIAL AUDITOR
Mr. Vijayakrishna K. T., Practicing Company Secretary (FCS I788) carried out Secretarial Audit under the provisions of Section 204 of the Companies Act, 20I3 for the financial year 20I6-I7 and submitted his report, which is annexed to this report as âAnnexure IVâ.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COSTAUDITORS
Pursuant to the provisions of Section I48 of the Companies Act, 20I3 read with the Companies (Cost Records and Audit) Amendment Rules, 20I4, the Board of Directors of the Company, upon recommendation of Audit Committee has appointed Messrs. K. S. Kamalakara & Co., Cost Accountants (Firm Registration No: 0000296), as the Cost Auditors of the Company for the financial year 20I7-I8. As required under Section I48 of the Companies Act, 20I3, the Shareholders'' approval for the remuneration payable to Messrs. K. S. Kamalakara & Co., Cost Auditors is being sought at the ensuing Annual General Meeting.
INTERNAL FINANCIAL CONTROL
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is annexed as âAnnexure 1â and which forms part of this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to the provisions of Section I88 of the Companies Act, 20I3 and Regulation 23 of the SEBI (LODR) Regulations, 20I5, the Related Party Transactions (RPTs) which were entered into, during the financial year were at arm''s length basis and in the ordinary course of business. Further, there are no material related party transactions during the financial year under review with the Directors or Key Managerial Personnel. All related party transactions were placed before the Audit Committee and the Board for approval as applicable under Section I88 of the Companies Act, 20I3 and Regulation 23 of the SEBI (LODR) Regulations, 20I5.
The policy on RPTs as approved by the Board is uploaded on the Company''s website at the link https://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%20Profile/Related%20P arty%20Transaction%20Policy%20.pdf
The Particulars on RPTs in Form AOC 2 is annexed to the Report as âAnnexure Vâ.
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
Pursuant to the provisions of Section I97(I2) of the Companies Act, 20I3 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 20I4, the ratios of the remuneration of each Director to the median employee''s remuneration for the financial year and such other details as prescribed are set out in the âAnnexure VIâ.
A statement showing details of employees of the Company throughout the year and employees employed for part of the year who were in receipt of remuneration of RS, I02 Lakhs or more per annum / RS, 8.5 Lakhs or more per month is annexed herewith as âAnnexureVIIâ.
Prevention of Sexual Harassment
Your Company has an Internal Complaints Committee as required under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 20I3.
There was no complaint lodged by any employee to the Internal Complaint Committee or Ethics helpline under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 20I3, with the Company during the year under report.
INSURANCE
Your Company has sufficient insurance coverage on all its assets. They are renewed on time.
RESEARCH & DEVELOPMENT (R & D)
The Research, Development and Engineering (RD&E), works on new Product and Process Developments with specific focus on materials, coatings and design.
RD&E, Bangalore works on the market requirements in terms of new products, custom solutions, cost saving projects and basic research. It is also recognized by the Ministry of Science & Technology - Department of Scientific and Industrial Research - Government of India.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Environmental, Health, and Safety (EHS) are fundamentals to your Company''s business and its ability to Deliver The Promise to all the stakeholders, including its employees, customers, shareholders, and the public. Every day, employees are empowered to demonstrate Kennametal EHS commitment by striving for: 100% Safe-pursuing a goal of zero injuries, illnesses, and incidents by living the belief that all are preventable. Your Company is pursuing the goal of zero incidents through senior leader ownership of safety, preventative actions and processes, and by establishing leadership roles for employees in safety.
Protecting Our Planet - providing sustainable solutions by reducing the total environmental impact of our products and operations. Your Company has been working towards protecting our planet by continuously improving the management of energy and natural resources, promoting recycling and recovery of materials, and preventing pollution. Among other things, the following EHS activities / improvements were undertaken during the year:
Safety Performance:
- Safety performance in FYI7 showed slight decrease and hence Total Incident rate (TIR) increased from 0.I5 to 0.36 compared to FYI6.
- Reduced electrical fire incidents from I0 incidents in FYI6 to 2 in incidents FYI7 (80% reduction).
- Competence, Training and Awareness: A total 4,500 hours were spent on EHS training by employees of your Company.
- Wellness Awareness programme was conducted covering 200 man-hours to create awareness and improve good health of the employees of the Company.
- 540 Find and Fix actions were implemented through employee involvement which helped in eliminating hazards, provide a safe working environment.
- Annual medical examination of employees was conducted to assess the health status and improve in good health.
- Your Company continued to monitor the hazardous and non-hazardous waste, according to waste stream and disposal route, with performance assessed on the basis of waste intensity.
- Your Company continued the Management Based Safety (MBS) programme, a standard global safety process that has been the cornerstone of great improvement in safety culture.
- A Risk Finder Tool and an improved Daily Safety Checklist are designed to strengthen every employee''s ability to identify, document and eliminate hazards at their workplace.
Improvements:
- To minimize risk and further improve safe working environment through the Hazard identification and Risk assessment tool, the following EHS Improvements were completed in FYI7:
- Laser Radiation Hazard - Installed fully enclosed laser marking machine to minimize the risk laser radiation.
- Up-gradation of Substation done - Improvement in Electrical Safety, The Thermography results after up gradation shows No abnormalities, Fire Detection & Suppression helps in Fire Risk Mitigation and Type tested panels conforming to IEC 6I439 with internal Form B Separation helps in containing the Energy release during any unforeseen Arc Flash.
- Fully Automatic Gas cabinets installed to store and use the Hydrogen Chloride Gas in Coating plant to minimize the toxic gas exposure to employees.
- Fire Sprinkler system was installed for Hydrogen gas storage area in Coating Plant to minimize the fire risk and property damage.
- Fire Alarm system is upgraded by installing Smoke detector in Hazardous waste storage area,
- Acetone vapor leak detection and alarming system is installed to minimize the risk of fire and explosion in Acetone storage area.
- Thermography survey conducted for electrical system by an external agency and corrective actions are taken
to minimize the electrical fire incidents.
- To improve safe material storage, handling and to utilize space in PU 7, a vertical storage system is installed.
- Installed Rollamatic CNC Wheel Dresser to improve safety standard and avoid serious injuries.
- To improve the work environment and to enhance the energy efficiency in PU-I, a new Ventilation system is installed.
Recognition to employees
Recognition program organized on I9th July, 20I7 for the employees for âLongest Accident (DART) Free period of 2500 daysâ.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section I34(3)(o) of the Companies Act, 20I3 and rules made there under, the Corporate Social Responsibility policy of the Company and initiatives undertaken by the Company on CSR activities during the financial year ended June 30, 20I7 are set out in âAnnexure VIIIâ to this report in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 20I4.
VOLUNTARY RETIREMENT SCHEME
During the financial year, your Company implemented a Voluntary Retirement Scheme for employees with a view to effect cost savings apart from other measures to optimize costs in the business. The compensation paid to the employees under the Voluntary Retirement Scheme was RS, 239 Lakhs.Your Company has also separated certain officers and associates in line with the âSeparation Compensation Design for India Salaried Employeesâ policy dated April 27, 20I5.The aggregate compensation paid to employees under the said policy is amounting to Rs. 3II Lakhs has also been charged to and disclosed separately in the Statement of Profit and Loss Account.
PERSONNEL / INDUSTRIAL RELATIONS
During the financial year under review, your Company maintained cordial industrial relations at all levels. Your Directors record their appreciation for employees'' contribution.
RISK MANAGEMENT
Enterprise Risk Management (ERM) at the Company is driven by the Risk Management Committee and Board of Directors through its routine oversight responsibilities. The Management team plays a primary role in identification, monitoring and minimizing risks as also to identify business opportunities and threats. As a process, the risk associated with the business is identified and prioritized based on severity, occurrence and effectiveness of detection.
The Risks are being reviewed by the Management team periodically and reported to the Risk Management Committee bi-annually for their review. The department leaders have the responsibility to monitor and implement the ERM framework approved by the Risk Management Committee.
The Company has formulated a Risk Management Charter and a mechanism to inform the Risk Management Committee of the Board about risk assessment. The detailed Risk Management mechanism is provided in the Management Discussion and Analysis (MD&A) Report.
The Risk Management Committee is constituted with the Directors and senior executives as its members. Mr. Prakash M.Telang is the Chairman of the Committee.
As an established practice, the Board of Directors is being updated on risks identification and steps taken to mitigate the same. Risk Management Charter is uploaded on the Company''s website at the link https://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%20Profile/Risk%20man agement%20committee%20charter.pdf
DISCLOSURES UNDERTHE COMPANIES ACT, 2013
Extract of the Annual Return
An extract of the annual return as per Form MGT - 9 is enclosed in âAnnexure IXâ to the Board''s report.
For and on behalf of the Board of Directors of
Kennametal India Limited
Bengaluru Prakash M. Telang
August 24, 20I7 Chairman
DIN:000I2562
Jun 30, 2016
The Directors are pleased to present the 51st Annual Report and the Audited Financial Statements for the year ended June 30, 2016 (FY16).
FINANCIAL RESULTS (Rs. in Lakhs)
|
Particulars |
FY16 Year ended June 30, 2016 |
FY15 Year ended June 30, 2015 |
|
Total Revenue |
57919 |
57579 |
|
Profit before Tax |
3071 |
3994 |
|
Add/Less-Exceptional items Income/(Expense) |
- |
647 |
|
Profit After Exceptional Items and Before Tax |
3071 |
4641 |
|
Less: Provision for Tax |
||
|
Current Tax |
1085 |
1581 |
|
Tax provision relating to earlier years |
67 |
- |
|
Deferred Tax (credit)/charge |
(155) |
(292) |
|
Profit after Tax |
2074 |
3352 |
|
Add: Balance brought forward from previous year |
19072 |
16249 |
|
Total available for appropriation |
21146 |
19601 |
|
Interim Dividend |
(440) |
(440) |
|
Dividend Distribution Tax |
(89) |
(89) |
|
Balance transferred to Balance Sheet |
20617 |
19072 |
DIVIDEND & RESERVES
An interim dividend of Rs. 2/- per Equity Share of Rs.10/- each (20% on the paid up capital of the Company) was declared by the Board for the financial year ended June 30,2016 and May 20,2016 was fixed as Record Date for the said purpose. The said interim dividend was paid on May 26, 2016. The Board of Directors has decided to treat the same as final dividend and therefore, no additional dividend is recommended for the year ended June 30, 2016.
The Company has not transferred any amounts to reserves for the year ended June 30, 2016.
The paid up share capital of the Company is Rs. 21,97,82,400/- divided into 2,19,78,240 equity shares of Rs. 10/- each. Your Company has not come out with any issue (public, rights or preferential) during the Financial Year.
