Mar 31, 2022
Your Directors take pleasure in presenting the 5th Integrated Report (prepared as per the framework set forth by the International Integrated Reporting Council) and the 32nd Annual Accounts on the business and operations of Tata Metaliks Limited (''TML'' or ''Company'') for the financial year (FY) ended March 31, 2022.
('' crore) |
||
Particulars |
Financial Year |
Financial Year |
2021-22 |
2020-21 |
|
Revenue from operations |
2745.53 |
1,916.66 |
Total expenditure before finance cost, depreciation |
2367.50 |
1,527.43 |
Operating Profit |
378.03 |
389.23 |
Add: Other Income |
16.65 |
8.12 |
Profit before finance cost, depreciation and taxes |
394.68 |
397.36 |
Less: Finance costs |
24.50 |
23.60 |
Profit before depreciation and taxes |
370.18 |
373.76 |
Less: Depreciation and amortization expenses |
61.69 |
67.13 |
Profit before exceptional items |
308.50 |
306.63 |
Exceptional Items |
30.83 |
|
Profit before tax |
339.32 |
306.63 |
Less : Tax expenses |
101.26 |
86.00 |
(A) Profit after tax -from continuing operations |
238.06 |
220.62 |
(B) Loss after tax - from discontinued operations |
(0.61) |
(0.81) |
(c) Profit for the Year (A B) |
237.45 |
219.81 |
(D) Other comprehensive income net of tax |
0.40 |
(0.30) |
(E) Total comprehensive income for the year (C D) |
237.85 |
219.51 |
Retained Earnings: Balance brought forward from the previous year |
700.01 |
487.52 |
Add: profit for the period |
237.45 |
219.81 |
Add: Other Comprehensive Income recognised (in Retained Earnings) |
0.40 |
(0.30) |
Add: Other movements within equity |
- |
- |
Balance |
937.85 |
707.03 |
Which the Directors have apportioned as under to: |
||
(i) Dividend on Ordinary Shares |
12.63 |
7.02 |
(ii) Tax on Dividend |
- |
- |
Retained Earnings: Balance to be carried forward |
925.22 |
700.01 |
As the second wave of COVID hit the country, fresh lockdowns were declared in several states during the first quarter. Restrictions were imposed in various parts of the country including West Bengal where intra-state transportation was affected. Consequently, the business got adversely affected in Q1 owing to the restrictions and allied disruptions in supply chain. Profits took a hit during Q3 mainly due to lower production in one of the Blast Furnaces owing to planned shutdown and higher cost of raw materials. Despite the continuing volatilities and surge in prices of major raw materials like coal, coke and iron ore, the Company remained resilient to achieve its highest-ever Turnover and highest-ever PBT. Highlights of the Company''s annual performance are:
⢠Highest-ever annual Hot Metal and DI Pipe production
⢠Highest-ever annual Coke Plant production
⢠Highest-ever annual Power Generation
⢠Highest-ever annual sales of PI and DI pipe from Kharagpur plant
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations''), the Board of Directors of the Company (the ''Board'') formulated and adopted a Dividend Distribution Policy.
The policy is available on our website at
https://www.tatametaliks.com/static-files/pdf/policies/
dividend-distribution-policy.pdf
The Board has recommended highest-ever dividend of ''8/-per Equity Share on 3,15,77,500 Equity Shares of ''10/- each for FY 2021-22 (previous year ''4 per equity share on 3,15,77,500 Equity Shares of ''10/- each). The Board has recommended dividend based on the parameters laid down in the Dividend Distribution Policy and the dividend will be paid out of the profits for the financial year.
The dividend on equity shares is subject to the approval of the Members at the ensuing Annual General Meeting (''AGM'') scheduled to be held on Tuesday, August 02, 2022 and will be paid on and from Saturday, August 06, 2022.
The dividend, if approved, would result in a cash outflow of ''25.26 crore. The total dividend outgo works out to 10.64%
(FY 2020-21: 5.75%) of the net profits.
Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the shareholders effective April 1, 2020 and the Company is required to deduct tax at source from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.
The Register of Members and Transfer Books of the Company will remain closed from Friday, July 22, 2022 to Tuesday,
August 02, 2022, (both days inclusive) for the purpose of payment of the dividend for the financial year ended March 31, 2022 and the AGM.
The Board has decided to retain the entire amount of profit for FY 2021-22 in the statement of profit and loss and no amount is proposed to be transferred to the general reserves.
During the year under review, the Company incurred capital expenditure of around ''324 crore, which has been funded through internal accruals. Despite adverse impact of two waves of COVID and geo-political crisis having far reaching impact on input costs, the Company successfully managed its liquidity situation and end the year with highest ever cash surplus of ''337 crore along with undrawn lines of both fund-based and non-fund based limits sanctioned by banks.
The Management Discussion and Analysis Report, in compliance with Regulation 34(2)(e) of SEBI Listing Regulations, forms an integral part of this report and is annexed herewith as Annexure A.
In line with the Company''s commitment to stakeholders to adopt sustainable business practices, we transitioned from a compliance-based reporting to the governance-based reporting by adopting the Integrated Report
Our 5th IR not only highlights our value creation process woven around our six business pillars but also provides enhanced disclosures around our business model, material issues and stakeholders, Environment Social and Governance (ESG) outcomes, response to external challenges, value creation outcomes, and risk management and governance aspects.
The enhanced disclosures are in line with our commitment to enhance accountability and promote a transparent approach to corporate reporting.
Financial & Operational Performance
The financial year 2021-22 has been a year of twists and turns. The year started with the deadly second wave of COVID-19 pandemic in India that saw a severe health crisis across the populace; it also impacted production at several facilities including at our plant that was partly also due to workforce restrictions imposed by the Govt. However, the situation settled down in Q2 with economic activity picking up & creating an upward momentum in the economy. Q4 witnessed a much milder third covid wave hitting the country but the economic impact was limited; however, the start of the Ukraine-Russia conflict in Q4 triggered a sharp jump in commodity prices which was already on an upward trend. Prime hard Coking coal prices reached a record level of USD670/t compared to approx. USD 100/t a year or so back. This put tremendous pressure on the cost structure of the pig iron and DI pipe makers; however, the war in Ukraine also cut off the exports of Pig iron & Steel from these two countries which have traditionally been large exporters. This led to a surge in the prices of iron & steel in the global markets and which then started impacting the domestic prices as well from March''22.
Despite the various challenges & price volatility enumerated above, the Company remained resilient and continued to focus on its operational performance. The rising input costs coupled with additional royalty on iron-ore for supplies from the captive mines of Tata Steel affected our margins adversely in H2. However, increased operational efficiencies, continued focus on improvement initiatives, agile procurement strategies aided by the rise in PI market prices helped in offseting the impact of rising costs to some extent.
Despite the above, the Company''s resilience and resource optimization helped it to clock an EBITDA from Operations of ''394.68 crore (FY 2020-21: ''397.36 crore) and record its highest-ever Profit Before Tax (PBT) of ''339.32 crore (FY 2020-21:
''307 crore).
State of Company''s affairs Pig Iron (PI)
During the year under review, demand got impacted severely in Q1 due to COVID second wave as operations in all major Foundry clusters got curtailed and domestic Foundry Grade (''FG'') PI prices remained volatile in line with related commodities viz. steel, scrap, sponge iron etc. Demand started recovering from mid-July 21 onwards with average utilization levels reaching 70-80% at all major foundry clusters. In Q3 demand was moderate due to festive season and recovery from second wave of COVID and it ultimately showed signs of recovery in Q4 when utilization levels improved to 80-90% in the foundries. However, the PI prices remained volatile throughout the year and reached all-time high levels due to unprecedented rise in raw material prices especially coking coal and coke.
Ductile Iron Pipe (DIP)
Despite sufficient volume of dispatchable orders and fund clearances from the government, DIP industry witnessed muted dispatches in Q1 due to COVID induced lockdowns. With rising demand and buoyant commodity prices, DIP prices witnessed a positive movement from the beginning of FY 2021-22 and the rising trend continued throughout the year. In the second and third quarter of the year industry witnessed moderate increase in dispatches. But in Q4, the increase in dispatches was visible with 578 KT in Q4 vs 555 KT in Q3. During FY 2021-22, the Company clocked DIP sales of 237 KT with a market share of 12%. The Company''s DI pipe business profitability for the year was adversely hit as the Company continued to support its customers & honour all the old low price contracts despite the significant increase in raw materials prices.
COVID-19 Response
The second and third wave of COVID-19 pandemic had adverse impact across global economies and financial markets. Most governments reacted by instituting covid-related restrictions, business shutdowns, quarantines and restrictions on travel.
Such actions led to disruption of economic activity, leading to many economies encountering contractions. The Company continued its agile response in taking precautionary measures to combat the spike in COVID cases at its plant in Kharagpur where most of the employees are based. Besides thermal screening and close medical monitoring that continued since the previous year, the Company focused on vaccination drive for employees & their families, including contract workers ; we also created various support groups and continued the digital health and wellness support for employees and their families. The existing Pod (roster system), work from home options, along with other industry-leading covid protocols continued till the Government of India provided relaxations. By March 31, 2022, we conducted more than 15,000 COVID-19 tests of which 529 positive cases were detected. There were 22 hospitalization cases with 3 unfortunate deaths.
In line with our focus on digital and innovation, the various contactless and digital solutions continued to aid our combat against COVID. Continuing our journey to build safety leadership capability, in-house online training modules, workforce engagement through virtual meetings, e-workshops, e-learning modules, helped increase connect with employees & build their morale. The Company not only provided medical assistance, but also arranged special medical insurance against COVID-19 for its employees and provided special COVID leave for employees who were infected with COVID-19 or advised home quarantine due to contact tracing at workplace.
The Company also allocated a special COVID-19 fund to provide immediate relief to the vulnerable communities including
daily wage workers who were adversely impacted due to the lockdowns. Assistance was also extended to the local hospitals and nursing homes at Kharagpur, with beds, oxygen cylinders and other medical equipment. There were multiple awareness sessions taken by employees to spread awareness about COVID-19, and the importance of vaccination. Postlockdown, operations continued with strict adherence to SOPs and extensive testing for all employees working in the plant at regular intervals based on contact tracing SOP.
D. Key Developments Change in capital structure
There has been no change in the capital structure of the Company during the year under review.
The Equity Share Capital of the Company is ^31,57,75,000 divided into 3,15,77,500 Equity Shares of ?10/- each as on the close of the FY 2021-22.
Sale of land at Redi
During the year under review, the Company completed sale of the vacant land at Redi, Maharashtra. The sale proceeds have been recognized as income under exceptional items in the financial statements.
Scheme of Amalgamation of Tata Metaliks Limited with Tata Steel Long Products Limited
The Scheme of amalgamation of Tata Metaliks Limited into and with Tata Steel Long Products Limited was approved by the Board of Directors of the Company at its meeting held on November 13, 2020. The statutory submissions were made to the Stock Exchanges i.e. National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Stock Exchanges had sought additional information on the scheme and the Company is in the process of appropriately responding to the same.
Credit Ratings
The Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The credit rating of your Company for long-term stands at [ICRA] AA- and short-term facilities stands at [ICRA] A1 . Details are provided in Corporate Governance Report.
E. Sustainability
The Company''s philosophy of sustainable value creation is deep rooted with the core values of the Tata Group. Underpinning this philosophy is a strong focus on zero harm along with resource efficiency and circular economy, minimising carbon footprint and care for community and workforce. This is ensured through a broad spectrum of focused interventions in areas of environment management, water sustainability, carbon emission reduction, use of alternate fuel and community development. Our commitment to serve our stakeholders is deployed by the linkage of our business priorities with United Nations Sustainable Development Goals (UNSDGs). The Company has set in motion a roadmap to be carbon neutral by 2050, enhancing value proposition on circular economy, implementing renewable/ alternate energy sources and higher
carbon pricing for revenue and capital decisions, to name a few. During the year, the Company adopted a sustainability policy to sharpen our sustainability interventions and attain the sustainability targets. The Policy is available at https://www. tatametaliks.com/static-files/pdf/policies/sustainabilitv-policv. pdf
Various initiatives taken in the last few years have not only improved our ESG performance but also improved the lives of the focused communities. External voluntary assessments by leading institutes and independent agencies, internal benchmarking study of ESG practices to acknowledge and adopt the best practices and materiality assessment help us regularly calibrate our interventions in our sustainability journey. The Company in FY 2021-22 also made carbon emission disclosure directly for the first time under Carbon Disclosure Project (CDP) for its stakeholders and was one of the very few Companies in the Iron & Steel sector in the country to do so.
The Company remains committed to serving its customers through a portfolio of eco-friendly products and environmental impact of its products by using Life Cycle Assessment (''LCA'') methodology. During the year under review, the Company also initiated the process for "GreenCo" certification.
Some of the key interventions on the sustainability front undertaken by the Company include setting up solar power plant & solar water heating system, GHG emission profiling, local community development in areas of Education and Essential amenities, operating a Skill Development Centre, to name a few. In FY 2020-21, the Company also launched another major initiative for its community called "TML 300 schools" to transform access & quality of education of children in the nearby villages in two blocks covering approx. 300 schools around the plant with the ultimate goal of making the area a child-labour free zone.
Environment & Climate Change
The Company continues its journey towards minimizing environmental impact of its operations. In line with the Tata Group Core values, concern for environment under the strategic business pillar of ''Responsible Corporate Citizenship'' is deeply embedded in Company''s vision and strategy.
The Company has implemented environment, health and safety management systems in accordance with standards ISO 14001, ISO 45001 and SA 8000 which provides the necessary framework for managing compliance and improving environmental performance. The Safety, Health, & Environment Committee of the Board provides oversight and necessary guidance on environmental matters. The manufacturing plant at Kharagpur operational excellence in harmony with environment based on the principles of 3 Rs - Reduce, Reuse and Recycle.
Climate change is one of the most pressing issues the world faces today and the Company recognizes the same and is committed to optimise water consumption, reduce waste, reduce carbon and energy footprints. The drive towards renewable energy and minimizing emissions is reflected in its various initiatives-setting up a 1 MWp Solar power plant, usage
of Electric vehicles (EVs) inside the plant as also a major drive towards improving energy efficiency. During the year, Energy Audit for PI division was initiated through a BEE accredited agency. The Company has also begun its journey to achieve its goal of becoming carbon neutral by 2050 in line with its longterm decarbonisation strategy.
Safety and Health
The Company under the guidance of the Safety, Health and Environment (SHE) Committee remains committed to its objective of achieving Zero harm through a set of well thought out strategies that include Contractor Management Safety, Process Safety, Risk based thinking and transforming the mindset of employees to enhance Behavioral Safety. During the year under review, renewed thrust was made on risk-based Safety approach by eliminating or reducing high risk activities through engineering controls & automation. Some of the key initiatives taken include commissioning of one-of-a-kind Vacuum pad system for loading & unloading of DI Pipes, deployment of robotics, and virtual training in collaboration with JN Tata Vocational Training Institute (JNVTI) on Safety Competency Building for Service Providers, Safety Supervisor and Site Supervisors. Further, behavior-based culture study was conducted to understand Safety Maturity Index Level. Efforts towards Hazard Identification and Risk Assessment (HIRA) in new recalibrated HIRA matrix and initiation of Process Safety Risk Management (PSRM) in critical processes are helping develop a Risk based approach to Safety which will give a thrust to achieving the goal of Zero harm. During the year the Company developed E-learning modules on Safety Induction & Safety Standards and also developed VR (Virtual Reality) modules on Lock out Tag out Try out (LOTOTO) & Centrifugal casting machine (CCM) operation and Fire fighting.
Digital
As part of the Digital Transformation Journey, several initiatives including deployment of Robotics, use of AI based system and Virtual Reality (VR) based training are being deployed to reduce Employee Machine interface and improve safety in the workplace. The DIP plant No. 2 (DIP-2) has been designed with a very high degree of automation & usage of dozens of robots; the first phase of DIP-2 has been commissioned through usage of digital technologies like Augmented Reality , a first in the DI Pipe industry. The new digital and robotics interventions will not only improve safety significantly, but will also enhance productivity and quality of operations.
Customer Relationship
Customer-centricity forms the core of Company''s strategic business pillar of "Supplier of Choice". The Company''s marketing strategy is built around developing deep customer engagement, differentiated product & service offerings and leveraging digital to improve the customer experience journey. During the year, the Company used virtual platforms to engage with customers and offered technical services and technical webinars with both domestic and international customers further leveraging the knowledge capital.
The Company''s digital initiatives served as a big differentiator during the pandemic and helped the Company to develop
stronger relationships with customers. Regular usage of data analytics tools such as pricing analytics has helped the Company in sharpening its pricing strategy. The Company implemented the Customer Relationship Management (CRM) solution for its Pig Iron business which improved ease of doing business with channel partners and customers In Q4 of FY 202122, 98% of PI orders were booked through CRM of which 40% orders were logged by channel partners & customers themselves. The CRM solution of DI pipe business has also gone live in beginning of FY 2022-23. The Company continues to promote its Tata eFee and Tata Ductura as premium brands which offers superior value to its customers through enhanced digital marketing enablers including social media platforms. During the year various technical webinars, technical services and onsite interactions were carried out to facilitate promotion.
Corporate Social Responsibility
The Corporate Social Responsibility (''CSR'') initiatives of the Company are embodied in its value chain and aligned with the core purpose of the Tata Group. The Company is committed to improving the quality of life of the community through longterm value creation for all its stakeholders.
In addition to the response to COVID-19 reported earlier, the Company continued with its focused interventions in the areas of Education and Essential Amenities which include projects on health, sanitation, water conservation and sustainability. Further, the Company also engaged with the community to develop entrepreneurs through formation of self-help groups in partnerships with other organisations. The Company has partnered with Tata Strive to impart quality training at its Skill Development Centre with the objective of making the youth employable.
The CSR activities are carried out through ''Sadbhavna Trust''.
In terms of Section 135 of the Companies Act, 2013 and the Rules framed there under, brief outline of the CSR policy and the prescribed details are part of the Annual Report on CSR activities annexed to this report as Annexure B. The CSR Policy adopted by the Company as revised on April 22, 2022 can be viewed at https://www.tatametaliks.com/static-files/pdf/ policies/Corporate-Social-Responsibilitv-Accountabilitv-Policv. pdf. For other details, please refer to the Corporate Governance Report, which forms part of this report.
In FY 2020-21, the Company also launched another major initiative for its community called âTML 300 schools" to transform access & quality of education of children in the nearby villages. The project aims to ensure all children in the age group of 5-15 years in a defined area, covering two blocks near the Plant (approx. 300 schools) are provided quality education so that the area ultimately becomes child labour free. During the year, despite the constraints posed by the pandemic the Company has made steady progress in this unique Education initiative.
The Company in FY 2019-20 embarked on an ambitious journey to become ''water positive'' by FY 2024-25 through focused interventions including steep reduction in water consumption, creating water conservation & harvesting structures, deepening
of ponds, etc. in and around our plant. In line with the objective of making water available to the community, the Jal se Jeevan project saw further progress during the year with excavation of several rainwater capturing ponds and infrastructure.
These two ambitious projects (to be conducted in two phases) are expected to create a significant positive impact on the community near the Plant. Despite COVID-19 constraints, the employees of the Company clocked 7246 Employee Volunteering (EV) hours in the service of the community. During the year under review, a sum of ''540 lakhs was contributed to the Sadbhavna Trust for CSR and Affirmative Action initiatives against the minimum statutory requirement of ''478.13 lakhs for the year under review.
Guided by the tenets of transparency and openness, the governance approach focuses on the effective working of the Management and the Board, while ensuring that corporate behaviour remains responsible. We consider it our inherent responsibility to disclose timely and accurate information regarding the operations and performance, leadership, and governance of the Company. The Company remains committed to raise the bar in adopting and adhering to transparent and ethical corporate governance practices. The practices reflect the Group values and ethos, organization culture, polices and the relationship with various stakeholders. As a responsible organization, timely and accurate disclosure in respect to Company''s operational performance, material corporate events as well as on leadership and governance is done for the interest of all stakeholders.
In line with the SEBI Listing Regulations, Corporate Governance Report along with the Certificate from a Practicing Company Secretary, certifying compliance with conditions of Corporate Governance, is annexed to this report as Annexure C.
Meetings of Board and Committees of Board
The Board met six times during the year under review. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI Listing Regulations. The Committees of the Board usually meet prior to the Board meeting, or whenever the need arises for transacting business. Details of composition of the Board and its Committees as well as the meetings held during the year under review and the Directors attending the same are given in the Corporate Governance Report forming part of this Report.
Selection of New Directors and Board Membership Criteria and Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and other Employees
The Nomination and Remuneration Committee (''NRC'') engages with the Board to evaluate the appropriate characteristics, skills and experience for the Board as a whole as well as for its individual members with the objective of having a Board with diverse backgrounds and experience in business, finance, governance, and public service. The NRC, based on such evaluation, determines the role and capabilities required for appointment of Independent Director. Thereafter, the NRC recommends to the Board the selection of new Directors.
The Company has a well-defined policy for appointment of Directors, Key Managerial Personnel (KMP) and other employees including their remuneration. The NRC recommends suitable candidates to the Board, based on their qualifications, positive attributes and experiences for Board Membership. The salient features of the Policy are:
⢠It acts as a guideline for matters relating to appointment and reappointment of Directors
⢠It contains guidelines for determining qualifications, positive attributes of Directors, and independence of a Director
⢠It lays down the criteria for Board Membership
⢠It sets out the approach of the Company on Board diversity
⢠It lays down the criteria for determining independence of a Director, in case of appointment of an Independent Director.
The Policy is available on our website at https://www. tatametaliks.com/static-files/pdf/policies/TML-NRC-policy.pdf
Familiarization Programme for Independent Directors
As a practice, all new Directors (including Independent Directors) inducted to the Board go through a structured orientation programme. Presentations are made by Senior Management giving an overview of the operations, to familiarize the new Directors with the Company''s business operations. The new Directors are given an orientation on the products of the business, group structure and subsidiaries, Board constitution and procedures, matters reserved for the Board, and the major risks and risk management strategy of the Company. In compliance with the provisions of the SEBI Listing Regulations, your Company facilitates various programmes/ awareness sessions for Independent Directors.
Details of the familiarization programmes for the Independent Directors are provided in the Corporate Governance Report, annexed herewith, and the policy as adopted by your Company is also available on our website at https://www.tatametaliks. com/static-files/pdf/policies/policy-prog-director.pdf
During the year under review, no new Independent Director were inducted to the Board.
The Board evaluated the effectiveness of its functioning, of the Committees and of individual Directors, pursuant to the provisions of the Companies Act, 2013 (''Act'') and the SEBI Listing Regulations. The Board carried out an annual evaluation of its own performance, the performance of the Independent Directors individually as well as an evaluation of the working of the Committees of the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, pursuant to the provisions of the Act and SEBI Listing Regulations.
The Board sought the feedback of Directors on various parameters including:
⢠Degree of fulfillment of responsibilities towards key stakeholders (by way of monitoring corporate governance practices, participation in the long term strategic planning, etc.);
⢠Structure, composition and role clarity of the Board and Committees;
⢠Extent of co-ordination and cohesiveness between the Board and its Committees;
⢠Effectiveness of the deliberations and process management;
⢠Board/Committee culture and dynamics; and
⢠Quality of relationship between Board Members and the Management.
The Chairman of the Board had one-on-one meeting with the Independent Directors (''IDs'') and the Chairman of NRC had one-on-one meeting with the Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors'' inputs on effectiveness of the Board/ Committee processes. The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. Additionally, the evaluation process compared the evaluation reports of earlier years and reviewed the areas where improvements have been made and the areas where further improvement is desired.
The Independent Directors had their meeting on February 24, 2022 and reviewed, inter-alia, the performance of the NonIndependent Directors and the Board as a whole including the Chairman of the Board. The feedback of the Independent Directors was shared with the NRC.
The NRC reviewed the performance of the individual Directors and the Board as a whole. In the Board meeting that followed the meeting of the Independent Directors and the meeting of NRC, the performance of the Board, its committees, and individual Directors were discussed.
The evaluation process found the overall performance of the Board satisfactory in working cohesively as a team and guiding the Company to attain its growth vision. The Board also appreciated and bestowed full confidence in the Chairman and the Management in guiding the Company through various challenges to be one of the best performing Companies amongst the Tata Steel group Companies.
Remuneration Policy for the Board and other Employees
In determining the remuneration of the Directors, Key Managerial Personnel (''KMP'') and other employees of the Company, based on the recommendations of the NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel and all other employees of the Company. The policy aims to ensure that the level and composition of remuneration for Directors, KMPs and other employees is reasonable and aligned to the market to attract, retain and motivate them. The remuneration involves a balance between
fixed and variable pay reflecting short and long term objectives of your Company.
The salient features of the Policy are:
⢠It lays down the parameters based on which payment of remuneration (including sitting fees and remuneration) should be made to Independent Directors and NonExecutive Directors.
⢠It lays down the parameters based on which remuneration (including fixed salary, benefits and perquisites, bonus/ performance linked incentive, commission, retirement benefits) should be given to whole-time directors, KMPs, and employees.
⢠It lays down the parameters for remuneration payable to Directors for services rendered in other capacity.
During the year under review, there has been no change in the Policy. The said policy is available on our website at https:// www.tatametaliks.com/static-files/pdf/policies/TML-NRC-policy. pdf.
Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure D. In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing names and other related particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of this report.
The year under review saw the following changes to the Board of Directors (''Board'').
Re-appointment of Independent Directors
i. The NRC after considering the (1) performance evaluation of Mr. Amit Ghosh (DIN: 00482967) as a Member of
the Board/ Commitees, (2) his contribution in Board/ Committee deliberations during his tenure as an Independent Director and (3) his skills, background and experience, recommended to the Board for his re-appointment as Independent Director for a second term. The Board unanimously endorsed the view of the NRC and recommended to the Shareholders of the Company, the re-appointment of Mr. Ghosh as an Independent Director of the Company, not liable to retire by rotation, to hold office for a second term, effective January 24, 2022 through July 19, 2023. On January 15, 2022, the Shareholders of the Company through postal ballot, approved the re-appointment of Mr. Ghosh as an Independent Director of the Company for the above-mentioned tenure.
ii. The NRC after considering the (1) performance evaluation of Dr. Rupali Basu (DIN: 01778854) as a Member of
the Board/ Commitees, (2) her contribution in Board/
Committee deliberations during her tenure as an Independent Director and (3) her skills, background and experience, recommended to the Board for her re-appointment as Independent Director for a second term of five years. The Board unanimously endorsed the view of the NRC and recommended to the Shareholders of the Company, the re-appointment of Dr. Basu as an Independent Director of the Company, not liable to retire by rotation, to hold office for a second term of five years, effective January 24, 2022 through January 23, 2027.
On January 15, 2022, the Shareholders of the Company through postal ballot, approved the re-appointment of Dr. Basu as an Independent Director of the Company for the above-mentioned tenure.
Re-appointment of Director retiring by rotation
In terms of the provisions of Section 152 of the Act read with Article 110 of the Articles of Association of the Company,
Ms. Samita Shah (DIN: 02350176), Non-Executive Director will retire by rotation at the ensuing AGM and is eligible for reappointment.
The necessary resolution for re-appointment of Ms. Shah forms part of the Notice convening the AGM. The Board recommends and seeks your support in confirming re-appointment of Ms. Shah. The profile and particulars of experience, attributes and functional expertise that qualify her for Board Membership are duly disclosed in the Notice convening the AGM.
Independent Directors'' Declaration
The Company has received the necessary declaration from each Independent Director (IDs) in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.
In the opinion of the Board, as per the confirmations received from the IDs, there has been no change in the circumstances which may affect their status as IDs of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act) of all IDs on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, IDs of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
Key Managerial Personnel
Pursuant to Section 203 of the Act, Mr. Sandeep Kumar, Managing Director, Mr. Subhra Sengupta, Chief Financial Officer, and Mr. Avishek Ghosh, Company Secretary and Compliance Officer are designated as Key Managerial Personnel (''KMP'') of your Company as on March 31, 2022. The details are mentioned in the Corporate Governance Report.
The Audit Committee (''Committee'') is duly constituted as per the provisions of the Act and applicable Rules framed there under read with the SEBI Listing Regulations. The primary objective of the Committee is monitoring and supervising the
Management''s financial reporting process to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting. During the financial year, there have been no instance where the Board have not accepted any recommendations of the Committee.
The Committee comprises of Mr. Krishnava Dutt (Chairman),
Dr. Pingali Venugopal, Ms. Samita Shah and Mr. Amit Ghosh.
The Committee met 5 (five) times during the year under review. Details of terms of reference of the Committee, number and dates of meetings held and attendance of Members during the year are part of the Corporate Governance Report.
Internal Control Systems
The Board is responsible for ensuring that Internal Financial Controls (IFC) are laid down in the Company and that such controls are adequate and operating effectively. The Company''s IFC framework is commensurate with the size, scale and complexity of the operations of the Company. The details of the IFC framework and their adequacy are included in the Management Discussion and Analysis Report.
Risk Management
Risks are integral to any business, and the Company''s Risk Management framework over the years has evolved in line with the strategic objectives and changes in the operating environment. It helps to predict and undertake pre-emptive response to manage and mitigate key risks. Amidst various micro and macro uncertainties and volatile business environment, the Company faces frequent changes in technology, geo-politics, financial markets, regulations, etc. which affect the value chain at large. To build a sustainable business that can respond to these changes, the Company has an agile and responsive risk management framework for identifying, prioritising and mitigating risks which may impact attainment of short and long-term business goals of the Company.
The Risk Management framework, based on the holding Company''s Group Risk Management process, is based on international standards like Committee of Sponsoring Organization of the Treadway Commission (''COSO'') and ISO 31000 and is aligned with strategic planning and capital project evaluation process of the Company. The process aims to analyse internal and external environment and manage economic, financial, market, operational, compliance, sustainability and business continuity risks and capitalises on opportunities for business success. The development and implementation of Risk Management policy has been covered in the Management Discussion and Analysis, which forms part of this report.
The Company periodically reviews the identified key risk areas, mapped and linked with operational objectives. These risks are periodically revisited against their respective mitigation plans. The Board has a separate Risk Management Committee consisting of Directors and a management representative, responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee also has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating
actions on a continuing basis. The Committee meets at periodic intervals and monitors, evaluates and strengthens the effectiveness of risk management framework of the Company.
The Company''s risk-based culture enabled it to manage the uncertainties in a volatile and challenging business environment during the year under review. As the COVID-19 situation resurfaced, "scenario-based risk assessment" was facilitated across the Company. Further, business decisions were pivoted to achieve cash neutrality in operations by reducing spend, managing working capital and reducing capital expenditures. Operating regime was recalibrated in response to the decline in domestic demand. Supply chain disruptions were managed through robust planning and developing alternate suppliers.In view of sluggish domestic dispatches, risk to sales was mitigated through enhanced exports and new international markets were cultivated.
During the year under review, the Company has made significant progress in its journey towards risk intelligence and the management is working under the active guidance of the Risk Management Committee and the Board to navigate the volatile economic environment.
Vigil Mechanism / Whistle Blower Policy
The Company has a well-defined Vigil Mechanism policy in place that provides a formal process for all Directors, employees, business associates and vendors of the Company to approach the Ethics Counsellor/ Chairman of the Audit Committee. Due awareness is made across the organization and business partners to enable anyone to make protective disclosures about any unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (TCoC). During the year under review, no person has been denied access to the Chairman of the Audit Committee. In addition, Directors, employees, and vendors, can approach the Ethics Counsellor to make any such protected disclosure. During the year under review, the Company also undertook a series of communication and training programmes for various stakeholders.
The Whistle Blower Policy is an extension of the TCoC which requires every Director/ employee/business associate/ vendor to promptly report to the Management any actual or possible violation of the TCoC or any event which he or she becomes aware of, that could affect the business or reputation of the Company. The said policy is available on the Company''s website at www.tatametaliks.com/static-files/pdf/policies/ whistleblower-policy.pdf. The Vigil Mechanism also includes the Anti-Bribery & Anti-Corruption (''ABAC'') Policy. During the year under review, the Company received 8 (Eight) whistleblower complaints which were duly investigated and resolved.
Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the workplace. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy.
The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Company received 1 (one) complaint of sexual harassment in the latter half of Q4 FY 202122. As on the date of this report, the investigation has been completed and the matter is due for final resolution.
Related Party Transactions
In compliance with the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions (RPTs) and manner of dealing with RPTs. During the year under review, the Policy has been amended to incorporate the regulatory amendments in the SEBI Listing Regulations. The updated Policy can be accessed on the Company''s website which is available on the Company''s website at the link: https://www.tatametaliks.com/static-files/pdf/policies/rpt-policy.pdf
All transactions with related parties during FY 2021-22 were reviewed and approved by the Audit Committee and were at Arm''s Length Price (ALP) and in the Ordinary Course of Business (OCB). Prior omnibus approval was obtained for all RPTs which were of repetitive nature and entered in the OCB and on an ALP basis. The transactions entered into pursuant to the omnibus approval so granted were reviewed by Audit Committee on quarterly basis.
Pursuant to the third proviso of Section 188(1) of the Act, the compliance with the provisions of Section 188(1) is not applicable, where all RPTs are carried out in the OCB and under ALP basis. Accordingly, the disclosure of RPTs as required under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 in form AOC-2 is not applicable to the Company for FY 2021- 22. However, the Company had material RPTs during FY 2021-22 under SEBI Listing Regulations. Hence, the same have been disclosure as form AOC-2 enclosed as Annexure E.
Details of RPTs entered into by the Company, in terms of Ind AS-24 are disclosed in notes to the financial statements forming part of this Integrated Report. There was no other material RPTs entered into by the Company with its Promoters, Directors, KMPs or other designated persons during FY 202122, except those reported in the financial statements. None of your Directors or KMPs had any pecuniary relationships or transactions with the Company during FY 2021-22, other than remuneration as disclosed elsewhere in the report.
Approval of Members is being sought for the material RPTs for FY 2022-23 at the ensuing AGM.
Directors'' Responsibility Statement
Based on the framework of IFC established and maintained, the work performed by the internal, statutory and secretarial auditors and external consultants, including the 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, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2021-22.
Accordingly, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Board, to the best of its knowledge and ability, confirms that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) 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 at the end of the financial year and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Business responsibility and sustainability Report
The Securities and Exchange Board of India (''SEBI''), in May, 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (''BRSR''). BRSR is a notable departure from the existing Business Responsibility Report (''BRR'') and a significant step towards giving platform to the Companies to report the initiatives taken by them in areas of environment, social and governance. Further, SEBI has mandated top 1,000 listed Companies, based on market capitalization, to transition to BRSR from FY 2022-23 onwards However, the Company has provided the BRSR for FY 2021-22 as a voluntary disclosure and is annexed herewith as Annexure F.
The Company has followed the
The Company does not have any subsidiary, associate or joint
venture Company as on March 31, 2022. Accordingly, the requisite disclosure as per Section 129(3) of the Act in Form AOC-1 is not applicable.
Statutory Auditors
Members of the Company at the 27th Annual General Meeting held on July 26, 2017, approved the appointment of Price Waterhouse & Co Chartered Accountants LLP (Registration No.304026E/ E300009) (''PW''), Chartered Accountants, as the Statutory Auditors of the Company for a term of 5 (five) consecutive years commencing from the conclusion of 27th AGM until the conclusion of the 32nd AGM to be held in the year 2022.
In terms of the provisions of the Companies Act, 2013, an audit firm acting as the statutory auditor of a Company is eligible to be appointed as statutory auditors for two terms of five years each. The first term of PW as statutory auditors of the Company expires at the conclusion of the 32nd AGM of the Company scheduled to be held on August 2, 2022. Considering their performance as auditors of the Company during their present tenure, the Audit Committee of the Company, after due deliberation and discussion, recommended the re-appointment of PW as statutory auditors of the Company for a second term of 5 years to hold office from the conclusion of the 32nd AGM to be held on August 2, 2022 through the conclusion of the 37th AGM of the Company to be held in the year 2027.
Further, the remuneration to be paid to Statutory Auditors for FY 2022-23 is ''41 lakhs plus out of pocket expense and the remuneration for the remaining tenure of their second term as Statutory Auditors shall be mutually agreed between the Board of Directors and PW, from time to time.
The Board at its meeting held on April 22, 2022, endorsed the recommendation of the Audit Committee for re-appointment of PW as statutory auditors and payment of the remuneration, as mentioned above, and approved the same. The above proposal forms part of the Notice of the AGM for your approval. The report of the Statutory Auditor forms part of this Integrated Report and Annual Accounts 2021-22. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors did not report any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
Section 204 of the Act, inter alia, requires every listed Company to annex to its Board''s report, a Secretarial Audit Report, given in the prescribed form, by a Company Secretary in practice. Accordingly, in compliance with the provisions of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, upon the recommendation of the Audit Committee, had approved the appointment of Mr. P. V. Subramanian, Company Secretary in Whole-time-Practice [C.P. No. 2077, ACS 4585], as the Secretarial Auditor of the Company for the financial year ending March 31, 2023. The
Secretarial Audit Report for the financial year ended March 31, 2022, in Form MR-3, forms an integral part of this report and is annexed herewith as Annexure G.
Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain its cost records and get the same audited by a Cost Accountant in practice. Accordingly, the cost records are made and maintained by the Company as required under Section 148(1) of the Act.
The Board has, based on the recommendation of the Audit Committee, approved appointment of Messrs. Shome & Banerjee, Cost Accountants (Firm Registration No: 000001) as the Cost Auditors of the Company for the financial year ending March 31, 2023.
Messrs. Shome & Banerjee have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years. Pursuant to Section 148 of the Act, read with Rule 14(a)(ii) of Companies (Audit and Auditors) Rules, 2014, ratification of the remuneration payable to the Cost Auditors (as recommended by the Audit Committee and approved by the Board) is being sought from the Members of the Company at the ensuing AGM. The details of the same are provided in the Notice convening the AGM. We seek your support in ratifying the proposed remuneration of ''3.50 lakhs plus applicable taxes and reimbursement of out-of-pocket expenses payable to the Cost Auditors for the financial year ending March 31, 2023.
Auditors'' qualification
No qualifications, reservations, adverse remarks or disclaimers are provided in the reports by the Statutory Auditors,
Secretarial Auditor and Cost Auditors respectively.
The Annual Return for FY 2021-22 as per provisions of the Act and Rules thereto, is available on the Company''s website at https://www.tatametaliks.com/static-files/pdf/annual-return-mgt7-21-22.pdf
Significant and Material Orders Passed by the Regulators or Courts
There has been no significant and material order(s), passed by any Regulator(s) or Court(s) or Tribunal(s), impacting the going concern status of the Company and it''s future operations. However, Members'' attention is drawn to the statement on contingent liabilities and commitments in the notes to the Financial Statements. No material changes and commitments have occurred after the close of the financial year till the date of this Report which affects the financial position of the Company for the year under review.
Particulars of loans, guarantees given and investments made during the year under review in accordance with Section 186 of the Companies Act, 2013 is annexed to this report Annexure H.
Details of energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this report as Annexure I.
Deposits
The Company has not accepted any fixed deposits nor does the Company have any outstanding amount on account of principal or interest on deposits from public under Section 73 of the Act, read with the Companies (Acceptance of Deposit) Rules, 2014 as on the date of the Balance Sheet.
The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.
No disclosure or reporting is made in respect of the following items as there were no transactions or change during the year under review:
⢠There was no revision in the financial statements other than as required to be done as per Ind AS; and
⢠There was no change in the nature of business.
Your Directors are happy to report that the Company was bestowed with several awards during the year. Noteworthy ones are mentioned below:
⢠Certified as ''Great Place to Work''
⢠Winner at the 4th CII National Kaizen Competition 2021 (Officer Level) under ''Cost Reduction'' & ''Cost Reduction through Digitization'' category respectively
⢠Winner at the CII National level case study competition for the Best case study on ''Innovative application of Low cost automation (LCA)'' project & for the case study on ''Human safety, quality & utility''
⢠Best case study on low cost automation (LCA) related to Human safety by CII
⢠"Innovative Best Practice" award for "Robotics Application in DIP Industry" at CII''s National DX Awards 2021
⢠Silver award under the Cost category for reducing consumable cost per ton of Hot Metal through kaizen (PI Team) and Platinum award for logistics management (DIP Team) at the 14th National CII Competition
⢠Winner at 4th National Electrical safety competition, power, quality and reliability forum organised by CII
Your Directors take this opportunity to thank its Stakeholders, i.e. Members, Customers, Vendors, Dealers, Investors, Business Associates and Bankers, for their continued support during the year. They place on record their deep sense of appreciation for the contribution made by Senior Leadership team and employees at all levels across the organisation. The resilience to meet and successfully overcome several challenges was possible due to their hard work, solidarity, co-operation and support. Your Directors also express their gratitude towards Government of India, Government of West Bengal and other states in India, concerned Government departments & agencies and regulatory authorities for their continued support.
On behalf of the Board of Directors
Sd/-
Koushik Chatterjee
Place: Mumbai Chairman
Date: April 22, 2022 DIN: 00004989
Mar 31, 2018
Dear Members,
The Directors are pleased to present the 1st Integrated Report (prepared as per the framework laid down by the International Integrated Reporting Council) and the 28th Financial Statements on the business and operations of the Company for the Financial Year ended March 31, 2018.
Financial Results
(Rs. Crore)
Particulars |
Financial Year 2017-18 |
Financial Year 2016-17 |
Gross Income from Sales & other operations (including other income) |
1,914.44 |
1,411.55 |
Profit before interest, depreciation and taxes |
296.54 |
225.59 |
Less: Interest |
47.09 |
37.50 |
Profit before depreciation and taxes |
249.45 |
188.09 |
Less: Depreciation |
49.07 |
36.43 |
Profit before taxes |
200.38 |
151.66 |
Less: Provision for taxes including deferred taxes |
41.20 |
35.61 |
Profit after taxes |
159.18 |
116.05 |
Profit / (Loss) and credit balance brought forward |
10.92 |
(97.22) |
Re-measurement Gain/ (Loss) on defined benefit plans (Net of tax) |
(0.07) |
(1.82) |
Amount available for appropriation |
170.03 |
17.01 |
Appropriation: |
||
Equity Dividend |
6.32 |
5.06 |
Tax on Dividend |
1.29 |
1.03 |
Transfer to General Reserve |
- |
- |
Balance carried forward |
162.42 |
10.92 |
Note:
The Company has adopted Indian Accounting Standard (referred to as âInd ASâ) with effect from April 1, 2016 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with the relevant Rules framed thereunder and the other accounting principles generally accepted in India.
Financial & Operational Performance
We are pleased to report that your Company achieved total revenues of Rs.1,914 Crore in FY 2017-18 compared to Rs.1,412 Crore in FY 201617, registering a growth of about 36%. The EBITDA for FY 2017-18 was Rs.297 Crore, which is higher by 31% compared to Rs.226 Crore in FY 2016-17.
Your Company recorded its highest ever Profit Before Tax (PBT) of Rs.200 Crore, which is 32% higher than that in FY 2016-17, led by significantly higher sales volume in both Pig Iron and Ductile Iron pipes businesses. While the Pig Iron business recorded a 46% growth in sales volume, the Ductile Iron Pipe business grew by 15% in sales volume terms and recorded 18% growth in sales revenue compared to the previous year.
The performance of your Company is primarily attributable to higher sales, benefits arising out of structural cost reduction and capacity enhancement projects commissioned in the last couple of years along with improved business synergies and focus on various improvement initiatives.
Pig Iron (PI)
During the year under review, your Company has recorded its highest ever production of hot metal at 499,540 tonnes, representing a 31% increase over last year. This was achieved despite various macroeconomic challenges including significantly high coal and coke cost. Out of the total hot metal produced, 39% was value added into Ductile Iron Pipes and balance was cast into pig iron. The increase in hot metal production was primarily on account of the full availability of the blast furnaces throughout the year including the upgraded MBF#1 and various operational improvement initiatives. This has translated into 46% increase in PI sales over the previous year.
Ductile Iron Pipe (DIP)
The DIP business of your Company continues on an upward trajectory with production growth of 11% over previous year. Production of DIP crossed the nameplate capacity with highest ever production and sales of finished pipes. The production performance helped your Company to increase sales volume by 15% over the previous year and achieve the highest ever turnover of DIP. The increase in numbers is attributable to the operational excellence of the DIP division along with efficient management of the product mix and selection of right customer segments.
Dividend
Your Board has recommended a dividend of Rs.3/- per Equity Share of Rs.10/- each for FY 2017-18 (previous year Rs.2.50/- per equity share).
The dividend on Equity Shares, recommended by the Board, is subject to the approval of the Members at the ensuing Annual General Meeting (AGM) to be held on July 2, 2018. The dividend, if declared, will be paid to the eligible Members on or before July 7, 2018. The total equity dividend outgo works out to 5.75% (FY 2016-17: 6.56%) of the net profit after tax. The dividend pay-out is in accordance with the Companyâs efforts to pay sustainable dividend linked to long-term growth objectives of the Company and enhancing stakeholder value.
The Register of Members and Share Transfer Books will remain closed from June 23, 2018 to July 2, 2018 (both days inclusive) for the purpose of payment of dividend for FY 2017-18 and the AGM.
Transfer to Reserves
Your Directors do not propose to transfer any amount to the general reserve.
Change in Share Capital
As reported last year, the amalgamation of Tata Metaliks DI Pipes Limited (TMDIPL) with your Company came into effect from December 22, 2016. Pursuant to the said amalgamation, the entire authorised share capital of TMDIPL has been transferred and added to the authorised share capital of your Company.
The Non-Cumulative Redeemable Preference Shares of your Company aggregating Rs.100.00 Crore, which carried a fixed coupon rate of 8.5% p.a., were fully redeemed at par on its due date i.e. on March 31, 2018.
There has been no other change in the capital structure of your Company during the year under review.
Capex and Liquidity
During the year under review, the Company incurred capital expenditure of approx. Rs.60 Crore, which has been funded through internal accruals. The liquidity position remains stable with undrawn lines of both fund-based and non-fund based limits sanctioned by banks.
Credit Ratings
Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The longterm credit rating of your Company was revised to [ICRA] AA- (stable outlook) from A (positive outlook) by ICRA. The credit rating for shortterm facilities was reaffirmed to [ICRA] A1 .