OPERATING RESULTS
Your Company registered total revenue of Rs. 57919 Lakhs during FY16 with Sales and Other Income compared with Rs. 57579 Lakhs in the previous year.
Profit before Tax and before Exceptional items was Rs. 3071 Lakhs as compared to Rs. 3994 Lakhs in the previous year. The Companyâs performance for the year has not improved due to lack of growth in the industry segment and market where the Company serves. Stagnant sales, adverse product mix and annual wage increase impacted the current year profitability. The profitability declined despite various measures taken by your Company to curtail/minimize expenses.
Your Company does not have any subsidiaries.
MATERIAL CHANGES AND COMMITMENTS
There has been no material change and commitment, affecting the financial performance of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis (MD&A) report is annexed to this report as âAnnexure Iâ as required under Regulation 34 of the SEBI [Listing Obligations and Disclosure Requirements (LODR)] Regulations, 2015.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Mr. David Lee (DIN:07175442) was appointed on May 05, 2015 as a Non-Executive Director, due to casual vacancy caused by the resignation of Mr. Gerald Goubau on the same day. He is eligible for appointment as Director liable to retire by rotation in the ensuing Annual General Meeting. Your Directors recommend the same for your approval. A notice has been received from a member along with the prescribed deposit of Rs. I Lakh proposing his appointment as a Director at the ensuing Annual General Meeting of the Company.
Mr. John H. Jacko Jr. (DIN: 06945511) resigned as Director with effect from August 09, 2016. Your Directors place on record their appreciation for the valuable contributions made by him to the Company during his tenure as Director.
The Board at its meeting held on August 09, 2016 approved the appointment of Mr. Alexander Broetz (DIN :07568713) filling the casual vacancy caused by the resignation of Mr. John H.Jacko Jr.
Profile of Mr. Alexander Broetz
Mr. Alexander Broetz is currently the Vice President of Kennametal Inc. and President of WIDIA. In this role, he is responsible for managing all business activities related to the WIDIA Business Segment.
He is associated with Kennametal Group for more than 10 years and has held several leadership positions like Director, Industrial Sales-EMEA for Kennametal Europe GmbH, Director of Widia as EMEA Development of a standalone sales organization in EMEA for WIDIA brand and development of a channel partner network.
Prior to joining Kennametal Inc., he served various organizations and handled various roles as President in Broevision Inc. and Director, Sales & Marketing in Tyrolit North America Inc. He has over 18 years of experience in the field of Sales and Marketing, General Management and Leadership.
Mr. Broetz holds a General Management Diploma and Certificate in Effective Management from St. Galler Business School, Switzerland.
Ms. Michelle R. Keating (DIN: 06721693) resigned as Director with effect from August 09, 2016. Your Directors place on record their appreciation for the valuable contributions made by her to the Company during her tenure as Director.
The Board at its meeting held on August 09, 2016 approved the appointment of Ms. Colleen Wood Cordova (DIN:07568701) filling the casual vacancy caused by the resignation of Ms. Keating.
Profile of Ms. Colleen Wood Cordova
Ms. Colleen Cordova is currentlyVice President Global Heavy Industries, Industrial at Kennametal Inc. In the past years she has held various positions including Vice President and GM, North America Commercial Operations, Vice President of Global Product Management and Industrial Marketing,Vice President of Marketing EMEA and Vice President of Energy Infrastructure. She joined as a President of Conforma Clad, Division of Kennametal Inc. in the year 2006.
Prior to joining Kennametal Inc. she served with various organizations and handled various roles as Vice President- Marketing and GM of Toxicology in Gene Logic, as GM-Adsorbents in W.R. Grace and as Market Segment Leader in Allied Signal Inc. She has over 27 years of enriched experience in the fields of Sales and Marketing and General Management and makes time to mentor female employees in the Kennametal organization.
Ms. Cordova holds a Master of Science in Chemical Engineering fromVirginia Polytechnic Institute and State University and also holds a Master of Business Administration (MBA) in International Marketing from University of Richmond-Robins School of Business.
She is also an Advisory Board Member on the Product Management Executive Board established by Sequent Learning Networks, United States and a recipient of the 2013 Woman in Manufacturing STEP Award presented by the Society of Manufacturing Engineers and the Manufacturing Institute.
Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of Independence as mentioned under sub-section (6) of Section 149 of the Companies Act, 2013.
The policy on Directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director, and also remuneration for Key Managerial Personnel and other employees forms part of Corporate Governance Report of this Annual Report.
A brief profile of the Director being appointed / reappointed as required under Regulation 36(3) of SEBI (LODR) Regulations, 2015 is furnished along with the Notice convening 51st Annual General Meeting.
Mr. D. Parameswara Reddy ceased to be Chief Financial Officer (CFO) with effect from February 17, 2016, due to elevation to the role of Director - Finance Region in Kennametal Group Companies and Mr. K. V. Suresh Reddy was appointed as Chief Financial Officer of the Company with effect from June 15, 2016.
DIRECTORSâ INTEREST
No Director was materially interested in any contracts or arrangements existing during or end of the period in relation to the business of the Company. No Director holds any shares in the Company as on June 30, 2016 except Mr. B.Anjani Kumar, Non-Executive Independent Director, who holds 10 equity shares of Rs.10/- each in the Company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee and Risk Management Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the FYI6.
Accordingly, pursuant to Section 134 (3) (c) and Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, report that:
- the applicable accounting standards have been followed in the preparation of the financial statements, along with proper explanations relating to material departures, if any;
- they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 2016 and of the profit of the Company for the year ended on that date;
- they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- they have prepared the annual accounts on a going concern basis;
- they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DEPOSITS
During the year, your Company has not invited/ accepted any Public Deposits under Chapter V of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements forming part of Annual Report. During the year, your Company has granted unsecured loan to Kennametal Shared Services Private Limited, a fellow Subsidiary. The Company has not provided any guarantees during the Financial Year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.
EVALUATION OF THE BOARD''S PERFORMANCE
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its performance and that of its Committees and Directors, including the Chairman of the Board. During the year, the evaluation exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. A separate exercise was carried out to evaluate the performance of each individual Director including the Boardâs Chairman who were evaluated on parameters such as contribution at the meetings, independent judgment, attendance and other relevant aspects. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the Directors of the Company.
FAMILIARIZATION PROGRAMME
The Company has a structured familiarization programme for Independent Directors of the Company which is also extended to other Non-Executive Directors to ensure that Directors are familiarized with their function, role, rights, responsibilities and the nature of our Business.
The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors and all Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management. Presentations made by the Senior Management of the Company, inter alia, cover the Company''s strategy, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.
The Independent Directors of the Company are associated with the Company for many years and are very familiar with the Company. During the year, the Management provided various documents, background notes, presentations etc. to have a better insight of the Company. On February 04, 2016, the Management arranged a session on Corporate Governance which was facilitated through Mr. J. Sundharesan, Practicing Company Secretary.
The Company also issues an appointment letter to the Independent Directors which incorporates their role, duties and responsibilities.
CORPORATE GOVERNANCE
Pursuant to Regulation 34 (3) read with Schedule(c) of the SEBI (LODR) Regulations, 2015, a report on Corporate Governance and the certificate as required under Schedule V (E) of the Listing Regulations from Mr. Vijayakrishna K T, Practicing Company Secretary, regarding compliance of conditions of Corporate Governance are annexed as âAnnexure IIâ which forms part of this report. Further, in compliance with the Listing Regulations, your Board has adhered to the Corporate Governance Code.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Companyâs Code of Conduct by your Directors and Senior Management of your Company, for the year under review, as required under SEBI (LODR) Regulations, 2015 is annexed as âAnnexure IIAâ and forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component of the Kennametal Value Business System (KVBS). The Code addresses the importance of fair dealing and compliance in all aspects of your Companyâs business and focuses on the concept of doing the right thing every day.
Your Company insists on its employees to embrace the Code of Business Ethics & Conduct to ensure maintenance of strong ethical culture. The code of conduct is available on the website of the Company at http://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%20Profile/code of co nduct Director.pdf
CEO/CFO CERTIFICATE
A certificate from the Chief Executive Officer and the Chief Financial Officer dated August 09, 2016 on the financial statements and the cash flow statement of the Company for the financial year ended June 30, 2016 is annexed as Annexure-IIB and forms part of this report.
WHISTLE-BLOWER POLICY/VIGIL MECHANISM
Your Company was following a Whistle Blower Policy/ mechanism even prior to requirements of the Companies Act,20l3. However, pursuant to Section 177 of the Companies Act, 2013 and the provisions of SEBI Listing Regulations, your Company had taken on record the Vigil Mechanism (Whistle Blower Policy) of the Company subsequent to the approval of the Board of Directors at its meeting. The Whistle Blower Policy provides avenues for employees to raise complaints and to receive feedback on action taken and seeks to reassure the employees that they will be protected against victimization and for any âWhistle Blowerâ action taken by them in good faith.
The Kennametal Ethics Helpline
Anyone can make a complaint about the violation of the Code of Conduct of the Company. Reports made to the helpline can be done via the phone or the web on a confidential and anonymous basis, where allowed by local law. The helpline is administered by an independent third-party and is available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section I34(3)(m) of the Companies Act,20I3 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as âAnnexure IIIâ to this report.
AUDITORS & AUDITORSâ REPORT STATUTORY AUDITORS:
Messrs. Price Waterhouse & Co. Bangalore LLP, Chartered Accountants (FRN:007567S/S-2000I2) were appointed as Statutory Auditors at the Annual General Meeting held on November 04, 20I4 for a period of 3 (three) years from conclusion of forty-ninth annual general meeting until the conclusion of fifty-second annual general meeting, subject to ratification at every annual general meeting of the Company. The Board recommends the ratification of their continuation as Auditors. The Company has received a confirmation from the Statutory Auditors to the effect that they would be eligible for such continuation.
The Independent Auditorsâ Report to the Members on the Accounts of the Company for the year ended June 30, 20I6 does not contain any qualification, reservation or adverse remarks. The notes on financial statements referred to in the Independent Auditorsâ Report are self-explanatory and do not call for any further comments.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board, as required under Section I43(I2) of the Act and Rules framed there under.