Integrated Report
In continuation with our commitment to the society, we are delighted to report that your Company has adopted the Integrated Report is a governance-based reporting framework, unlike the traditional compliance-based reporting. The Accordingly, your Directors present the 1st Integrated Report of your Company for the financial year ended March 31, 2018. Management Discussion and Analysis The Management Discussion and Analysis Report, in compliance with Regulation 34(2)(e) of the Listing Regulations, forms an integral part of this report and is annexed herewith as Annexure A. Subsidiaries, Joint Ventures and Associates Your Company does not have any subsidiary, associate and joint venture Company. Accordingly, the requisite disclosure as per Section 129(3) of the Companies Act, 2013 (Act) in Form AOC-1 is not applicable. Sustainability The Tata Group core values act as the bedrock of your Companyâs sustainability initiatives to achieve triple bottom-line approach viz. social, environmental and financial. Your Company continues to create positive influence on the community and all other stakeholders through its sustainability-related initiatives and actions. Your Company focusses on creating awareness on sustainability, sharing best practices and incorporating valuable sustainability initiatives on various materiality issues which can have a positive impact on all stakeholders in the value chain. Safety and Health Safety and Health remains your Companyâs top most priority with primary focus on developing a safety culture among employees. Your Company is constantly working towards enhancing safety standards, adopting safe working processes, addressing safety risks and mitigating safety & health hazards. Throughout the year, various safety initiatives have been taken to increase awareness and competence among the employees. The Company launched a Felt Leadership safety training for its executives to sensitise and build leadership competence on safety; regular safety âLine Walksâ were also initiated to ensure that there is no compromise on safety even at the remotest corners of the work place. Environment Your Company remains committed and focused towards minimising environmental impact of its operations and continues to adopt sustainable practices to improve its environmental performance. Aligned with the Group values, compassion for environment under Corporate Citizenship is deeply embedded in your Companyâs vision. Your Companyâs ISO 14001, ISO 27001 and OHSAS 18001 certified manufacturing plant at Kharagpur continues to focus on operational excellence aimed at resource and energy efficiency, along with recovery, reuse and recycling of waste to minimise ecological footprint. Customer Relationship Your Company continuously endeavours to understand the unique needs of its customers and deliver value. The Companyâs focus on âCustomer Centricityâ as one central theme and aims to become âThe Supplier of Choiceâ through well-structured marketing and sales initiatives. This includes a holistic process to understand customersâ requirements including unarticulated needs, achieve customer segmentation and obtain feedback through various mechanisms to deliver on 3-D customer promise i.e. - Develop deep insight; Deliver outstanding products and services; and Delight customers at all touch points. The Company continuously learns from customer interactions and creates value propositions for them which improve their competitiveness in their businesses. The Marketing and Sales team works closely with customers to obtain clear understanding of their unique needs. Thereafter, the operations and logistics teams work together to serve them with products and services with the objective of exceeding their expectations. There is also a structured complaint management system in place which not only captures customer complaints proactively but also resolves them to the satisfaction of the customers. The Company will increasingly leverage digital platforms for marketing products and improving customer engagement. Human Resource Management & Industrial Relations Your Company considers its employees as the most valuable resource and ensures the strategic alignment of human resource practices to business priorities and objectives. The Companyâs mission is to create a workforce that is competent, engaged and socially sensitive. Driven by this mission, the HR function has two-fold objectives (a) To be the Employer of Choice for its employees in the market; and (b) To develop processes which sustain a happy, positively engaged and socially sensitive workforce. This year, there has been immense focus on building the know-how to assess internal capabilities and capacity thereby taking manpower related decisions based on the same. The Company took significant and tangible steps towards building capability in various spaces such as digitisation, analytics and strengthening strategic areas. This was driven by investing in capabilities externally and hiring suitable resources from the market. The focus was also on building the leadership pipeline through campus recruitments and pre-placement offers from premier institutes. A Campus Placement Committee (CPC) is in place to drive and oversee the campus hiring process. Initiatives have been taken for hiring socially disadvantageous sections which demonstrates your Companyâs commitment towards Affirmative Action and diversity. As an equal opportunity employer, work practices are built into talent acquisition and retention process to encompass employees across varied geography, culture, industry and experience. The Company was focused on its journey of cost leadership across the value chain that required leveraging enterprise-wide synergies and achieving process efficiencies. Organisation restructuring and redesign was done to achieve operational efficiencies, leverage on economies of scale and optimise the workforce deployment. The Company also invested to rejuvenate competence through training and personal development on one hand and lateral movements across functions and divisions on the other, which translated into higher engagement and exposure to new opportunities. The Company has enjoyed cordial relations with its employees and unions at its factory and offices and has received support in implementation of reforms that impact safety, quality, cost efficiency and productivity improvements across all locations. Employee engagement is a thrust area of your Company. The Company uses various methods for determining the factors that affect workforce engagement and satisfaction. Employee engagement and satisfaction results have shown an upward trend. With an aim to improve the employee engagement, the Company has taken up a number of initiatives including digital ones. A Reward & Recognition (R&R) portal is under implementation. An R&R scheme to encourage safe behaviour was also introduced and this covered all categories of employees including contract employees. A full-fledged HR portal covering all employees is also planned to be developed shortly. Particulars of Employees Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure B. In terms of the provisions of Section 197(12) of the Act read with sub-rules (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing names and other related particulars of prescribed employees is annexed and forms part of this report. Corporate Social Responsibility Your Company is committed to improve the quality of life of the communities in its focus areas through long-term value creation for all its Stakeholders through its various Corporate Social Responsibility (CSR) initiatives. This objective is also aligned with the core purpose of the Tata Group. We remain focused to improve the quality of life and engage with various communities through interventions in areas of health, education, sanitation, infrastructure development etc. Your Company carries out its CSR activities through âSadbhavna Trustâ. Brief details on various focus areas of interventions are part of the Annual Report on CSR activities annexed to this report as Annexure C. The Policy adopted by the Company can be viewed at http://www.tatametaliks. com/static-files/pdf/sustainability/Corporate-Social-Responsibility-Accountability-Policy.pdf. During the year under review, a sum of Rs.324.19 Lakh was spent on CSR and Affirmative Action initiatives against the minimum statutory requirement of â295.65 Lakh under the Act. The Annual Report on CSR activities, in terms of Section 135 of the Act and the Rules framed thereunder is also annexed herewith. Corporate Governance Your Company believes in transparent and ethical corporate governance practices. The Companyâs approach to Corporate Governance transcends across its business operations and its stakeholders at large to create long term sustainable value. We are pleased to report that during the year under review, your Company won the ICC Corporate Governance and Sustainability Vision Awards, 2018 in the Corporate Governance category. Pursuant to Regulation 34(3) of the Listing Regulations, a separate section on Corporate Governance and a Certificate regarding compliance of conditions of Corporate Governance from a Practicing Company Secretary is part of this report as Annexure D. Board and Committee Meetings The Board of Directors of your Company met 7 (seven) times during FY 2017-18. The details of the composition of the Board, its various Committees, meetings held and attendance of the Directors at such meetings are provided in the Corporate Governance Report. The intervening gap between any two (2) meetings was within the period prescribed under the Act and the Listing Regulations. Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Other Employees Your Company has a well-defined policy for appointment of Directors, Key Managerial Personnel (KMP) and other employees including their remunerations. The Nomination and Remuneration Committee (NRC) functions in consultation with the Board and follows the guidelines of this policy in letter and spirit while selecting candidate(s) for appointment of Director(s) and/ or KMP(s). The NRC recommends to the Board suitable candidates, based on their qualifications, positive attributes and experiences for Board Membership. The Policy on appointment and removal of Directors is available on our website at www.tatametaliks.com/static-files/pdf/policies/TML-NRC-policy.pdf. Familiarisation Programme for Independent Directors In compliance with the provisions of the Listing Regulations, your Company facilitates various programmes / awareness sessions to familiarise Independent Directors with respect to the nature of the industry in which the Company operates, business model of the Company, the roles, rights and responsibilities of Independent Directors etc. Details of the familiarisation programmes for Independent Directors are provided in the Corporate Governance Report, annexed herewith, and the policy as adopted by the Company is also available on our website http://www.tatametaliks.com/static-files/pdf/policies/ policy-prog-Director.pdf. Board Evaluation The NRC and the Board of Directors of the Company have laid down the process and criteria for annual performance evaluation of the Board, its Committees and individual Directors. During the year under review, the evaluation process was carried out for the Board, its various Committees and individual Directors. The evaluation process sought feedback on various parameters. This includes discharge of respective responsibilities, timeliness of flow of information along with its quality and quantity, independence of judgment and effectiveness of deliberations. The Chairman of the Board and the NRC together sought one-on-one feedback from all Directors. The feedback sessions were conducted to obtain inputs on, inter-alia, the effectiveness of the Board and its various Committees. The NRC and subsequently the Board discussed and collated the feedback received. The Independent Directors met on March 19, 2018 and reviewed the performance of the Non-Executive Directors and the Board as a whole including the Chairman. The evaluation process found overall performance of the Board satisfactory in working cohesively as a team to guide the Company to attain its growth vision. The Board also appreciated and bestowed full confidence in the Chairman and the Management in guiding the Company through various challenges to be the best performer amongst the Tata Steel group companies. Additionally, the evaluation process compared the evaluation reports of earlier years and reviewed the areas where improvements have been made and the areas where further improvement is desired. The Board decided to improve its performance in general and in the specific focus areas. Remuneration Policy for the Board and Other Employees The policy on remuneration of the Directors, KMPs and other employees was approved and adopted by the NRC and the Board on March 30, 2015. The said policy aims to ensure that the level and composition of remuneration for Directors, KMPs and other employees is sufficient and reasonable to attract, pool, retain and motivate them. The remuneration involves a balance between fixed and variable pay reflecting short and long-term objectives of the Company. During the year under review, there has been no change in the Policy. The said policy is available on our website at http://www.tatametaliks. com/static-files/pdf/policies/TML-NRC-policy.pdf. Independent Directorsâ Declaration The Company has received requisite declaration from each Independent Director, in accordance with the provisions of Section 149(7) of the Act and the Listing Regulations, stating they meet the criteria of independence as per Section 149(6) of the Act and the Listing Regulations. Directors Inductions As already reported last year, the Board had appointed Mr. Sandeep Kumar (DIN: 02139274) as a Whole-time Director (designated as an Executive Director) of the Company for a period of 3 (three) years w.e.f. April 10, 2017. The Board of Directors, subsequently, at its meeting held on June 1, 2017 appointed Mr. Kumar as the Managing Director of the Company, for a period of 3 (three) years w.e.f. July 1, 2017. The Members have already approved the said appointments at the last Annual General Meeting held on July 26, 2017. Re-appointment In compliance with the provisions of Section 152 of the Act read with Article 110 of the Articles of Association of the Company, Mr. Koushik Chatterjee (DIN: 00004989) will retire by rotation at the ensuing AGM and is eligible for re-appointment. The Board recommends and seeks your support in confirming re-appointment of Mr. Chatterjee. The profile and particulars of experience, attributes and skills that qualify Mr. Chatterjee for Board Membership are disclosed in the Notice convening the AGM. Cessation As reported last year, Mr. Sanjiv Paul (DIN: 00086974) relinquished office as Managing Director of the Company at the close of business hours on June 30, 2017. He continues on the Board as a Non-Executive Director w.e.f. July 1, 2017. Key Managerial Personnel As already reported last year, Mr. Sanjiv Paul held the position as a Key Managerial Personnel till the close of business hours of June 30, 2017. Mr. Sandeep Kumar has become a Key Managerial Personnel w.e.f. April 10, 2017. There has been no other change with respect to the other KMPs. The remuneration and other details of Key Managerial Personnel for FY 2017-18 are duly disclosed in Form MGT-9 forming part of this report. Audit Committee The Audit Committee is duly constituted as per the provisions of the Act, applicable Rules framed thereunder read with the Listing Regulations. The primary objective of the Committee is monitoring and supervising the Managementâs financial reporting process to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting. During the financial year, there has been no instance where the Board has not accepted any recommendation of the Committee. The Committee met 7 (seven) times during the year, the details of terms of reference of the Committee, number and dates of meetings held and attendance of Members during the year are part of the Corporate Governance Report. Vigil Mechanism / Whistle Blower Policy Your Company has a Vigil Mechanism policy in place to provide a formal mechanism for all Directors, employees, business associates and vendors of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee. The mechanism can be used to make protective disclosures about any unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (TCoC). The Whistle Blower Policy is an extension of the TCoC which requires every Director/ employee / business associate/ vendor to promptly report to the Management any actual or possible violation of the TCoC or any event which he or she becomes aware of, that could affect the business or reputation of the Company. During the year under review, none of the Directors / employees / business associates/ vendors was denied access to the Ethics Counsellor / Chairman of the Audit Committee. The said policy is available on the Companyâs website at http://www.tatametaliks.com/static-files/pdf/ policies/whistleblower-policy.pdf. Internal Control Systems The Board of Directors of your Company is responsible for ensuring that Internal Financial Controls (IFC) are laid down in the Company and that such controls are adequate and operate effectively. The Companyâs IFC framework is commensurate with its size, scale and complexity of operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliances with corporate policies. The controls, based on the prevailing business conditions and processes, have been tested during the year and there was no reportable material weakness in the design or effectiveness. The framework on IFC over Financial Reporting has been reviewed by the internal and external auditors. The Audit Committee reviews the reports submitted by the Internal Auditors in its meetings. The Audit Committee, whenever it deems fit, engages in independent discussions with the external auditor and the Management to discuss the adequacy and effectiveness of internal financial controls. The details of the IFC system and their adequacy are included in the Management Discussion and Analysis. Related Party Transactions In compliance with the provisions of the Act and the Listing Regulations, each Related Party Transaction (RPT) is placed before the Audit Committee for prior approval. A prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and repetitive in nature. The transactions pursuant to the omnibus approval so granted, is subject to audit and a detailed quarterly statement of all RPTs is placed before the Audit Committee for its review. The quarterly statement is supported by a Certificate duly signed by the Chief Financial Officer. The policy on RPTs, as approved by the Board, is available on the Companyâs website at http://www. tatametaliks.com/static-files/pdf/policies/rpt-policy.pdf. During the year under review, all RPTs were on Armâs Length Price basis and in the Ordinary Course of Business and hence do not fall under the ambit of Section 188(1) of the Act. In view of the above, the disclosure required under the Act in Form AOC-2 is not applicable for FY 2017-18. During the year under review, approval of Members was sought by way of Postal Ballot for entering into a material RPT. The material RPT with Tata Steel Limited was duly approved by the Members with the requisite majority on December 19, 2017. The Notice of Postal Ballot, voting results and other information is available on http://www. tatametaliks.com/investors/postal-ballot-2017.aspx. There was no other material RPT entered into by the Company with Promoters, Directors, KMPs or other designated persons during FY 2017-18, except those reported in the financial statements. Approval of shareholders is being sought for 3 (three) material RPTs at the ensuing AGM. None of the Directors or KMPs had any pecuniary relationships or transactions with the Company during FY 2017-18. Risk Management Your Company has an effective risk management framework for identifying, prioritising and mitigating risks which may impact attainment of short and long-term business goals of your Company. The risk management framework, which is based on our holding Companyâs risk management process, is aligned with strategic planning, deployment and capital project evaluation process of the Company. The process aims to analyse internal and external environment and manage economic, financial, market, operational, compliance and sustainability risks and capitalises opportunities for business success. The Company has mapped key risk areas which may affect business and operational objectives of your Company. These risks are periodically revisited against their respective mitigation plans. The Board has a separate Risk Management Committee consisting of Directors and a management representative. The Committee meets at periodic intervals and monitors, evaluates and strengthens the effectiveness of risk management framework of the Company. Brief overview of the Risk Management process is also part of the Integrated Report. Directorsâ Responsibility Statement Based on the framework of IFC established and maintained, work performed by the internal, statutory, cost and secretarial auditors and the external agencies including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during FY 2017-18. Accordingly, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) 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 at the end of the financial year and of the profit of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) t he Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls in the Company and that such internal financial controls are adequate and were operating effectively; and f) 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. Auditors Statutory Auditors Messrs Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (ICAI Registration No.304026E/E300009), were appointed as the Statutory Auditors of the Company at the 27th AGM of the Company. The appointment was for a term of 5 (five) consecutive years from the conclusion of 27th AGM till the conclusion of 32nd AGM of the Company. The proposal to ratify appointment of Messrs Price Waterhouse & Co Chartered Accountants LLP (Firm Registration No. 304026E/ E-300009) as the Statutory Auditors was considered and approved by the Board upon recommendation of the Audit Committee. Accordingly, the proposal to ratify their appointment forms part of the Notice convening the ensuing AGM. It is to be noted that the Companies (Amendment) Act, 2017 has omitted the provision for seeking ratification of such appointment at every intervening AGM. However, the said omission is yet to be notified as on the date of this report. Hence, the provision requiring such ratification stands as on date. In case the said omission is notified on or before the date of the ensuing AGM, then the related agenda in the Notice of AGM would not be considered. Secretarial Auditor In compliance with the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors, upon the recommendation of the Audit Committee, has approved the appointment of Mr. P. V. Subramanian, Company Secretary in Whole-time-Practice [C.P. No. 2077 (ACS-4585)], as the Secretarial Auditor of the Company for the Financial Year ending March 31, 2019. The Secretarial Audit Report for the financial year ended March 31, 2018, in Form MR-3, forms an integral part of this report and is annexed herewith as Annexure E. Cost Auditors Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, your Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors, upon the recommendation of the Audit Committee, has approved the appointment of M/s. Shome & Banerjee, Cost Accountants (Firm Registration No: 000001) as the Cost Auditors of the Company for the Financial Year ending March 31, 2019. Pursuant to Section 148 of the Act, read with Rule 14(a)(ii) of Companies (Audit and Auditors) Rules, 2014, ratification of the remuneration of Cost Auditors is being sought from the Members of the Company at the ensuing AGM. The details of the same are provided in the Notice convening the AGM. Auditorsâ qualification There are no qualifications in the respective reports of the Statutory Auditors, Secretarial Auditor and Cost Auditors. Reporting of Fraud The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act. Extract of Annual Return In compliance with Section 134(3)(a) of the Act, the extract of the Annual Return in Form MGT 9, as per Section 92 of the Act and the Rules framed thereunder, forms an integral part of this report and is annexed herewith as Annexure F. Disclosure as per Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 Your Company has zero tolerance towards sexual harassment at workplace. It has a well-defined policy in compliance with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. An Internal Committee (IC) is in place to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy. The Company has not received any complaint of sexual harassment during FY 2017-18. Significant and Material Orders Passed by the Regulators or Courts There has been no significant and material order(s), passed by any Regulator(s) or Court(s) or Tribunal(s), impacting the going concern status of the Companyâs operations. However, Membersâ attention is drawn to the statement on contingent liabilities and commitments in the notes forming part of the Financial Statements. No material changes and commitments have occurred after the close of the financial year till the date of this Report which affects the financial position of the Company for the reporting period. Particulars of Loans, Guarantees or Investments Your Company did not provide any loan, directly or indirectly to any person or to other body corporate, nor did it give any guarantee or provide any security in connection with a loan to any other body corporate or person during the financial year under review. The Company has certain long term non-current investments, as detailed in the âNotes to the Financial Statementsâ; and all such investments are in compliance with Section 186 of the Act. Deposits Your Company has not accepted any fixed deposits nor does the Company have any outstanding deposits under Section 73 of the Act, read with the Companies (Acceptance of Deposit) Rules, 2014 as on the date of the Balance Sheet. Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo Details of energy conservation, technology absorption and foreign exchange earnings and outgo are annexed herewith as Annexure G. Awards and Accolades As already stated elsewhere in this report, your Company was declared Winner in the Corporate Governance category of the âICC Corporate Governance and Sustainability Vision Awards 2018â. Other Disclosures The Company has proper and adequate systems and processes in place to ensure compliance with all applicable Secretarial Standards issued by The Institute of Company Secretaries of India. No disclosure or reporting is made in respect of the following items as there were no transactions or change during the year under review: Details relating to deposits covered under Chapter V of the Act; Issue of equity shares with differential rights as to dividend, voting or otherwise; I ssue of shares to the employees of the Company under any scheme (sweat equity or stock options) The Company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees; There was no revision in the financial statements other than as required to be done as per Ind AS; and There was no change in the nature of business. Acknowledgements Your Directors take this opportunity to thank all its Stakeholders, i.e. members, customers, vendors, dealers, investors, business associates and bankers, for their continued support during the year. They place on record their deep sense of appreciation for the contribution made by Senior Leadership team and employees at all levels across the organisation. The resilience to meet and successfully overcome several challenges was possible due to their hard work, solidarity, co-operation and support. Your Directors also express their deep sense of gratitude towards various Governments and regulatory authorities for their continued support and look forward to their guidance in the future. On Behalf of the Board of Directors Koushik Chatterjee Place: Mumbai Chairman Date: April 26, 2018 DIN: 00004989
Mar 31, 2017
Dear Shareholders, The Directors are pleased to present their 27th Annual Report on the business and operations of your Company, along with the Audited Financial Statements for the Financial Year ended 31 March, 2017. Financial Results Rs. in Crores Particulars Financial Year 2016-17 Financial Year 2015-16 Gross Income from Sales & other operations (including other income) Profit before interest, depreciation and taxes Less : Interest Profit before depreciation and taxes Less : Depreciation Profit before taxes Less : Provision for taxes including deferred taxes Profit after taxes Profit / (Loss) and credit balance brought forward Depreciation on transition to Schedule II of the Companies Act, 2013 (Net of deferred tax) Re-measurement Gain/(Loss) on defined benefit plans (Net of tax) Amount available for appropriation Appropriation: Equity Dividend Tax on Dividend Transfer to General Reserve Balance carried forward 1,411.56 1,391.76 225.59 217.14 37.50 45.88 188.09 171.26 36.43 32.97 151.66 138.29 35.61 26.02 116.05 112.27 (97.74) (208.82) - 0.88 (1.82) (0.30) 16.49 (97.74) 5.06 - 1.03 - - - 10.40 (97.74) Note: The Company has adopted Indian Accounting Standard (referred to as âInd ASâ) with effect from 1 April, 2016 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued there under and the other accounting principles generally accepted in India. Upon amalgamation of Tata Metaliks DI Pipes Limited (erstwhile wholly owned subsidiary) with the Company, the financial results for the year 2016-17 are comparable with the consolidated financial results of 2015-16. OPERATION AND PERFORMANCE Your Company recorded a turnover of Rs. 1,410 crores for FY 2016-17 as compared to Rs. 1,390 crores for FY 2015-16. The EBITDA for FY 2016-17 was Rs. 226 crores, which is higher by 4% than Rs. 217 crores for FY 201516. Your Company recorded its highest ever Profit after Tax of Rs. 116 crores, which is 4% higher than that of FY 2015-16. This was primarily due to significant improvement in overall performance of Ductile Iron (DI) pipes business. DI Pipe business has recorded a 32% growth in turnover compared to the previous year and a 41% increase in production of finished DI Pipes. During the year under review, your Company has commissioned the following capital projects which would have significant bearing on the operational efficiencies and volume growth in the years to come: - Capacity expansion of DI pipe plant to 200,000 tonnes by installing a new casting machine and a finishing line during Quarter 2; - Coke Oven Project on BOOT (Build Own Operate Transfer) basis having a capacity of 10,000 tonnes/ month of BF grade coke during Quarter 3; - 10 MW Captive Power Plant utilizing exhaust flue gases from Coke Ovens during Quarter 3; and - Modernization and expansion of Mini-Blast Furnace (MBF) - 1 in Quarter 4. Several cost optimization initiatives have immensely helped to reduce costs thereby helping in achieving a robust bottom-line. Pig Iron The Pig Iron (PI) division produced 381,968 tonnes of hot metal against last yearâs production of 433,437 tonnes. Out of the total hot metal produced, 177,545 tonnes were utilized for manufacture of DI pipes and the balance 204,358 tonnes have been utilized for manufacture of Pig Iron. Hot metal production has been lower than previous year on account of a 91 days shutdown of MBF - 1 during last two quarters of FY 201617. PI division recorded a total sale of 199,084 tonnes with a turnover of Rs. 560 crores including inter segment transfers. Ductile Iron pipe The Ductile Iron (DI) pipe business of your Company has recorded its highest ever production of 187,253 tonnes of finished pipes and highest ever dispatch of 182,480 tonnes, thereby resulting in its highest ever turnover of Rs. 850 crores. The result is attributable to the successful execution of the expansion of DI pipe manufacturing plant and installation of a new casting and finishing line. DIVIDEND The Board has recommended a dividend of Rs. 2.50 per Equity Share of Rs. 10/- each for FY 2016-17 (Rs. 2.00 per Equity Share of Rs. 10/- each during FY 2015-16). The dividend on Equity Shares, as recommended by the Board, is subject to the approval of the Shareholders at the ensuing Annual General Meeting (AGM) to be held on 26 July, 2017. The dividend, if declared, will be paid to the eligible Shareholders on or before 29 July, 2017. The total equity dividend outgo works out to 6.56% (FY 2015-16: 5.42%) of the net profit after tax. The dividend payout is in accordance with the Companyâs efforts to pay sustainable dividend linked to long-term growth objectives of the Company and enhancing Shareholder value. The Register of Members and Share Transfer Books will remain closed from 15 July, 2017 to 26 July, 2017 (both days inclusive) for the purpose of payment of the dividend for FY 2016-17 and the AGM. TRANSFER TO RESERVES Your Directors do not propose to transfer any amount to the general reserve. CHANGE IN SHARE CAPITAL There has been no change in the capital structure of the Company during the year under review. CAPEX AND LIQUIDITY During the year under review, your Company has incurred capital expenditure to the tune of Rs. 126 crores, which has been funded through internal accruals. The liquidity position remains stable with undrawn lines of fund-based and non-fund based limits sanctioned by banks. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis Report, as required under Regulation 34(2)(e) of the Listing Regulations, forms an integral part of this report and is annexed herewith as Annexure A. EXTERNAL ENVIRONMENT Macro-Economic Environment Weak international trade, subdued investment, heightened policy uncertainty has slowed global growth to its weakest pace since 2009. Geopolitical uncertainty remains high with concerns about political leanings and increased protectionism. During FY 2016-17, the macro-economic stability of Indian economy has improved substantially with lower inflation, fiscal prudence and moderate current account deficit coupled with robust foreign exchange reserves. Growth was impacted in the last quarter of FY 2016-17 due to the impact of the demonetization which has faded quickly. However, in the long run, this reform aims to foster greater transparency in financial transactions and a progress towards a cashless economy. Despite elevated uncertainties, global steel demand grew by 1% to 1.5 billion tonnes in 2016, due to stronger than expected demand growth in China supported by recovery in the developed world and growth in emerging markets. The price recovery was driven by Chinese government investment stimulus and rising raw materials prices. It was also supported by Chinese steel capacity cuts of 45 million tonnes as well as global steel industry consolidation trends. The price of coal/ coke plays a pivotal role in the overall production cost of the iron and steel industry. During FY 2016-17, the coal price witnessed periodic surge in prices. The volatility of the coal prices remains a challenge for the industry. Pig Iron and DI Pipe Industry Outlook The foundry/ casting Industry is the key component supplier for automotive, tractors, pump valves, compressors, railways, power equipment, industrial machinery, etc. It is expected to grow at CAGR ~8% during financial years FY 2016-17 to FY 2020-21 on account of governmentâs focus on initiatives such as âMake in Indiaâ. At 10.77 million tonnes, India is the second largest manufacturer of castings in the world after China. The Government and the Indian Foundry Association have plans to modernize foundry industry by 2020. As a result, casting production capacity would increase significantly during the next 5 years. The DI Pipe market is expected to remain positive in the coming year due to increased government spending in water, sanitation and irrigation infrastructure. With a renewed focus of various government agencies on smart cities, sanitation and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) water projects, the outlook of the DI pipe business of your Company is expected to be optimistic. Your Company has recently completed its expansion programme of the DI pipe plant facility. Your Company is also entering into DI fittings business, through franchisee arrangement, to supplement the DI pipe business. Your Company endeavours to meet the ever increasing customer requirements through product and service differentiation in its businesses i.e. PI and DI pipes. Strategy Your Company conducts its strategic planning through a well-defined and structured mechanism. It gathers inputs on contextual changes through an environment scan and develops Long-Term strategies (5 years). This is broken into yearly plans and deployed each year through Short-Term plans (1 year) and Balanced Score Card. Key steps in the planning process consists of scanning of external business environment, internal capabilities (participants - respective functional heads), risk management [by Risk Management group involving Strategic Leadership Team and various functional heads], developing Strategic objectives and Long term/Short term plan and deployment of plan. Your Company aims to be the most competitive in the market place in terms of cost of production of hot metal and DI pipe and be the customersâ choice through its quality products and service differentiation. Cost competitiveness is being achieved through capital investments in coke ovens, captive power plant and blast furnace modernization. Simultaneously, your Company is also working on increasing its top line and market share through capacity expansion of value added products - DI pipes. Amalgamation During the year under review, the Scheme of Amalgamation between your Company and its wholly owned subsidiary i.e. Tata Metaliks DI Pipes Limited (TMDIPL) with Tata Steel Limited was withdrawn due to multiple factors including inordinate delay in obtaining requisite regulatory and statutory approvals along with the significant dilution in the intended synergies that were initially envisaged. Subsequently, a fresh Scheme of Amalgamation (Scheme) between TMDIPL and the Company was filed with the Honâble High Court, Calcutta, aimed to realize greater benefits of financial, managerial, technical, distribution and marketing synergies between the entities to maximize stakeholder value. The said Scheme has received the approval of the Honâble High Court, Calcutta and became effective from 22 December, 2016. Upon the effectiveness of this Scheme, your Company has two integral business segments i.e. Pig Iron and Ductile Iron Pipes - both structured as two separate divisions. Pursuant to the effectiveness of the Scheme, TMDIPL has ceased to be in existence as the subsidiary of your Company. Subsidiaries, Joint Ventures and Associates At the end of the year under review, your Company does not have any subsidiary, associate and joint venture Company. Hence, the requisite disclosure as per Section 129(3) of the Companies Act, 2013 (Act) in Form AOC-1 is not applicable. Credit Ratings Your Company enjoys a good reputation for its sound financial management and its ability to meet financial obligations. The current rating of the Company is [ICRA] A (positive outlook). Customer Relationship Customer focus in your Company starts with one central theme - âCustomer Centricityâ with the objective of becoming âThe Supplier of Choiceâ through a well-defined marketing and sales process. It includes listening and learning from the customer, customer segmentation and feedback through various mechanisms in order to deliver on 3-D customer promise - Develop deep insight, Deliver outstanding products and services and Delight customers at all touch points. For both DI pipes and pig iron, our marketing and sales team work closely with customers to get a deep understanding of their unique needs. Thereafter, the operations and logistics teams serve them with innovative products and services. There is a structured complaint management system which not only captures customer complaints proactively but also resolves them to the satisfaction of the customers. Social media and digital platform is also used for marketing the products and getting across to customers from all key segments. Health and Safety In line with our Group vision, Health and Safety remains our top most priority. Our continued efforts, aimed at enhancing safety standards and processes and minimize safety risks and reduce health hazards, are aligned with our focus to be the industry benchmark. TMLâs slogan on safety is âYour safe return to your familyâ. Environment Your Company remains focused on minimizing the environmental impact of its operations and continues to adopt sustainable practices to improve its environmental performance. Aligned with the Group values, compassion for environment under Corporate Citizenship is deeply embedded in your Companyâs vision. Your Companyâs ISO 14001, ISO 27001 and OHSAS 18001 certified manufacturing plant at Kharagpur continues to focus on operational excellence aimed at resource and energy efficiency, along with recovery, reuse and recycling of waste to minimize ecological footprint. Sustainability Your Companyâs sustainability initiatives are driven by the Tata Group core values and rests on triple bottom-line approach viz. social, environmental and financial. Your Company continues to strive to have a positive influence on the community and all other stakeholders through its sustainability-related initiatives and action plans. Corporate sustainability function in the Company is responsible for creating awareness on sustainability, sharing best practices and incorporating valuable sustainability initiatives on various materiality issues which are being taken care of after carrying out assessments on material issues related to all stakeholders in the value chain. Your Company will publish the Sustainability Report for FY 2016-17, based on the Global Reporting Initiative (GRI) G4 guidelines, which will articulate your Companyâs focus to create long-term sustainability for all its Stakeholders and will be available at www.tatametaliks.com. HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONS Your Company considers its employees as the most valuable resource and ensures the strategic alignment of human resource practices to business priorities and objectives. Your Company strives to provide a conducive and competitive work environment for all its employees to excel and create new benchmarks of work culture, employee engagement, productivity, effectiveness, efficiency and customer delight. This year has been of significant importance as the Human Resources & Industrial Relations function has seamlessly handled the amalgamation of TMDIPL with your Company. Subsequent to the amalgamation, the focus remains on strengthening and standardizing all people related processes and culture of amalgamation of two units. The year under review also saw the signing of Charter of Demand and wage agreement of PI Division, which was a step further towards sustained harmonious industrial relations for uninterrupted operations. An employee engagement survey was conducted to assess improvement in the level of engagement and commitment as compared to the previous year. The results show an upward trend. Initiatives like introduction of new employee centric HR policies (Paternity Leave, Additional Privileged Leave for Women Employees, Adoption Leave for Women, Convocation Leave, Wedding Gift etc.), Employeesâ Cultural Meet, Holiday plan, improved canteen amenities and ambience, Employee connect programme, IT enabled Employee Concern Platform and Sports events were undertaken to meet the changing needs of the workforce, attract and retain talent and enhance workforce engagement. Diversity is embedded in our people processes - from recruitment to development - and is reflected in all HR-related offerings. Your Company is committed to an inclusive culture that respects and embraces the diversity of employees and communities. The Company aims to attract, develop and retain the most capable employees without regard to culture, ethnicity, race, gender, ability, belief and background. Your Company seeks to build the capabilities of its employees to help them develop both professionally and personally. Learning and development activities are aligned to three priorities i.e. (1) building leadership capabilities and developing future leaders; (2) fostering an environment that supports sustainable performance; and (3) promoting continual professional and personal development for all employees. Particulars of Employees Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report in Annexure B. In terms of the provisions of Section 197(12) of the Act read with sub-rules (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing names and other prescribed particulars of Top 10 employees in terms of remuneration drawn and that of every employee, who if employed throughout the year ended 31 March, 2017 was in receipt of remuneration aggregating not less than Rs. 102.00 lakhs, and if employed for part of the same year was in receipt of remuneration of not less than Rs. 8.50 lakhs per month is annexed to and forms part of this report. CORPORATE SOCIAL RESPONSIBILITY The objective of our Corporate Social Responsibility (CSR) initiatives is to improve the quality of life of communities through long-term value creation for all our Stakeholders. This objective is in alignment with the Tata Group core purpose. We continue to remain focused on improving the quality of life and engaging communities through health, education, sanitation, infrastructure development etc. As per the Act, CSR activities may be undertaken through a registered trust or a registered society. Your Company carries out its CSR activities through âSadbhavna Trustâ. Brief details on the various focus areas of interventions are part of the Annual Report on CSR activities annexed to this report. During the year under review, your Company has spent a sum of Rs. 2.28 crores on CSR and Affirmative Action initiatives. The Annual Report on CSR activities, in terms of Section 135 of the Act, is attached as Annexure C. CORPORATE GOVERNANCE Your Company strives to ensure that corporate governance guidelines and best practices are followed in letter and spirit and believes in accurate and timely disclosure of information regarding financials, performance as well as the leadership and governance of the Company. Aligned with the Tata Steel Group Vision, to be the industry benchmark for value creation and corporate citizenship, all initiatives are directed in order to achieve the goals of value creation, safety, environment and people. Pursuant to Regulation 34(3) of the Listing Regulations, a separate section on Corporate Governance and a Certificate from a Practicing Company Secretary regarding compliance of conditions of Corporate Governance are made part of this report as Annexure D. Board and Committee Meetings The Board of Directors of the Company met 6 (six) times during FY 2016-17. The details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such meetings are provided in the Corporate Governance Report in Annexure D. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. Policy on appointment and remuneration of Directors, Key Managerial Personnel and other employees There is a well-defined policy in place for appointment of Directors, Key Managerial Personnel (KMP) and other employees and their remunerations. The Nomination and Remuneration Committee (NRC) functions in consultation with the Board, if necessary and follows the guidelines of this policy both in letter and spirit while selecting a candidate for appointment. The NRC recommends to the Board suitable candidates, based on their qualifications, skills and experiences for Board Membership. The Policy on appointment and removal of Directors is available on our website at www.tatametaiiks.com/static-fiies/pdf/poiicies/TML-NRC-poiicy.pdf. Familiarization Programme for Independent Directors In accordance with the provisions of the Listing Regulations, the Company has put in place various programmes to familiarize Independent Directors with respect to the nature of the industry in which the Company operates, business model, the roles, rights and responsibilities of the Independent Directors etc. Details of the familiarization programme for Independent Directors are provided in the Corporate Governance Report, annexed herewith and is also available on our website http://www.tatametaiiks.com/static-fiies/pdf/poiicies/ poiicy-proa-Director.pdf. Board Evaluation The process and criteria for annual performance evaluation of the Board, its Committees and individual Directors had been laid down by the NRC and the Board of Directors of the Company. In accordance with the provisions of the Listing Regulations, the evaluation process for the performance of the Board, its various Committees and individual Directors was carried out during the year. Each Director filled-up a questionnaire giving feedback on the functioning of the Board and its various Committees on the parameters such as execution of specific duties, timeliness of flow of information including its quality and quantity, independence of judgment etc. The Chairman of NRC also sought one-on-one feedback from the Managing Director and all other Directors. A one-on-one meeting of the individual Directors with the Chairman of the Board was also conducted. The NRC and subsequently the Board discussed the collated feedback received from the Directors. The evaluation process found the overall performance of the Board satisfactory in working as a team and guiding the Management. The Board also appreciated the Chairman and the Management in guiding the Company during turbulent times and making it the best performer amongst the Tata Steel group companies. In addition, the evaluation process compared the evaluation reports of 2015-16 and 2016-17 and reviewed the areas where the Board has improved and the areas where more improvement is desired. The Board would work to improve its performance in general and specifically in areas where additional focus is required. The Independent Directors met on 23 February, 2017 and reviewed the performance of the Managing Director, the Board and its Chairman. The Independent Directors appreciated the exemplary leadership role of the Board Chairman in upholding the highest standards of corporate governance. Based on the outcome of the evaluation and feedback, in future the Board would look at guiding the Company to become a top player, both in pig iron and DI pipes businesses. Remuneration Policy for the Board and other employees The policy on remuneration of the Directors, KMPs and other employees was approved and adopted by the NRC and the Board on 30 March, 2015. The main objective of the said policy is to ensure that the level and composition of remuneration for Directors, KMPs and other employees is sufficient and reasonable to attract, pool, retain and motivate them. The remuneration involves a balance between fixed and variable pay reflecting short and long-term objectives of the Company. During the year under review, there has been no change in the Policy. The said policy is available on our website htto://www.tatametaliks.com/static-files/Ddf/Dolicies/TML-NRC-oolicv.Ddf. Independent Directorsâ Declaration Pursuant to the provisions of Section 149(7) of the Act and the provisions of the Listing Regulations, the Company has received requisite declaration from each of the Independent Directors, stating that they meet the criteria of independence as per Section 149(6) of the Act and the Listing Regulations. Directors a) Re-appointment In accordance with the provisions of Section 152 of the Act read with Article 110 of the Articles of Association of the Company, Ms. Samita Shah (DIN: 02350176) will retire by rotation at the ensuing AGM of the Company and is eligible for re-appointment. The Board recommends and seeks your support in confirming re-appointment of Ms. Samita Shah. The profile and particulars of experience, attributes and skills that qualify her for the Board Membership is disclosed in the Notice convening the AGM to be held on 26 July, 2017. b) Inductions - The Board appointed Mr. Sandeep Kumar (DIN: 02139274) as an Additional Director w.e.f. 20 March, 2017. He holds office up to the date of the ensuing Annual General Meeting. Pursuant to Section 160 of the Act, your Company has received requisite notice, proposing the appointment of Mr. Kumar as a Director on the Board. Accordingly, the Board recommends his appointment as Director. The Board of Directors at its meeting held on 20 March, 2017, on the recommendation of the NRC, has appointed Mr. Kumar as a Whole-time Director (Designated as an Executive Director) of the Company for a period of 3 (three) years w.e.f. 10 April, 2017. The Board of Directors, subsequently, at its meeting held on 1 June, 2017 appointed Mr. Kumar as the Managing Director of the Company, for a period of 3 (three) years w.e.f. 1 July, 2017. Accordingly, the Board recommends his appointment as Managing Director. The resolution confirming the above appointment forms part of the Notice convening the ensuing AGM of the Company. We seek your support in confirming the above appointment to the Board. - Dr. Rupali Basu (DIN: 01778854) and Mr. Amit Ghosh (DIN: 00482967) have been appointed as Additional (Independent) Directors w.e.f. 24 January, 2017. They will hold their respective offices up to the date of the ensuing AGM. Pursuant to Section 160 of the Act, your Company has received separate requisite notices, proposing the appointments of Dr. Rupali Basu and Mr. Amit Ghosh as Independent Directors on the Board at the said AGM. Accordingly, the Board recommends their appointments as Independent Directors. The resolutions confirming the above appointments forms part of the Notice convening the ensuing AGM of the Company. We seek your support in confirming the above appointments to the Board. c) Cessation - In line with the group policy on retirement of Directors (Independent Directors to retire on attaining 75 years of age), Mr. Ashok Kumar Basu (DIN: 01411191) retired as an Independent Director of the Company w.e.f. 24 March, 2017. Mr. Basu joined the Board on 29 March, 2007. The Directors place on record their sincere appreciation of Mr. Basuâs valuable contributions during his long tenure of association as a Director in the Company. - Mr. Sanjiv Paul (DIN: 00086974) will hold office as Managing Director of the Company till the close of business hours on 30 June, 2017. He will, however, continue as a Non-Executive Director on the Board w.e.f. 1 July, 2017. The Directors would like to place on record their deep sense of appreciation towards the valuable contribution made by Mr. Paul, particularly in turning around the Company during his tenure as Managing Director. Key Managerial Personnel During the year under review, there has been no change in the offices of the KMPs. However, after the close of the financial year under review, following changes have taken place in the offices of KMPs: - Mr. Sandeep Kumar has become a Key Managerial Personnel w.e.f. 10 April, 2017 and has been appointed as the Managing Director of the Company w.e.f 1 July, 2017; and - Mr. Sanjiv Paul will continue to hold the position as the Key Managerial Personnel till the closing hours of 30 June, 2017. The remuneration and other details of the Key Managerial Personnel for FY 2016-17 are provided in Extract of the Annual Return which forms part of this Directorsâ Report. Audit Committee Our Audit Committee was constituted in the year 1995. The Committee has adopted a charter for its functioning. The primary objective of the Committee is to monitor and provide effective supervision of the Managementâs financial reporting process to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. During the financial year, there has been no instance where the Board has not accepted any recommendation of the Committee. During the year, the Audit Committee comprised of Mr. Krishnava Dutt, Chairman (Independent Director), Mr. Ashok Kumar Basu (Independent Director), Dr. Pingali Venugopal (Independent Director) and Ms. Samita Shah (Non-executive Director) as Members. Mr. Ashok Kumar Basu ceased to be a Member with effect from 24 March, 2017 consequent upon completion of his tenure as a Director in the Company and Mr. Amit Ghosh (Independent Director) was appointed as a Member of the Audit Committee with effect from 21 April, 2017. The Committee met 6 (six) times during the year, the details of terms of reference of the Committee, number and dates of meetings held and attendance of Directors during the year are given in the Corporate Governance Report forming part of this Annual Report. Internal Control Systems The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been laid down in the Company and that such controls are adequate and operating effectively. The Company has adequate and effective Internal Financial Controls (IFC) framework, commensurate with its size, scale and complexity of operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The framework on Internal Financial Controls over Financial Reporting has been reviewed by the internal and external auditors. The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting. Also, the Audit Committee at frequent intervals has independent sessions with the external auditor and the Management to discuss the adequacy and effectiveness of internal financial controls. The details of the internal financial control system and their adequacy are included in the Management Discussion and Analysis as Annexure A, which forms a part of this Annual Report. Risk Management Your Company has a robust risk management framework in line with its holding Companyâs risk management process for identifying, prioritizing and mitigating risks which may impact attainment of short and long term business goals of the Company. The risk management framework is aligned with strategic planning, deployment and capital project evaluation process of the Company. The process aims to analyze internal and external environment and manage economic, financial, market, operational, compliance and sustainability risks and capitalizes opportunities for business success. The Company has identified key risk areas which may affect the business and operational goals of the Company. These identified risks are periodically revisited against their respective mitigation plans. The Board has constituted a separate Risk Management Committee consisting of Directors and a management representative. The Committee meets at periodic intervals and monitors, evaluates and strengthens the effectiveness of risk management framework of the Company. Vigil Mechanism / Whistle Blower Policy Your Company has adopted a Vigil Mechanism policy that provides a formal mechanism for all Directors, Employees and Vendors of the Company to approach the Ethics Counselor/Chairman of the Audit Committee to make protective disclosures about any unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (TCoC). The Whistle Blower Policy is an extension of the TCoC which requires every Director/ employee/ vendor to promptly report to the Management any actual or possible violation of the TCoC or any event which he or she becomes aware of, that could affect the business or reputation of the Company. During the year under review, none of the Directors/ employees/ vendors was denied access to the Ethics Counsellor/ Chairman of the Audit Committee. The said policy is available on the Companyâs website at http://www.tatametaliks.com/static-files/pdf/ whistleblower-policy.pdf Related Party Transactions During the year under review, all Related Party Transactions (RPTs) were on Armâs Length basis and in the ordinary course of business and hence do not fall under the ambit of Section 188(1) of the Act. There was no material RPT entered into by the Company with Promoters, Directors, KMPs or other designated persons during FY 2016-17, except those reported in the financial statements. In compliance with the provisions of the Act and the SEBI Regulation 2015, each RPT is placed before the Audit Committee for prior approval. A prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and repetitive in nature. The transactions, pursuant to the omnibus approval so granted, is audited and a detailed quarterly statement of all RPTs is placed before the Audit Committee for its review. The quarterly statement is supported by a Certificate duly signed by the Managing Director and the Chief Financial Officer. The policy on RPTs, as approved by the Board, is available on the Companyâs website at http://www.tatametaliks.com/static-files/pdf/policies/rpt-policv.pdf In view of the above, the disclosure required under the Act in Form AOC-2 is not applicable for FY 2016-17. None of the Directors or KMPs has any pecuniary relationships or transactions with the Company during FY 2016-17. Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013 Your Company has zero tolerance towards sexual harassment at workplace. It has in place a Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. An Internal Complaints Committee (ICC) is in place to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy. The Company has not received any complaint of sexual harassment during the financial year 2016-17. Directorsâ Responsibility Statement Based on the framework of IFC established and maintained, work performed by the internal, statutory, cost and secretarial auditors and the external agencies including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during FY 2016-17. Accordingly, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) 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 at the end of the financial year and of the profit of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls in the Company and that such internal financial controls are adequate and were operating effectively; and f) 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. Auditors Statutory Auditors Pursuant to Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, the current term of Messrs Deloitte Haskins & Sells (Firm Registration No. 302009E), Chartered Accountants, as the Statutory Auditors of the Company expires at the conclusion of the ensuing AGM of the Company. Your Board at its meeting held on 1 June, 2017, upon the recommendation of the Audit Committee, has recommended the appointment of Messrs Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (ICAI Registration No.304026E/E300009), as the Statutory Auditors of the Company at the 27th AGM of the Company for an initial term of 5 (five) years. Accordingly, a resolution proposing appointment of Messrs Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants as the Statutory Auditors of the Company for a term of 5 (five) consecutive years i.e. from the conclusion of 27th AGM till the conclusion of 32nd AGM of the Company pursuant to Section 139 of the Act, forms part of the Notice of the 27th AGM of the Company. The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that their appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed there under. Messrs Deloitte Haskins & Sells had been appointed as the Statutory Auditors of the Company in FY 2006-07 and will hold office until the conclusion of the ensuing AGM. On your behalf and on our own behalf we place on record our sincere appreciation for the services rendered by Deloitte during its long association with the Company. Secretarial Auditor Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors, upon the recommendation of the Audit Committee, has approved the appointment of Mr. P V Subramanian, Company Secretary in Whole-time-Practice [CP. No. 2077 (ACS-4585)], as the Secretarial Auditor of the Company for the Financial Year ending 31 March, 2018. The Secretarial Audit Report for the financial year ended 31 March, 2017, in Form MR-3, forms an integral part of the report and is annexed herewith as Annexure E. Cost Auditors Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, your Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors, upon the recommendation of the Audit Committee, has approved the appointment of Messrs Shome & Banerjee, Cost Accountants (Firm Registration No: 000001) as the Cost Auditors of the Company for the Financial Year ending 31 March, 2018. Pursuant to Section 148 of the Act read with Rule 14 of Companies (Audit and Auditors) Rules, 2014, ratification of the remuneration of Cost Auditors is being sought from the Members of the Company at the ensuing AGM. The details of the same is provided in the Notice convening the AGM. The due date for filing the Cost Audit Report of the Company for the Financial Year ended 31 March, 2016 was 30 September, 2016 and the same was filed in XBRL mode by the Cost Auditor on 17 August, 2016. Auditorsâ qualification There are no qualifications in the respective reports of the Statutory Auditors, Secretarial Auditor and Cost Auditors. Reporting of Fraud The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act. Extract of the Annual Return In compliance with Section 134(3)(a) of the Act, the extract of the Annual Return in Form MGT 9, as per Section 92 of the Act and the Rules framed there under, forms an integral part of this report and is annexed herewith as Annexure F. Significant and Material Orders passed by the Regulators or Courts There has been no significant and material order(s), passed by any Regulator(s) or Court(s) or Tribunal(s), impacting the going concern status of the Companyâs operations. However, Membersâ attention is drawn to the statement on contingent liabilities and commitments in the notes forming part of the Financial Statements. No material changes and commitments have occurred after the close of the financial year till the date of this Report which affect the financial position of the Company for the reporting period. Particulars of Loans, Guarantees or Investments Your Company did not give any loans, directly or indirectly to any person or to other body corporate, nor did it give any guarantee or provide any security in connection with a loan to any other body corporate or person during the financial year under review. The Company has certain long term non-current investments, as detailed under note 6 to the âNotes to the Financial Statementsâ; such investments are in compliance with Section 186 of the Act. Deposits Your Company has not accepted any fixed deposits nor does the Company has any outstanding deposits under Section 73 of the Act, read with the Companies (Acceptance of Deposit) Rules, 2014 as on the Balance Sheet date. Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo Details of energy conservation, technology absorption and foreign exchange earnings and outgo is an integral part of this report and is annexed herewith as Annexure G. Awards and Accolades During the year under review, your Company received multiple awards and appreciations. Noteworthy among them was the IIM National Sustainability Award in Iron and Steel sector for 2015-16 under the category of DR plants/Pig Iron Plants/Major Re-Rolling Units. Your Company was also the proud recipient of the Tata Engage Responsible Leader Award for Employee Volunteering - a Tata Group level appreciation for significant contribution towards CSR initiatives. Other disclosures No disclosure or reporting is made in respect of the following items as there were no transactions during the year under review: - Details relating to deposits covered under Chapter V of the Act; - Issue of equity shares with differential rights as to dividend, voting or otherwise; - Issue of shares to the employees of the Company under any scheme (sweat equity or stock options) - The Company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees; - Managing Director has not received any remuneration or commission from its erstwhile subsidiaries during the year; - There was no revision in the financial statements other than as required to be done as per Ind AS ; and - There was no change in the nature of business. ACKNOWLEDGEMENTS Your Directors take this opportunity to thank all its Stakeholders, i.e. shareholders, customers, vendors, dealers, investors, business associates and bankers, for their continued support during the year. They place on record their deep sense of appreciation for the contribution made by Senior Leadership team and employees at all levels across the organisation. The resilience to meet and successfully overcome several challenges was possible due to their hard work, solidarity, co-operation and support. Your Directors also express their deep sense of gratitude towards various Governments and regulatory authorities for their continued support and look forward to their guidance in the future. On behalf of the Board of Directors Koushik Chatterjee Place : Kolkata Chairman Date : 1 June,2017 DIN:00004989
Mar 31, 2016
Dear Shareholders,
Th Directors are pleased to present their 26th Annual Report of the
Company along with the Statement of Accounts for the financial year
ended 31 March, 2016.