SECRETARIAL AUDITOR
Mr. Vijayakrishna K. T., Practicing Company Secretary (FCS I788) carried out Secretarial Audit under the provisions of Section 204 of the Companies Act, 20I3 for the financial year 20I5-I6 and submitted his report, which is annexed to this report as âAnnexure IVâ.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS
Pursuant to Section I48 of the Companies Act, 20I3 read with the Companies (Cost Records and Audit) Amendment Rules, 20I4, the Board of Directors of the Company upon recommendation of the Audit Committee has appointed Messrs. K. S. Kamalakara & Co., Cost Accountants (Firm Registration No: 0000296), as the Cost Auditors of the Company for the financial year 20I6-I7. As required under Section I48 of the Companies Act, 20I3, the Shareholdersâ approval for the remuneration payable to Messrs. K. S. Kamalakara & Co., Cost Auditors is being sought at the ensuing Annual General Meeting.
INTERNAL FINANCIAL CONTROL
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is annexed as âAnnexure 1â and which forms part of this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to Section I88 of the Companies Act, 20I3 and Regulation 23 of the SEBI (LODR) Regulations, 20I5, the Related Party Transactions (RPTs) that were entered into during the financial year were on armâs length basis and in the ordinary course of business. Further, there are no material related party transactions during the year under review with the Directors or Key Managerial Personnel. All related party transactions are placed before the Audit Committee and the Board for approval as applicable under Section I88 of the Companies Act, 20I3 and Regulation 23 of the SEBI (LODR) Regulations, 20I5.
The policy on RPTs as approved by the Board is uploaded on the Companyâs website at the link http://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%2 OProfile/KIL%2 0Rel ated%2 0Party%2 0 Transactions %2 0Policy%2005052015 %20.pdf
The Particulars on RPTs in AOC 2 is annexed to the Report as âAnnexure Vâ.
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
Pursuant to Section I97(I2) of the Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of the remuneration of each Director to the median employee''s remuneration for the financial year and such other details as prescribed are set out in the âAnnexure VIâ.
A statement showing details of employees of the Company throughout the year and employees employed for part of the year who were in receipt of remuneration of Rs. 102 Lakhs or more per annum/ Rs. 8.5 Lakhs or more per month is annexed herewith as âAnnexure VIIâ.
Prevention of Sexual Harassment
Your Company has an Internal Complaints Committee as required under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
There was no complaint lodged by any employee to the Internal Complaint Committee or Ethics helpline under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, with the Company during the period under report.
INSURANCE
Your Company has sufficient insurance coverage on all its assets. They are renewed on time.
RESEARCH & DEVELOPMENT (R & D)
The Research, Development and Engineering (RD&E), department of the Company works on new Products and Process Developments with specific focus on materials, coatings and design.
RD&E, Bengaluru works on the market requirements in terms of new products, custom solutions, cost saving projects and basic research. It is also recognized by the Ministry of Science & Technology-Department of Scientific and Industrial Research-Government of India.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Environmental, Health, and Safety (EHS) are fundamentals to your Companyâs business and its ability to Deliver The Promise to all the stakeholders, including its employees, customers, shareholders, and the public. Every day, employees are empowered to demonstrate Kennametal EHS commitment by striving for: 100% Safe-pursuing a goal of zero injuries, illnesses, and incidents by living the belief that all are preventable. Your Company is pursuing the goal of zero incidents through senior leader ownership of safety, preventative actions and processes, and by establishing leadership roles for employees in safety.
Protecting Our Planet - providing sustainable solutions by reducing the total environmental impact of our products and operations. Your Company has been working towards protecting our planet by continuously improving the management of energy and natural resources, promoting recycling and recovery of materials, and preventing pollution. Among other things, the following EHS activities/improvements were undertaken during the year:
Safety Performance:
- 63% reduction in Total Incident rate (TIR) compared to FyI5.
- Zero DART incidents.
- A total 3,100 hours were spent on EHS training by employees of your Company.
- 12 Health Awareness programme was conducted covering 438 man-hours to create awareness and improve good health of the employees of the Company.
- 614 Find and Fix actions were implemented through employee involvement which helped in eliminating hazards, provide a safe working environment and ensure 100% compliance.
- Annual medical examination of employees was conducted to maintain good health.
- Your Company continued to monitor the hazardous and non-hazardous waste, according to waste stream and disposal route, with performance assessed on the basis of waste intensity.
To minimize risk and further improve safe working environment through the Hazard identification and Risk assessment tool, the following EHS Improvements were completed in FyI6:
- Your Company continued the Management Based Safety (MBS) programme, a standard global safety process that has been the cornerstone of great improvement in safety culture.
- A Risk Finder Tool and an improved Daily Safety
Checklist are designed to strengthen every employeeâs ability to identify, document and eliminate hazards at their workplace.
- In General Stores, a scissor lift with movement is procured which will help to directly unload the Carbide rods box from the vehicle and move to the store. This has helped to eliminate Bending and Twisting and back injury.
- Industrial Hygiene Monitoring carried out to assess the exposure level to prevent occupational health hazards.
- Laser Radiation Hazard - Installed fully enclosed laser marking machine to minimise the risk from Class 4 laser to Class 2 laser.
Fire Safety
- Sprinkler system was installed in Production unit 1 to minimize the fire risk and property damage.
- Fire Escape Hydrants (FEH) installed in Office building for upper floors.
Hydrogen Cylinder Storage area:
- Installed Hydrogen gas sensors to alert any gas leakage and take quick action to avoid any Safety or Fire hazard .
- Fire Detection and alarm system installed for identified area based on the fire audit.
EHS Management System
- Designed and Developed EHS info site a web based application which provides flexible Solution to manage EHS. It provides automotive solutions to drive continual safety performance improvement with user-friendly interface. One platform to support and control all EHS process.
Loss Prevention Survey
- Fire and Associated Perils audit was conducted by an external agency to improve fire safety program.
- Thermograph survey conducted for electrical system by an external agency to minimize the electrical fire hazards.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section l34(3)(o) of the Companies Act, 2013 and rules made there under, the Corporate Social Responsibility policy of the Company and initiatives undertaken by the Company on CSR activities during the year ended June 30, 2016 are set out in âAnnexure VIIIâ to this report in the format prescribed under the Companies (Corporate Social Responsibility Policy) rules, 2014.
PERSONNEL / INDUSTRIAL RELATIONS
During the year under review, your Company maintained cordial industrial relations at all levels. Your Directors record their appreciation for employeesâ contribution.
RISK MANAGEMENT
Enterprise Risk Management (ERM) at the Company is driven by the Risk Management Committee and Board of Directors through its routine oversight responsibilities. The Management team plays a primary role in identification, monitoring and minimizing risks as also to identify business opportunities and threats. As a process, the risk associated with the business is identified and prioritized based on severity, occurrence and effectiveness of detection. The Risks are being reviewed by the Management team periodically and reported to the Risk Committee bi-annually for their review. The department leaders have the responsibility to monitor and implement the ERM framework approved by the Risk Management Committee.
The Company has formulated a Risk Management Charter and a mechanism to inform the Risk Management Committee of the Board about risk assessment. The detailed Risk Management mechanism is provided in the Management Discussion and Analysis (MD&A) Report.
The Risk Management Committee is constituted with the Directors and senior executives as its members. Mr. Prakash M. Telang is the Chairman of the Committee.
As an established practice, the Board of Directors are being updated on risks identification and steps taken to mitigate the same. Risk Management Charter is uploaded on the Companyâs website at the link http://www.kennametal.com/content/dam/kennametal/ken nametal/hi/About%20Us/Company%20Profile/Risk%20ma nagement%20committee%20charter.pdf
LISTING AGREEMENT
The Company has entered into new/ revised Listing Agreement with BSE Limited, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
DISCLOSURES UNDER THE COMPANIES ACT, 2013
Extract of the Annual Return
An extract of the annual return as per Form MGT - 9 is enclosed in âAnnexure IXâ to the Boardâs report.
Number of Board Meetings
The Board of Directors met five times during FYI6.The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
Committees of Board of Directors
Details of memberships and attendance of various committee meetings of the Company are given in Corporate Governance Report.
GREEN INITIATIVES
Electronic copies of the Annual Report and the notice of the Fifty-first AGM are being sent to all such Members whose e-mail addresses are registered with the Company/ its Registrar and Transfer Agent.
To the other Members physical copies of the Annual Report and Notice of the Fifty-first AGM are being sent through the permitted modes of dispatch. However, Members who have received the said documents in electronic mode but seek physical copies of the same, can send their requests to the Company Secretary. The remote e-voting facility is being provided to the Members to enable them to cast their votes electronically on all resolutions set forth in the notice, pursuant to Section I08 of the Companies Act, 20I3 read with Companies (Management and Administration) Amendment Rules, 20I5. The instructions for the remote e-voting are provided in the notice.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and assistance received from customers, investors, business associates, bankers, vendors, regulatory and governmental authorities. Your Directors also wish to place on record their gratitude to the Members for their continued trust, confidence and express its sincere appreciation to all employees for their teamwork and contributions during the year.
For and on behalf of the Board of Directors
of Kennametal India Limited
Bengaluru Prakash M. Telang
August 09, 2016 Chairman
DIN: 000I2562
Jun 30, 2015
Dear Members,
The Directors are pleased to present the 50th Annual Report and the
Audited Financials for the year ended June 30, 2015 (FY15).
FINANCIAL RESULTS in Lakhs)
FYI5 FYI4
Particulars Year ended Year ended
June 30, 2015 June 30, 2014
Total Revenue 57579 55071
Profit before Tax 3994 2978
Add/Less: Exceptional items lncome/(Expense) 647 (1020)
Profit After Exceptional Items and Before Tax 4641 1958
Less: Provision for Tax
Current Tax 1581 1010
Tax provision relating to earlier years - (277)
Deferred Tax (credit)/charge (292) (482)
Profit after Tax 3352 1707
Add: Balance brought forward from previous year 16249 14542
Total available for appropriation I9601 16249
Interim Dividend (440)
Dividend Distribution Tax (89) Â
Balance transferred to Balance Sheet 19072 16249
DIVIDEND
An interim dividend of Rs 2/- per equity share of Rs 10/- each (20% on
the paid up capital of the Company) was declared by the Board for the
financial year ended June 30, 2015 and June 23,2015 was fixed as Record
Date for the said purpose. The said interim dividend was paid on June
26,2015.The Board of Directors has decided to treat the same as final
dividend and therefore, no additional dividend is recommended for the
year ended June 30, 2015.
OPERATING RESULTS
Your Company continued to improve its operating results during FYI5
with Sales and Other Income increasing by 4.6 % to Rs 57579 Lakhs
compared with Rs 55071 Lakhs in the previous year. Profit before Tax
before Exceptional items was Rs 3994 Lakhs as compared to Rs 2978 Lakhs
in the previous year. The growth in Sales and Profit for the year was
driven by improved demand for the products and various cost containment
initiatives undertaken by the Company during the year under review,
Your Company does not have any subsidiaries.