Financial Results Rs. in Crore
Stand-alone Consolidated
Particulars Year ended Year ended Year ended Year ended
31.03.2016 31.03.2015 31.03.2016 31.03.2015
Gross Income from
Sales & other
operations 1038.37 1229.85 1389.81 1529.38
Profit / (Loss)
before interest,
depreciation and
taxes e 111.52 151.60 219.54 204.56
Less : Interest 32.96 32.20 37.80 41.31
Profit / (Loss)
before depreciation
and taxes 78.56 119.40 181.74 163.25
Less : Depreciation 13.58 12.56 32.97 30.93
Profit / (Loss)
before taxes 64.98 106.84 148.77 132.32
Less : Provision
for taxes including
deferred taxes 14.37 23.18 25.98 23.18
Profit / (Loss) after
taxes 50.61 83.66 122.79 109.14
Profit / (Loss) and
credit balance brought
forward (19.99) (103.01) (121.23) (228.43)
Depreciation on
transition of Schedule
II of the (0.88) (0.64) (0.88) (1.94)
Companies Act, 2013
Rs. in Crore
Stand-alone Consolidated
Particulars Year ended Year ended Year ended Year ended
31.03.2016 31.03.2015 31.03.2016 31.03.2015
Amount available
for appropriation 29.74 (19.99) 0.68 (121.23)
Appropriation:
Proposed Dividend - -
a) Preference 8.50 8.50
b) Equity 5.06 5.06
Tax on Dividend 2.76 - 2.76 -
General Reserve - - - -
Balance carried
forward 13.42 (19.99) (15.64) (121.23)
Performance
During the year under review, your Company has achieved its highest
ever production of hot metal of 433,437 tonnes with all round
improvement in performance including various operating parameters such
as production, sales, consumption norms, yield and costs.
Sales performance was also satisfactory as all pig iron produced was
sold despite depressed market conditions. However, the Company
witnessed a steep drop of 16% in foundry grade sales price during first
three quarters of the year. There was an improvement of 8% in prices in
the last quarter of the year due to general increase in steel prices as
a result of imposition of minimum import price by Government of India.
Despite fall in pig iron prices, your Company sustained its performance
due to lower costs of major raw materials i.e. iron ore, coke etc. and
significant improvement in the DI Pipe business.
On standalone basis, the Company has made a Profit after Tax ("PAT") of
Rs. 50.61 crores, which is 39% lower as compared to PAT of Rs. 83.66
crores of last year mainly due to lower realization on account of pig
iron prices. On a consolidated basis, the Company delivered its best
ever performance with PAT at Rs. 122.79 crores which is 12.5% higher
compared to Rs.109.14 crores of last year mainly due to significant
improvement in the overall performance of the Company''s subsidiary,
Tata Metaliks DI Pipes Limited ("TMDIPL"). TMDIPL has recorded a 183%
growth in the PAT at Rs. 72.18 crores compared to the previous year and
a 20% increase in production of finished ductile iron pipes at 133,210
tonnes.
Dividend
The Board recommended a dividend of Rs. 2/- per Ordinary Equity Share
on 2,52,88,000 Ordinary Equity Shares of Rs. 10 each for the year ended
31 March, 2016. This marks the resumption of dividend after a gap of 7
years.
The Board has also recommended a dividend of Rs. 8.50/- per Non
Cumulative Redeemable Preference Shares of Rs. 100 each for the year
ended 31 March, 2016.
The dividend on Ordinary Equity Shares is subject to the approval of
the shareholders at the Annual General Meeting ("AGM") scheduled to be
held on 29 June, 2016. The total dividend pay-out works out to Rs.
16.32 crores of the net profit for the standalone results.
The Register of Members and Share Transfer Books will remain closed
from 23 June, 2016 to 29 June, 2016 (both days inclusive) for the
purpose of payment of dividend for the Financial Year ended 31 March,
2016 and the AGM.
Change in Share Capital
There has been no change in the capital structure of the Company during
the year under review.
Deposits
During the year under review, the Company has not accepted any deposits
under the Companies Act, 2013 ("Act"). Change in nature of Business
During the year under review, there has been no change in the nature of
business of the Company.
Consolidation of Projects
Your Company is in the process of improving its operational costs and
efficiencies through the following strategic projects which are under
implementation:-
- Coke Oven Project on BOOT basis having a capacity of 10,000
tonnes/month of BF grade coke. This project is likely to be
commissioned during Q1 of FY 2016-17;
- 10 MW Power Plant utilizing the exhaust flue gases from Coke Ovens
which is likely to be commissioned during Q1 of FY 2016-17;
- Relining and upgrading of MBF#1 (from 225 m3to 305 m3), which is
likely to be commissioned during Q3 of FY 2016-17. Customer Focus
Tata Group''s focus on "Customer Promise" through 3-Ds (Develop deep
insight, Deliver outstanding products and services, Delight customers
at all touch points) has also been practiced in your Company to enhance
its customer- centricity. Key initiatives which were taken during the
year in DI pipe business were (i) improvement in delivery compliance of
smaller diameter pipes for customers and (ii) production of high value
zinc-aluminum coated Tata Ductura pipes for global customers. Besides
these, for both the products, pig iron and DI pipes, the Company
delivered high quality products consistently to the customers.
Company''s customer-centric approach was validated by the customers
through customer satisfaction studies by external agency, in which it
received high rating especially on customer relationship management.
The Company with the help of Research & Development team of Tata Steel
is in the process of developing improved product offerings for DI pipe
customers.
Industry Outlook
The year 2015-16 has been one of the most challenging periods in recent
times since the financial crisis of 2008 in terms of global slowdown,
oversupply of steel products from China, and oversupply and lower
demand of pig iron due to weak industrial activities in India. For the
second consecutive year, pig iron exports from India dropped by 60%
year on year, which resulted in state owned integrated steel
manufacturers dumping pig iron in the domestic market leading to fall
in price of pig iron. However, with some protective measures announced
by the government, the iron and steel prices showed some improvement
during the last quarter of 2015-16.
Moving forward in 2016-17, although no immediate improvement in pig
iron demand is foreseen, government''s supporting measures in terms of
minimum import price, safeguard duty and firming up of raw material
prices may lead to an increase in iron and steel market prices.
However, since raw material prices are expected to increase marginally,
pressure on margins in iron and steel business is likely to
continue.Casting industry is expected to get a boost when "Make in
India" program of the government picks up with growth in engineering,
automobile, construction, sanitation and pipe sectors. Further,
government''s increased expenditure on providing drinking water and
sanitation to the entire population and development of several smart
cities across the country would keep the DI pipe demand robust for the
next few years.
Meetings
Four Board Meetings were held during the year under review. For details
of the meetings, please refer to the Corporate Governance Report, which
forms part of this report.
Directors
Mr. Koushik Chatterjee retires by rotation at the forthcoming AGM and
is eligible for re-appointment.
On the recommendation of Nomination & Remuneration Committee, the Board
of Directors of the Company on 30 March, 2016 has re-appointed Mr.
Sanjiv Paul, as the Managing Director of the Company for a further
period of 3 (three) years w.e.f. 1 April, 2016 subject to the approval
of the members at the following AGM.
Declaration by Independent Directors
In compliance with section 149(7) of the Act, all Independent Directors
have given declaration that they meet the criteria of independence as
laid down under Section 149(6) of the Act and Regulation 16(1)(b) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
Dr. Pingali Venugopal, Mr. Krishnava Dutt and Mr. Ashok Basu,
Independent Directors are already familiar with the nature and
industry, business plan and other aspects of the Company since they
have been directors of the Company for a long time. However, the
familiarization program of Independent Directors with the company in
respect of their roles, duties and responsibilities and related matters
are being uploaded on to the Company''s website at the link
www.tatametaliks.com/ investors/shareholderinformation.aspx
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 the reviews
performed by the Management and the relevant Board Committees,
including the Audit Committee, the Board is of the opinion that the
Company''s internal financial controls were adequate and effective
during the financial year 2015-16.
Accordingly, pursuant to Section 134(5) of the Act, the Board of
Directors, to the best of their knowledge and ability, confirm that:-
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) The Directors had 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 at the end of the financial year and of the profit and loss
of the company for that period;
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
d) The Directors had prepared the annual accounts on a going concern
basis;
e) The Directors had laid down proper Internal Financial Controls
("IFC") and such IFC are adequate and were operating effectively;
f) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Directors appointment and remuneration policy
The Company''s Policy on Directors'' appointment and remuneration and
other matters provided in Section 178(3) of the Act has been disclosed
in the Corporate Governance Report, which forms part of this Report.
Board Evaluation
In line with the requirement of Regulation 25(3) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, a meeting
of the Independent Directors of the Company was held on 10 February,
2016, wherein the performance of the non-independent directors
including Chairman was evaluated.
The Board, based on the recommendation of the Nomination and
Remuneration Committee ("NRC"), evaluated the effectiveness of its
functioning and that of the Committees and of individual directors by
seeking their inputs on various aspects of Board/Committee Governance.
The aspects covered in the evaluation included the contribution to and
monitoring of corporate governance practices, participation in the
long-term strategic planning and fulfillment of Directors'' obligations
and fiduciary responsibilities, including but not limited to active
participation at the Board and Committee meetings.
Key Managerial Personnel
Following officials are appointed as the Key Managerial Personnel
("KMP") of the Company:-
- Mr. Sanjiv Paul, Managing Director;
- Mr. Subhra Sengupta, Chief Financial Officer; and
- Mr. Sankar Bhattacharya, Chief-Corporate Governance & Company
Secretary
Remuneration and other details of the KMP are mentioned in the extract
of the Annual Return which forms part of this report.
Internal Financial Control
Your Company has adequate internal control system in place,
commensurate with the size, scale and complexity of the operations. The
Company has already carried out an audit on internal financial control
by third party. The Statutory Auditor has also commented on the
internal financial control on financial reporting in their report.
Audit Committee
The Audit Committee comprises of 4 (four) Members of which 3 (three)
are independent including Chairman. All recommendations made by the
Audit Committee were accepted by the Board during FY 2015-16.
Corporate Social Responsibility
Our philosophy does not rest on philanthropy alone but dovetails the
community need with the organizational involvement, adding value in all
initiatives with the Community.
Social Context
The Company has been fulfilling its vision of "Reaching Tomorrow First"
by committing itself even before the law made CSR a mandatory
requirement in 2014, by implementing various CSR initiatives around its
plant. The plant is located in No. 4 Kalaikunda Gram Panchayat of
Paschim Medinipur district of West Bengal having 57 villages, of which
36 villages with 54 % SC/ST population are located within a radius of 5
km from the plant. Nearly 10,000 inhabitants of these 36 villages form
the "Core Beneficiaries" of the various CSR & Affirmative Action ("AA")
interventions planned and executed by the Company.
In order to understand the needs of the community, a Need Assessment
Survey was carried out during August 2014 articulating the needs and
expectations of the community and provided the inputs required to
formulate the Company''s CSR & AA strategy. Based on the prevailing
social and business challenges, your Company has focused its energy and
resources on the following broad interventions:-
a) Education
b) Employability
c) Employment
d) Entrepreneurship
e) Essential Amenities
Priority Interventions
The Company''s focused CSR & AA interventions are directed towards
EDUCATION, i.e. create a pedigree of educated youth in the years to
follow through increasing access as well as quality of education and
also simultaneously on EMPLOYBILITY, i.e. imparting marketable skills
to the available educated youth.
Education
We believe in the truism that education is the ultimate leveler to
change people''s life and this "E" is being given the deepest engagement
and importance it deserves.Our precise intervention has been:-
a) To encourage primary school education by providing stationery items;
b) Scholarship to meritorious students;
c) Improve infrastructure of primary schools at Amba, Maheshpur and
Kendupal;
d) Improve quality of education for high school students through extra
coaching class at Gokulpur High School; Employability
To develop a pedigree of skilled manpower for the nation, there have
been a basket of interventions in the area of marketable skills/
training to local youth. It is directed towards the educated youth from
AA community from the surrounding villages. This is to arm them with
requisite skills to increase their employability quotient locally as
well as nationally, thereby enabling a sustainable livelihood for them
and includes the following initiatives:-
a) Sponsoring Two Year ITI Course in Fitter & Electrical trades;
b) In-plant One Year "On - the - Job" Training to ITI / Diploma / B.Sc.
qualified youths;
c) Sponsoring Two Year Mid Wifery Nursing Course for matriculate girls;
d) Sponsoring "Loader cum Excavator Operator" Training in partnership
with Tata-Hitachi;
e) Sponsoring "Project SABLA", a Government project (Rajiv Gandhi
Scheme for Empowerment of Adolescent Girls) being CII coordinated
program for providing short - term skill training;
f) Setting up of Skill Development Centre -Your Company is committed
towards establishing a Skill Development Centre in FY''17 for imparting
marketable skills to local youth of the community to enable them earn a
sustainable livelihood, either through employment or as entrepreneurs.
Entrepreneurship
The spirit of positive discrimination towards developing entrepreneurs
from AA community in Company''s value chain is adopted. In addition to
vendor development, the Company has also initiated a pilot project
wherein a group of farmers are being nurtured and supported technically
and financially to take up multi-cropping and cultivation of cash crop
(capsicum) to enable them increase their household income. More
projects on promoting agriculture have been planned based on the
outcome of this pilot project.
Essential Amenities
Due to the rural background of the community in which we are operating,
most of villages lack basic infrastructure amenities like potable
drinking water, roads, drainage system, toilet facilities etc. Three
drinking water projects have been implemented on "Community -
Corporate" partnership model wherein one time infrastructure including
a deep boring along with a network of water pipeline with overhead
tanks is being provided by the Company. After completion,the same have
been handed over to respective village committees who then operate and
maintain the facility. Every household contributes towards the cost of
operating and maintaining the drinking water projects.
The Company has been recognized for the "Water Project" at the Tata
Group level as one of the Good Practices in 2015 - 16.
In addition, drainage system and toilet blocks are being provided in
villages in a phased manner. Starting FY''17, Plain Cement Concrete
roads will also be provided in villages in a phased manner to improve
basic infrastructure in surrounding villages.
Health
In addition to above, various health related initiatives are organized
e.g. blood donation camps conducting health check-up camps with
distribution of free medicines for women & children, organizing various
types of health awareness camps on alcoholism, hygiene etc. in various
villages throughout the year.
Environment
A number of initiatives have been promoted on the environment front,
like industrial water treatment, waste water recirculation system in
sinter pant, installing sprinklers on dusty areas including roads and
spreading greenery to name a few.
Assisting Community during Natural Calamity
More than 200 persons from surrounding villages were affected due to
cyclone Komen which had hit Paschim Medinipur during the period Jul/Aug
2015 rendering several of them homeless due to incessant rainfall. 200
nos. of polythene sheets were provided to affected families immediately
which enabled them to rebuild their damaged homes.
CSR & AA plays a significant role amongst the employees across all
levels of the Company through a Tata Group wide initiative called ''Tata
Engage'', wherein individual employees are encouraged to volunteer for
CSR. Your Company has been awarded at the Tata Group level with"Highest
Participation Award" in 2015 - 16. Specifically, CSR is a channel for
bringing more of the whole self to work, an alignment with the values
of the organization, and/or being able to contribute to a higher
purpose. In other words, CSR & AA are seamlessly embedded in the
organization.
The disclosure required under Schedule - VII of the Companies Act, 2013
is given in Annexure - A, which forms part of this report.
The average net profit of the Company for last 3 (three) years was Rs.
53.58 crores and 2% of the same is i.e. Rs. 1.07 crores. The Company
has spent Rs. 1.12 croreson CSR in 2015-16 which is more than the
requirement as the Act.
Corporate Governance
Pursuant to Regulation 34(3) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, a separate section on
Corporate Governance along with reports on Management Discussion &
Analysis and Certificate from a Practicing Company Secretary regarding
compliance of conditions of Corporate Governance are made part of this
Report.
Subsidiary
Your Company has one wholly owned subsidiary, TMDIPL. There is no
associate and joint venture Company as defined under the Act.There has
been no material change in the nature of business of TMDIPL during the
year under review.
Pursuant to the provisions of Section 129(3) of the Act, a statement
containing salient features of the financial statements of TMDIPL in
Form AOC-1 in Annexure - "B" is attached to the financial statements of
the Company.
Pursuant to the provisions of Section 136 of the Act, the financial
statements of the Company, consolidated financial statements along with
relevant documents and separate audited accounts in respect of TMDIPL
are available on the website of the Company.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form
MGT - 9 in Annexure "C"as per provisions of the Act and rules framed
thereunder is annexed to this Report.
Particulars of loans, guarantees or investments
The particulars of loans, guarantees and investments have been
disclosed in the financial statements.
Related Party Transactions
All related party transactions ("RPT") entered into during FY 2015-16
were on arm''s length basis and also in the ordinary course of business.
No material RPT was made by the Company with Promoters, Directors, KMP
or other designated persons during FY 2015-16, except those reported.
All RPT was placed before the Audit Committee for approval. Prior
omnibus approval of the Audit Committee was obtained on a yearly basis
for the transactions which were foreseen and were repetitive in nature.
The transactions entered into pursuant to the omnibus approval so
granted were audited and a statement giving details of all RPTs was
placed before the Audit Committee for its monitoring on quarterly
basis. The statement was supported by a Certificate duly signed by the
Managing Director and the Chief Financial Officer. The policy on RPT as
approved by the Board is uploaded on the Company''s website at the link
www.tatametaliks.com/corporate/policies. aspx.
In view of the above, the disclosure required under the Act in form
AOC-2 is not applicable for the FY 2015-16.
None of the Directors or KMP has any pecuniary relationships or
transactions vis-a-vis the Company during FY 2015-16. Significant
material orders passed by Regulators/ Courts
There were no significant material orders passed by the Regulators/
Courts/ Tribunals impacting the going concern status and Company''s
operations in future.
There were also no material changes and commitments after the closure
of the year till the date of this report, which affect the financial
position of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
earnings and outgo
Details of energy conservation, technology absorption and foreign
exchange earnings and outgo are annexed to this report in Annexure "D".
Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
annexed to this Report in Annexure -"E".In terms of the provisions of
Section 197(12) of the Act read with sub-rules (2) and (3) of Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement showing the names and other particulars of
employees drawing remuneration in excess of the limits set out in the
said Rules are provided in the Report.
However, having regard to the provisions of the first proviso to
Section 136(1) of the Act, the details are excluded in the report sent
to members. The required information is available for inspection at the
registered office and the same shall be furnished on request.
Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules
framed thereunder, Messrs. Deloitte Haskins & Sells, Chartered
Accountants, were appointed as the statutory auditors of the Company at
the 24th AGM held in the year 2014 and will hold office till the
conclusion of the 27th AGM to be held in the year 2017, subject to
ratification of their appointment at every AGM.
Cost Auditors
M/s. Shome & Banerjee, Cost Accountants were appointed as the Cost
Auditors of the Company for the financial year 2016-17.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company had appointed Mr. P V Subramanian, Practicing Company Secretary
to undertake the Secretarial Audit of the Company for the year ended 31
March, 2016. The Secretarial Audit Report is annexed in Annexure -"F"
herewith and forms part of this report.
Auditors'' qualification
There are no qualifications in the reports of the Statutory Auditors,
Cost Auditors and Secretarial Auditors.
Risk Management
The Company has a framework in line with Tata Steel''s risk management
process of identifying, prioritizing and mitigating risks which may
impact attainment of short and long term business goals of the Company.
The risk management framework is interwoven with strategic planning,
deployment and capital project evaluation process of the Company. The
process aims to analyze the internal and external environment and
manage economic, financial, market, operational, compliance and
sustainability risks and capitalizes opportunities for business
success.
The Company has already identified the key risks areas which may affect
the business goals and periodically revisits the relevance of the
identified risks and progress of the mitigation plans undertaken. In
order to strengthen the governance framework, the Board has constituted
a Risk Management Committee consisting of Directors and KMP which
monitors and evaluates the effectiveness of risk management framework
of the Company and strengthens it.
Prevention of Sexual Harassment at Workplace
The Company has in place a Policy in line with the requirements of The
Sexual Harassment of Women at the Work place (Prevention, Prohibition &
Redressal) Act, 2013. Internal Complaints Committee ("ICC") is in place
to redress complaints received regarding sexual harassment. All
employees (permanent, contractual, temporary, trainees etc.,) are
covered under this Policy.
The following is a summary of sexual harassment complaints received and
disposed of during the year 2015-16:-
- No. of complaints received - NIL
- No. of complaints disposed of - NIL Vigil Mechanism
The Company has adopted Vigil Mechanism policy that provides a formal
mechanism for all Directors, employees and vendors of the Company to
approach the Ethics Counselor/Chairman of the Audit Committee and make
protective disclosures about the unethical behavior, actual or
suspected fraud or violation of the Tata Code of Conduct ("TCoC").
The Vigil Mechanism comprises of whistle blower policy for directors,
employees and vendors.
Amalgamation
The Company is considering the withdrawal of Scheme of amalgamation
from Hon''ble High Court, Calcutta due to various factors including
inordinate delay in obtaining requisite regulatory and statutory
approvals along with significant dilution in intended synergies that
were envisaged in April 2013. A Committee of Directors has been
constituted to consider and approve the proposal of withdrawal of
Scheme from Calcutta High Court.
Acknowledgement
The Board takes this opportunity to sincerely thank all its
stakeholders i.e. shareholders, customers, suppliers,
contractors,bankers, employees, government agencies, local authorities
and the immediate society for their un-stinted support and cooperation
during the year.
On behalf of the Board of Directors
Place : Mumbai Koushik Chatterjee
Date : 28 April, 2016 Chairman
Mar 31, 2014
Dear Shareholders,
The Directors are pleased to present their 24th Annual Report of the
working of the Company along with the Statement of Accounts for the
financial year ended 31 March, 2014.
Financial Results
Particulars Stand-alone Conslidated
Year ended Year ended Year ended Year ended
Gross Income from
sales and other
operations 1287.59 966.59 1547.55 1083.50
Profit / (Loss)
before Interest,
Depreciation and
Taxes 73.32 (19.03) 76.57 (46.96)
Less : Interest 25.53 19.41 42.67 38.72
Profit/(Loss)
before Depreciation
and Taxes 47.79 (38.44) 33.90 (85.68)
Less : Depreciation 15.84 16.10 31.08 28.23
Profit / (Loss)
before Taxes 31.95 (54.54) 2.82 (113.91)
Less : Provision for
Taxes including
deferred taxes (6.65) - (6.65) -
Profit / (Loss)
after Taxes 38.60 (54.54) 9.47 (113.91)
Less : Minority Interest - - - (26.80)
Profit / (Loss)
after Tax and
Minority Interest 38.60 (54.54) 9.47 (87.11)
Profit / (Loss) and
loss credit balance
brought forward (141.61) (87.07) (237.90) (150.79)
Balance to be
carried forward (103.01) (141.61) (228.43) (237.90)
Dividend
Your company has made a consolidated profit for the first time after
commencement of commercial operation of DI pipe plant. Your company has
several investment plans lined up for improvement of operational
efficiency and it also needs to reduce its debt substantially.
Accordingly, your Directors are not in a position to recommend any
dividend for 2013-14.
Performance
During the year under review the company focused on stabilizing the
sinter plant which was commissioned during first quarter of 2013-14.
The sinter plant surpassed its rated productivity of 1.2 t/m2/day and
operated consistently over 1.3 t/m2/day. The availability of the sinter
and stable blast furnace operation helped in surpassing the hot metal
production target of 4.02 lakhs tonnes and finish at 4.06 lakh tonnes
which is a record in the production history of your Company since its
inception as far as Kharagpur operations is concerned.
The Company has made a Profit after Tax (PBT) of Rs. 38.60 crores
compared to a loss of Rs. 54.54 crores in the previous year on
stand-alone basis. The profit on consolidated basis is Rs. 9.47 crores
compared to a loss of Rs. 113.90 crores of the previous year. The
stand-alone profit is after adjustment of losses of Rs. 28.38 crores
which was mainly due to loss on sale of plant and machineries of Redi
unit. The Kharagpur unit made a profit of Rs. 60.00 crores and this was
achieved due to highest ever production, better realization in second
half and controlled raw materials cost. The losses of subsidiary were
mainly due to lower net realization as well as lower capacity
utilization in first half. However, the subsidiary has made its maiden
profit of about Rs. 1.60 crores during last quarter through overall
improvement in performance. The production of cast ductile iron pipes
has crossed 100,000 tonnes during the year under review.
Customer Focus
Customer focus is something which your Company always strives to
achieve through its Customer Relationship Management and Customer
Complaint Management processes. Your Company developed an improved
version of its branded product, Tata eFee, during the year, which not
only improved productivity of pig iron production process but also had
improved physical attributes for the benefit of the customers. In order
to strengthen its customer relationship, your Company manufactured and
supplied value-added customised grades pig iron to several customers.