MATERIAL CHANGESAND COMMITMENTS
There was a significant material change which occurred affecting the
financial position of your Company between June 30,2015 and the date of
approval of this report, which is explained below:
The Company's part of land (3435.26 Sq. Mtrs. in Sy No. I I Nagasandra)
was acquired by Karnataka Industrial Areas Development Board (KIADB)
for Bangalore Metro Rail project in the year 2010 and the claim of the
Company was disputed by other third parties. On August 19, 2015 your
Company received the land compensation amount after tax deduction at
source (Rs 55.52 Lakhs) along with interest total amounting Rs
5,91.80,773/- on August 19,2015 vide cheque from the City Civil Court,
Bengaluru. The total of the above is Rs 647 Lakhs which is shown as an
exceptional item in the Financial Results.
MANAGEMENT DISCUSSION ANDANALYSIS
A Management Discussion and Analysis (MD&A) report is annexed to this
report as "Annexure I" as required under Clause 49 of the Listing
Agreement with BSE Limited.
DIRECTORS
Mr, M. N. Bhagwat (DIN No. 00036692). Non-Executive Independent
Director of the Company and Chairman of the Board since September 27,
2002 had expressed his unwillingness to be re-appointed as a Director
at the 49th Annual Genera! Meeting of the Company. The Board of
Directors and the employees accorded a farewell to Mr. Bhagwat. The
Board and the management appreciated Mr. Bhagwat's guidance and advice
to the Company for over 12 years. Over the years, the Company had
progressed a lot under his guidance. His dedication and devotion to the
Company has been an inspiration for all the employees.
During the year, the Board of Directors appointed Mr. Prakash M.
Telang, Non-Executive Independent Director as an Additional Director
with effect from November 04, 2014, to hold office up to the date of
ensuing Annual General Meeting. Mr. Telang was appointed as the
Chairman of the Board on November 04,2014. Being eligible, M r.Telang
offered himself to be appointed as an Independent Director of your
Company. A notice has been received from a member along with the
prescribed deposit of Rs 1 Lakh proposing his appointment as a
Non-Executive Independent Director at the ensuing Annual General
Meeting of the Company.
As per the provisions of the Companies Act, 2013, independent Directors
are required to be appointed for a term of five consecutive years, but
shall be eligible for reappointment on passing of a special resolution
by the Company and shall not be liable to retire by rotation. The
Independent Directors of your Company have given the Certificate of
Independence stating that they meet the criteria of Independence as
mentioned under Section 149 (6) of the CompaniesAct, 2013.
The details of training and familiarization programmes and Annual Board
Evaluation process for Directors have been provided under the Corporate
Governance Report.
The policy on Director's appointment and remuneration including
criteria for determining qualifications, positive attributes,
Independence of Director, and also remuneration for Key Managerial
Personnel and other employees forms part of the Corporate Governance
Report of this Annual Report.
Mr. John H.Jacko Jr. (DIN:069455 11) was appointed on August 12,2014 as
a Non-Executive Director due to a casual vacancy caused by the
resignation of Mr. John Chang on the same day. He is eligible for
appointment as Director liable to retire by rotation in the ensuing
Annual General Meeting.Your Directors recommend the same for your
approval. A notice has been received from a member along with the
prescribed deposit of Rs 1 Lakh proposing his appointment as a Director
at the ensuing Annual General Meeting of the Company
Mr. Gerald Goubau (DIN:06566705) resigned as Director with effect from
May 05, 2015.Your Directors place on record their appreciation of the
valuable contributions made by him to the Company during his tenure as
Director,
The Board at its meeting held on May 05,2015 approved the appointment
of Mr. David Lee (DIN: 07175442) filling the casual vacancy caused by
Mr.Gerald Goubau' s resignation.
Profile of Mr. David Lee
Mr. David Lee is currently the Sales Leader Asia, Kennametal Tooling at
Kennametal Inc. He joined Kennametal Inc. in the year 2007 as Regional
Sales and Marketing Director. He has served through different
businesses in Kennametal over the span of seven years.
Prior to joining Kennametal Inc. he had served various organizations
and handled various roles as Sales Engineer in Avery Dennison, Senior
Sales Manager in ID Technologies and as Sales Manager in Brady
Corporation. He has over 19 years of experience in the field of Sales,
Marketing and Leadership.
He graduated as a Mechanical Engineer from Nanyang Technological
University in the year 2001 and also holds a Master of Business
Administration (MBA) from the University of Buffalo. USA.
Appropriate resolutions are being proposed at the ensuing Annual
General Meeting seeking consent of the members for the aforesaid
reappointments/appointments and your Directors recommend your approval.
A brief profile of the respective Directors being appointed/
re-appointed as required under Clause 49 of the Listing Agreement is
furnished along with the Notice convening the 50th Annual General
Meeting.
DIRECTORS' INTEREST
No Director was materially interested in any contracts or arrangements
existing during or end of the period in relation to the business of the
Company. No Director holds any shares in the Company as on June 30,2015
except Mr. B.Anjani Kumar. Non-Executive Independent Director, who
holds 10 equity shares of Rs. 10/- each in the Company
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) of the CompaniesAct, 2013, the Board of
Directors report that:
* the applicable accounting standards have been followed in the
preparation of the financial statements, along with proper explanations
relating to material departures, if any;
* the directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at June 30,2015 and of the profit of the Company for the
year ended on that date;
* that directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
* the directors have prepared the annual accounts on a going concern
basis;
* the directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
* the directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
FIXED DEPOSITS
During the year, your Company has not invited/ accepted any Fixed
Deposits under ChapterV of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year, the Company has not provided any Loans or Guarantees
to any other company as per the provisions of Section 186 of the
Companies Act, 2013 and the details of investments made are given in
the notes to the Financial Statements.
EVALUATION OFTHE BOARD'S PERFORMANCE
During the year, the Board adopted a formal mechanism for evaluating
its performance and that of its Committees and Directors, including the
Chairman of the Board.The exercise was carried out through a structured
evaluation process covering various aspects of the functioning of the
Board and Committees such as their composition, experience &
competencies, performance of specific duties & obligations, governance
issues etc. A separate exercise was carried out to evaluate the
performance of each individual director including the Board's Chairman
who were evaluated on parameters such as contribution at the meetings,
independent judgment, attendance and other relevant aspects.The Board
was satisfied with the evaluation results, which reflected the overall
engagement of the Board, Committees and the Directors of the Company.
CORPORATE GOVERNANCE
A detailed report on Corporate Governance along with the certificate
from Mr. Vijayakrishna K.T. ,a Company Secretary in Practice confirming
compliance of Corporate Governance norms as stipulated in Clause 49 of
the Listing Agreement with the BSE Limited is set out in"Annexure II"
to this report.
COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with
the Company's Code of Conduct by your Directors and Senior Management of
your Company, for the year under review, as required under Clause 49 of
the Listing Agreement with BSE Limited is annexed as"Annexure IIA" and
forms part of this report.
The Kennametal Code of Business Ethics & Conduct is a major component
of the Kennametal Value Business System (KVBS). The Code addresses the
importance of fair dealing and compliance in all aspects of your
Company's business and focuses on the concept of doing the right thing
every day.
Your Company insists on its employees to embrace the Code of Business
Ethics & Conduct to ensure maintenance of a strong ethical culture.
CEO/CFO CERTIFICATE
A certificate from the Chief Executive Officer (Managing Director) and
the Chief Financial Officer dated August 21, 2015 on the financial
statements and the cash flow statement of the Company for the financial
year ended June 30, 2015 is annexed as "Annexure-IIB" and forms part of
this report.
WHISTLE-BLOWER POLICY/VIGIL MECHANISM
Your Company was following a Whistle Blower policy/mechanism even prior
to the requirements of the Companies Act 2013. However, pursuant to
Section 177 of the Companies Act, 2013 your Company has taken on record
the Vigil Mechanism (Whistle Blower Policy) of the Company subsequent
to the approval of the Board of Directors at their meeting. The Whistle
Blower policy provides avenues for employees to raise complaints and to
receive feedback on action taken and seeks to reassure the employees
that they will be protected against victimization and for any whistle
blowing conducted by them in good faith.
THE KENNAMETAL ETHICS HELPLINE
Anyone can make a compliant about the violation of Code of Conduct of
the Company. Reports made to the Helpline can be done via the phone or
the web on a confidential and anonymous basis, where allowed by local
law. The Helpline is administered by an independent third-party and is
available 24 hours a day, 7 days a week.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,FOREIGN EXCHANGE,ETC.
A report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of The
Companies (Accounts) Rules, 2014, is set out in"Annexure III" to this
report.
AUDITORS & AUDITORS' REPORT
Messrs. Price Waterhouse & Co Bangalore LLP, Chartered Accountants (FRN:
007567S/S-200012) were appointed as Statutory Auditors at the Annual
General Meeting held on November 04, 2014 for a period of 3 (three)
years from the conclusion of the Forty-ninth Annual General Meeting
until the conclusion of the fifty second annual general meeting, subject
to ratification at every annual general meeting of the Company. The
Board recommends the ratification of their continuation as Auditors. The
Company has received a confirmation from the Statutory Auditors to the
effect that they would be eligible for such continuation,
The Auditors' Report to the Members on the Accounts of the Company for
the year ended June 30, 2015 does not contain any
qualification,reservation or adverse remarks.The notes on financial
statement referred to in the Independent Auditor's Report are
self-explanatory and do not call for any further comments.
SECRETARIAL AUDITOR
Mr. Vijayakrishna K.T., Company Secretary in practice (FCS 1788)
carried out a Secretarial Audit under the provisions of Section 204 of
the Companies Act, 2013 for the financial year 2014-15 and submitted
his report, which is annexed to this report as "Annexure-IV'.The report
does not contain any qualification,
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013, the Board of
Directors of the Company upon recommendation made by the Audit
Committee has appointed Messrs. K.S.Kamalakara & Co., Cost Accountants
(Firm Registration No: 0000296), as the Cost Auditors of the Company
for the financial year 2015-16 and has recommended his remuneration to
the shareholders for their ratification at the ensuing Annual General
Meeting.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Pursuant to Section 188 of the Companies Act, 2013 and Clause 49 of the
Listing Agreement, the related party transactions that were entered
into during the financial year were on arm's length basis and in the
ordinary course of business. Further, there are no material related
party transactions during the year under review with the Directors or
Key Managerial Personnel. All related party transactions are placed
before the Audit Committee and the Board for approval as applicable
under Section 188 of the Companies Act,2013 and Clause 49 of the
ListingAgreement.
The policy on related party transactions as approved by the Board is
uploaded on the Company's website at the link
http://www.kennameta!.corn/contentidam/kennametal/kennameta
l/hi/About%20Us/Companv%20Profile/KIL%20Related%20Party
%20Transactions%20Policy%200S052015 %20.pdf
The Particulars on RPTs in AOC 2 is annexed to the Report as
"AnnexureV".
PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE
COMPANIES ACT, 2013
Pursuant to Section 197(12) of the Companies Act, 2013 read with
Companies (Appointments Remuneration of Managerial Personnel) Rules,
2014 the ratio of the remuneration of each director to the median
employee's remuneration for the financial year and such other details
as prescribed are set out in the "Annexure VI". The statement showing
details of employees of the Company employed throughout the year and
employed for the part of the year, who were in receipt of remuneration
of Rs 60 Lakhs or more per annum / Rs 5 Lakhs or more per month is
annexed herewith as"AnnexureVII" .
Prevention of Sexual Harassment
There was no complaint lodged by any woman employee under Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act,2013, with the Company during the period under report.
RESEARCH & DEVELOPMENT (R &D)
The Research, Development and Engineering (RD& E), works on new
Products and Process Developments with specific focus on
materials,coatings and design.
RD&E, Bengaluru is a globally aligned matrix set-up and works for the
Company's needs with a continued specific focus on up- gradation of
products, processes and technology, which is also recognized by the
Ministry of Science & Technology - Department of Scientific and
Industrial Research - Government of India.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Environmental, Health, and Safety (EHS) are fundamental to your
Company's business and its ability to Deliver The Promise to all the
stakeholders, including its employees, customers, shareholders, and the
public. Everyday, employees are empowered to demonstrate Kennametal EHS
commitment by striving for:
100% Safe-pursuing a goal of zero injuries, illnesses, and incidents by
living the belief that all are preventable. Your Company is pursuing
the goal of zero through senior leader ownership of safety,
preventative accions and processes, and by establishing leadership
roles for employees in safety.
Protecting Our Planet- providing sustainable solutions by reducing the
total environmental impact of our products and operations. Your Company
have been working towards protecting our planet by continuously
improving the management of energy and natural resources, promoting
recycling and recovery of materials, and preventing pollution. Among
other things, the following EHS activities/ improvements were
undertaken during the year:
* A total 3,635 hours were spent on EHS training by employees of your
Company.
* Annual medical examination of employees was conducted to maintain
good health. Health awareness programme was also conducted to create
awareness and improve good health of the employees of the Company.
* Your Company continued the Management Based Safety (MBS) programme,a
standard global safety process that has been the cornerstone of great
improvement in safety culture.
* A Risk Finder Tool and an improved Daily Safety Checklist are
designed to strengthen every employee's ability to identify, document
and eliminate hazards at their workplace.
* Your Company continued to monitor the hazardous and non-hazardous
waste, according to waste stream and disposal route, with performance
assessed on the basis of waste intensity.
To minimise risk and to improve the safe working environment through
hazard identification and Risk assessment, the following EHS
Improvements projects were completed in FYI5.
* Fire Hydrant improvement - Updating of Firefighting and sprinkler
system to minimise the fire risk.
* Installed flame detection on Carburizing furnaces ( Six numbers) with
alarm to alert the operator to take immediate action to minimize the
fire risk
* 5 dust collectors for Bangalore Metallurgy Plant to improve safe
working environment.
* In Production Unit No.2, installed dry dust collectors by removing
wet type dust collector to improve efficiency of dust collection and
also to improve safe working environment.
* Compact Heater to replace existing oil heating system to improve safe
working and also to save energy.
* Ergonomics
* Drums with materials are handled using a customised lift and tilt
unit to eliminate scooping and to minimize the exposure to dust.
* A pneumatically operated jib crane has been installed for lifting and
lowering of milling drums from the Acetone bath to prevent finger
injury and sprain to shoulder.
* Employee Involvement and Recognition
* The 404 Find and Fix program was implemented in FYI5, to involve
employees in eliminating hazards and to recognize them for their
contribution. This also helped in creating a safe working environment.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As required under Section 134(3)(o) of the Companies Act, 2013, details
about the policy developed and implemented by the Company on Corporate
Social Responsibility initiatives during the year ended June 30, 2015
are given in "Annexure VIII" to this report.
LAND COMPENSATION MATTER
As reported in the previous annual reports, the Special Land
Acquisition officer of Karnataka Industrial Area Development Board
(KIADB) had passed an order dated March 05,2012 to deposit the land
compensation amount of Rs 499.75 Lakhs after Tax Deduction at Source
(TDS) in the City Civil Court, Bangalore, due to objections raised by
the representatives of Ramlingeshwar Mutt, Harnahaili, Shivamogga,
Karnataka on the title of the property. The Civil Court finally heard
the matter and passed the verdict on June 10,2014 in favor of your
Company.The Court found an error in memo of the parties and corrected
it in December, 2014.The order for release of compensation amount was
passed on August 18,2015 and your Company has received the land
Compensation amount along with interest totally amounting to Rs 647
Lakhs which is shown as an exceptional item in the Financial Results.
After tax deduction at source, the net amount received from the court
19,2015 was Rs 5,91,80,773/-.
PERSONNEL/INDUSTRIAL RELATIONS
During the year under review, your Company maintained healthy, cordial
and good industrial relations at ail levels.The enthusiasm and
unstinting efforts of the employees have enabled your Company to remain
at the forefront of the industry.Your Directors record their
appreciation for the hard work and efficiency.
DISCLOSURES UNDERTHE COMPANIES ACT, 2013
Extract of the Annual Return
An extract of the annual return as per Form MGT - 9 is enclosed
in''Annexure IX" to the Board's Report.
Number of Board Meetings
The Board of Directors met five times during FYI5.The details of the
Board meetings and the attendance of the Directors are provided in the
Corporate Governance Report,
Committees of Board of Directors
Details of memberships and attendance of various committee meetings of
the Company are given in the Corporate Governance Report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has a structured familiarization programme for Independent
Directors of the Company which is also extended to other Non-Executive
Directors to ensure that the Directors are familiarized with their role,
rights, responsibilities and the nature/details of the Company's
business.
The Board of Directors has complete access to the information within
the Company. Presentations are regularly made to the Board of Directors
and all Committees of the Board on various matters, where Directors get
an opportunity to interact with Senior Management. Presentations, inter
alia, cover the Company's strategy, business model, operations,
markets, organization structure, product offerings, finance, risk
management framework, quarterly and annual results, human resources,
technology, EHS, quality and such other areas as may arise from time to
time.
The Company also issues an appointment letter to Independent Directors
which also incorporates their role, duties and responsibilities.
GREEN INITIATIVES
Electronic copies of the Annual Report and the notice of the fiftieth
AGM are being sent to all such members whose e-mail addresses are
registered with the Company/ its Registrar and Transfer Agent.
To the other members physical copies of the Annual Report and Notice of
the fiftieth AGM are being sent through the permitted modes of
dispatch. However, Members who have received the said documents in
electronic mode but seek physical copies of the same, can send their
requests to the Company Secretary. The remote e-voting facility is
being provided to the members to enable them to cast their votes
electronically on all resolutions set forth in the notice, pursuant to
Section 108 of the Companies Act, 2013 read with the Companies
(Management and Administration) Amendment Rules, 2015. The instructions
for the remote e- voting are provided in the notice.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities .Your
Directors place on record their gratitude to the Members for their
continued trust and confidence and express their sincere appreciation
to all employees for their teamwork and contributions during the year.
For and on behalf of the Board of Directors of
Kennametal India Limited
Bengaluru B.Anjani Kumar Bhagya Chandra Rao
August 21,2015 Director Managing Director
Jun 30, 2013
The Directors are pleased to present the 48th Annual Report and
Audited Accounts for the year ended June 30, 2013 (FY13).
FINANCIAL RESULTS
(Rs.in Lakhs)
FY13 FY12
Particulars Year ended Year ended
June 30, 2013 June 30, 2012
Total Revenue 49745 57278
Proft before Tax 1958 9894
Less: Provision for Tax
Current Tax 560 3145
Tax provision relating to earlier years (112)
Deferred Tax (credit)/charge 25 (90)
Proft after Tax 1485 6839
Add: Balance brought forward
from previous year 13057 13288
Total available for appropriation 14542 20127
Transfer to General Reserve 684
Interim Dividend 5495
Tax on Interim Dividend 891
Balance transferred to Balance Sheet 14542 13057
DIVIDEND
Your Company intends to acquire suitable parcel of land for
modernization, expansion and relocation of its manufacturing operations
and other services for future growth. The resources available would be
required for the above said purpose and hence, your Directors have
thought it prudent not to recommend any dividend for the year ended
June 30, 2013.
OPERATING RESULTS
Uncertainty in the Indian economy particularly in Automobile Industry
has resulted in a drop in your Company''s revenue in FY13. During the
year, the revenue of your Company has declined by 13.5% from Rs. 57278
Lakhs to Rs. 49745 Lakhs as compared to the previous year. This decline
in revenue has resulted in underutilisation of manufacturing capacity.
As a consequence of reduction in Sales and underutilisation of the
capacity, the Proft before Tax has declined from Rs. 9894 Lakhs to Rs. 1958
Lakhs during FY 13.
Your Company does not have any subsidiaries.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments which occurred affecting
the fnancial position of your Company between June 30, 2013 and the
date of approval of this report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis (MD&A) report is annexed to this
report as "Annexure I" as required under Clause 49 of the Listing
Agreement with BSE Limited.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Vinayak K. Deshpande and
Mr. John Chang retire by rotation, and being eligible, offers
themselves for re-appointment.
While Mr. B. Anjani Kumar has earlier represented Kennametal Inc. as a
Non-Executive director of the Company''s Board, he has been functioning
as an Independent Director for all intents and purposes. He has also
not been in the executive employment of the Company during the past
three fnancial years. In view of this, the Board approved the change
in the status of Mr. B. Anjani Kumar from Non-Executive Director to
Non-Executive Independent Director on August 16, 2013.
Mr.Bernard North resigned as Director with effect from April 30, 2013.
Your Directors place on record their appreciation of the valuable
contribution made by him to the Company during his tenure as Director.
The Board at its meeting held on April 30, 2013 approved the
appointment of Mr. Gerald Goubau flling the casual vacancy caused by
Mr. Bernard North''s cessation.
Profle of Mr. Gerald Goubau:
Mr. Gerald Goubau is Vice president- Sales EMEA region, Kennametal Inc.
and has been associated with Kennametal group since year 2007.