Further, attending to each and every customer complaint and resolving
the same to the satisfaction of the customer is an attribute which your
Company practiced at all times.
Industry Outlook
The over-supply and lower demand of pig iron is expected to continue
during first half of 2014-15. However, cost pressure on account of
higher iron ore prices and also import duty of 2.5% on imported
coal/coke may result in some price increase of pig iron. Pig Iron
demand is expected to be better in second half of the year as demand is
expected to improve in some of key sectors like automobile,
construction, etc. and also the over-supply situation may get eased out
with shifting of some of the steel grade pig iron manufacturers from
pig iron to finished steel.
On account of low demand, capacities in the foundry industry are
currently under-utilized except those who export sanitary castings from
eastern India. In the next four years, castings industry is destined to
grow with growth in automobile, farm equipment, construction and pipe
sectors. The Indian foundry industry has a bright future and is poised
to grow with growth in sectors using castings including exports and is
expected to be only second to China in near term. While demand for
castings would look up, it is imperative that foundries adopt newer
cost efficient and greener technologies to remain competitive in the
global market.
Expansion Projects
Your Company is in the process of expanding its business operation and
improving its operational costs and efficiencies through the following
projects which are in the pipeline:
- Coke Oven Project on BOOT basis having a capacity of 10,000
tonnes/month BF grade coke. This project is likely to be commissioned
by Q4 of FY-16;
- 10 MW Power Plant utilising the exhaust flue gases from Coke Oven and
this is likely to be commissioned by Q1 of FY-17;
- Relining and enhancement of capacity of MBF#1 which is likely to be
completed by Q4 of FY-16; and
- Coal Dust Injection ("CDI") project which is likely to be
commissioned by Q1 of FY-17.
Amalgamation
As reported last year, your Directors approved amalgamation of the
Company with its holding Company i.e. Tata Steel Limited. The Company
has filed the Confirmation Petition before the Hon''ble High Court,
Calcutta and the same is pending for approval at present.
The amalgamation, if approved, will be advantageous and beneficial to
all stakeholders of your Company.
Consolidated Financial Statements
The consolidated financial statement presented by the Company includes
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. MCA vide its Circular No.
5/12/2007-CL-III dated February 8, 2011 has granted general exemption
under section 212(8) of the Companies Act, 1956 from attaching the
balance sheet, profit & loss account and other documents of the
subsidiary companies to the balance sheet of the Company, provided
certain conditions are fulfilled. Accordingly, annual accounts of the
subsidiary company and the related detailed information will be made
available to the holding and subsidiary company''s investors seeking
such information at any point of time. The annual accounts of the
subsidiary company will also be kept for inspection by any investor at
the Registered Office of the Company.
Subsidiary
Your Company has one wholly owned subsidiary i.e. Tata Metaliks DI
Pipes Limited ("TMDIPL") [formerly known as Tata Metaliks Kubota Pipes
Limited]. TMDIPL is also in the process of amalgamation with Tata Steel
Limited and its Confirmation Petition is also pending for approval
before the Hon''ble High Court, Calcutta at present. As reported
earlier, TMDIPL, the subsidiary company has significantly improved its
operational and financial performance in the last year and is going to
add value to the combined entity going forward. The market for DI pipe
is expected to witness robust growth because of the expected
investments in infrastructure and rapid urbanization.
Directors
- Mr. D P Deshpande retires by rotation and being eligible offers
himself for re-appointment;
- In accordance with the provisions of Section 149, 152 and other
applicable provisions of the Companies Act, 2013 ("Act") and Rules
framed thereunder, it is proposed to appoint Mr. Krishnava Dutt, Mr.
Ashok Kumar Basu and Dr. Pingali Venugopal, who are currently
non-executive independent directors of the Company and who meet the
criteria for independence as provided in Section 149(6) of the Act, as
Independent Directors for a period of 5 (five) years wherever
applicable from the date of the ensuing Annual General Meeting.
The Board recommends re-appointment of Mr. D P Deshpande and
appointment of Mr. Krishnava Dutt, Mr. Ashok Kumar Basu and Dr.
Pingali Venugopal.
- Mr. Dipak Banerjee has resigned from the Board w.e.f. 15 June, 2014.
The Board of Directors placed on record its sincere appreciation,
thanks and gratitude for his contribution to the Company.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, who are the
statutory auditors of the Company, hold office until the conclusion of
the ensuing Annual General Meeting and are eligible for re-appointment.
Pursuant to provisions of Section 139 of the Companies Act, 2013 and
rules framed thereunder, it is proposed to appoint Deloitte Haskins &
Sells as statutory auditors of the Company from the conclusion of the
ensuing AGM till the conclusion of the 27th AGM to be held in the year
2017, subject to annual ratification by members at Annual General
Meeting.
Corporate Social Responsibility
The Board constituted a Corporate Social Responsibility Committee
comprising of three directors of which two are non- executives. The
Chairman of the Committee is an Independent Director.
The terms of reference and scope of work is same as prescribed in
Section 135 of the Companies Act, 2013 and the Rules framed thereunder.
In line with the values of Tata Group, your Company also considers its
interests to be inseparable from that of the requirements of the
community. Guided by the principle of its Founder that "In a free
enterprise, the community is not just another stakeholder in business,
but is in fact very purpose of its existence", your Company has always
involved itself in activities which benefit the residents of the areas
around its operations and improve their quality of life. Company''s
involvement in the community with its direct interaction with the
residents and assessment of issues/risks faced by those living in the
Company''s surrounding areas has helped in delivering a
community-focused CSR strategy  making positive changes to the lives
of the people.
The company through its Affirmative Action (AA) initiatives is also
committed to directly conducting or supporting activities to ensure an
equal footing for socially and economically disadvantaged sections in
the country at large, and specifically the Scheduled Caste and
Scheduled Tribe communities.
Reconstitution of Committees
The Remuneration Committee and the Shareholders''/Investors'' Grievance
Committee of the Board were reconstituted and renamed as Nomination and
Remuneration Committee and Stakeholders Relationship Committee
complying with the requirements of the provisions of the Companies Act,
2013 and the Rules framed thereunder.
Prevention of Sexual Harassment at Workplace
The Company has constituted Internal Complaints Committee in compliance
with The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules framed thereunder.
There was no case to dispose of as the Committee has received NIL
complaint during the year. Various workshops were organized in the
Company to promote awareness to employees on this subject.
Conservation of Energy, Technology Absorption and Foreign Exchange
earnings and outgo
As required under Section 217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, particulars regarding conservation of
energy, technology absorption, foreign exchange earnings and outgo are
annexed to this report.
Particulars of Employees
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made thereunder, in respect of the employees of the
Company, and in terms of Section 219(1)(b)(iv) is available for
inspection by Members at the Registered Office of the Company during
business hours on working days up to the date of the ensuing AGM and if
any Member is interested in obtaining a copy thereof, such Member may
write to the Company, whereupon a copy would be sent.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
based on the representations from the Operating
Management, confirm that :
(i) In the preparation of annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
(ii) 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 at the end of the financial year and of the profit of your
company for that period;
(iii) They have taken proper and sufficient care 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; and
(iv) They have prepared the annual accounts on a going concern basis.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement executed with the Stock
Exchanges, a separate section on Corporate Governance along with
reports on Management Discussion & Analysis and Auditors'' Certificate
regarding compliance of conditions of Corporate Governance are made
part of this Report.
Note of Appreciation
The Board takes this opportunity to sincerely thank all its
stakeholders namely, shareholders, customers, suppliers/ contractors,
bankers, employees, government agencies, local authorities and the
immediate society for their un-stinted support and co-operation during
the year.
On behalf of the Board of Directors
Place : Mumbai Koushik Chatterjee
Date : 21 July, 2014 Chairman
Mar 31, 2013
Dear Shareholders,
The Directors are pleased to present their Twenty Third Annual Report
of the working of the Company along with the Statement of Accounts and
the Auditors'' Report for the financial year ended March 31, 2013.
1. Financial Results (Rs. Crore)
Particulars Current
Year Previous
Year Current
Year Previous
Year
(Stand-
Alone) (Stand-
Alone) (Consoli
dated) (Consoli
dated)
Gross Income from
sales and other
operations 966.59 1,240.15 1,083.50 1,327.76
Profit/(Loss)
before Interest,
Depreciation and
taxes (19.03) (80.20) (46.96) (100.01)
Less: Interest 19.41 28.79 38.72 43.14
Profit/(Loss) before
Depreciation and
Taxes (38.44) (108.99) (85.68) (143.15)
Less: Depreciation 16.11 16.47 28.23 26.95
Profit/(Loss) before
Taxes (54.54) (125.46) (113.90) (170.10)
Less : Provision for
Taxes including
deferred Taxes
- (34.86) - (34.86)
Profit/(Loss)
After Taxes (54.54) (90.60) (113.90) (135.24)
Less : Minority
Interest - - (26.80) (21.77)
Profit/(Loss) After
Tax and Minority
Interest (54.54) (90.60) (87.11) (113.47)
Profit/(Loss) and
loss credit balance
brought forward (87.07) 3.53 (150.79) (37.32)
Balance to be
carried forward (141.62) (87.07) (237.90) (150.79)
Dividend
As the Company has suffered losses, your Directors are not in a
position to recommend any dividend for 2012-13.
Performance
During the year under review, the Company has made capital investment
of over Rs. 100 crores to reduce cost of production and increase the
production volume. The Company has upgraded and enhanced the capacity
of MBF#2 during October, 2012. A newly commissioned 4,00,000 MTPA
capacity Sinter Plant at Kharagpur is in operation w.e.f. April 4,
2013. It is expected that these investments will contribute to a better
operating performance in F.Y. 14.
The Company produced 2.87 lacs tons of hot metal. Out of this 2.05 lacs
tons of pig iron were sold and 0.68 lacs tons of hot metal supplied to
TMKPLfor manufacturing Dl Pipes.
Domestic prices of pig iron were stable in the first half of FY- 13,
but started reducing from October''12 and thereafter market remained
depressed.
The Company has incurred a loss of Rs. 54.54 crores compared to Rs. 90.60
crores in the previous year on standalone basis. The loss on
consolidated basis is Rs. 113.90 crores compared to Rs. 135.24 crores of
the previous year. The loss is largely attributable to Redi business
unit which suffered a loss of Rs. 78.66 crores. This included
''extra-ordinary items'' of Rs. 55.70 crores consisting of (i) Labour
settlement cost of Rs. 10.70 crores; and (ii) Impairment charge on Redi
Plant and Machinery of Rs. 45.00 crores. The Redi unit had been
mothballed since October 15, 2011.
The Kharagpur unit made a profit of Rs. 24.12 crores in the current year.
The profit of Kharagpur unit could have been higher but the same has
been impacted due to delay in commissioning of Sinter Plant and
revamping of the MBF#2 and the major price drop from October''12
onwards. The losses at subsidiary are mainly due to lower capacity
utilisation and sharp fall in net realisation. Production at Dl Pipe
business however increased to an annualised rate of 1 lac tpa, from
November.
Amalgamation
Your Directors have approved the amalgamation of the Company with its
holding Company i.e. Tata Steel Limited. The amalgamation will bring
following synergy benefits to the current and future business :-
- Supply of iron ore at competitive price, a key success factor;
- Financial support for capital projects;
- Benefits in inventory management;
- Savings in administrative and interest cost.
The amalgamation, if approved, will be advantageous and beneficial to
all stakeholders of your company.
Building Customer Centric culture
TML continuously strives to bring forth ''Customer Centricity'' as an
organization-wide initiative and in our endeavor to inculcate this
culture within the Company, all the recommendations of Strategizing for
Customer Oriented Processes and Excellence (Project "SCOPE" guided and
mentored by MM Calcutta) were implemented and pursued, and all the Key
Enterprise Processes were aligned and integrated accordingly. We have
also built up the concept of internal and external customers over a
period of time to understand and cascade customer needs.
In 2012-13 we offered our premium product Tata eFee*, the first branded
pig iron, which has the capability to reduce energy consumption in
foundries by 5-15%. Gradually TML has increased the share of Tata eFee*
in product mix and currently we are producing 100% Tata eFee*. The
company plans to increase its market share through higher volumes of
value added products and become the supplier of choice by providing
enhanced services like, web access mechanisms, business query through
web, SMS services for delivery, technical support services from
Customer Service Centre (CSC), etc.
Expansion Projects
Your Company :-
a) has successfully commissioned Sinter Plant at Kharagpur and started
commercial production from April 4, 2013. This plant will enable the
Company to use iron ore fines at lower cost and achieve lower coke rate
and higher productivity in the mini blast furnaces;
b) has also completed normal relining, modification, up- gradation and
volume enhancement of MBF#2 at Kharagpur;
c) has signed a BOOT (Build, Own, Operate and Transfer) contract for
setting up a Coke Conversion unit at Kharagpur. This unit, when
commissioned, will help getting coke at low cost and produce flue gas
which can be used to generate power;
d) is in the process of setting up a power plant based on waste heat
from flue gas from the coke conversion facility. The power thus
generated would be used for captive use.
The Company is in search of adequate and suitable land in the vicinity
of the existing plant for future expansion.
Consolidated Financial Statements
The consolidated financial statement presented by the Company includes
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The Ministry of Corporate Affairs,
Government of India vide its Circular No. 5/12/2007-CL-lll dated
February 8, 2011 has granted general exemption under Section 212(8) of
the Companies Act, 1956 from attaching the balance sheet, profit and
loss account and other documents of the subsidiary companies to the
balance sheet of the Company, provided certain conditions are
fulfilled. Accordingly, annual accounts of the subsidiary company and
the related detailed information will be made available to the holding
and subsidiary company''s investors seeking such information at any
point of time. The annual accounts of the subsidiary company will also
be kept for inspection by any investor at the Registered Office of the
Company.
Subsidiary
Your Company has one subsidiary i.e. Tata Metaliks Kubota Pipes Limited
("TMKPL"). This company was formed in 2007 through a joint venture
agreement with Kubota Corporation, Japan and Metal One Corporation,
Japan. By virtue of a joint- venture termination agreement, Kubota and
Metal One have sold and transferred their respective stakes to your
company and TMKPL has become a wholly owned subsidiary of your company
with effect from April 9, 2013.
Directors
Mr. Harsh K Jha has retired as Managing Director w.e.f. April 1, 2013.
Mr. A C Wadhawan has retired as an Independent Director w.e.f. January
27, 2013. Mr. Ashok Kumar has resigned as Director from the Board
w.e.f. March 30, 2013.
Mr. D. P. Deshpande has relinquished his Executive position and become
a Non-Executive Director w.e.f. April 1, 2013.
Mr. Sanjiv Paul has been co-opted as an Additional Director w.e.f.
March 30, 2013. Mr. Paul has also been appointed as Managing Director
of the Company w.e.f. April 1, 2013.
Mr. Koushik Chatterjee and Mr. V S N Murty retire by rotation at the
ensuing Annual General Meeting and are eligible for re- appointment.
Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, the statutory
auditors of the company shall retire at the ensuing Annual General
Meeting and being eligible offered themselves for re-appointment. Your
Company has received a Certificate from the Auditors to the effect that
their re-appointment, if made would be within the limits of Section
224(1 B) and in compliance with the provisions of Section 226 of the
Companies Act. 1956.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
confirm that:
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with providing proper explanation
relating to material departures;
ii) 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 at the end of the financial year and of the profit of your
Company for that period;
iii) They have taken proper and sufficient care 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; and
iv) They have prepared the annual accounts on a going concern basis.
Conservation of Energy Technology Absorption, Foreign Exchange Earnings
and Outgo
The information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo as per Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, is appended as Annexure "A" and forms part of this Report.
Particulars of Employees
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made there under, in respect of the employees of the
Company, and in terms of Section 219(1)(b)(iv) is available for
inspection by Members at the Registered Office of the Company during
business hours on working days up to the date of the ensuing AGM and if
any Member is interested in obtaining a copy thereof, such Member may
write to the Company, whereupon a copy would be sent.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement executed with the Stock
Exchanges, a separate section on Corporate Governance along with
reports on Management Discussion & Analysis and Auditors'' Certificate
regarding compliance of conditions of Corporate Governance are made a
part of the Annual Report.
Corporate Social Responsibility
Your Company endeavours to take initiatives to improve quality of life
in the community through "SADBHAVNA" a Trust set up for CSR activities.
The corpus of the Trust is made by contribution from employees and
Company.
Our focused area of CSR activities include:-
- Health
Under Maternal & Child Health care initiative, nutritional survey camp
for school children has been very effective in bringing down the number
of cases of skin diseases, malnutrition etc.
Through Maternal & Child Health awareness program we have been able to
provide clarity on the myths & realities of some common ailments and
educate people on the importance of vaccination.
- Education :
In the field of education, scholarships were provided to meritorious
students belonging to families from Below Poverty Line (BPL) category
and aspiring for higher studies.
- Employability:
The company has been providing ITI training to unemployed youth under
the name of "SWABLAMBAN" for the last two years. The first batch has
already passed out in June 13 and we are also sponsoring second batch
for the current financial year.
The vermicompost project has been running for the last three years. A
group of dedicated tribal women of SHG called Sidukanu Birsa at
Kunjachawk are successfully running this project and have successfully
carved out a livelihood from the project to supplement the income of
their families.
Note of Appreciation
The Board takes this opportunity to sincerely thank all its stake-
holders namely, shareholders, customers, suppliers/contractors,
bankers, employees, government agencies, local authorities and the
immediate society for their un-stinted support and co- operation during
the year.
On Behalf of the Board of Directors
Place : Kolkata Koushik Chatterjee
Date: July 30, 2013 Chairman
Mar 31, 2012
The Directors are pleased to present the Twenty Second Annual Report
of the working of the Company along with the statement of accounts and
the Auditors' Report for the financial year ended March 31, 2012.
1. Financial Results (Rs. Crore)
Particulars Current Year Previous Year Current Year Previous Year
(Stand-Alone) (Stand-Alone)
Gross Income from
sales and other
operations 1240.15 1438.87 1327.76 1462.92
Profit/(Loss)
before Interest,
Depreciation
and taxes (83.37) 74.03 (103.50) 48.87
Less: Interest 25.62 28.71 39.65 37.66
Profit/(Loss)
before Depreciation
and Taxes (108.99) 45.32 (143.15) 11.21
Less: Depreciation 16.47 16.64 26.95 26.41
Profit/(Loss)
before Taxes (125.46) 28.68 (170.10) (15.20)
Less : Provision
for Taxes including
deferred taxes (34.86) 5.73 (34.86) 5.73
Profit/(Loss) After
Taxes (90.60) 22.95 (135.24) (20.93)
Less : Minority
Interest- - - (21.77) (21.50)
Profit/(Loss) After
Tax and Minority
Interest (90.60) 22.95 (113.47) 0.57
Profit/(Loss) and
loss credit balance
brought forward 3.53 (12.16) (37.32) (30.62)
Balance available
for appropriation (87.07) 10.79 (150.79) (30.05)
Which the Directors
have appropriated to :
i) Debenture
Redemption Reserve - 7.26 - 7.26
ii) Proposed Dividend
on Equity Shares - - - -
iii) Taxes on Dividend - - - -
iv) General Reserve - - - -
Total - 7.26 - 7.26
Balance to be carried
forward (87.07) 3.53 (150.79) (37.31)
Dividend
As the company has suffered losses, the Directors are not in a position
to recommend any dividend for 2011-12.
Change in Capital Structure
Authorized Share Capital
TML has increased and changed the authorized share capital of the
company from Rs. 100.00 crore to Rs. 150.00 crore by (i) retaining 5.00
crore equity shares of Rs. 10 each aggregating Rs. 50.00 crore (ii)
re-classifying 5.00 crore equity shares of Rs. 10/- each as 50.00 lac
preference shares of Rs. 100/- each aggregating Rs. 50.00 crore; and (iii)
creation of 50.00 lac preference shares ofRs. 100/- each aggregating Rs.
50.00 crore, through postal ballot during the year under review.
Issued, subscribed and paid-up capital
The Company has received Rs. 100.00 crore from its holding company i.e.
Tata Steel Limited (TSL) by way of equity and made an allotment of 1.00
crore redeemable preference shares of Rs. 100/- each to TSL, on
preferential allotment basis, during the year under review.
Business Results
In the year under consideration, TML passed through considerable
difficulty mainly due to soaring prices of coal and iron ore. The price
of coal and iron ore went up by 30% over the previous year while
product prices could be raised only upto 17%. This reduction in the
spread put considerable pressure on the margins.
Due to steep increase in price of lump ore from Kamataka associated
with limited availability and significant drop in quality, TML had to
suspend operations at Redi from October 2011. With only one plant in
operation, the sales volume declined significantly from 473,332 tons in
2010-11 to 356,121 tons in 2011-12.
TML had entered into an agreement to sell the Redi Unit, and prepaid a
considerable portion of the long term debt to make the unit
unencumbered. The transaction could not be consummated due to
irreconcilable differences with the buyer. This has resulted in an
imbalanced capital structure. The Company is taking steps to restate
the appropriate mix of long term and short term debts.
Kharagpur operations also incurred losses due to higher raw material
costs, disruption in iron ore supply in the last quarter of the year
and unstable blastfurnace health that led to higher coke consumption.
Tata Metaliks Kubota Pipes Ltd. (TMKPL) subsidiary of your Company
could increase the production of pipes by 143% from 20402 tons to
49,502 tons but could not achieve its business targets for the year due
to lower net realizations arising out of intense competition in the
ductile iron (the "Dl") pipe industry. The Dl Pipe business witnessed
entry of three new manufacturers (including TMKPL) all located in the
eastern part of the country. This brought about * 20-25% drop in net
realization for pipes which made the business unprofitable for all
manufacturers of Dl Pipe. Towards the end of 2011-12, prices began
moving up but are still below expected levels. The upward trend in
coke and iron ore prices also caused a significant increase in the
input cost of the business.
Thus, on a consolidated basis TML reported a Loss after Tax and
Minority Interest of Rs. 113.47 crores in 2011-12 against a profit ofRs.
0.57 crores in the previous year.
Building Customer Centric culture-
With TML's focus on 'Customer Centricity', an organization- wide
initiative "SCOPE" launched in earlier years has helped in integrating
and aligning of work processes within the company and in building a
better understanding of the requirements of internal and external
customers.
The Marketing and Sales objective for 2012-13 is to augment the
Company's net realization by offering premium product Tata eFeeTM, the
first branded pig iron which has created possibilities of bringing down
energy consumption in the foundries by 5- 15%. 55,177 tons of Tata
eFeeTM was sold during 2011-12 and the Company expects to increase the
share of Tata eFeeTM in the coming years. The Company plans to improve
market share with higher volumes of the value added product and
enhanced services. This is expected to reduce the sales to cash
realization cycle.
Sales Performance
During 2011-12, your Company produced 352,322 tons of hot metal and
sold 303,278 tons of pig iron (domestic 295942 tons with market share
of 8% and export 7336 tons). The off-take of hot metal by the Dl pipe
business started to increase over the months and reached its maximum in
March 2012. The sales performance of pig iron for the past five years
is presented below:
Domestic prices of pig iron which were stable in the first quarter of
2011 -12 started rising from August 2011 and thereafter again remained
stable. International prices remained significantly lower than domestic
prices and your company did not find it lucrative to export pig iron.
Therefore, exports share in the total revenue was marginal.
Pig iron market remained volatile and non-committal with regard to long
term purchases. The total share of pig iron produced by secondary
manufacturers has marginally declined from 89.64% in 2010-11 to 88.08%
in 2011-12. Some pig iron producers had to curtail their production due
to non availability of iron ore. Increased availability of low cost
substitutes including basic grade pig iron and steel scrap, prompted
foundries to reduce usage of foundry grade pig iron.
Expansion Projects
(i) Projects at Kharagpur
a) As previously reported, your Directors are hopeful of commissioning
the 40m* Sinter Plant at Kharagpur by September, 2012. This project
will enable TML to substitute 50% of the expensive lump ore by sinter
in the blast furnace burden.
b) The Board of Directors of the Company has also approved normal
relining, modification and up gradation of MBF#2 at the Kharagpur Unit
for its capacity enhancement from the current volume of 215m> to a new
volume of 259m>. The cooling water circuit of the blast furnace will
also be modified to reduce water consumption. This, together with bell
less top charging facility, will yield benefits to the Company through
increase in production by 15000 THM/year, decrease in coke rate by 12
kg/THM and reduction in specific emission by 0.07 TC02/THM.
(ii) Karnataka Project
Further to the development reported last year, there have not been any
major developments except on land acquisition. Against the approval for
allotment of 2500 acres of land, your Company was asked to make advance
payments to Karnataka Industrial Area Development Board (KIADB).
(iii) Backward integration - Acquisition of mines
Your Company has taken up with Government to get a mining lease after
submitting the prospecting report and mining lease application for
Dongarpal Mines, from Government of Maharashtra.