Mr. Goubau has over 28 years of experience in Sales & Marketing,
Engineering, Industries and General Management. He holds a Master''s
Degree in Science- Electro-Mechanical Engineering from University of
Louvain, as well as an MBA from INSEAD, France.
Resolutions are being proposed seeking consent of the members for the
re-appointment of Mr. Vinayak K. Deshpande and Mr. John Chang in the
ensuing Annual General Meeting and your Directors recommend the same
for your approval.
The brief profles of respective Directors being re-appointed as
required under Clause 49 of the Listing Agreement are furnished along
with the Notice convening 48th Annual General Meeting.
REMUNERATION COMMITTEE
The Remuneration Committee of Directors was constituted on August 16,
2013 in accordance with the applicable laws and regulations to
determine and approve remuneration payable to the Managing Director
and/or Whole time Directors and at its discretion also the remuneration
of such management team as required from time to time in compliance of
the Companies Act and rules made thereunder. The Committee consists of
Mr. B. Anjani Kumar as its Chairman, Mr. M. N. Bhagwat, Mr. Vinayak K.
Deshpande and Mr. John Chang as members.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the Annual Accounts for the fnancial year ended
June 30, 2013, the applicable accounting standards have been followed
along with proper explanation relating to material departures
- Accounting policies have been selected and applied consistently and
that the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as
on June 30, 2013 and of the proft for the period of July 01, 2012 to
June 30, 2013;
- Proper and suffcient care has been taken for the maintenance of
adequate accounting records in
accordance with the provisions of the Companies Act, 1956, for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities;
- The Annual Accounts have been prepared for the year ended June 30,
2013 on a going concern basis.
FIXED DEPOSITS
During the year, your Company has not invited/ accepted any Fixed
Deposits under Section 58A and 58AA of the Companies Act, 1956 read
with the Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s. Price Waterhouse & Co, Chartered Accountants (Firm registration
No. FRN 007567S), will retire at the conclusion of the forthcoming 48th
Annual General Meeting and being eligible, offer themselves for
re-appointment. They have furnished a written certifcate to the Company
certifying that, if they will be re-appointed as auditors of your
Company, such appointment would be within the limits specifed in
Section 224(1)(B) of the Companies Act, 1956.
The Notes to the Accounts referred to by the auditors in their report
are self-explanatory and may be treated as information / explanation
submitted by the Board as contemplated under Section 217 (3) of the
Companies Act, 1956.
zCORPORATE GOVERNANCE
A detailed report on Corporate Governance and the certifcate from Mr.
Vijayakrishna K. T, a Practicing Company Secretary confrming compliance
of Corporate Governance norms as stipulated in Clause 49 of the Listing
Agreement with the BSE Limited is set out in "Annexure II" to this
report.
CODE OF CONDUCT COMPLIANCE
A declaration signed by the Managing Director affrming compliance with
the Company''s Code of Conduct by your Directors and Senior Management
of your Company, for the year under review, as required under Clause 49
of the Listing Agreement with BSE Limited is annexed and forms part of
this report.
Kennametal Code of Business Ethics & Conduct is a major component of
the Kennametal Value Business System (KVBS). The Code addresses the
importance of fair dealing and compliance in all aspects of your
Company''s business and focuses on the concept of doing the right thing
every day.
Your Company encourages its employees to embrace the Code of Business
Ethics & Conduct to ensure maintenance of strong ethical culture.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees forms part of this report.
However, as per the provisions of Section 219(1) (b)(iv) of the
Companies Act, 1956, the Annual Report excluding the aforesaid
information is being sent to all the members of your Company and others
entitled thereto. Any member interested in obtaining a copy of the
statement containing the aforesaid information may write to the Company
Secretary at the Registered Offce of the Company and the same shall be
provided by the Company.
INCREASE OF PUBLIC SHAREHOLDING
Pursuant to the notifcation of the Securities and Exchange Board of
India (SEBI) read with the Securities Contracts (Regulation) Rules,
1957, Kennametal Inc., Promoter of your Company sold in March, 2013, an
aggregate of 28,92,333 Equity Shares of the face value of Rs. 10 each,
aggregating to approximately 13.16 % of the total paid-up share capital
of the Company by way of the Offer For Sale (OFS) through Stock
Exchange mechanism notifed by SEBI. As a result of this sale, public
shareholding of the Company has increased from 11.84% to 25% of the
total paid up share capital of your Company.
RESEARCH & DEVELOPMENT (R &D)
The Research, Development and Engineering (RD&E), works on new Product
and Process Developments with specifc focus on materials, coatings and
design.
RD&E, Bangalore is a globally aligned set-up and works with a specifc
focus on up-gradation of products, processes and technology.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In terms of Section 205C of the Companies Act, 1956, the following
amounts lying with the Company for a period of seven years were
transferred during the year to the Investor Education Protection Fund:
Unclaimed dividend - Rs.128256/-
Unclaimed fxed deposit - NIL
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(1)(e) read with the Company''s (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in "Annexure III"
to this report.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Safety, Health and Environment protection have continued to be an
important focus area in your Company. Your Company has taken efforts in
building awareness about EHS among employees, suppliers and service
providers. It is worthwhile to mention here that your Company has
commissioned a modern and very effcient system for effuent treatment of
waste, and also engaged in improving the greenery all around the
manufacturing plants.
Your Company celebrated India''s 42nd National Safety Day, and organised
a Safety exhibition in Company''s cafeteria by displaying of Personal
Protective Equipment''s, Fire and First Aid equipment''s and demo of
automatic emergency shut-off for domestic LPG Systems to create
awareness to improve safety in workplace and at home.
Employee Wellness and Well-Being are of prime concern for your Company.
Periodic preventive health checks and health promotion programs are
organised. A new Occupational Health Clinic (OHC) was constructed
during the year with facilities to treat illness and injuries.
Your Company has committed itself to the safety of its employees and
conservation of the environment by setting clear expectations, fxing
responsibilities and accountabilities. Safety campaign 2013 was
organised to create awareness and recognize employees for their
contribution. Your Company recognizes its employees for EHS
achievements and innovative EHS activities through award programs.
Management Based Safety (MBS) is your Company''s standard global safety
process that has been the cornerstone of great improvement in our
safety culture. Implementing MBS has resulted in a dramatic reduction
in safety incidents across your Company.
A Risk Finder Tool and an improved Daily Safety Checklist have been
designed to strengthen every employee''s ability to identify, document
and eliminate hazards in his or her workplace.
Waste management is a key area of focus of your Company with
opportunities to reduce the use of raw materials, packaging and other
consumables.
Hazardous and non-hazardous waste is monitored according to waste
stream and disposal route, with performance assessed on the basis of
waste intensity.
EHS Improvements undertaken during the year
- Improvements in hazardous waste storage area. Installed chip
compacting machine to facilitate compacting the Borings which helped in
the safe storage and transportation
- Disposal of E waste to Recyclers.
- Replaced the asbestos roofng in the shop foors with sandwiched sheets
and disposed the asbestos in approved Land fll site.
- The tree transplantation was done successfully to facilitate
construction of new parking area.
- Adopted various Green Initiatives to conserve the natural resources .
- The "Protecting Our Planet" program initiated by your Company in 2007
has resulted in achieving reduced Energy consumption by 46 %, Water
consumption by 15 %, Paper Consumption by 48 % and Hazardous waste
generation by 15 % in last 5 years The Company has been annually Rain
Water Harvesting 80 Million Liters of Rain water.
Awards and Recognitions for EHS activities:
During the year, your Company won the "Environmental Excellence Award
2012-13" under the Engineering & Automobile industries category from
Karnataka State Pollution Control Board.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility continues to be an important part in
the activities of your Company. The employees of your Company
continued their commitment to "Protect Our Planet". Your Company has
undertaken following initiatives/activities relating to CSR during the
year.
- Participated in the Independence Day Flower show as well as the
Republic Day Flower Show held at Lalbagh, which were organised by
Mysore Horticulture Society as a part of our ''Protecting Our Planet''
initiative.
- As a part of Delivering the Promise to the Community, Kennametal
organised a Blood Donation Drive in the campus and collected 160 Units
of blood. This was further donated to the Rashtrotthana Blood Bank.
- Continued to contribute to Akshayapatra programme under which Mid-Day
meals were provided to the students of government schools in the nearby
area.
LAND COMPENSATION MATTER
As reported in the last year''s annual report FY12, the Special Land
Acquisition Offcer of Karnataka Industrial Area Development Board
(KIADB) had passed an order dated March 05, 2012 to deposit
compensation amount of Rs.4,99,75,679/- after deduction of TDS in the
City Civil Court, Bangalore due to objections raised by the
representatives of Sri Ramlingeshwar Mutt, Harnahalli, Shimoga,
Karnataka on title of the property. Upon your Company fling a Writ
Petition before the Hon''ble High Court of Karnataka, Bangalore on July
05, 2012 vide its order dated March 18, 2013 it directed the Civil
Court to complete the proceedings within 6 months. Meanwhile, the
Special Land Acquisition Offcer, KIADB fled a Land Acqusition Case
(LAC) on August 27, 2012 before the Civil Court whereby, the dispute
was referred to the court irrespective of the stay order passed by the
Hon''ble High Court. Your Company has fled contempt proceedings against
the Special Land Acquisition Offcer, KIADB. The Civil Court vide its
order dated October 20, 2012 directed to deposit the compensation
amount of Rs.4, 99, 75,679/- payable by KIADB after deducting the tax, by
way of fxed deposit for a term of three years. Your Company is taking
all legal steps required and necessary to receive its entitled
compensation with interest.
PERSONNEL/INDUSTRIAL RELATIONS
During the period under review, your Company maintained healthy,
cordial and good industrial relations at all levels. The enthusiasm and
unstinting efforts of the employees have enabled your Company to remain
at the forefront of the industry. Your Directors record their
appreciation for this hard work and effciency.
COST AUDIT AND COMPLIANCE CERTIFICATE
Your Company appointed M/s. K.S. Kamalakara & Co., Cost Auditors,
Bangalore (frm Registration Number: 0000296) for the fnancial year
2012-13 for undertaking Cost Audit under the Companies Act, 1956 and
the Companies (Cost Accounting Records) Rules, 2011.
The Compliance Certifcate for the fnancial year ended June 30, 2012 was
fled with the Ministry of Corporate Affairs within the permissible
time.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities. Your
Directors place on record their gratitude to the Members for their
continued trust, confdence and expresses its sincere appreciation to
all the employees for their teamwork and contributions during the year.
For and on behalf of the
Board of Directors of
Kennametal India Limited
M.N. Bhagwat
August 16, 2013 Chairman
Jun 30, 2012
The Directors are pleased to present the 47th Annual Report and
Audited Accounts for the year ended June 30, 2012(FY12).
FINANCIAL RESULTS (Rs. In Lakhs)
FY12 FY11
Particulars Year ended Year ended
June 30, 2012 June 30, 2011
Total Revenue 57278 51905
Profit Before Tax 9894 12754
Less: Provision for Tax
Current Tax 3145 4019
Tax provision relating to earlier years - (115)
Deferred Tax (credit)/charge (90) (5)
Profit After Tax 6839 8855
Add: Balance brought forward from
previous year 13288 14259
Tota! available for appropriation 20127 23114
Transfer to General Reserve 684 886
Interim Dividend 5495 7692
Tax on Interim Dividend 891 1248
Balance transferred to Balance Sheet 13057 13288
DIVIDEND
An interim dividend of Rs.25 per equity share of Rs.10/- each (250% on the
paid-up capital of the Company) was declared by the Board for the
financial year ended June 30, 2012. May 25, 2012 was fixed as 'Record
Date' for the said purpose. The said interim dividend was paid from
June 4, 2012. The Board of Directors has decided to treat the same as
final dividend and therefore no additional dividend is recommended for
the year ended June 30,2012.
OPERATING RESULTS
During FY12, Total revenue was Rs. 57278 Lakhs as compared to Rs. 51905
Lakhs during the previous year {10.35% higher). Profit after tax
declined to Rs. 6839 Lakhs from Rs.8855 Lakhs recorded for the previous
year. The decline in profit is mainly due to increase in the cost of
input raw materials.
Your Company does not have any subsidiaries.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred affecting
the financial position of your Company between June 30, 2012 and the
date of approval ofthis report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis (MD&A) report is annexed to this
report as Annexure I as required under Clause 49 of the Listing
Agreement with BSE Limited.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr.Bidadi Anjani Kumar and
Mr.Bernard North retire by rotation, and being eligible, offers
themself for re-appointment. Your Directors commend the re-appointment
of Mr. Bidadi Anjani Kumarand Mr. Bernard North for youracceptance.
Mr. Santanoo Medhi, resigned as Managing Director and Director of the
Company and the Board of Directors have relieved him from the position
of the Managing Director with effect from September 17, 2012. The
Directors place on record their appreciation for the valuable
contributions made by Mr. Medhi during his tenure as Managing Director
of the Company. .
Mr. Bhagya Chandra Rao was appointed as Additional Director on the
Board and subsequently as Managing Director of the Company with effect
from September 17,2012, subject to the approval of the members.
Appropriate resolutions are being proposed seeking consent of the
members for the aforesaid reappointments/appointment and your Directors
recommend your approval. Profiles of respective Directors being
appointed/reappointed as required under Clause 49 of the Listing
Agreement are given along with the Notice convening 47" Annual
General Meeting.
DIRECTORS'RESPONSIBILITY STATEMENT
Pursuant to Section 217{2AA) of the Companies Act, 1956, the Board of
Directors report that:
- that in the preparation of the Annual Accounts for the financial
year ended June 30, 2012, the applicable accounting standards have been
followed along with proper explanation relating to material departures
- Accounting policies have been selected and applied consistently and
that the judgments and estimates made are reasonable and, prudent so as
to give a true and fair view of the state of affairs of the Company as
on June 30, 2012 and of the profit for the period of July 1,2011 toJune
30,2012;
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities:
- The Annual Accounts have been prepared for the year ended June 30,
2012 on a going concern basis.
FIXED DEPOSITS
During the year, your Company has not invited/accepted any Fixed
Deposits under Section 58Aand 58AAofthe Companies Act, 1956 read with
the Companies {Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s.Price Waterhouse & Co., Chartered Accountants (Firm registration
No. FRN 007567S), will retire at the conclusion of the forthcoming 47th
Annual General Meeting and being eligible, offer themselves for
re-appointment. They have furnished a written certificate to the
Company certifying that, if they are re-appointed as auditors of your
Company, such appointment would be within the limits specified in
Section 224(1)(B) of the Companies Act, 1956.
The Notes to the Accounts referred to by the auditors in their report
are self-explanatory and may be treated as information/explanation
submitted by the Board as contemplated under Section 217 (3) of the
Companies Act, 1956.
CORPORATE GOVERNANCE
A detailed report on Corporate Governance and the certificate from Mr.
Vijay Krishna VT, a Practicing Company Secretary confirming compliance
of Corporate Governance norms as stipulated in Clause 49 of the Listing
Agreement with BS E Li mited is set out in Annexure II to this report.
CODE OF CONDUCT COMPLIANCE
A declaration signed by the Managing Director affirming compliance with
the Company's Code of Conduct by your Directors and Senior Management
of your Company, for the year under review, as required under Clause 49
of the Listing Agreement with BSE Limited is annexed and forms part of
this report.
Kennametal Code of Business Ethics & Conduct is a major component of
the Kennametal Value Business System (KVBS). The Code addresses the
importance of fair dealing and compliance in ail aspects of your
Company's business and focuses on the concept of doing the right thing
everyday.
Your Company encourages its employees to embrace the Code of Business
Ethics & Conduct to ensure maintenance of strong ethical culture.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees forms part of this report.
However, as per the provisions of Section 219(1) (b)(iv) of the
Companies Act, 1956, the Annual Report excluding the aforesaid
information is being sent to all the members of your Company and others
entitled thereto. Any member interested in obtaining a copy of the
statement containing the aforesaid information may write to the Company
Secretary at the Registered Office of the Company and the same shall be
provided by the Company.
RESEARCH & DEVELOPMENT (R&D)
The Research, Development and Engineering (RD&E) works on development
of new Products and Process Developments with specific focus on
materials, coatings and design.
RD&E function of your Company in collaboration with the parent
Company-Kennametal Inc. continues its endeavor for new products
development, enhancement of product efficiency, reduction in cost,
enhancement of durability etc. and has a globally aligned matrix
set-up. RD&E works as per the global requirements of Kennametal Inc.
with a continued specific focus on up-gradation of products, processes
and technology in line with local market requirements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217{1){e) read with the Company's (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in Annexure III
to this report.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Safety, Health and Environment protection have continued to be an
important focus area in your Company. Your Company has adopted an
integrated approach towards EHS and has incorporated these in business
practices. Your Company is committed to maintain highest standard of
Health, Safety and Environment Protection and also complying with all
applicable EHS laws and regulations and align EHS strategies with
business goals and objectives.
On Safety front, you r Company strives to work safely in a manner that
protects and promotes the health and well-being of employees,
contractors, and the communities in which it operates because it is
fundamentally the right thing to do. Your Company believes that safety
is largely about cultural change, with the ultimate goal of
institutionalizing a safety system that first and foremost protects its
employees, contractors, and the communities in which it operates.
Management Based Safety (MBS) process is implemented in your Company
which involves Leaders , Supervisors and Employees to practice MBS
Tools which will help to build safety culture.
EHSTraining
Your Com pany du ring the year under review -
- Focused-Hand Safety awareness, Chemical Safety, Office ergonomics,
MBS office, MBS Refreshing , Health Awareness and Industrial Safety.
Achieved 5.73 hrs peremployee EHStraining.
- EHS e-learning tool has been designed and developed to give its
employees the knowledge needed to develop skill, and competency to
create 100% compliance and safe working environment.
- Developed on line reporting system to inculcate a habit to follow
MBS Tools practice with meaning by all the levels.
Environment:
Your Company during the year under review-
* continued its green initiatives and conserved Energy of 5.7 Lakh
units, reduced its water consumption by 20 % and continued the rain
water harvesting. The factory premises' greenery was increased by
25,000 Sq.ft and trees which were up- rooted due to land acquisition by
Karnataka Industrial Areas Development Board (KIADB) for the Bangalore
Metro Rail Project were successfully transplanted. In addition about
100 saplings were planted to facilitate green coverage of the facility.
Your Company continued to recycle sewage water by treating it in the
Sewage Treatment Plant and using the treated water for gardening.
* conducted Carbide Recycling process- 8.5 Tons of used Carbide was
purchased from various customers and recycled the same, so as to reduce
energy usage, and add sustainable raw material usage.
Awards and Recognitions for EHS activities:
Awards received from Kennametal Inc. USA, the Parent company viz.
(1)100% Safe - Health and Safety Awards- Excellence Award No.1, and (2)
'Protecting Our Plant'-Environmental Awards - Presidential Award.
Your Company was conferred with the following awards (1)" Certificate
of Commendation for Strong Commitment - 2011" by Confederation of
Indian Industries (Cll)Ã Indian Tobacco Company (ITC) Sustainability
Center (2) State Energy Conservation Award- 2011 by Government of
Karnataka and Karnataka Renewable Energy Development Ltd. (KREDL) (3)
State Best Maintained Industrial Garden by - Department of
Horticulture & Mysore Horticultural Society and "Gold Award" in
Engineering Sector at National Level Competition for outstanding
achievement in Safety Management, during the year under review.
CORPORATE SOCIAL RESPONSIBILITY {CSR)
Corporate Social Responsibility continues to be an important part in
the activities of your Company, The employees of your Company continued
their commitment to Protect Our Planet. Your Company undertaken
following initiatives/activities relating to CSR.
- Active participation in the 'LaSbagh Republic Day Flower Show'
organized by Mysore Horticultural Society, as a part of 'Protect Our
Planet' initiative.
- In order to create Environmental Awareness among school children the
employees of your Company conducted workshop on Rain Water Harvesting
in schools located adjacenttothe premises of your Company, .
- Continued to participate in the Akshaya Patra Programme under which
Mid-Day meals were provided to the students of government schools
located adjacent to the premises of your Company.
FACTORY LAND ATTUMKUR ROAD
KIADB had acquired and taken possession of your Company's land to the
extent of 3,435.26 sq. mts located at Sy. No. 11 Nagasandra,
Yeshwanthpur Hobli, Bangalore for the use of Bangalore Metro Rail
Project. The Company had sought release of compensation amount by
producing all the relevant records establishing the title of the
Company over the acquired land, without prejudice to its right to claim
higher compensation in future. Meanwhile, Sri Ramlingeshwar Mutt,
Harnahalli, Shimoga, Karnataka, a religious organisation filed an
objection against payment of the compensation amount to your Company
contending that several lands including that acquired by KIADB belongs
to them. The Office of the Special Land Acquisition Officer-2 vide its
Order dated March 05, 2012 has decided to refer the matter to the City
Civil Court under Section 30, 31 of the Land Acquisition Act, 1894
stating that there is an objection with regard to the right of
ownership of land existed and that civil court was the appropriate
authority to decide the same. Upon challenging the order by your
Company by way of a Writ application, the Hon'ble High Court of
Karnataka, Bangalore has, vide its Order dated July 11, 2012 granted an
interim stay of the Order passed by the Special Land Acquisition
Officer. The matter is pending before the High Court of Karnataka,
Bangalore.