Proposals for acquisition of mines in the iron ore bearing states of
Karnataka, Odisha, Jharkhand, Chhatisgarh for the 3 mtpa steel project
as well as raw material linkages for Kharagpur project are being
pursued.
Consolidated Financial Statements
The Audited Consolidated Financial Statements based on the Financial
Statements received from the subsidiary Company, TMKPL as approved by
its Board of Directors, have been prepared in accordance with the
Accounting Standard-21 (AS- 21) - 'Consolidated Financial Statements',
Accounting Standard- 23 (AS-23) - 'Accounting for Investment in
Associates' and Accounting Standard-27 (AS-27) - 'Financial Reporting
of Interests in Joint Ventures', notified under Section 211 (3C) of the
Companies Act, 1956 read with Companies (Accounting Standards) Rules,
2006 as applicable.
The consolidated financial statements presented by your Company include
financial information of the subsidiary i.e. TMKPL prepared in
compliance with applicable Accounting Standards. The Ministry of
Corporate Affairs, Government of India vide its Circular No.
5/12/2007-CL-lll dated February 8, 2011 has granted general exemption
under Section 212(8) of the Companies Act, 1956, from attaching the
balance sheet, profit and loss account and other documents of the
subsidiary companies to the balance sheet of the Company, provided
certain conditions are fulfilled. Accordingly, annual accounts of the
subsidiary company and the related detailed information will be made
available to the holding and subsidiary company's investors seeking
such information at any point of time. The annual accounts of the
subsidiary company will also be kept for inspection by any investor at
the Registered Office of the Company and that of the subsidiary company
at 43, Jawaharlal Nehru Road, Kolkata - 700 071.
Directors
Mr. Ashok Kumar Basu and Mr. Dipak Kumar Banerjee retire by rotation at
the ensuing Annual General meeting and are eligible for re-appointment.
Dr. Pingali Venugopal, Mr. Digambar Pandurang Deshpande and Mr.
Krishnava Dutt have been co-opted as Additional Directors in the Board
and will hold their respective offices up to the date of the ensuing
annual general meeting of the company. The Company has received notices
under Section 257 of the Companies Act, 1956 from three shareholders of
the company who have proposed the respective candidatures of Dr.
Pingali Venugopal, Mr. Digambar Pandurang Deshpande and Mr. Krishnava
Dutt as Director in the company.
Your Board took little more time than prescribed to re-balance its
desired composition, as Board was in search for a right profile and
finally co-opted Dr. P Venugopal in the Board.
Mr. Harsh K Jha, has been re-appointed as Managing Director for a
further period of 1 (one) year with effect from April 1, 2012.
Mr. Digambar Pandurang Deshpande has been appointed as Executive
Director of the Company for a period of 3 (three) years with effect
from April 1,2012.
Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
274(1 )(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the standard listing agreement.
Auditors
The Auditors, M/s Deloitte, Haskins & Sells, Chartered Accountants,
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. Your Company has received a Certificate
from the Auditors to the effect that their appointment, if made, would
be within the limits of Section 224(1 B) and in compliance of Section
226 of the Companies Act, 1956.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo as per Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is appended as Annexure "A" and forms part of this Report.
Particulars of Employees
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made there under, in respect of the employees of the
Company, and in terms of Section 219(1)(b)(iv) is available for
inspection by Members at the Registered Office of the Company during
business hours on working days up to the date of the ensuing AGM, and
if any Member is interested in obtaining a copy thereof such Member may
write to the Company, whereupon a copy would be sent.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on 'Corporate Governance' has been
included in this Annual Report, along with reports on 'Management
Discussion and Analysis' and 'Shareholder Information'.
All Board members and senior management personnel have affirmed
compliance to the Code of Conduct for 2011-12.
A Certificate from the Statutory Auditors of the Company regarding
compliance of conditions and provisions of the Corporate Governance is
enclosed after the Corporate Governance Report.
Amount transferred to Investors' Education and Protection Fund
During the year under review, pursuant to the provisions of Section
205C of the Companies Act, 1956, the following unclaimed amounts
pertaining to 2003-04 were credited to the Investors' Education &
Protection Fund :
Sl Particulars Date of Amount
Transfer transferred
1 Unpaid dividend 2003-04 19.08.2011 Rs. 2,287,921.00
Investor Services
The Investors Relations function of your Company strives to cater to
the increasing expectations of the investors by keeping its services
backed with state of the art infrastructure and systems. The Registrar
and Transfer Agents of your Company have been accredited with ISO
certification for their investor servicing.
The investors can also directly lodge their queries / complaints to the
Compliance Officer of the Company over e-mail on
'[email protected]'.
Official news releases, financial results and investor related
information are also displayed on the Company's website
'wwwtatametaliks.com'.
Your Company, in keeping with statutory requirements, publishes the
financial and other investor related information, in English as well as
vernacular newspapers, where the registered office of the Company is
situated.
Availability of information on Corporate Filing and Dissemination
System (CFDS)
SEBI vide circular no SEBI/CFD/DIL/LA/4/2007/27/12 dated December 27,
2007 informed that EDIFAR will be phased out gradually in view of new
portal viz. Corporate Filing and Dissemination System (CFDS) put in
place jointly by BSE and NSE at the URL www.corpfiling.co.in wherein
requisite information about your Company is available. SEBI has since
discontinued the EDIFAR system w.e.f from April 1, 2010.
Corporate Social Responsibility
Your Company along with TMKPL engages itself in various community
initiatives under "Sadbhavna'.
The Company focuses on the areas of health, education & employability
issues of the community.
(i) Health:
Under Maternal & Child Health care initiative, nutritional survey camp
for school children has been very effective in bringing down the number
of cases with skin diseases, malnutrition etc.
Women in the rural areas underplay their health and non availability of
female doctors in the community was a disadvantage for them.
Gynaecological camps have been organized to benefit the women of our
community.
(ii) Education :
In the field of education, scholarships were provided to meritorious
students coming from BPL (Below Poverty Line) category and aspiring for
higher studies.
(iii) Employability :
The vermicompost project is sustainable for the last two years. A group
of dedicated tribal women of SHG called Sidukanu Birsa at Kunjachawk
are successfully running this project and have created a livelihood to
supplement the income of their family.
Your Company has also initiated to provide technical education (ITI) to
the youth of the nearby villages who are from economically weaker
sections of society.
Driver-straining:
To promote self employment in the vicinity of TML plant, Kharagpur,
driver's training program has been held by TML and driving license has
been provided to 22 persons of nearby villages.
Directors' Responsibility Statement:
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures; "
ii) 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 at the end of the financial year and of the profit of your
Company for that period;
iii) they have taken proper and sufficient care 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; and
iv) they have prepared the annual accounts on a going concern basis.
The above statements were noted by the Audit Committee at its meeting
held on April 25, 2012.
Directors' response to the comments made by the Auditors in their
report
Auditors' Report read together with Annexure referred to in Paragraph 3
of the Auditors' Report do not contain any qualification of significant
nature and do not call for any explanation/clarification.
Note of Appreciation
Your Directors wish to place on record their deep appreciation for the
continued support and co-operation of Financial Institutions, Banks,
Government authorities and other stakeholders. Your Directors also
acknowledge the support extended by all employees for their dedicated
service.
The Directors appreciate and value the contributions made by every
member of the TML family. Propelled by your Company's strong vision and
powered by internal vitality, your Directors look forward to the future
with confidence.
On Behalf of the Board of Directors
Place : Kolkata Koushik Chatterjee
Date: July 5, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors are pleased to present the Twenty First Annual Report of
the working of the Company along with the statement of accounts and the
Auditors' Report for the financial year ended 31st March, 2011.
1. Financial Performance (Rs. Crore)
Particulars Current
Year Previous
Year Current
Year Previous
Year
(Stand-
Alone) (Stand-
Alone) (Consolid
-ated) (Consolid
-ated)
a) Gross Income from sales
and other operations 1411.89 1126.53 1436.31 1130.37
b) Profit/(Loss) before
Interest, Depreciation and
taxes 74.03 102.87 48.50 84.45
c) Less : Interest 28.71 35.80 37.29 42.04
d) Profit / (Loss) before
Depreciation and Taxes 45.32 67.07 11.21 42.41
e) Less: Depreciation 16.64 16.42 26.41 25.06
f) Profit/(Loss) before Taxes 28.68 50.65 (15.20) 17.35
g) Less : Provision for Taxes
including deferred taxes 5.73 5.10 5.73 5.10
h) Profit/(Loss) After Taxes 22.95 45.55 (20.93) 12.25
i) Less : Minority Interest - - (21.50) (16.32)
Profit/(Loss) After Tax and
Minority Interest 22.95 45.55 0.57 28.57
i) Profit/(Loss) and loss
credit balance brought
forward (12.16) (57.71) (30.62) (59.20)
Balance available for
appropriation 10.79 (12.16) (30.05) (30.63)
Which the Directors have
appropriated to:
i) Debenture Redemption
Reserve 7.26 - 7.26 -
ii) Proposed Dividend on
Equity Shares - - - -
iii) Taxes on Dividend - - - -
iv) General Reserve - - - -
Total 7.26 - 7.26 -
Balance to be carried forward 3.53 (12.16) (37.31) (30.63)
2. Business Results
During the Financial Year (FY) 2010-11, the pig iron prices in
comparison to FY 2009-10, improved to give your Company an increased
turnover, with a marginal decline in sales volume, but the pig iron
industry was impacted by the high cost of imported metallurgical coal
/coke which could not be passed on to the end users. Thus the profit
margins were put under pressure during the year resulting in lower
contributions compared to the past trend.
Your Company on a Standalone basis has posted Profit After Tax (PAT) of
Rs. 22.95 crore for FY 2010-11 compared to PAT of Rs. 45.55 crore
reported for FY 2009-10, a drop of about 50% approximately.
Tata Metaliks Kubota Pipes Ltd. (TMKPL) the Joint Venture subsidiary of
your Company failed to achieve its business targets for the year due to
cutthroat competition in ductile iron pipe industry and significant
increase in the input prices. Thus on a consolidated basis TML reported
a Profit after tax and Minority Interest of Rs.0.57crore against PAT
and Minority Interest of Rs.28.57 crore for the previous year. TMKPL
with a view to stabilise it's operations has ramped up its production
capacity and is carrying out breakthrough interventions in consultation
with the foreign collaborators, to offer significantly superior
products in comparison to the competitors.
Building Customer Centric culture and CRM Initiatives -
In line with your Company's focus on 'Customer Centricity', SCOPE, an
organization-wide initiative was launched in early 2008 with MM
(Kolkata), as the consultant. The objective of this initiative is to
develop the organisation culture and environment by
integrating/aligning of work processes within TML in order to build a
better understan- ding of Customers (both internal & external) across
the organisation.
Your Company's Marketing and Sales objective for FY 2011-12 is to
augment the Company's sales volume and net realisation by offering
premium product "Tata eFeeÃ" (pronounced as e-f-f-i) and value added
products along with enhancement of services, with special focus on
improving the market share in the contiguous markets that support
faster sales to cash realisation.
After an intensive feedback from over 100 customers across India, your
Company realized that it had to take some quick steps towards reduction
of energy consumption in pig iron foundries of India. Being world's
largest producer of foundry grade pig iron, the foundries looked up to
TML for solving one of the biggest challenges in recent times 'Energy
Conservation'. TML decided to take up this challenge and thus started
the journey of Tata eFeeÃ, World's first branded Pig Iron.
TML introduced Tata eFeeà to the foundries as the first of its kind
product which melts faster than existing foundry grade pig irons in the
market, thereby making customers' operations energy efficient and
reducing their carbon footprint. In a competitive market with growing
energy costs, Tata eFeeà will be extremely beneficial for cupola as
well as induction furnace based foundries in reducing their energy
consumption, offering them an opportunity to contribute towards a
greener environment.
Your Company along with the Research & Development team of Tata Steel
and NT Kharagpur, have successfully developed this pioneering product
with optimum surface area to mass ratio, void distribution and packing
density which as per tests carried out in various foundries across
India, Tata eFeeà has helped bring down energy consumption in the range
of 5-15%.
Tata eFeeà has been successfully tried with many of our customers in
all regions who have found the results to be in line with its brand
promise.
After successful launch of Tata eFeeà in Southern and Western India
markets, your Company looks forward to launch the product across India
over next few months. Efforts are on to standardize the product
quality and volume of production. Regular customer feedback and
interaction has been identified as the key to the success of Tata
eFeeÃ. Sales & Marketing teams have been trained on the elements of
brand building and have been equipped with all necessary marketing
collaterals.
Your Company also understands that every brand has a shelf life and has
already started the next phase of research which will fuel the
introduction of brand extensions of TataeFeeÃ.
Your Company is also taking up additional Marketing Initiatives like,
Product segmentation exercise with the help of external Foundry
consultant and CRM Initiatives like Technical Service/Seminars for
Ductile Iron casting manufacturers, appreciation of customers and
partners through appropriate 'Reward & Recognition' mechanism, holding
technical meets, reinforcing 'sms services' and web access mechanism,
improved customer engagement by organising Customer Awareness
Programmes, Periodic Communication with customers, entering into long
term contracts, etc., which shall in the long run establish your
Company as the 'Supplier of Choice' for its customers.
Backward integration -Acquisition of mines
As reported previously, your Company received a prospecting license for
iron-ore mining, over an area of 154.80 ha from the Maharashtra State
Government in Dongarpal, Sindhudurg district, which is in close
proximity of the Redi plant. Subsequent to execution of Prospecting
License deed in February, 2010, though the statutory time limit for
submission of prospecting report was 31st January, 2012, your Company
has successfully completed the prospecting operation with the help of
Tata Steel (Natural Resources Division), Jamshedpur. The Prospecting
Report alongwith Mining Lease application has been submitted to Govt,
of Maharashtra on September 27, 2010. Your Company awaits grant of
Mining Lease.
3. Production Performance
During the year ended 31st March 2011, the Kharagpur and Redi plants
produced 310,803 & 178,115 tonnes of hot metal and 306,189 tonnes &
170,926 tonnes of Pig Iron, respectively. The production of hot metal
and pig iron for the past five years is shown in Figure -1 below :
4. Marketing Performance
During FY 2010-11, your Company produced 488,918 tonnes of hot metal
and sold 473,333 tonnes of pig iron. The sales performance for the
past five years is represented graphically in Figure-2 below:
Your Company's marketing initiatives like expansion of customer base,
entry into new markets and industry sectors, loyalty programs with long
term customers, initiating various CRM initiatives, rolling out of Tata
eFeeà Brand, etc. These initiatives along with sale of valued added
products have contributed significantly to the sales performance for FY
2010-11.
Performance : Domestic market
Domestic prices of pig iron remained stable during the first half of FY
2010-11 and rose marginally during second half of FY 2010-11.
International prices kept on fluctuating and March 2011 prices finally
reached the level of April 2010. The demand for finished castings has
shown gradual recovery especially in the automobile, infrastructure,
energy and agricultural sectors. The application of ductile iron
castings has also shown signs of growth leading to augmented demand of
customized grade pig iron like SSG But due to non availability of low
phosphorus iron ore we have not been able to consistently produce this
grade.
Pig iron buyers remain speculative and non-committal with regard to
long term purchases. The total share of Pig iron produced by secondary
manufacturers has increased from 87.38% in 2009-10 to 89.64% in
2010-11. Some pig iron producers had to curtail their production due to
non availability of iron ore. Increased availability of low cost
substitutes including basic grade pig iron and steel scrap, prompted
foundries to reduce usage of Foundry Grade pig iron.
During FY 2010-11, your company sold 473,333 tonnes of Pig Iron in the
domestic market with a national market share of 15%. The Redi plant of
your Company catered significantly to markets in the Western and
Southern India whereas the Kharagpur Plant supplied mainly to markets
in Eastern and Northern India.
There is a perceived threat of closure of Iron Ore Mines in Kamataka
due to Government action on illegal mining, which will adversely impact
the availability of Raw Material for Redi plant operations. Movement of
iron ore from other sources would put costs under pressure. Coupled
with this, due to shortage of labour and power in some states, the
foundries were constrained to scale down their operating capacity to
about 60% of their installed capacity.
Performance : Export market
The prices of Pig iron in the international market dipped briefly in
the first quarter of FY 2010-11. However, it rose again in Sept'10 and
then fluctuated till March, 11.
Your Company sold 28,731 tonnes of Pig Iron during the year to Tata
International Ltd. about 7,700 tonnes more with respect to 2009-10.
Though sales in the South East Asian markets and Far East Asia were
still recovering, your Company's pig iron was able to maintain it's
presence there. The Bangladesh market showed signs of recovery in the
second half of FY 2010-11. Exports to niche markets in the Middle East
remained below expected levels.
5. Karnataka Project
At the Global Investors Meet, Advantage Karnataka, held on June 4, 2010
at Bengaluru, your Company entered into a Memorandum of Understanding
with the Government of Karnataka, for setting up an Integrated Steel
Plant, with a capacity of 3 MTPA in Haveri District, Karnataka. It is
estimated that the total project cost would be about Rs. 15,000cr and
your Company would undertake the same alongwith Tata Steel and TML
would be the strategic partner in the project. Your Company has
received approval for allotment of 2500 acres of land, for which
necessary advance has been made to Karnataka Industrial Area
Development Board (KIADB). The process of acquisition of land as
identified for the project is in progress.
6. Dividend
With a view to strengthening the financial positions of the Company,
your directors have not recommended any dividend for the year 2010-11.
7. Credit Rating
The Company's Credit Rating remained stable in the last financial year.
ICRA has rated for its Rs 166 crore term loan facilities, Rs 100 crore
Non Convertible Debenture (NCD) and Rs 150 crore fund based bank
facilities of your Company, LA (pronounced LA). The outlook on the
rating is stable.
The Issuer Rating, of Rs. 650 crore short term Non Fund Based bank
facilities and Rs 100 crore commercial paper (CP) programme of your
Company, has remained same as IrA (pronounced I R A) and it is A1
(pronounced A one), respectively.
8. Amount transferred to Investors' Education and Protection Fund
During the year under review, pursuant to the provisions of Section
205C of the Companies Act, 1956 the following unclaimed amounts
pertaining to FY 2002-03 were credited to the Investors' Education &
Protection Fund :
SI. Particulars Date of Amount
No. Transfer transferred
1 Unpaid dividend 2002-03 26.08.2010 Rs. 2,300,047
9. Directors' Responsibility Statement:
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
- They have selected such accounting policies and applied them
consistently and made judgements and estimates that 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 your
Company for that period;
- They have taken proper and sufficient care 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; and
- They have prepared the annual accounts on a going concern basis.
The above statements were noted by the Audit Committee at its meeting
held on April 25, 2011.
10. Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
274(1 )(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the Listing Agreement.
11. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo as per Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is appended as Annexure "A" and forms part of this Report.
12. Particulars of Employees
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules there under, in respect of the employees of the
Company, is provided in the Annexure forming part of this Report. In
terms of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are
being sent to the members, excluding the aforesaid Annexure. The
Annexure is available for inspection by members at the Registered
Office of the Company during business hours on working days upto the
date of the ensuing AGM and if any member is interested in obtaining a
copy thereof, such member may write to the Company Secretary, whereupon
a copy would be sent.
13. Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on 'Corporate Governance' has been
included in this Annual Report, along with reports on 'Management
Discussion and Analysis' and 'Shareholder Information'.
All board members and senior management personnel have affirmed
compliance to the Code of Conduct for FY 2010-11.
Your Company has also taken initiatives to adopt the Corporate
Governance Voluntary Guidelines 2009 issued by Ministry of Corporate
Affairs, Government of India, New Delhi.
A Certificate from the Statutory Auditors of the Company regarding
compliance of conditions and provisions of the Corporate Governance is
enclosed as Annexure 'B' to this report.
14. Capital Investments
For setting up a 40m2 Sinter Plant at Kharagpur, Board has approved
Rs.98 crore for the total project cost at its meeting in January, 2011.
The Board of Directors of your Company has also approved normal
relining, modification & up gradation of MBF#2 at the Kharagpur Unit at
an estimated capital expenditure of Rs. 27.15 crore.
15. Fixed Deposits
During the year under review, your Company has not accepted any deposit
under Section 58Aand 58AAof the Companies Act, 1956, read with
Companies (Acceptance of Deposits) Rules, 1975.
16. Investor Services
The Investors Relations function of your Company strives to cater to
the increasing expectations of the investors by keeping its services
backed with state of the art infrastructure and systems. The Registrar
and Transfer Agents of your Company have been accredited with ISO
certification for their investor servicing.
The investors can also directly lodge their queries/ complaints to the
Compliance Officer of the Company over e-mail on
[email protected]:
Your Company has as a measure of investor service created a web-enabled
service for the investors, wherein the investors can through the
Company's website 'www.tatametaliks.com' log-in with their folio/demat
account details and pin-code to post their complaints and view status
thereof.
Official news releases, financial results and investor related
information are also displayed on the Company's website
'www.tatametaliks.com'.
Your Company, in keeping with statutory requirements, publishes the
financial and other investor related information, in English as well as
vernacular newspapers, where the registered office of the Company is
situated.
17. Availability of information on Corporate Filing and Dissemination
System (CFDS)
SEBI vide circular no SEBI/CFD/DIL/LA/4/2007/27/12 dated December 27,
2007 informed that EDIFARwill be phased out gradually in view of new
portal viz. Corporate Filing and Dissemination System (CFDS) put in
place jointly by BSE and NSE at the URL www.corpfiling.co.in wherein
requisite information about your Company is available. SEBI has since
discontinued the EDIFAR system w.e.f from April 1,2010.
18. Human Capital
Your company is committed towards creating (3C) i.e. Culture,
Commitment and Competency for human excellence. All three are needed to
make your company function in an atmosphere of trust and respect
vis-a-vis TATA CODE OF CONDUCT (TCoC). Involving the employees at
crucial stages of decision making is a hall mark of your company. The
employee mix of your company is not only cosmopolitan but also
appropriately qualified and young. The Human Resource team has been
using a number of innovative motivational tools such as Suggestion
Award Scheme, Employee Empowerment Scheme etc. for increasing
employee's engagement towards performance and productivity of the
company. Creating the process as well as behavioural competencies of
employees through focused training modules and rewarding higher
performing employees through a well honed and structured reward and
recognition scheme has gone a long way in achieving desired business
results. The effort started in 2009-10 to create one company culture
by integrating the Human Resource process of both Kharagpur and Redi
and Corporate Headquarters at Kolkata, have shown results in the form
of dyadic relationship between the two plants for mutual benefits and
trouble shootings. This has also resulted in broadening of horizons of
the employees across all these establishment of the company.
Your Company's Human Resource team in valued association with external
experts, developed necessary processes for mapping the behavioural and
process competencies of the employees.
Training :
Any asset need to be maintained by refurbishing and polishing to endure
the vagaries of time and changing paradigms. Considering its people as
assets your company is structurally maintaining their development of
knowledge and skills to meet the challenges through a well laid out
training systems in consultation with Tata Management Training Centre
(TMTC), Pune. Training is now the important tool for Human Resource
Management, which helps motivate employees, achieve their professional
and personal goals, increasing the level of job satisfaction etc. Your
company has apportioned a significant portion of its investment into
training and development of it's employees as well as contractors'
employees and also installed an effective system of evaluation.
Improvements in behavioural parameters of the relationship dynamics are
one of the measures through which your company analyses the success of
its training efforts. Technical training of its employees as well as
employees of its service providers is also given prime importance.
Your company has embarked upon an ambitious plan to upgrade skills of
fifty (50) service provider employees who are presently unskilled and
engaged by the contractors in menial jobs.
During the year under review, your company with the objective of
"Creating tomorrow's capability today" in collaboration with Tata
Management Training Centre (TMTC), Pune has initiated Leadership
training programmes tailor made and suited for managerial and
leadership team of TML. At present the training is being conducted at
three levels :-
i. Senior Master Leadership Training Programme for the senior
executives;
ii. Second Level Training Programme is designated for middle
management;
iii. Emergent Leader Training Programme is being conducted to address
the managerial skill requirements to be matched with current needs of
business of the company for becoming a mature heads for tomorrow, being
ready in the succession planning of hot list for young professionals;
Your company had 661 employees on its roll as on 31st March, 2011 (258
at Kharagpur and 358 at Redi).
Your Directors would like to place on record their sincere appreciation
to the Labour Union and the employees for their continued cooperation
in maintaining harmonious industrial relations, production and
productivity and in the implementation of various initiatives to reduce
internal costs, adopt environment-friendly initiatives and supporting
management in implementing initiatives directed toward improvement of
operational efficiencies.
19. Corporate Social Responsibility
At TML, sustainable principles and practices are the drivers of growth.
Your Company has always applied its core competencies - innovation,
agility and corporate integrity to reduce the environmental impact of
it's business. Sustained efforts aimed at reducing carbon emissions,
optimising resources and mobilising all employees and service providers
to participate in the 3Rs (Reduce, Reuse and Recycle) have been
undertaken.