PERSONNEL / INDUSTRIAL RELATIONS
During the period under review, your Company maintained healthy,
cordial and good industrial relations at all levels. Kennametal India
Employees Association (KlEA) had served a notice of indefinite strike
due to delay in wage settlement. The 4 Year Wage Settlement was signed
between KIEAand the Company on June 29, 2012. The enthusiasm and
unstinting efforts of the employees have enabled your Company to remain
at the forefront of the industry. Your Directors record their
appreciation for this hard workand efficiency.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities. Your
Directors place on record their gratitude to the Members for their
continued trust, confidence and expresses its sincere appreciation to
all the employees for their teamwork and contributions during the year.
For and on behalf of the Board of Directors
of Kennametal India Limited
M. N. Bhagwat
September 17,2012 Chairman
Jun 30, 2010
The Directors are pleased to present the 45th Annual Report and
Audited Accounts for the year ended June 30, 2010 (FY10).
FINANCIAL RESULTS (Rs. in million)
FY10 FY09
PARTICULARS Year ended Year ended
June 30, 2010 June 30, 2009
Sales including other income 3,828.59 3,182.83
Profit Before Depreciation and Tax 969.42 599.33
Less: Depreciation 202.95 188.13
profit Before tax 766.47 411.20
Less: Provision for Tax
Current Tax 238.00 169.82
Deferred Tax 8.79 (46.26)
Fringe Benefit Tax - 7.50
profit After tax 519.68 280.14
Add: Balance brought forward
from previous year 1,291.35 1,011.21
profit available for appropriations 1,811.03 1,291.35
Transfer to General Reserve 52.00 0
Interim Dividend 285.72 0
Tax on Interim Dividend 47.45 0
Balance transferred to Balance Sheet 1,425.86 1,291.35
DIVIDEND
During the year, the Board of Directors declared and paid an Interim
Dividend of Rs.13/- per equity share on 21,978,240 equity shares of
Rs.10/- each (130% on the paid up capital of the Company) during May
2010. The total outgo on account of
dividend, inclusive of taxes, for FY10 was Rs.333.17 Million which
represents a pay-out of 64% of the Companys profits. The Board of
Directors have decided to treat the same as final dividend and
therefore no additional dividend is recommended for the financial year
ended June 30, 2010.
OPERATING RESULTS
Your Company significantly improved its operating results in FY10 with
Total Income increasing by 20% to Rs.3,828.59 Million compared with
Rs.3,182.83 Million in the previous year. The growth in total income
for the year was driven by an improved performance in the Automobile
Industry and General Engineering Sector. Consequent to this commendable
performance, the profit after tax of your Company for the year under
review was Rs. 519.68 Million as against Rs. 280.14 Million of the
prior year, an increase of 86% over prior year.
Your Company does not have any subsidiaries.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred affecting
the financial position of the Company between June 30, 2010 and the
date of approval of this report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis (MD&A) report is annexed to this
report as Annexure I as required under Clause 49 of the Listing
Agreement with Bombay Stock Exchange Limited.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Bernard North retires by
rotation, and being eligible, offers himself for re-appointment.
During the year -
- Mr. Dinakar A, resigned as Managing Director and Director of the
Company with effect from September 04, 2009. Mr. Frank P. Simpkins
resigned as Director with effect from April 24, 2010. Mr.Rakesh Makhija
resigned as Director with effect from on August 14, 2010. Your
Directors place on record their appreciation and acknowledge the
valuable contributions made by them to the Company during their tenure
as Directors.
- Mr. Bidadi Anjani Kumar was appointed as Additional Director on the
Board of the Company with effect from April 02, 2010.
- Mr. Santanoo Medhi was appointed as Additional Director on the Board
and subsequently as Managing Director of the Company with effect from
April 24, 2010, subject to the approval of the Central Government, the
application for which has already been made.
- Further, Mr. Vinayak Kashinath Deshpande was appointed as Additional
Director (Non Executive Independent Director) effective September 06,
2010.
Appropriate resolutions are being proposed seeking consent of the
members for the aforesaid re-appointment/appointments and your
Directors recommend your approval. Profiles of respective Directors
being appointed / re-appointed as required under Clause 49 of the
Listing Agreement, are given along with the Notice convening 45th
Annual General Meeting.
Directors responsibility statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any;
- Accounting policies have been selected and applied consistently and
that the judgments and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the financial year and of the profit of the Company for that
period;
- Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- The annual accounts have been prepared on a going concern basis.
RECONSTITUTION OF THE COMMITTEES AND CESSATION OF OFFICE OF "MANAGER"
The Audit Committee of Directors, Shareholders / Investors Grievance
Committee of Directors and Share Transfer Committee were reconstituted
during the year, the details of which have been provided in the
Corporate Governance Section of this report. Consequent to the
appointment of Mr. Santanoo Medhi as Managing Director of the Company,
Mr. D. Sarathy ceased to be the ÃManagerà of the Company with effect
from April 24, 2010.
FIXED DEPOSITS
The Companys fixed deposit scheme was foreclosed on April 01, 2003 and
all deposits outstanding as on March 31, 2003 were sought to be repaid.
During the year, your Company has not invited/accepted any Fixed
Deposits under Section 58A and 58AA of the Companies Act, 1956 read
with the Companies (Acceptance of Deposits) Rules, 1975.
As on June 30, 2010, six depositors having fixed deposits aggregating
to Rs.336,750/- remained unclaimed. In terms of Section 205C of the
Companies Act, 1956, such amount remaining unclaimed upon the expiry of
seven years from the date of maturity will be transferred to the
Investor Education and Protection Fund.
TRANSFER to iNVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 205C of the Companies Act, 1956, the following
amounts lying with the Company for a period of seven years were
transferred during the year under review to the Investor Education and
Protection Fund :
Unclaimed fixed deposit Rs. 75,103
Unclaimed dividend Nil
AUDITORS
M/s. Price Waterhouse, Chartered Accountants, Auditors of the Company
will retire at the conclusion of the forthcoming 45th Annual General
Meeting and being eligible, offer themselves for re-appointment. They
have furnished a written certificate to the Company certifying that, if
they are re-appointed as auditors of your Company, such appointment
would be within the limits specified in Section 224 (1)(B) of the
Companies Act, 1956.
CORPORATE GOVERNANCE
A detailed report on Corporate Governance and the certificate from the
CompanyÃs Statutory Auditors confirming compliance of Corporate
Governance norms as stipulated in Clause 49 of the Listing Agreement
with the Bombay Stock Exchange Limited is set out in Annexure II to
this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees forms part of this report.
However, as per the provisions of Section 219(1) (b)(iv) of the
Companies Act, 1956, the Annual Report excluding the aforesaid
information is being sent to all the members of the Company and others
entitled thereto. Any member interested in obtaining a copy of the
statement containing the aforesaid information may write to the Company
Secretary at the Registered Office of the Company and the same shall be
provided by the Company. Shareholders may inspect the said Statement at
the Registered Office of the Company between 10.30 am and 12.30 pm on
any working day for the Company till the date of the forthcoming 45th
Annual General Meeting.
RESEARCH & DEVELOPMENT (R &D)
The Research, Development and Engineering (RD& E), unit at your Company
works on new Product and Process Developments with specific focus on
materials, coatings and design.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE, ETC.
A report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(1)(e) read with the Companys (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in Annexure III
to this report.
Your Company was conferred ÃState Energy Conservation Award 1st PrizeÃ
in general category by Karnataka Renewable Energy Development Limited
and Department of Energy, Government of Karnataka. Your Company was
also conferred, the ÃMost Innovative Energy Conservation Project in
Karnataka à 2010à à by Bangalore Chamber of Industries and Commerce
(BCIC) and Government of Karnataka.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
Safety, Health and Environment protection are of paramount concern to
your Company. To celebrate IndiaÃs 39th Safety Day, a safety
exhibition was organized at the factory premises for the benefit of the
employees. An Automatic Fire Hydrant System was installed and
commissioned during the year under review. Your Company was awarded
the First Position in the State Level Award for Outstanding Safety
Performance and Management Systems - Athyunnatha Surksha Puraskara by
the National Safety Council (Karnataka Chapter). Your Company has
recorded zero eye injuries sustained for the past 6 years.
Water Conservation: Your Company harvested 80 Million Liters of
rainwater during the monsoon season which seems to have recharged the
groundwater in the factory premises and in surrounding villages. Your
CompanyÃs water requirement for domestic usage is catered to by inhouse
bore wells. Domestic sewage water is treated in the sewage treatment
plant and subsequently used for gardening. 50,000 sq.ft. of additional
greenery was developed in the campus of factory premises at Bangalore.
Through a specially designed Management Based Safety programme, your
Company has inculcated global best practices in safety and created a
culture that accords pre-eminence to the safety of its employees. Your
Company has a
stated objective of ensuring one hundred percent safety for its
employees. Your Company has committed itself to the safety of its
employees and conservation of the environment by setting clear
expectations, fixing responsibilities and ensuring accountability.
CORPORATE SOCIAL RESPONSIBILITY
Your Company takes its responsibilities as a corporate citizen. During
the year under review your Company has initiated many activities to
contribute its might towards the betterment of the under privileged
sections of society, the support to those affected by natural
disasters, and the conservation of the environment.
- Your Companys employees participated in the Bangalore Walkathon on
June 05, 2010 thereby demonstrating its strong commitment towards
protecting the planet on the eve of the World Environment Day.
- Your Companys employees generously contributed to "A-Coin-A-Day"
programme, the proceeds of which were utilised for the benefit of the
Abhilashrayam Foundation and a nearby Government Primary School,
- To mitigate the misery caused by unprecedented food in the Northern
part of Karnataka, the employees of your Company contributed a days
salary and your Company matched their contribution to aggregate a
donation of Rs. 1.13 Million towards the Chief Ministers Relief Fund
during the year.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation for the support and
assistance received from customers, investors, business associates,
bankers, vendors, regulatory and governmental authorities. The Board
places on record its gratitude to the Members for their continued
trust, confidence and expresses its sincere appreciation to all the
employees for their teamwork and contributions during the year.
For and on behalf of the Board of Directors
of Kennametal India Limited
Bangalore M.N. Bhagwat
September 06, 2010 Chairman
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