- Efforts have been made to continuously reduce raw material
consumption per ton of hot metal produced over the years and
intensified efforts are taken to reduce production of non-standard
quality products.
- Slag, which is a waste arising in the pig iron manufacturing process,
is used as raw material for cement plant. Your Company uses a slag
granulation plant at Redi for higher returns.
- The Blast Furnace Gas (BFG) produced in the manufacturing process,
being rich in carbon monoxide (CO), acts as a fuel for the steam
turbines to generate electricity from captive power plants. BFG is also
used in the blast stoves to produce hot air that is blown into the
blast furnace. Your company also provides BFG to TMKPL which is used in
the annealing furnaces as fuel, which helps minimise dependency on
fossil fuel.
- Your Company religiously follows the principles of 3R's as regards
water which is consumed extensively in the manufacturing process. Your
Company has for its Kharagpur operations, taken up ambitious plans to
become water neutral in the coming few years, through water
conservation and rain water harvesting.
- Your Company has ensured 33% green cover at both the plant locations
as per directives of Pollution Control Boards (PCB).
- Employees of both Tata Metaliks and its subsidiary Tata Metaliks
Kubota Pipe Ltd. actively participate in community initiatives like
blood donation, health checkup, relief activities, mobile wheel chair
donation for physically challenged persons, vermin culture compost by
using waste food of canteen etc.
- TMKPL has on its part, used energy efficient motors to keep the
electrical energy consumption at the minimum. Moreover, in the zinc
plant, the zinc dust is captured through bag filter and dispose to PCB
approved vendors.
In the year under report, Kharagpur plant's community outreach
increased from 10 villages to 15 villages. The Redi plants corporate
care extends to seven villages including the mining village of
Dongarpal. Since the population falls under the Below Poverty Line
category, extensive activities for community empowerment have been
undertaken in the area of health, education, training and livelihood
programmes.
20. Directors
Mr. Koushik Chatterjee, Mr. A. C. Wadhawan and Mr. Manish Gupta retire
by rotation at the ensuing Annual General meeting and being eligible,
offer themselves for re-appointment.
21. Auditors
The Auditors, M/s Deloitte, Haskins & Sells, Chartered Accountants,
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. Your Company has received a Certificate
from the Auditors to the effect that their appointment, if made, would
be within the limits of Section 224(1 B) of the Companies Act, 1956.
22. Subsidiary Company
In terms of Section 4(1 )(c) of the Companies Act, 1956, Tata Metaliks
Kubota Pipes Limited (TMKPL) is a subsidiary of the Company in which
TML holds 51% of the equity shares as on 31st March, 2011.
Tata Metaliks Kubota Pipes Limited (TMKPL) got the BIS License on
27.09.2010 and their domestic sales commenced from October, 2010.
The Company having received international certifications like ISO 2531,
BSEN 545 and ISO 9001, exported about 10,891 MTto some of the quality
conscious international customers.
23. Consolidated Financial Statements
The Audited Consolidated Financial Statements is based on the Financial
Statements received from our subsidiary Company, TMKPL as approved by
its respective Board of Directors and have been prepared in accordance
with the Accounting Standard-21 (AS-21)- 'Consolidated Financial
Statements', Accounting Standard-23 (AS-23) - Accounting for Investment
in Associates in Consolidated Financial Statements' and Accounting
Standard-27 (AS-27) - 'Financial Reporting of Interests in Joint
Ventures', as notified under Section 211 (3C) of the Companies Act,
1956 read with Companies (Accounting Standards) Rules, 2006 as
applicable.
The consolidated financial statements presented by your Company include
financial information of the subsidiary TMKPL prepared in compliance
with applicable Accounting Standards. The Ministry of Corporate
Affairs, Government of India vide its Circular No. 5/12/2007-CL-lll
dated 8th February, 2011 has granted general exemption under Section
212(8) of the Companies Act, 1956, from attaching the balance sheet,
profit and loss account and other documents of the subsidiary companies
to the balance sheet of the Company, provided certain conditions are
fulfilled. Accordingly, annual accounts of the subsidiary company and
the related detailed information will be made available to the holding
and subsidiary company's investors seeking such information at any
point of time. The annual accounts of the subsidiary company will also
be kept for inspection by any investor at the Registered Office of the
Company and that of the subsidiary company at 43, Jawaharlal Nehru
Road, Kolkata - 700 071.
24. Directors response to the comments made by the Auditors in their
report
Auditors' Report read together with Annexure referred to in Paragraph 3
of the Auditors' Report do not contain any qualification of significant
nature and do not call for any explanation/clarification.
25. Note of Appreciation
Your Directors wish to place on record their deep appreciation for the
continued support and co-operation of Financial Institutions, Banks,
Government authorities and other stakeholders. Your Directors also
acknowledge the support extended by all employees for their dedicated
service.
Your Directors also thank the Government of India and the Governments
of various countries, the concerned State Governments, Government
Departments and various Agencies for their co-operation. The Directors
appreciate and value the contributions made by every member of the TML
family. Propelled by your Company's strong vision and powered by
internal vitality, your Directors look forward to the future with
confidence.
On Behalf of the Board of Directors
Place : Kolkata Koushik Chatterjee
Date :3rd May, 2011 Chairman
Mar 31, 2010
The Directors are pleased to present the Twentieth Annual Report of
the working of the Company along with the statement of accounts and the
Auditors Report for the financial year ended 31st March, 2010.
1. FINANCIAL RESULTS: (Rs. Cr)
PARTICULARS Current
Year
Current
Year Previous
Year Previous
Year
(Stand-
Alone) (Consoli
dated) (Stand-
Alone) Consoli
dated
a) Gross Income from sales and
other operations 1121.24 1126.12 1107.05 1106.05
b) Profit / (Loss) on sale of
surplus raw material 1.22 1.22 (0.68) 0.68
c) Profit / (Loss) before
Interest, Depreciation and taxes (118.85) (120.35)
d) Less: Interest 35.80 42.04 30.38 30.38
e) Profit / (Loss) before
Depreciation and Taxes (149.22) (150.73)
f) Less: Depreciation 16.42 25.06 16.09 16.31
g) Profit / (Loss) before Taxes 50.65 17.35 (165.46) (167.04)
h) Less:
Provision for Taxes including
deferred taxes 5.10 5.10 (16.72) (16.43)
i) Profit / (Loss) After Taxes 45.55 12.25 (148.59) (150.62)
Profit / (Loss) After Tax &
Minority Interest 45.55 28.57 - (149.70)
j) Profit / (Loss) and loss credit
balance brought forward 102.87 (59.20) 91.03 90.50
Balance available for appropriations 12.16 (30.63) (57.56) (59.20)
Which the Directors have
appropriated to:
i) Proposed Dividend on Equity Shares - - - -
ii) Taxes on Dividend - - - -
iii) General Reserve - - - -
Total - - - -
Balance to be carried forward 12.16 (30.63) (57.56) (59.20)
2. BUSINESS RESULTS
2009-2010 was an extremely crucial year for the Global Steel Industry
after the global recession of end 2008 and early 2009 - the worst
economic crisis ever faced since the Great Depression in 1930Ãs and
India was no exception. Aware of the challenges that lay ahead, your
Company placed itself firmly on the path of recovery with the macro
mission of ÃRecouping the Lost Groundà in two years, i.e. 2009-11,
through (i) conserving cash within the organisation, (ii) reducing the
cash requirements of the business and (iii) preventing revenue
leakages.
These measures paid off with your Company recording a Gross Income of
Rs.1121cr as against Rs.1107cr for the previous year 2008- 09.Your
Company ended FY 2009-10 with a PBT of Rs. 50 cr as against a loss of
Rs.167cr suffered during the previous year 2008-09. Hot metal
production was recorded at 0.50 million tones which is not only the
second highest production in the history of TML but also an industry
record.
The business and operating performance of the company has been
discussed in details in the Management Discussion and Analysis section
of the Report.
Building a Customer Culture - Project SCOPE (Strategising for Customer
Oriented Processes & Excellence)
In line with your Companys focus on Customer Centricity, SCOPE, an
organization-wide initiative was launched in early 2008 with IIM
(Kolkata), as the consultant. The objective of this initiative is to
develop the organisation culture & environment by integrating/ aligning
of work processes within TML in order to build a better understanding
of Customers (both internal & external) across the organisation.
Project SCOPE is targeted towards enriching and reinforcing the
awareness levels of Customers expectations across the total value
chain. Specific steps taken in this regard include Sales and Marketing
Initiatives such as identifying the needs of Institutional and Retail
buyers in relation to both products (like customized grades) and
services. Creation of a National Accounts Key Manager to handle Top 50
key customers & corporate buyers was yet another process initiative
undertaken. Demarcation and emphasis of the boundary divisions of LSCM
and Marketing roles, creation of a customer support group in the
Accounts function. Establishment of a Head-operations position keeping
in view the nature of growth avenues and criticality of manufacturing,
organisation of a retail sales team as per the organisational presence
were some of the organisational changes taken by your Company. Periodic
feedback from partners (dealers/agents/CSAs), who are an important link
in a sizeable portion of our business, is utilised as a means of
developing a platform for effective two-way communication and
relationship building. Thereby ensuring that the Company is able to
meet the changing needs and expectations of the customers.
SCOPE has helped your Company address the dynamic business environment,
changing customer expectations and the challenges of the competitive
landscape. Your Company believes that the need of the hour is to be
pro-active rather than reactive.
Backward integration - Acquisition of mines
As reported previously, your Company received a prospecting license for
Iron-ore, over an area of 154.80 ha from the Maharashtra State
Government in the Dongarpal district at Sindhudurg, which is in the
vicinity of the Redi plant. Dongarpal Prospecting License deed was
executed by DMO, Sindhudurg on Feb 3, 2010 for a period of two years
(w.e.f Feb 1, 2010). Subsequently after obtaining consent from majority
of land owners your company started the prospecting operation in
Dongarpal on March 09, 2010.
The Prospecting operation which will be executed in three phases is
expected to be completed by March 31, 2011. The Topographical survey
and Core drilling part has been outsourced to M/s Central Drilling
Province, Nagpur while the Geological Mapping and Bore hole planning
shall be carried out by Tata Steel (NRD), Jamshedpur.
3. PRODUCTION PERFORMANCE
During the year ended 31st March 2010, the Kharagpur and Redi plants
produced 306,000 and 200,022 tonnes of hot metal respectively. During
FY 2009-10, the production of Pig Iron at the Kharagpur and Redi plants
was 301,874 tonnes and 196,2678 tonnes respectively. The production of
hot metal and pig iron for the past five years is shown in Figure -1
below:
The manufacture of value-added products like SSG grade pig iron with
low sulphur, phosphorous and manganese content alongwith significant
improvements in operational parameters has contributed to increased
productivity of FY 2009-10.
4. MARKETING PERFORMANCE
As mentioned above, the use of value added products and improve
operational parameters have contributed significantly to the sales
performance for FY 2009-10.
Performance: Domestic market
Domestic prices of pig iron remained stable during the first half of FY
2009-10 and rose marginally during second half of FY 2009-10.
International prices kept on rising in the second half of FY 2009-10
leading to an export order boom from November 2009. Since June 2009,
the demand for finished castings has shown gradual recovery especially
in the automobile, energy & agricultural sectors. The application of
ductile iron castings has also shown sign of recovery leading to
augmented demand of customized grade pig iron.
Pig iron buyers remain speculative and non-committal with regard to
long term purchases. The total share of Pig iron produced by secondary
manufacturers, like your Company, has come down to 87.38% in FY 2009-10
from 90.51% in FY 2008-09.
During FY 2009-10 , your company sold approx. 469080 tonnes of Pig Iron
in the domestic market with a national market share of 16%. The Redi
plant of your Company catered significantly to markets in the West and
South India whereas the Kharagpur Plant supplied mainly to markets in
East, North India as well as the overseas market.
Performance: Export market
The prices of Pig iron in the international market rose briefly in the
first quarter of F.Y. 2009-10. However, the improvement was short-lived
as the prices crashed again before eventually gaining momentum from
November 2009.
Albeit sales in the South East Asian markets and Far East Asia were
still recovering, your Company was able to maintain its presence. The
Bangladesh market showed signs of recovery in H1 followed by Taiwan in
H2. Exports to niche markets in the Middle East remained at expected
levels. Your Company sold 21,000 mt of Pig Iron during the year to M/s.
Tata International Ltd. in the course of export.
During the year under review your Company in association with M/s.
Tata International Ltd., took initiatives to hold marketing conferences
in countries such as Taiwan, Vietnam, Indonesia, Malaysia, Thailand,
Bangladesh and UAE with an aim to increasing exports and developing new
markets for Pig Iron.
5. KARNATAKA PROJECT
At the Global Investors Meet, Advantage Karnataka, held on June 4, 2010
at Bengaluru, your Company entered into a Memorandum of Understanding
with the Government of Karnataka, for setting up an Integrated Steel
Plant, with a capacity of 3 MTPA in Haveri District, Karnataka. The
Company has also been allotted 2500 hectares of land for the same under
the terms of the Agreement. It is estimated that the total project cost
would be about Rs. 15,000 crore and your Company would undertake the
same alongwith Tata Steel and TML would be a minority player in the
project.
6. DIVIDEND
With a view to strengthening the financial positions of the Company,
your directors have not recommended any dividend for the year 2009-
2010.
7. AMOUNT TRANSFERRED TO INVESTORSÃ EDUCATION & PROTECTION FUND
During the year under review, pursuant to the provisions of Section
205C of the Companies Act, 1956 the following unclaimed amounts
pertaining to F.Y. 2001-02 were credited to the Investorsà Education &
Protection Fund :
Sl No. Particulars Date of Amount
Transfer transferred
1 Final redemption of 26.08.2009 16,60,433/-
debentures
2 Unpaid dividend 22.06.2009 22,83,209/-
3 Debenture Interest 20.04.2009 1,73,962/-
8. CREDIT RATING
ICRA has upgraded the ratings of the Rs 166 crore term loan facilities,
Rs 100 crore non convertible debenture (NCD) and Rs 150 crore fund
based bank facilities of your Company from LA-(pronounced L A minus) to
LA (pronounced LA)ñ. The outlook on the rating is stable. The Issuer
Rating of your Company has also been revised from IrA-
(pronounced I R A minus) to IrA (pronounced I R A). ICRA has also
(pronounced A one).
9. DIRECTORS RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm having:
- Followed in the preparation of the Annual Accounts, the applicable
accounting standards with proper explanation relating to material
departures, if any ;
- Selected such accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of your Company at
the end of the financial year and of the profit of your Company for
that period;
- Taken proper and sufficient care, to the best of their knowledge and
ability for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act 1956 for
safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities; and
- Prepared the annual accounts on a going concern basis.
The above statements were noted by the Audit Committee at its meeting
held on May 6, 2010.
10. STATUTORY DISCLOSURES
None of the Directors are disqualified under the provisions of Section
274(1)(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of the
Companies Act, 1956 and Clause 49 of the Listing Agreement.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Information relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo as per Section
217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is appended as Annexure ÃBÃ and forms part of the Report.
12. PARTICULARS OF EMPLOYEES
The statement of particulars of employees as required under section
217(2A) of the Companies Act 1956, read with the Companies (Particulars
of Employees) Rules, 1975 as amended, is appended as Annexure ÃCÃ.
13. CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance has been
included in this Annual Report, along with reports on Management
Discussion and Analysis and Shareholder Information. All board
members and senior management personnel have affirmed compliance to the
Code of Conduct for FY 2009-10.
Your directors are happy to inform that in a survey conducted by the
Institute of Company Secretaries of India; your Company was selected
among the Top 25 companies for practicing Good Corporate Governance.
Your Company has also taken initiatives to adopt the Corporate
Governance Voluntary Guidelines 2009 issued by Ministry of Corporate
Affairs, Government of India, New Delhi.
A Certificate from the Statutory Auditors of the Company regarding
compliance of conditions and provisions of the Corporate Governance is
enclosed as Annexure A to this report.
14. CAPITAL INVESTMENTS
Your Company has not taken up any Capital Investment projects during
the year under review.
15. FIXED DEPOSITS
During the year under review, your Company has not accepted any deposit
under Section 58A and 58AA of the Companies Act, 1956, read with
Companies (Acceptance of Deposits) Rules, 1975.
16. INVESTOR SERVICES
The Investors Relations function of your Company strives to cater to
the increasing expectations of the investors by keeping its services
backed with state of the art infrastructure and systems. The Registrar
and Transfer Agents of your Company have been accredited with ISO
certification for their investor servicing.
The Company has launched a special investor service drive by creating
web-enabled service for the investors, wherein the investors can log-in
with their account number & pin code and post their complaints, and
view their complaint status. Through the electronic messaging facility,
the investors can directly lodge their complaints to the Compliance
Officer of the Company on investors@ tatametaliks.co.in. Official news
releases are also displayed on the Companys website as well as on the
Company intranet. The same are also published in English as well as
vernacular newspapers, where the registered office of the Company is
situated.
17. AVAILABILITY OF INFORMATION ON ELECTRONIC DATA INFORMATION FILING
AND RETRIEVAL SYSTEM (EDIFAR) SYSTEM
SEBI vide circular no SEBI/CFD/DIL/LA/4/2007/27/12 dated December 27,
2007 informed that EDIFAR will be phased out gradually in view of new
portal viz. Corporate Filing and Dissemination System (CFDS) put in
place jointly by BSE and NSE at the URL www. corpfiling.co.in. SEBI
has since discontinued the EDIFAR system w.e.f from April 1, 2010.
18. HUMAN CAPITAL
Your Company considers its workers to be its biggest assets and the
Management encourages employee participation at every stage of the
decision making process and day to day running of the Company. . This
has led to the development of a culture based on mutual trust and
respect built assiduously and nurtured over the years. As an equal
opportunity employer, your Company has created a cosmopolitan employee
mix, reflective of its national stature.
The Human Resource team has introduced a number of measures aimed at
motivating and increasing employee performance and productivity. These
measures include focused need-based skill enhancement training modules,
revised compensation aligned to performance, safety trainings and a
structured Reward & Recognition Scheme. A significant event during the
year was the integration of the HR practices of both Kharagpur and Redi
on a common platform with regard to promotions, pay structure and
career paths of individuals. The result was a new and distinctive one
Company culture that aims at engaging our people not only in our
strategy, development and implementation but also educates them about
the business, stimulates innovation and drives growth.
Training:
As mentioned earlier, your company considers its employees as its
greatest asset and the HR policies and strategies of the company have
been focused on converting potential into performance. The result would
be an informed, engaged and aligned employee at the workplace. Your
Company, as part of its endeavour of being a learning organization, has
a policy of continuously investing in the training and development of
all its employees (including contractual employees). Your Company
continuously upgrades the technical skills and competencies of its
employees. Further, continuous steps are taken to attract fresh talent
from all over the country. Your company imparts training in several
areas including managerial topics, information technology, etc.
During the year under review, your Company with the objective of
ÃCreating tomorrowÃs capability todayà in collaboration with Tata
Management Training Centre (TMTC), Pune has initiated Leadership
training programmes tailor made and suited for managerial and
leadership team of TML. The training is at present being conducted in
three levels
(i) Senior Master Leadership Training Programme for thesenior
executives;
(ii) Second Level Training Programme is designated for middle
management;
(iii) Emergent Leader Training Programme is being conducted to address
the managerial skill requirements for young professionals. TMTC also
measures the effectiveness of the training imparted by way of tracking
the performance of employees.
The Directors would like to place on record their sincere appreciation
to the Labour Union and the employees for their continued cooperation
in maintaining harmonious industrial relations, production and
productivity and in the implementation of various initiatives to reduce
internal costs, adopt earth-friendly initiatives and improvements in
operational efficiencies.
Your Company had 678 employees on roll as on 31st March, 2010 (261 at
Kharagpur and 371 at Redi unit).
19. CORPORATE SOCIAL RESPONSIBILITY
The philosophy of sustainability and business ethics has been the
cornerstone of your Companys policies and practices.. In line with the
values of Tata Group,your Company considers its interests to be
inseparable from that of the community. As a result the Company has
always involved itself in activities that benefit the inhabitants of
the areas where its operations are located.
Measures in areas such as education, health care and environment are
taken by the Company, which enables the local population to improve the
quality and standard of living.
Going Green
Considering the emerging need of addressing the climate change
initiatives in line with Tata Group guidelines, your Company has taken
a three step process across the organisation viz. a) Awareness across
its stakeholders including its community; b) Process improvements by
introducing energy efficient pig-iron and c) Technological intervention
by way of Capital Projects like Sinter Plant and Enhancement in
capacity of Blast Furnace.
You Company had also adopted innovative measures to reduce its carbon
footprint and in this regard both the units at Kharagpur and Redi are
seeing dedicated activity at every level. One of these initiatives has
to do with increasing the green cover around the plant in keeping with
the requirements prescribed by the Ministry of Environment and Forests.
Other initiatives taken during the year include adopting suitable Water
conservation measures to make TML a water neutral Company by 2015.
Similar measures have been taken to conserve the utilisation of power.
Other initiatives to protect the environment are the replacement of a
petrol-operated motorbike used by employees for movement within the
plant with an electric two-wheeler and the use of video- conferencing
for communication between the companys site at KGP, Redi, Bengaluru
and Kolkata. A solar heater has been installed in the canteen to reduce
the consumption of fuel.
The World Environment Day was celebrated in Tata Metaliks, Kharagpur
works on June 5th, 2010. On this occasion, saplings were planted near
the Material gate and near the 100 tonne weigh bridge. A month long
environment campaign was also initiated. Through all these initiatives,
your Company has reinforced its commitment to the planet.
20. DIRECTORS
Mr. Dipak Banerjee, Mr. Ashok Kumar and Mr. V S N Murty, Directors
retire by rotation at the upcoming Annual General Meeting and being
eligible offer themselves for re-appointment.
Mr. H. M. Nerurkar and Mr. Ajoy Roy relinquished directorship of your
company w.e.f 28th October, 2009 and 30th July, 2010 respectively. The
Board of Directors would like to place on record their sincere
appreciation of the valuable guidance and support extended by them
during their tenure.
The nomination of Mr. Subrata Gupta, Managing Director of WBIDC Ltd was
withdrawn w.e.f. 7th May 2010.
21. AUDITORS
The Auditors, M/s Deloitte, Haskins & Sells, Chartered Accountants,
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment. Your Company has received a Certificate
from the Auditors to the effect that their appointment, if made, would
be within the limits of Section 224(1B) of the Companies Act, 1956.
22. SUBSIDIARY COMPANY
In terms of Section 4(1)(c) of the Companies Act, 1956, Tata Metaliks
Kubota Pipes Limited (TMKPL) is a subsidiary of the Company in which it
holds 51% of the equity shares as on 31st March, 2010. As required
under section 212 of the Companies Act, 1956 the Balance Sheet, Profit
& Loss Account and the reports of the Board of Directors and Auditors
of TMKPL have been attached to the Balance Sheet of your Company.
Tata Metaliks Kubota Pipes Limited (TMKPL) started commercial
production from the month of May 2009 and applied for BIS License. The
CompanyÃs application for BIS License, got rejected due to some
procedural mistakes. Thus, the plant was not under normal operation for
a large part of the year.
The Company having received international certifications like ISO2531,
BSEN545 and ISO9001, exported about 1528 mt to some quality conscious
international customers.
23. CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements based on the Financial
Statements received from our subsidiary Company, TMKPL as approved by
its respective Board of Directors, have been prepared in accordance
with the Accounting Standard-21 (AS-21) Consolidated Financial
Statements, Accounting Standard 23 (AS-23)- Accounting for Investment
in Associates and Accounting Standard-27 (AS-27)- Financial Reporting
of Interests in Joint Ventures, notified under Section 211 (3C) of the
Companies Act, 1956 read with Companies (Accounting Standards) Rules,
2006 as applicable.
24. DIRECTORS RESPONSE TO THE COMMENTS MADE BY THE AUDITORS IN THEIR
REPORT
Auditorsà Report read together with Annexure referred to in Paragraph 3
of the Auditorsà Report do not contain any qualification of significant
nature and do not call for any explanation/clarification.
25. NOTE OF APPRECIATION
Your Directors wish to place on record their deep appreciation for the
continued support and co-operation of Financial Institutions, Banks,
Government authorities and other stakeholders. Your Directors also
acknowledge the support extended by all employees for their dedicated
service.
Your Directors also thank the Government of India and the Governments
of various countries, the concerned State Governments, Government
Departments and various Agencies for their co-operation. The Directors
appreciate and value the contributions made by every member of the TML
family. Propelled by your Companys strong vision and powered by
internal vitality, your Directors look forward to the future with
confidence.
On Behalf of the Board of Directors
Kolkata Koushik Chatterjee
30th July 2010 Chairman
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